Canada’s liquefied natural gas touted — and doubted — as a green ‘transition’ fuel

The LNG Canada industrial energy project is seen under construction in Kitimat, B.C., on Wednesday, Sept. 28, 2022. THE CANADIAN PRESS/Darryl Dyck

CALGARY — Canada’s first liquefied natural gas cargoes will soon arrive on Asian shores, a milestone touted — and doubted — as a boon for global emissions-cutting efforts.

“Cleaner energy around the world is what I think about when I think about LNG,” Shell Canada country chair Stastia West said in an onstage interview at the Global Energy Show in Calgary earlier this month.

Shell and four Asian companies are partners in LNG Canada in Kitimat, B.C., the first facility to export Canadian gas across the Pacific in an ultra-chilled liquid state using specialized tankers. A handful of other projects are either under construction or in development on the B.C. coast.

Alberta Premier Danielle Smith told the energy show that Canadian oil and gas exports can be an “antidote” to the current geopolitical chaos.

“And it comes with an added benefit: lower global emissions. By moving more natural gas, we can also help countries transition away from higher emitting fuels, such as coal.”

Smith cited a recent Fraser Institute study that suggested if Canada were to double its natural gas production, export the additional supply to Asia and displace coal there, it would lead to an annual emissions cut of up to 630 million tonnes annually.

“That’s almost 90 per cent of Canada’s total greenhouse gas emissions each year,” Smith said.

The authors of the Fraser Institute study, released in May, argued that Canada’s ability to reduce emissions elsewhere should be factored into its climate policy.

“It is important to recognize that GHG emissions are global and are not confined by borders,” wrote Elmira Aliakbari and Julio Mejía.

“Instead of focusing on reducing domestic GHG emissions in Canada by implementing various policies that hinder economic growth, governments must shift their focus toward global GHG reductions and help the country cut emissions worldwide by expanding its LNG exports.”

Some experts see a murkier picture.

Most credible estimates suggest that if liquefied natural gas were to indeed displace coal abroad, there would be some emissions reductions, said Kent Fellows, assistant professor of economics with the University of Calgary’s School of Public Policy.

But the magnitude is debatable.

“Will all of our natural gas exports be displacing coal? Absolutely not. Will a portion of them be displacing coal? Probably, and it’s really hard to know exactly what that number is,” he said.

Fellows said there’s a good chance Canadian supplies would supplant other sources of gas from Russia, Eurasia and the Middle East, perhaps making it a wash emissions-wise. He said the Canadian gas could actually be worse from an emissions standpoint, depending on how the competing supply moves. LNG is more energy intensive than pipeline shipment because the gas needs to be liquefied and moved on a ship.

In China, every type of energy is in demand. So instead of displacing coal, LNG would likely just be added to the mix, Fellows added.

“Anyone who’s thinking about this as one or the other is thinking about it wrong,” Fellows said.

A senior analyst with Investors for Paris Compliance, which aims to hold Canadian publicly traded companies to their net-zero promises, said he doubts a country like India would see the economic case for replacing domestically produced coal with imported Canadian gas.

“Even at the lowest price of gas, it’s still multiple times the price,” said Michael Sambasivam. “You’d need some massive system to provide subsidies to developing countries to be replacing their coal with a fuel that isn’t even really proven to be much greener.”

And even in that case, “it’s not as if they can just flip a switch and take it in,” he added.

“There’s a lot of infrastructure that needs to be built to take in LNG as well as to use it. You have to build import terminals. You have to refit your power terminals.”

What LNG would be competing head-to-head with, Sambasivam said, is renewable energy.

If there were any emissions reductions abroad as a result of the coal-to-gas switch, Sambasivam said he doesn’t see why a Canadian company should get the credit.

“Both parties are going to want to claim the emissions savings and you can’t claim those double savings,” he said.

There’s also a “jarring” double-standard at play, he said, as industry players have long railed against environmental reviews that factor in emissions from the production and combustion of the oil and gas a pipeline carries, saying only the negligible emissions from running the infrastructure itself should be considered.

Devyani Singh, an investigative researcher at Stand.earth who ran for the Greens in last year’s B.C. election, said arguments that LNG is a green fuel are undermined by the climate impacts of producing, liquefying and shipping it.

A major component of natural gas is methane, a greenhouse gas about 80 times more potent than carbon dioxide over a 20-year time frame, according to the Intergovernmental Panel on Climate Change. Methane that leaks from tanks, pipelines and wells has been a major issue that industry, government and environmental groups have been working to tackle.

“Have we actually accounted for all the leakage along the whole pipeline? Have we accounted for the actual under-reporting of methane emissions happening in B.C. and Canada?” asked Singh.

Even if LNG does have an edge over coal, thinking about it as a “transition” or “bridge” fuel at this juncture is a problem, she said.

“The time for transition fuels is over,” she said. “Let’s just be honest — we are in a climate crisis where the time for transition fuels was over a decade ago.”

This report by The Canadian Press was first published June 29, 2025.

Lauren Krugel, The Canadian Press