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The International Energy Agency (IEA) has long collected and interpreted statistics, and calls itself “the most authoritative global source of energy analysis and projections.”
In recent years, though, the IEA has also taken to painting three-part “scenarios” of possibilities.
As others have noted, these scenarios tend to look like this: If current government energy policies continue, then the outcome would be X; if governments keep all their climate promises, then Y would happen; if net-zero energy production comes about, then the result would be Z.
The executive director of the IEA has stressed that the agency’s theoretical scenarios “are not ‘forecasts.’
But many opponents of fossil fuels and LNG do treat X, Y and Z as predictions. They select the X, Y or Z that best fits their political position and announce that it is an “outlook” (or simply a “fact”) determined by the IEA.
Alberta Premier Danielle Smith says the IEA is simply “no longer credible.” She says it no longer does analysis but points to outcomes it wants and outlines paths to get there.
And, questioning IEA scenarios (“Prognosis, prediction or palmistry?”), Resource Works noted that those with long memories may also recall the assorted “experts” in the distant past who wrongly predicted that world demand for oil would peak in the early 1950s — some 70 years ago.
If we look at actual LNG forecasts, we see LNG demand is expected to rise significantly until 2040 and then either continue to grow or at least stabilize until 2050. After that, who knows?
Credible organizations like IEEJ, Shell, McKinsey & Company, and Wood Mackenzie have all endorsed this view in their projections.
Shell now says world demand is expected to reach around 625-685 million tonnes per year in 2040. That is slightly lower than Shell’s Outlook 2023 estimates of 700 million tons by 2040.
And Shell does see peak demand coming down the road. “Demand for natural gas has peaked in some regions and globally is set to peak after 2040.”
But you read from various green groups that “peak gas” will occur in just a few short years.
(We often see people taking ”peak demand” to mean “the end of demand.” Not so; demand continues after the peak, but no longer climbs.)
We also see LNG opponents happily predicting that we shortly face a “glut” of gas, and thus there is a slim future for the LNG sector. The sector, though, sees any glut as temporary and short-lived, and not a cause for doom and gloom among producers.
And with the newly exploding demand for electricity, for electric vehicles and Artificial Intelligence (AI) computer centres, those current forecasts of “peak gas” should be firmly questioned.
There’s other demand, too: Note that the world’s population will increase by some two billion between now and 2050 – all of whom will require new energy capacity, much of it in Asia. As well, some 700 million people currently lack access to electricity and will require additional energy capacity.
Meanwhile, the US Energy Information Administration sees natural-gas consumption more than tripling in India by 2050. That would be more than twice the growth rate of gas consumption in China, the next-fastest-growing country.
Among those seeing strongly growing markets for LNG is the Arab country Qatar, which is spending billions with a goal of becoming the world’s biggest LNG exporter and biggest owner of LNG carrier ships. It has signed a series of deals to provide European and Asian partners with LNG from its huge North Field expansion project.
According to Japan’s Institute of Energy Economics, the world is highly unlikely to meet all this coming demand without new LNG infrastructure.
Closer to home, LNG Canada, Woodfibre LNG, FortisBC’s Tilbury LNG, the Haisla-led Cedar LNG and the Nisga’a-led Ksi Lisims LNG projects all see firm future demand for LNG.
LNG Canada is in testing stages and start-up activities at its Kitimat export plant, and “we remain well-positioned to deliver our first cargoes of lower-carbon, made-in-B.C. LNG by the middle of this decade.” Woodfibre LNG is looking at 2027 to complete the world’s first net zero LNG export facility. It has pre-sold 70% of its output.
And all of them point out that Canadian LNG is the cleanest in the world, which gives us a competitive edge as buyers begin to seek more lower-carbon LNG. We also have an edge in our lower costs for natural gas, shipping and liquefaction.
Indigenous People now are at the forefront of LNG development in Canada, with projects involving significant partnerships, including ownership stakes and business agreements. Thus LNG projects offer a wealth of benefits to Indigenous Peoples, including economic growth, job creation, and the advancement of self-determination.
And now the federal government has recognized the importance of Indigenous involvement, with its Indigenous Loan Guarantee Program promising to support Indigenous equity investment in natural resource, energy, or hydrocarbon projects.
Increasingly, Canadian LNG is Indigenous LNG.
(Posted here 15 May 2024)
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