Power Struggle
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Power Struggle
Is Canadian LNG a Climate Solution? | Mark Cameron on Energy, Exports & Emissions
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Canada’s energy exports are often criticized as a climate liability — but what if they could actually reduce global emissions?
In this episode of Power Struggle, Stewart Muir sits down with Mark Cameron — Fellow at the Public Policy Forum, Senior Associate with BlueSky Strategy Group, and former VP of External Relations at the Pathways Alliance and former Deputy Minister of Policy Coordination with the Government of Alberta — to unpack the findings of a groundbreaking report he co-authored: "Refuel".
Backed by advanced modeling from Navius Research, the study shows that scaling up Canadian LNG exports by 47 million tonnes per year could lead to a net global emissions reduction of 40 to 70 megatonnes annually, largely by displacing coal and higher-emitting alternatives.
Cameron also reflects on:
• Why carbon accounting should be global, not local
• The growing role of Indigenous partnerships in energy development
• How Canada compares to the U.S. on emissions intensity
• What the new federal–Alberta MOU really means for climate and investment
This conversation cuts through the noise and reframes Canada’s place in the global energy transition.
The energy conversation is polarizing. But the reality is multidimensional. Get the full story with host Stewart Muir.
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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Meet Mark Cameron And Refuel
SPEAKER_01Hi, I'm Stuart Muir. Welcome to Power Struggle. Today we're joined by Mark Cameron, who has co-authored a new report with Arash Golshan called Refuel: What Canadian LNG and Oil Exports Could Mean for Global Emissions. Mark, welcome. Thanks very much, Stuart. This report looks at how Canada's energy exports could play a meaningful role in reducing global greenhouse gas emissions while strengthening economic competitiveness. Mark is a veteran public policy leader. I've actually known him for quite a few years in different things he's done. He's got decades of experience across government, industry, and advisory roles. He previously served in senior positions within the government of Canada, including as director of policy and research in the Prime Minister's office, and he was Deputy Minister of Alberta's policy coordination office. Marks held executive and advisory roles in the private and not-for-profit sectors as well. He's worked at the intersection of energy, climate policy, economic growth. He holds both an honors bachelor's degree and a master's degree in political science from the University of British Columbia. And he's widely respected for his ability to bridge pragmatic policy analysis with real-world economic and environmental outcomes. So I'm really glad to see you here today, Mark. I want to hear your views and ideas on LNG that have come out in this new report. There's some other things as well. We've got the MOU as we sit here today. It's still pretty fresh the news that the memorandum of understanding signed between the federal government and Alberta is being understood. There's a lot more we probably need to know, and you've been really at the intersection of all this, so I can't wait to get into some of those issues too. Great. Looking forward to it. Yeah. So as co-author of this new report, Refuel, what Canadian LNG and Oil Exports Could Mean for Global Emissions, what uh got you started on this topic?
SPEAKER_00Over the last couple of years, there's been a real debate as to what would be the impact if Canada was to really start increasing oil and gas exports. There's been some people that have asserted that this would be a carbon bomb, that Canada increasing oil and gas exports would unacceptably increase greenhouse gas emissions. On the other side, some people in industry have asserted that if you increase Canadian LG exports, you're automatically reducing coal use in China and elsewhere, and it would dramatically improve uh environmental outcomes. So we wanted to do some research to show in the real world what would likely happen. And we got uh Navius, Vancouver-based economic modeling firm, to do some research on that and looking at a number of different markets, particularly in Asia, to see what the actual results would be on emissions impact if Canada was to increase its oil and gas exports substantially.
SPEAKER_01What kind of research is needed to get into this?
SPEAKER_00You really have to look at the mix of power in different markets. So you have to look at China, India, Japan, Korea, and look at what mix they have of gas, nuclear, coal, et cetera, to determine what market Canadian LNG is being sold into. And the same thing with Canadian oil. And then you have to look at what the competing sources of fuel are. So whether you're looking at LNG from the United States or gutter or somewhere else and how Canadian LNG stacks up against those other sources.
