2020 – Energy and Canadian First Nations
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ENERGY AND CANADIAN FIRST NATIONS LNG - AN INTRODUCTION BC First Nations Energy and Mining Council 2020 1 1 World Energy consumption Billion Tons of Oil Equivalent Source: bp.com 2 World Energy Consumption World energy demand is increasing. Global economic growth, led primarily by China and India, is driving increasing prosperity in developing economies. Global growth is partly supported by population growth with world population increasing by around 1.7 billion to reach nearly 9.2 billion people in 2040, and the emergence of large and increasing middle classes. With an increasing middle class comes a rising standard of living. It’s this standard that drives energy demand. In the next 20 years, demand for all forms of energy will rise, led by China and India. 2 Canada and Energy 3 Canada and Energy Canada is sell positioned to provide multiple forms of energy to growing world economies. Canada is rich in oil, natural gas, coal, hydroelectricity, and nuclear energy options. Wind, solar, geothermal, biomass, biofuels: Increasingly, these forms of energy are increasingly part of Canada’s energy mix with export opportunities. Oil: Canada has the third-largest oil reserves in the world. Of the 170 billion barrels of Canadian oil that can be recovered economically with today’s technology, 165 billion barrels are located in the oil sands. The International Energy Agency (IEA) expects that Canada will be third in oil production growth until 2040, after Brazil and Iraq. Natural Gas: At current rates of consumption, Canada has enough natural gas to meet the country’s needs for 300 years, with enough remaining for export. The export of natural gas using proposed liquefied natural gas (LNG) facilities on Canada’s West Coast would enable Canada to ship its abundant energy resources to markets in Asia. Coal: Coal is Canada’s most abundant fossil fuel, with 6.6 billion tonnes of recoverable reserves. Hydro: Hydro is the largest source of electricity generation in Canada, providing more than 60% of Canada’s total electricity with an installed capacity of about 85,000 MW. This makes Canada the second largest generator of hydroelectricity in the world, after China. 3 4 For the most part, nearly ALL of Canada’s oil and natural gas exports go to the United States. And often, the USA receives Canadian oil and natural gas at a discount due to being the sole customer. Diversifying markets for Canada’s oil and natural gas production is vital to ensure Canada receives full value for its natural resources. This supports Canadian jobs, government revenues and contributions to Canada’s economy. The largest non-USA energy market is Asia. With Asia’s growing population and rising living standards, Canadian energy would find ready customers in countries like China, Japan, India and southeast Asia. This issue is how to get Canadian energy to Asia. 4 5 First Nations in BC have a potential huge role in Canada’s energy exports. Any energy exports to Asia MUST pass through the traditional and unceded territories of First Nations. This is why there has been high levels of consultation and negotiation with First Nations in all areas of energy projects from production, to pipelines, to transmission lines, to LNG facilities and to marine transport. 5 Energy Literacy BY FIRST NATIONS for First Nations 6 Energy Literacy by First Nations for First Nations For many First Nations, there is a need for unbiased, technical information about proposed energy projects. The First Nations Energy Mining Council (FNEMC), as a creation of the BC First Nations Leadership Council, has been mandated to assist First Nations with energy information to assist impacted Nations make informed decisions. FNEMC does NOT advocate for specific energy projects. Rather, by providing Nations with requested energy literacy information, communities may be better able to engage with project proponents and reach outcomes that are in the Nations’ best interests. 6 ENERGY SOURCES Natural Oil Coal Renewable Hydro Nuclear ^ Gas Crude & LNG Geothermal Condensates NG Liquids Biomass Other * Wind Solar * Other oil liquids includes biofuels, Gas-to-Liquid (GTL) Coal-to-Liquid (CTL) and refinery gains ^ None in BC 7 Energy Information by First Nations for First Nations Canada has many different energy sources, each of which could impact First Nations. In some cases, First Nations may decline to participate in an energy project for a variety of reasons. Other First Nations may decide to participate if the projects offer their communities a net-benefit. To achieve a net-benefit, Nations need to well-versed on relevant sector information. In time, BC First Nations Energy and Mining Council will offer First Nations a range of technical information modules in all of Canada’s key energy areas. 