All evolution happens in stages. This is also true for energy use. There has never been an energy revolution — a sudden, complete, and fundamental switch from one thing to another — just gradual change as humans incrementally transition to higher-density energy forms (see Figure 1).
With respect to liquefied natural gas (LNG), 1852 was the year the liquefying technique was invented, before natural gas was even part of the global fuel mix. One hundred and sixty-five years later, global-scale LNG use and infrastructure are still in development. In fact, today there is still no global trading hub for price discovery. But world-wide demand for natural gas is growing – a trend projected to continue over the next 25 years. One question is to what extent LNG will help to meet that demand.
In 2016, the world traded 347 billion cubic meters of LNG in a market with weak demand and falling prices. This amounted to about 6% of total global natural gas production. As noted by the International Energy Agency, “unless Asian LNG imports stay on a clear growth trajectory, the scale of growth in global LNG trade will remain limited.”
Of course, Canada aspires to become an LNG player given our massive and largely untapped 31 trillion cubic meters (tcm) of natural gas resources. BC and Alberta are the main beneficiaries of this bounty, together being home to 72% or 22 tcm of Canada’s natural gas resources in the Montney formation.
Alas, Canada has no infrastructure to produce/export LNG, apart from one small importing facility in New Brunswick, the nearing construction Woodfibre LNG Project in Squamish BC, and a few other small domestic industrial supplies and users in BC and Quebec.
Over the past few years, there has been an attempt to kick-start the LNG industry in Canada. At one point, there were 24 applications for LNG facilities across the country, with 18 of these in British Columbia. There are also 35 approved export licenses. But Canada, including BC, struggles with significant and in some cases self-inflicted competitive disadvantages that have slowed development. The glacial pace of policy and regulatory decision-making around major industrial projects is one important hurdle faced by the nascent Canadian industry. At the same time, the United States has more than 110 facilities. As of May 2017, the US had 7 LNG export terminals under construction, plus another 4 approved but not yet under construction. Moreover, the US is already exporting LNG to customers in Chile, Mexico, India, Argentina and China. The picture is unflattering to Canada: while the United States moves ahead to take advantage of market opportunities, we dither and become increasingly preoccupied with process issues.
Despite strong market headwinds, LNG can still serve, for BC and Canada, as an important offset to declining natural gas exports to the United States via pipeline, as well as a way for Canada to help meet global natural gas demand amid the transition to a lower carbon energy future. “The environmental advantages of natural gas, particularly when replacing coal, also deserve more attention from policy makers.” There are opportunities, particularly in the Asian industrial sector, to produce and sell BC-based LNG.
The Business Council remains hopeful that at least one and possibly more LNG projects will advance in British Columbia in the next few years. Success will require a competitive fiscal regime for the upstream and downstream industries as well as a sustained effort to make the regulatory system faster-moving and more efficient. Canada’s (increasingly shaky) reputation as a competitive global energy supplier is at stake.
 Canada’s Role in the Global LNG Market, Energy Market Assessment, July 2017, National Energy Board. https://www.neb-one.gc.ca/nrg/sttstc/ntrlgs/rprt/2017lngmrkt/2017lngmrkt-eng.pdf.
 These perform a variety of services. Some facilities export natural gas from the U.S., some provide natural gas supply to the interstate pipeline system or local distribution companies, while others are used to store natural gas for periods of peak demand.