SPEAKER_01So it sounds like this is providing context rather than simply looking at this molecule here.
SPEAKER_00Trevor Burrus, Jr.: Yeah, we're looking at what the market dynamics would be for a potential increase in Canadian LNG. And we really looked at what would happen if the projects that are currently on the books, so Cedar LNG, LG Canada 2, C Lissons, if these projects got built, what would the impact be?
SPEAKER_01Aaron Powell Now the Prime Minister of Canada, Mark Carney, has been talking about a 50 megaton LNG world where Canada is producing that very large amount of LNG. Is that about what's on the order books now of potential projects, or does that include new things that haven't been scoped out yet?
SPEAKER_00I think our study assumed that there'd be about a 47 uh BCF per day uh uh export. So I think that's uh in the same ballpark.
SPEAKER_0147 BCF, so not megatons, that's a different measurement.
SPEAKER_00Yeah, sorry, 47, 47 million tons per annum. I just looked it up.
SPEAKER_01Aaron Powell If you look at say phase one of LNG Canada, that would be about 12 megatons, to give you an idea. So um that's a large project, and there's a phase two of that that would double it. So that would that alone would be maybe half of that 47.
SPEAKER_00Right. And then
Why Model Global Emissions Impacts
SPEAKER_00you've got cedar, sealessms, wood fiber, so there's a number of other projects that are currently already under under construction or under consideration.
SPEAKER_01Aaron Powell So what's the headline news here of your findings?
SPEAKER_00So the headline news is that if Canada was to increase its LNG exports by that much, and if we are exporting primarily into Asian markets, there would be a net reduction in emissions of about 40 to 70 megatons per year.
SPEAKER_01Aaron Powell Let's break that down. First of all, my question is: how does adding more LNG or natural gas result in fewer emissions? Because I think this is uh probably the counterfactual. How is that possible? You're adding more but getting less.
SPEAKER_00Aaron Powell It's really two reasons. One is that in some of those markets, you're displacing coal. Coal obviously is about twice the emissions uh uh in generating electricity uh as uh LNG. So to the extent that you're displacing coal, you're getting a clear emissions reduction. Now, some people assume that you automatically replace coal with LNG. That's not necessarily true. That depends on the dynamics in different markets, but there is definitely going to be some replacement or displacement of coal. The other question is what other sources of LNG are you displacing? So we looked particularly at U.S. LNG, and Canadian LNG, because it has uh cooler temperatures, shorter shipping times to Asia, uh more electric drive in its production, is actually about 35 percent lower in emissions than LNG that would be shipped from, say, the U.S. Gulf Coast. Aaron Powell, Jr.
SPEAKER_01Pretty good advantage there. Um we often hear about these debates on climate policy as if the only decision makers are in Canada here at the source of production. But surely the destination countries, those importing this fuel, have their own issues, including economic issues, but also environmental and climate issues. Would you agree?
SPEAKER_00Aaron Powell Well, absolutely. This is as much about the markets and the customers as it is about the producers.
SPEAKER_01Aaron Powell It seems as if we we seldom hear that. And I'm just wondering, what if you were to talk to a destination country, and I'm just thinking about who is already getting natural gas from Canada, Japan and Korea, for example, what do you think motivates them to want to do this? I mean, obviously they are paying good money for it, so it must be valuable to them somehow.
SPEAKER_00What I think most of these countries want to have a diversity of supply. They don't want to be entirely reliant on one energy source or one source country, so they don't want to be completely reliant on nuclear or completely reliant on coal, and they don't want to be relying on only one uh producer market. So for a country like Japan and Korea, and they're obviously quite climate conscious as well. They're looking at at all these factors and saying we want to have a certain percentage of LNG, and we want a certain percentage of that have coming from Canada because it's a stable market and it has a particularly low emissions intensity for its LNG profile.
