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Strong bilateral ties, innovation and diversity key for booming sector
PHOTO: LNG CANADA
As countries around the world confront the realities of climate change, global cooperation is key to developing solutions that will result in environmentally and socially responsible energy that is clean. This was the central topic of a virtual forum held on November 19–20.
Titled The Canadian Energy Forum — Advancing the Canada–Japan Energy Security Partnership, the event drew speakers from both sides of the Pacific representing a wide range of perspectives. The moderators were Counsellor (Commercial) and Senior Trade Commissioner David Bostwick and First Secretary (Commercial) and Trade Commissioner Mark Mylvaganam, both from the Embassy of Canada to Japan.
Supporting partners for the occasion were the Japan Oil, Gas and Metals National Corporation (JOGMEC), the provinces of British Columbia and Alberta, as well as the Canadian Chamber of Commerce in Japan.
The forum began with remarks from Ambassador of Canada to Japan Ian Burney, who reflected on the major issues of the year, while acknowledging the strength of bilateral ties: “As you all know, 2020 has been a difficult year. But I’m pleased to be able to say that the Canada–Japan relationship has not only held up well during this challenging period, but has actually never been stronger. And nowhere is the importance and potential of Canada’s partnership with Japan clearer than in the energy sector.
“As you all know, Canada is one of the top energy producers in the world, with 10 per cent of the world’s oil reserves, and enough natural gas to sustain production for the next 300 years. And with Canadian natural gas prices being amongst the lowest globally, Canada is well positioned to produce and supply liquefied natural gas markets.
“Beyond the attractive fiscal and political stability that we offer, Canada has a decided geographic advantage over its competitors. Indeed, we are only eight to 10 shipping days to Japan from our north and west coasts. In addition, the construction of the C$40 billion [liquefied natural gas] Canada project, the Coastal Gas Pipeline and the Trans-Mountain Expansion have all continued uninterrupted despite the Covid-19 pandemic. This is a clear demonstration of Canada’s resilience and its determination to move forward with the development of our energy infrastructure.”
“For the global clean energy transition to be successful, innovation and clean energy technologies will be critical.”
Burney’s remarks were followed by a panel discussion moderated by Tracy Reynolds, minister (commercial) and senior trade commissioner at the Embassy of Canada to Japan. The members of the panel were:
Tupper highlighted the ways in which Canada and Japan are reaching for a common goal: “As countries around the world face the challenge of transforming how they produce and use energy, we also have to ensure it remains accessible, affordable and secure. But while Canada is a major energy producer, we’re also committed to tackling climate change, which is driving the change in energy systems around the world.
“As many of you will know, Canada has committed to reaching net zero emissions by 2050. And we’re pleased that Japan recently announced their own commitment to achieving this very same target. The shared goal is ambitious, and Canada is delighted to have a partner like Japan with whom we can collaborate to achieve it.
“For the global clean energy transition to be successful, innovation and clean energy technologies will be critical,” he added. “Canada is investing nearly C$1.4 billion in Canadian clean tech innovation across all energy sectors — innovations that will drive investment, increase the energy sector’s competitiveness and help us meet our energy transition goals. In fact, four of the world’s largest-scale demonstration projects in carbon capture, use and storage are in Canada.”
He also highlighted the role that nuclear energy can play in clean energy, pointing the potential, in a clean energy mix, of small modular reactors, such as those produced by GE Hitachi Nuclear Energy.
James pointed out the longstanding connection between Japan and Alberta in the energy industry, which started with Japan Petroleum Exploration Company Limited’s investments in Japan Canada Oil Sands Limited and the Keystone pipeline project back in the 1980s. The connection continues to this day, in partnerships such as the enterprise involving AltaGas and Astomos.
In addition, he detailed the province’s Natural Gas Vision and Strategy. “It lays out the long-term vision for the development of Alberta’s natural gas resources across the entire value chain that includes LNG off the west coast and potentially off the east coast of Canada. It also encompasses hydrogen opportunities, petrochemicals and advanced plastics recycling within a plastic circular economy. We take very seriously the need to look at a zero-waste global effort, including the Oceans Plastics Charter that has been signed here in Canada, which Alberta is party to. These pathways are very complementary to Japan’s 2050 net zero ambitions and we believe leveraging our existing carbon capture and storage projects allows significant environmental and economic partnerships with Alberta, Canada and our colleagues in Japan.”
Mihlar explained that the close ties between British Columbia and Japan led to the approval of the landmark LNG Canada project. “The Memoranda of Understanding that we have with the Ministry of Economy, Trade and Industry (METI) as well as JOGMEC demonstrates the kind of relationship that we have with Japan. In fact, the MOU between the province of British Columbia and JOGMEC played an instrumental role in securing the positive final investment decision for LNG Canada.”
He also reinforced the importance of coastal Canada in supplying energy to Japan. “Whether it’s the partnership between Idemitsu and AltaGas, Mitsubishi’s participation in LNG Canada as well as the foundational agreement signed by Astomos for cargoes from Wrigley Island in [the port city of] Prince Rupert to [Japan’s joint venture power generation company] JERA and Tokyo Gas for cargoes from LNG Canada, it is clear that the west coast of Canada is going to play a big role in securing energy supplies for Japan.”
A topic touched on by all three panellists was the inclusion of Canadian First Nations in energy projects throughout Canada. As Mihlar pointed out, in 2019 the government of British Columbia passed legislation to implement the United Nations Declaration on the Rights of Indigenous people. “With this new law, indigenous people are going to become part and parcel of the decisions that affect them, their families and their territories.”
