- Category: Economic
- Published Friday, January 22, 2016
- CTV News
CALGARY -- Strong environmental leadership will help boost Canada's natural gas exports and could pave the way for future oilsands exports, says a high-profile analyst.
Robert Johnston, CEO of political risk assessment firm Eurasia Group, says Prime Minister Trudeau should promote stricter emissions targets in Asia to boost the potential of liquefied natural gas exports to the region.
"I see actually a very positive opportunity to align what Alberta wants for its gas sector, what Trudeau wants on climate change and what Asian consumers and governments really want," Johnston said Friday at a Calgary Chamber event.
Coal is still projected to be the fastest-growing energy source in Asia, but cleaner-burning natural gas could replace some of that if the right regulations are in place.
"Canada has a role to play in advocating for natural gas a climate solution," said Johnston.
The switch to natural gas would mean cleaner air for smog-choked Asian cities as well as help with the aim of reducing carbon emissions globally, making it a "quick and easy win" for Canada.
"If Prime Minister Trudeau and Hillary Clinton and EU leaders really want to do something about this, there's an opportunity to put more gas into the market versus coal."
Getting a liquefied natural gas exporting project completed would also have the symbolic benefit of showing Canada can still build and permit major infrastructure projects, Johnston added.
Promoting stricter environmental controls could also give a boost to exporting Alberta oilsands crude, even opening the potential of having the Keystone XL pipeline approved, Johnson suggested.
"I still think that maybe you can get a Keystone-XL-for-carbon deal with Hillary Clinton," said Johnston. "Having a proactive leadership position from the Canadian side on carbon will make it a lot easier to have a dialogue."
And given the sensitive politics of mayors and local communities opposing Canadian pipelines, Keystone might actually be easier to negotiate.
"I think that Justin Trudeau might find the politics of Keystone XL easier than the politics of Energy East," he said.
But while better environmental policy could open up export routes, he wasn't so optimistic on oilsands development itself.
The International Energy Agency recently slashed its long-term oil demand profile, removing 10 million barrels a day of "high-cost oil that we're not going to need anymore," he said.
And he doesn't expect oil to recover towards US$50 until sometime in 2017.
In the meantime, Canada needs to do what it can to make its energy projects more appealing.
"Governments have to recognize that we're a marginal, high-cost supplier and everything we can do to make it a better place to invest, whether it's fiscal, environmental, regulatory efficiencies, First Nations, all those will be important."
Sound environmental policy is important but not necessarily at the expense of Canada's energy industry.
"You're going to have to have a carbon angle, you're going to have to have a clean energy angle, but you can also include oil and gas in that deal," he said. "These things are not necessarily mutually exclusive."