SPEAKER_01Aaron Powell You went to Navius and you outlined probably some of the things you've just been telling us. Um Tell us about Navius. Um, are they uh a firm that does this kind of work for all comers, or are they particularly aimed at a certain outcome?
SPEAKER_00Aaron Powell I would say they do this type of work for all comers. They work for industry, they work for federal and provincial governments, they work for NGOs. What is interesting about Navius is that their methodology is very close to the methodology that Environment Canada uses. It comes from the same computer models that were developed at SFU. So when you get the Navius results, it tends to replicate the results that government is using in its own analysis.
SPEAKER_01There has been for years now a very lively discourse in this. And it's safe to say that you followed that probably with even more interest than I have, but I've certainly uh been watching. I mean, there's there's always a new report coming out, and and your report, Refuel, is is the latest new report to come out, but not the not the only one, even in recent times. Um often it seems as if there is a critique of LNG on environmental and climate and economic issues. Uh so you will hear arguments that the extraction and transportation of natural gas in Canada is somehow uniquely bad and it for that reason shouldn't be developed. You might hear that it is not economic, that there's no there's no market for LNG, because projections in, say, two years from now are that there's going to be a little more LNG than the world needs. Therefore, you shouldn't build an LNG project today that's gonna be ready in ten years from now. And also the climate arguments. Um I mean, from a you know, a consumer point of view, one who's consuming all this information, uh,
Displacing Coal And Higher-Carbon LNG
SPEAKER_01what do you think one should make of this flow of new studies? I mean, it's always good to have more information.
SPEAKER_00Well, I think it depends what perspective you're coming from. If you're looking at this from the point of view of only Canadian or only BC emissions, obviously if you're producing more natural gas, there are going to be emissions in Canada. But climate change is a global problem. CO2 doesn't really know international boundaries. It's not like local air pollution that has a local effect on the health and safety in a community. It's it's a global issue. So looking at carbon dioxide emissions, you really have to look at the impact globally. And if the LNG is not coming from Canada, it's going to come from somewhere else. It's going to come from the US or Gutter or Australia, or it would be displaced by coal or another energy source. So when you look at all those things in balance, it does look like Canadian LNG is a net positive for the climate.
SPEAKER_01Well, it it feels like what you've done here maybe is settle an argument because I've been hearing for years that you no, no, you can only look at things in terms of local emissions. And it's safe to say that in British Columbia we have a almost a decade-long commitment to the idea that you cannot consider the global impact, you can only look at local numbers. But increasingly, the local jurisdictions in Canada are not meeting, no matter what they're doing, the climate targets they had. So I'm just thinking, is there is there a realization happening that it's way harder to bring about this change in reducing emissions than was hoped?
SPEAKER_00Yeah, I think there's beginning to be a change. I mean, one of the challenges is that the way carbon accounting works under the UNFCCC process and so on is it looks at domestic emissions productions. It doesn't really look at the globe the global impacts. And one thing that we talk about in this report is shifting the way some of that climate accounting is done to look at product-based standards. So a country like Canada that has particularly low emissions for its LNG should actually score higher in terms of emissions reduction than other jurisdictions. And if there's going to be more LNG produced, you want it to be produced from the countries that have those higher standards. And similarly with oil, I think Canadian conventional petroleum is pretty close to the global average. Uh Canadian heavy oil in the oil sands is, or at least historically, has been higher than the global average. But those numbers are coming down, and there's now a clear pathway with pathways and other methods to actually make Canadian heavy oil among the cleanest in the world.
SPEAKER_01Let's come back to pathways in a minute. But you mentioned Canadian oil, heavy oil, oil sands product. Um, for years now, in part thanks to the California Air Resources Board, you can see the accounting of the of the uh emissions impact of different crude oils that are imported to California, to the refineries. I don't think anyone else does that. So everyone goes to those numbers to find out. And when you look at Canada and the different blends that come from the oil sands and and uh go into that essentially global market of s of California, what do you learn from that?