Tupper then pointed out that the resources sector is already the largest employer of indigenous people in Canada, with more than 10,000 sector jobs being in the oil and gas industry.
Later in the forum, these points were reinforced by representatives from Canadian First Nations. Harold Leighton, chief councillor of the Metlakatla First Nation explained how their partnerships with cities and companies involved in the Canadian energy sector have helped bring unemployment in the community from 75 per cent to under 12 per cent.
Karen Ogen-Toews, chief executive officer of the First Nations LNG Alliance and a member of the Wet’suwet’en First Nation, spoke about her dedication to helping inspire more First Nations to consider and engage in discussions with industry and government around the possibility of resource-related opportunities.
Crystal Smith, chief councillor of the Haisla First Nation, whose support was key to the establishment of the LNG Canada project, said that the project goes beyond the financial benefits: “The relationship between the LNG Canada coastal gas link and our nation isn’t necessarily all about the monetary compensation. It’s what the compensation is able to provide for our community, and that speaks to the strength of our goals to regain our identity as First Nation people.”
During the rest of the forum’s proceedings, developments and details from companies and other organizations were shared. Brian Friesen, vice president of trade development and communications at Prince Rupert Port Authority spoke about how the coastal city in British Columbia benefits from being on the deepest natural harbour in North America, an employment makeup that reflects the full diversity of the region’s communities, as well as a direct link to the Canadian National Railway (CN), which is a significant contributor to the region’s success.
Further, Prince Rupert’s location makes it the closest North American port to Asia, offering transit times up to three days shorter than other ports on the west coast.
James Cairns, senior vice-president of rail centric supply chain at CN, described how the transportation service “offers rail carload, intermodal, last mile trucking, international freight forwarding, warehousing and distribution services with a network reach that connects three coasts — east, west and Gulf.”
He encouraged attendees to think of CN as the “rolling pipeline that connects Canadian energy production,” while pointing to recent investments they have made to improve connections between the areas of Canada that are key to the production and transport of energy products.
He was followed by Dan Woznow, senior vice-president of energy exports at AltaGas, who explained how one of the key areas of business for the Alberta-based company is the midstream natural gas sector, concentrated in western Canada. The company processes about 6.4 billion cubic metres a day of natural gas at 12 facilities in Alberta and British Columbia.
While they do not drill for natural gas themselves, they work with third party producers to supply the raw product, and their connections with these producers is allowing them to expand their reach beyond North America and into global markets, particularly in Asia.
Although they’ve only been operating in the Japan market for 18 months, in 2020 they supplied close to 10 per cent of the liquefied propane gas (LPG) that the country imports.
Speaking on behalf of Astomos Energy Corporation, President Tsuyoshi Ogasawara explained that the company maintains a fleet of LPG vessels, comprising three proprietary vessels and 18 liner vessels, which import LPG from supply points around the world.
He also touched on the agreement between Astomos and AltaGas, which will diversify its supply of LPG and strengthen ties between Canada and Japan through energy supply.
Bryan Cox, president and CEO of the Canadian LNG Alliance, which represents a wide range of projects in the country, spoke about the influence that the LNG industry can have on the Canadian economy. He said he anticipates that annual investment in LNG between 2020 and 2064 could average more than C$11 billion, to exceed C$500 billion over the period. Combined, the projects could create more than 96,000 jobs and generate C$6 billion in wages.
Providing an update on the landmark LNG Canada project was Susannah Pierce, director of corporate affairs at the company. She explained that 2021 would see LNG berth construction, marine works and dredging carried out, while the main construction would take place between 2022 and 2024. She also highlighted how a premium residential facility, Cedar Valley Lodge, has been built for workers currently employed at the facility. Given the Covid-19 pandemic, seeing that workers don’t have to take shuttles back into Kitimat, the closest city, helps to maintain the health and safety of LNG Canada employees and the neighbouring communities.
“Nowhere is the importance and potential of Canada’s partnership with Japan clearer than in the energy sector.”
Producers (CAPP) represents both large and small companies throughout Canada that explore for, develop and produce natural gas, natural gas liquids, crude oil and other oils. Mark Pinney, CAPP’s manager of markets and transportation, mentioned three primary ways that CAPP has been helping the industry collaborate with the government to address the impact of Covid-19. The association is making sure that supply chains stay intact, helping maintain liquidity and preserve jobs, as well as working closely with government agencies to ensure regulatory efficiency in areas such as infrastructure development.
Satoshi Asawa, executive vice president of JOGMEC’s oil and gas upstream business, explained that this government organization’s mission is to ensure Japan’s energy security. He said that, while Japan depends heavily on the Middle East for its oil and gas supply, Canada is increasingly becoming a steady source. Asawa also noted that, with regard to LNG, JOGMEC has three key goals: diversifying supply, establishing market transparency and reliability, as well as LNG market expansion in Asia.
Closing the forum was Shinichi Kihara, deputy commissioner for international affairs at METI’s Agency for Natural Resources and Energy. He spoke to the circumstances that require use of a virtual format and the role that Canada and Japan can play in a green future. “Unfortunately, we cannot meet in person due to Covid-19. But, thanks to technology, even though we are actually so far apart, we can share common issues and converse with each other. Japan and Canada are like-minded countries with common values, and energy cooperation between our two countries will become even more important in the future, for the realization of a carbon-free society for the world at large.”
