Gwyn Morgan: Net zero is fantasy. Net reductions are easy — with LNG

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At their meeting last month G7 leaders agreed to a greenhouse gas emissions target of “net zero” by 2050. That would require phasing out all fossil fuels. But how? The common reply is “putting a price on carbon,”, i.e., carbon taxes. But unless there’s a viable alternative, taxing something people can’t do without only makes them poorer. Policy makers seem to believe that “green power,” meaning wind and solar, is the answer. But despite hundreds of billions of dollars having been spent on them, wind and solar currently account for only 3.3 per cent of world energy supply.

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That fact may come as a surprise, since the heavily subsidized wind and solar industry claims a much higher “capacity” number, defined as the electricity that would be generated when the sun is shining and the wind is blowing everywhere. But it’s hard to imagine those conditions existing at any time, let alone during cold, calm Canadian winter nights when power is needed most. Ontario consumers learned this first-hand after large-scale investment in costly windmills and solar panels sent their electricity rates from being among the lowest in North America to among the continent’s highest and driving the province’s manufacturers south to the welcoming arms of Georgia and the Carolinas.

Given these realities, it’s hard to understand how G7 leaders could agree to base the energy security of their citizens on a plan that defies the laws of physics – which, unlike the laws they deal in, are unchangeable and irrefutable.

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What about other alternatives to replace the 84 per cent of energy supplied by fossil fuels? At the moment, hydro accounts for 6.4 per cent of world energy supply, nuclear for 4.3 per cent and geothermal and biofuels just 1.7 per cent. Hydro is a zero-emissions energy source but most of the world’s rivers are already dammed. Nuclear is also a zero-emissions energy source with huge growth potential, but new plants are very capital-intensive and often face strong public opposition. It’s hard to see how either of those sources could have a material impact in the foreseeable future.

Besides the laws of physics, G7 leaders must face another reality.  The U.S., U.K. and E.U. produce just 27 per cent of global emissions. Most of the other 73 per cent comes from Asian countries. Emissions from China alone equal the G7’s 27 per cent. And despite President Xi’s virtuous green rhetoric, his country built three times more emissions-intensive coal-fired electrical capacity in 2020 than the rest of the world combined. Meanwhile, to further their green energy fantasy, Prime Minister Trudeau and his G7 counterparts plan to further cripple their economies, which are already uncompetitive with China.

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Should we give up hope of reducing greenhouse gas emissions? Although it’s clear that “net zero” is simply not on, a substantial reduction is possible. And the biggest opportunity for emissions reduction lies in a fossil fuel that is in practically unlimited supply: natural gas.

Burning coal to generate electricity causes 40 per cent of global fossil fuel emissions. Converting coal plants to natural gas reduces emissions from those plants by almost 50 per cent. Canada can, as the saying goes, “do good by doing well” by exporting our bountiful natural gas supplies in the form of LNG (liquefied natural gas) to replace coal. The LNG Canada project in Kitimat BC will reduce Chinese CO2 emissions by 60-90 million tonnes per year, the equivalent of shutting down 20-40 coal-fired power plants. That’s also the equivalent of taking some 80 per cent of Canada’s cars off the road. This country has enough gas to supply many more LNG projects. A decade ago, 20 projects were proposed. But Canada’s byzantine regulatory approval process, which has earned our country its “can’t get anything done” reputation, saw sponsors giving up after spending billions of dollars in preparation and regulatory costs.

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Oil used for ground transportation and shipping contributes approximately one third of global emissions. Converting vehicles and ships to natural gas cuts greenhouse gas emissions by up to 25 per cent. And that’s already happening. There are more than 20 million natural gas-fueled (NGV) passenger vehicles, heavy trucks and buses in the world. Paradoxically, few of those are in the very G7 countries that vow to achieve “net zero.”  Asian countries, led by China, India and Pakistan, account for the majority of NGV’s, though probably because they’re more concerned with reducing dangerous levels of smog rather than greenhouse gas emissions. Iran has the world’s second largest NGV fleet, which seems surprising until you consider that switching vehicles to natural gas allows it to export more oil.

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The marine shipping industry is well advanced in replacing high-polluting bunker fuel with LNG. Here in Canada, BC Ferries has taken delivery of several new LNG-powered vessels and has also converted older vessels to natural gas.

Rather than ravaging the living standards of Canadians with carbon taxes and wasting public funds subsidizing green power, Ottawa should commission an LNG export task force made up of government, industry and directly affected populations (including First Nations) to streamline the LNG export project approval process. It should also support the creation of a nation-wide filling station network for natural gas vehicles and eliminate fuel taxes for cars powered by natural gas.

It’s time for a Canadian emissions reduction strategy based on facts and economic opportunity, not fantasy.

Gwyn Morgan is a retired business leader who has been a director of five global corporations.

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In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

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