SPEAKER_00Well, I think what we've seen is that those emissions, that emissions intensity is coming down. It's come down by about 30 percent in the last 20 years. I mean in the past, Canadian oil sands. Yeah, Canadian oil, yeah, Canadian oil sands was using petroleum coke, essentially coal, to uh generate the steam uh for uh the oil sands production. That is almost entirely shifted to natural gas. And now there's increasing exploration of carbon capture, there's other technologies like solvent-assisted capture that are uh lowering that intensity.
SPEAKER_01We've been hearing recently about the phenomenon of the oil sands, which is that you've got this resource in place. You know exactly where it is, you don't have to drill new wells to find out how you're gonna get at it, because there it is. And that has allowed the industry to invest in continual improvements across all of these different activities. Would you would you think that's a part of why we've been able to get this incredible 30% reduction?
SPEAKER_00Aaron Powell Sure, that's absolutely part of it, because simply for economic reasons, companies are trying to extract more oil with less energy. So every time there's a 1% improvement in efficiency, there's also a reduction in emissions, or at least of emissions intensity.
SPEAKER_01Aaron Powell Well, we've seen in recent times global markets when the uh cost of producing was high, but the value of the resource, you know, during COVID in Canada, the producers did what to respond to those conditions?
SPEAKER_00Aaron Powell They lowered costs. I mean costs have come down significantly in the oil sands. And part of the reason that these costs have come down is that they're able to get more oil with less steam, which means less natural gas is burned and therefore less emissions.
SPEAKER_01Now in the report you talk about Venezuela, and Venezuela is in the news right now. What's the deal with Venezuelan oil and Canadian comparison?
SPEAKER_00Yeah, Venezuela
What Buyers In Asia Want
SPEAKER_00has uh among the world's largest oil reserves, and like Canada, it's producing mostly heavy oil. Uh but their efficiency, their industrial plant is much older, uh, hasn't had the same kind of maintenance that they've had Canada. But they're still selling 750,000 barrels a day of the Venezuelan heavy crude to China. So that is a much higher emissions intensity than Canadian oil sands.
SPEAKER_01Aaron Powell And it's more volume. We're somewhat below that still, right?
SPEAKER_00Yeah, we're probably only sending about 50,000 barrels or so to China now that we have TMX open, but but you know the potential there is for that to increase.
SPEAKER_01And I know the report doesn't really focus on so much on the geopolitics, but just in a snapshot, it's the U.S. that is driving so much of the demand for Canadian oil, and will in future, it's very dependent now on these heavy oil-based refineries that are going to be there for essentially forever, because that's sort of how the refinery world works. What what's what's the play between Canada and Venezuela as a future, as well as a present supplier? Trevor Burrus, Jr.
SPEAKER_00I mean, if the political situation changed and Venezuela was able to sell more into the US market, then the Canadian uh heavy oil, I think, looks much more attractive than the Venezuelan oil just on climate grounds. So to the extent that there is any uh premium or any policy consideration for lower emissions of density, then Canadian oil sands is going to win that competition.
SPEAKER_01Now, just to speculate, suppose that Venezuela was able to become, maybe it would take a decade or two, or what happened overnight, a much bigger supplier to the refineries of the United States, the same refineries that are getting a lot of Canadian oil sands, that would probably have an impact on the price that Canada is able to command. It would become even more constrained if it's landlocked. Would you agree?
SPEAKER_00If it was landlocked, I mean if we have more pipeline access to the West Coast, then we might be able to shift our attention to China or India or Indonesia or other markets.
SPEAKER_01So there is something important in the fate of the Venezuela relationship with the U.S. And what happens to Canada?