7 ENERGY SOURCES Natural Oil Coal Renewable Hydro Nuclear ^ Gas Crude & LNG Geothermal Condensates NG Liquids Biomass Other * Wind Solar * Other oil liquids includes biofuels, Gas-to-Liquid (GTL) Coal-to-Liquid (CTL) and refinery gains ^ None in BC 8 Energy Information by First Nations for First Nations Canada has many different energy sources, each of which could impact First Nations. In some cases, First Nations may decline to participate in an energy project for a variety of reasons. Other First Nations may decide to participate if the projects offer their communities a net-benefit. To achieve a net-benefit, Nations need to well-versed on relevant sector information. In time, BC First Nations Energy and Mining Council will offer First Nations a range of technical information modules in all of Canada’s key energy areas. 8 LNG - AN INTRODUCTION 9 IMAGE: cherezoff/Shutterstock LNG - An Introduction IMAGE: cherezoff/Shutterstock 9 World Energy Demand 10 World Energy Demand World energy demand is increasing. Global economic growth, led primarily by China and India, is driving increasing prosperity in developing economies. Global growth is partly supported by population growth with world population increasing by around 1.7 billion to reach nearly 9.2 billion people in 2040, and the emergence of large and increasing middle classes. With an increasing middle class comes a rising standard of living. It’s this standard of living that drives energy demand. In the next 20 years, demand for all forms of energy will rise, led by China and India. 10 Source: CAPP 11 Canada and Natural Gas: Canada has vast amounts of natural gas, enough to service domestic needs and to export to overseas markets. Canada’s natural gas comes mainly from the Western Canada Sedimentary Basin (WCSB) in British Columbia, Alberta, and Saskatchewan. Source: CAPP 11 Asia Market Potential for LNG Source: BC Government SOURCE: BC Government 12 Asia Market Potential for LNG The world’s largest LNG market is in Asia. Nearly 3/4 of all world LNG is sold is in Asia. BC one of Asia’s closest potential suppliers of natural gas. At the moment, BC supplies ZERO natural gas to Asia. To serve the Asia market, there are currently four active LNG projects in BC. 12 BC LNG projects LNG CANADA 1 26 MTPA / $25-40 BILLION KITIMAT LNG 2 10 MTPA / $15 BILLION 1 2 3 WOODFIBER LNG 2.1 MBTA / $1.6 BILLION TILBURY LNG 4 3 3.5 MTPA / $3 BILLION 4 13 BC LNG Projects There are currently four active LNG proposals in BC. In 2015, there were 18 LNG plants proposed for the province. LNG CANADA 26 MTPA (million tonnes per annum) / $25-40 BILLION KITIMAT LNG 10 MTPA / $15 BILLION WOODFIBER LNG 2.1 MTPA / $1.6 BILLION TILBURY LNG 3.5 MTPA / $3 BILLION 13 Planned BC LNG projects LNG CANADA 1 26 MTPA / $25-40 BILLION KITIMAT LNG 2 10 MTPA / $15 BILLION $58 billion1 2 3 WOODFIBER LNG 2.1 MBTA / $1.6 BILLION 4 TILBURY LNG 3.5 MTPA / $3 BILLION 3 4 14 Planned BC LNG Projects Total anticipated cost for these four plants: $58 billion. For comparison, what can else could you buy for $58 billion? 14 Trans-CANADa RAILWAY $0.6 Billion(2020 dollars) 97 times CreativeNature.nl/Shutterstock https://en.wikipedia.org/wiki/Canadian_Pacific_2816#/media/File:Canadian_Pacific_2816.jpg 15 Amy Johansson/Shutterstock Trans-Canada Railway The Canadian Pacific Railway was to cost $25 million in 1881 or $634 million in 2020 equivalent dollars. If once could build the same railway today using today’s money, you could build 97 Trans-Canada railways. https://www.in2013dollars.com/ IMAGE: https://en.wikipedia.org/wiki/Canadian_Pacific_2816#/media/File:Canadian_Pacific_2816.jpg 15 2010 Olympic games $8.3 Billion(2020 dollars) 7 timeshttps://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpg 16 https://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpgAmy Johansson/Shutterstock 2010 Olympic Games A more modern example would be the 2010 Vancouver Olympic Winter Games. In 2010, the games cost just over $7 billion, or $8.3 billion in 2020 equivalent funds. In today’s terms, you could host seven Olympic Games for the cost of four LNG plants in BC. IMAGE: https://en.wikipedia.org/wiki/List_of_Olympic_women%27s_ice_hockey_players_for_Canada#/media/File:Canada2010WinterOlympicswomengold.jpg 16 Why LNG? Why now? nikkytok/Shutterstock 17 Liquified Natural Gas, (LNG) is not a new fuel. It already trades in vast quantities around the world. It has traded for over 40 years and is shipped around the globe. In order to understand why it is proposed for BC, we need to examine why the LNG proposals are happening now. And, what is driving the $58 billion proposals. The two key reasons are world population growth and increasing individual prosperity. Image: nikkytok/Shutterstock 17 World Supply & Demand 1 Liquefaction 5 Value Chain 2 Marine Transport 6 Exploration & Production 3 Storage & Regasification 7 Pipeline 4 Distribution 8 18 World Supply and Demand First Nations are now in the middle of energy ‘super highway’ that connects the energy supplies in Alberta and the BC northeast to energy buyers in Asia and beyond.