China Sees the Canadian Energy Brand to be of Higher Value
In the next 5 years China’s need for energy is going to be enormous due to its annual economic growth of 6% year over year. Along with its demand for oil and natural gas, China has instituted a long-term plan to reduce its GHG emissions. Canada fits perfectly into that plan as we produce the most clean, ethical, technically advanced oil and natural gas products in the world.
“Natural gas is the perfect clean energy fuel because it produces significantly fewer GHG emissions than coal when burned to generate electricity.” says David Keane, President of B.C LNG Alliance.
Canada is also the world’s 4-largest natural gas producer and the 5-largest exporter of the fuel. While we rank 17th globally in natural gas reserves, China does not have significant domestic natural gas resources and has to import 40% LNG to meet their needs. In 2017 alone, China increased its imports of LNG by 50% over 2016. On a side note, currently China is the 2nd largest importer of LNG behind Japan?!
China’s overarching strategy (2016-2030) is to continue it’s path towards urbanization and industrialization. The Chinese middle class is growing rapidly and now counts in the hundred of millions. This demographic loves cars, big houses, and the consumption of goods. Which translates into a rising demand for energy and natural gas that will not be declining, only increasing until at least 2040.
Industrial production has also ramped up in China, as it’s considered the workshop for the world. With its modern industrial plant complexes and its growing transportation network, China is now the number one oil importer of crude oil on earth. This increased demand is seen as a major win for countries like Canada, which are seen as rock solid with high production and environmental standards, unlike our competitors in the Middle East and Africa.
Along with producing ethically sound oil and gas products, the distance between Canada and China is also seen as an advantage because of the sailing time between our countries – which is shorter than our competitors ports.
While heavily dependent upon oil, China also requires LNG for heating and industrial activities. LNG is seen as a positive energy solution because of its lower GHG emissions. At one point, coal comprised 62% of China’s energy consumption and was considered their dominant fuel supply, however in the last 20 years, that number has fallen by 74% as of 2017.
Their 5 year plan, (2016 to 2020) is to replace coal in non-power sectors through natural gas or electricity. There’s now a big push to get coal out of direct heating. In cities like Beijing there is an effort to use LNG over coal as it offers a huge environmental improvement. Millions of homes in the country’s northern provinces are also being converted to LNG for residential heating but there are still many parts of China where they rely on large centralized heating stations that use coal to produce steam and heat for multiple buildings.
China’s increased demand is expected to account for 1/4 of the Global consumption of LNG by 2040, a rise of of almost 222% , as reported by US Energy Information Administration (EIA)
China sees the Canadian brand to be of higher value. As a country we are seen as safe, with a stable economic, legal and political environment. However, a complaint often heard from our Chinese partners is that surprisingly, they find doing business in Canada complicated because of our complex regulations and environmental rules.
But on the flip side, it is because of those regulations and tough environmental standards that our brand is seen so favourably. In time, the Canadian brand standard will become our competitive advantage for countries that must deal with negative public perception caused by the importation of oil and LNG products.
Currently China would like to import more Canadian oil and natural gas but at this point there is no easy way to do it. While the competition is fierce with Australia and Indonesia actively supplying LNG to China, unfortunately Canada is not expected to become a major LNG supplier until at least 2025 when the West Coast LNG terminals are completed in Kitimat B.C.
The LNG facility in Kitimat is expected to be “Best in Class“ because of it’s combination of energy efficient natural gas turbines and renewable electricity from BC Hydro. When completed, the Canadian LNG facility is expected to emit less 50% GHG emissions than any other facility currently in operation worldwide. As reported by JWN Energy. The LNG Canada project is seen as a significant step not only for Canada’s energy industry but also for the global LNG industry.
“This is the largest single industrial project in Canadian history and is a large part of the future of British Columbia’s prosperity ” said BC’s Liberal leader Andrew Wilkinson
Once Canadian LNG is finally transported to Asia, it’s expected to displace coal consumption to an even greater degree and is projected to reduce GHG by 60 to 90 million tonnes per year, according to LNG Canada. This is good for China but it’s also great for Canada.
The B.C. ministries of Finance and Energy have estimated the LNG facility will generate $22 billion in direct government revenue over the next 40 years. It is also also expected to employ as many as 10,000 people in its construction and up to 950 in full-time jobs.
“We have enough natural gas supply to last 300 years,” said David Keane.
Lastly, it would do well for all Canadians to remember
“those who control the energy, control the wealth” – Warren Buffet
The AiM Land has earned a solid reputation for using leading edge technology to reduce costs and improve communications, which ultimately helps us deliver projects on time and on budget.