SPEAKER_00I think so. I mean, Venezuela, as I say, I think it is the second or third largest oil reserves in the world. So uh a democratic Venezuela that sort of returned to the liberal capitalist economy would be a significant competitor. But I think they would have 10 or 20 years to have to improve their own efficiency to be able to really compete.
SPEAKER_01Aaron Powell I'd like to pivot from this into the MOU reference. But before doing that, I think it would be helpful to share a little more of your background and how you developed the interest. What got you started and what has really become a climate career mark? Was that where you started that you wanted to be in this space?
SPEAKER_00Aaron Powell It started back in the early 2000s. I I did some work with Environment Canada then. Uh then when I was later in the prime minister's office, I was very involved and interested in the climate issues at the time. So this was in the early mid-2000s. Uh later on, I worked with Ontario Power Generation and then with Canadians for Clean Prosperity, which is an NGO that works in the climate and energy space, but tries to take a fairly pragmatic point of view. Uh then I worked three years as a deputy minister in the governor of Alberta in the policy coordination office, which really energy is a big part of the whole policy debate in Alberta, obviously. And then after that, with the Pathways Alliance, working on carbon capture and uh trying to help uh tell the story of the Canadian oil sands and work with the Canadian Oil Sands in an attempt to reduce its own emissions intensity.
SPEAKER_01And today you're based in Ottawa?
SPEAKER_00I'm in Ottawa. I'm working with the Public Policy Forum, uh, doing a few other things as well, working as a consultant with Blue Sky Strategies, but still very involved in the energy and climate debate.
SPEAKER_01Aaron Powell You have a particularly interesting perspective based on where you are and where you've been. Um Do you find yourself explaining Alberta to Ottawa? Is there a need to do that? Is there a deficiency of understanding? Because I know in the West, you're in Vancouver, we, you know, um we don't feel as if people are obsessed with uh BC or Alberta.
Interpreting Studies And Global Accounting
SPEAKER_01And I know, having spent my years in Ottawa, that they're not. Uh it's it's almost an afterthought. What's your thought on that? Am I am I reflecting um a sentiment that you encountered in Alberta?
SPEAKER_00Yeah, I mean, I actually find myself explaining BC, Alberta, and Ottawa to each other, having spent a fair amount of my life in all those three places. Uh and I think there's a fair amount of mutual incomprehension. I think in British Columbia it tends to be ignoring what goes in Ottawa, and Ottawa ignoring what goes on British Columbia, whereas in Alberta it's more of a uh uh a rivalry or anxiety about what Alberta and Ottawa think about each other.
SPEAKER_01It's complicated. Uh do you think it's getting better? Do you think it has potential to improve? Because let's let's face it, those those gaps in understanding might be behind some of the frustrations we've got.
SPEAKER_00Yeah, I mean, I think the MOU is certainly a concrete example of how it can get better. Uh so I think there's the prospect for improvement, but we'll have to see how this MOU plays out over the next several years.
SPEAKER_01Cole's notes on the MOU.
SPEAKER_00Well, the main trade-offs in the MOU was that Canada accepted that Canada should increasingly uh should increase its oil and gas exports, uh, but that Alberta accepted that that should be done on the basis of lower emissions, trying to get to best-in-class emissions, and that both parties agreed to a goal of net zero by 2050. And then concretely, uh the federal government has agreed to fast track a pipeline to uh the West Coast as long as the Indigenous consultation is sufficient and the government of British Columbia has to be consulted as well. Uh, and Alberta has agreed to prioritize and fast track the Pathways Carbon Capture Project. There's other provisions in there: removal of the oil and gas emissions cap, the clean electricity regulations as they apply to Alberta, uh a nuclear strategy, a number of other things. But the big uh trade-off is a pipeline to the West Coast in exchange for lowering emissions through carbon capture.
SPEAKER_01So that's the description that I'm sure those two signatories would prefer the world to see. But there have been critics who have said, well, this is really uh if not a smokescreen, it's it's really a gambit to talk about doing something that they both know might never happen. And it's okay that it will never happen because they will achieve some short-term or medium-term outcome. They don't really need this stuff to happen. What do you say to that criticism?
SPEAKER_00I don't think it's a smokescreen. I think both governments are committed to to seeing these projects happen. But I think that's a long way from those projects being a done deal. Getting to a pipeline is going to be very challenging given the indigenous issues, what the Supreme Court has said in repeated decisions around uh consultation, and just the economics of building a $30, $40, $50 billion pipeline. So I don't think it's a done deal, but I think both governments want to see it done. But I think the point you make is that there's value in the MOU, even if the project doesn't get spilled, because getting rid of the emissions cap, getting rid of some of these other provisions will actually allow for an increase in economic activity.
SPEAKER_01Now, there's an element to this, and it's not just that they've changed regulations, but it's dealt with what I've often heard described in recent years as a pancaking effect, where we saw in the last decade it was just one thing put on top of the other without reforming. Um do you do you agree that's part of what's happening here?
SPEAKER_00Yeah, see several layers of that pancake have either been removed or made less onerous. So we've got the emissions cap has been removed, the clean electricity regulation has been removed, at least for Alberta, the methane regulations have been delayed. So there's several of the things that industry is pointing to uh as part of this pancaking that have really been made much less significant.
SPEAKER_01Now, the former environment minister of Canada, Stephen Guyot, took only a couple of hours to decide after the MOU was announced that he couldn't tolerate being in cabinet, so he left. He didn't quit the party or a seat, as far as I'm aware, this time. Why would he object to a process of sort of purifying, concentrating, improving the regulations for greater efficacy?
SPEAKER_00I think it's always there's a philosophical split within the environmental movement. There are many who would prefer command and patrol regulation as the way of ensuring that emissions are reduced. And there are others that prefer to rely on carbon pricing. And really, this MLU says that carbon pricing will be the primary tool, and many of these other regulations are going to be removed.
SPEAKER_01And this is what conservative environmentalists and climate campaigners, including yourself, have been arguing for years, which is pick the solution and stick with it. Make sure it's a market solution. Right? Absolutely.
SPEAKER_00Yeah.
SPEAKER_01So would you say we're tending back towards that original track?
SPEAKER_00I'd say we're tending back towards it. I think we need to see how these negotiations play out over the next between now and April 1st,
Oil Sands Emissions Are Falling
SPEAKER_00and probably longer than that, to actually get to an agreement on carbon pricing, methane ranks, uh, et cetera.
SPEAKER_01Isn't this maybe what you'd expect if you had a former financier and banker becoming the prime minister of Canada to say we need to get to principles that are proven to be effective and we are market economy?
SPEAKER_00I think it's what you'd expect a prudent business person and banker to do. I mean, obviously, Mark Cardi has a reputation for caring a lot about climate. This was a focus of his when he was the head of the Bank of England. But he he's also a pragmatic businessman and he's realizing that if we're in a change situation in terms of our relationship with the United States and we have to diversify markets, that this is one of the most important areas where we can actually make changes.
SPEAKER_01Do you think he's achieving the recognition for this approach that he would probably wish to have?
SPEAKER_00Not sure. I don't think the jury is still out on that. I mean, I think we see within his own party, we see some people who are critical of this approach. We obviously saw Mr. Gibo resign. Uh and I think there's a number of people in Alberta who are still very skeptical as to whether the government does want to change its approach. So I think we'll have to see over the next number of months and years how this all plays out.
SPEAKER_01Aaron Ross Powell So for years now, we've been hearing in Canada about the problem with competitiveness and productivity. It's a crisis. Break the glass, as the Deputy Governor of the Bank of Canada said. Um how do you think the MOU fits in with that?
SPEAKER_00Aaron Powell I think it does. I mean, oil and gas is one of our most productive sectors in terms of a sector that creates employment, revenue, income, exports. Oil and gas is right at the top of the list. It's been hamstrung to some extent because of this pancaking of regulations, which has prevented people from developing uh further. So this opens up the opportunity for Canada to increase oil and gas production and oil and gas exports by simplifying the environmental regulations. Obviously, there's still a commitment to reducing emissions, but it's now hopefully going to happen through market measures and through building big projects like the Pathways projects rather than prescriptive regulation.
SPEAKER_01So you might say the MOU is going to be a competitiveness solution.
SPEAKER_00I think so. I think oil and gas is probably in the next five or 10 years is the sector that you could expect to see some of the most growth from. I mean, things like critical minerals will take 10 or 15 years to develop new mines. And obviously, our auto sector and some of our manufacturing industries are going to be under real pressure because of what's happening in the US. So in the meantime, oil and gas is really one of the most important sectors to fill the gap in terms of new export potential.
SPEAKER_01It sounds like we don't really need to be spending a lot of time right now talking about whether or not there's a pipeline or if there is, where it goes, because there's a whole bunch of things that would come out of an MOU that don't even depend on that specific outcome, even though that's been discussed and is obviously of great interest to Alberta. And those have to do with reforms in the electricity market, as well as getting oil to markets who want to pay top dollar for it. Can you explain how this figures in? Because you know, you worked on both sides, the electricity, the molecule side of the energy business. Um this is really complicated stuff, and then the regulations just are mind-bendingly complex. Um just try to break it down for us. How does the MOU come into this and improve situations on that front?
SPEAKER_00Well, the clean electricity regulations for starters, I mean, the biggest demand for electricity in Alberta is for industry. So uh unlike Ontario or British Columbia, where there's a higher consumer demand, really in Alberta, a disproportionate amount of electricity is used for industrial purposes. And having to achieve net zero by 2035, as was the previous goal, uh, would have made it very onerous for industry. So that in and of itself helps uh industry competitiveness. And then when you look at the export potential, let's say there's 47 uh million tons of LNG projects already on the books. Uh so just building those projects increases exports to Asia quite significantly. Um, when you look at the potential for existing pipelines for increasing uh output on the current Transmont pipeline or the Trans-Canada mainline uh or the Enbridge mainline, uh that's another probably 400,000 each, so maybe an 800,000 barrel uh capacity that could open up even without a new pipeline. So these regulations, simplifying these regulations and just allowing the existing increases in oil and gas activity to go forward is going to lead to a significant increase in output.
SPEAKER_01On the day of the MOU and the buildup to it, and then the commentary afterwards, when that happened in November 2025, um, the story was about Alberta and Government of Canada. It wasn't about government of Canada NBC or Alberta NBC. Um just wanted to come back to how it was seen in British
Venezuela, TMX, And Market Dynamics
SPEAKER_01Columbia. Um, why are you doing this deal here? It's obvious the things you're talking about would have an impact on uh perceptions of life in BC. Um initially, the premier David Eby had some pretty strong words on it, but a number of commentators f flagged that over ensuing days it seemed to kind of come down in intensity. Um what what do you think the reception was of the MOU in British Columbia and what is its real consequence?
SPEAKER_00Yeah, I mean I'm a foreign British Columbian and grew up there and went to UBC, uh, but I'm not as familiar with the day-to-day realities of BC politics. But uh my assessment is that Premier Ebu was particularly concerned about the tanker ban, but I think he's tried to avoid ruling out pipelines in principle. So there might be some openness to a southern route, to building a third pipeline along the Trans Mountain route, or uh potentially you could get uh a northern pipeline if you could get one of the coastal First Nations to be a willing uh host of the terminal.
SPEAKER_01Now, in British Columbia, there's a lot of ambition to grow the economy with large industrial projects, which under the BCNDP government's uh doctrine on energy should be ideally or just full stop, powered by electricity, not just uh any old electricity, but green electricity, so from hydro and other sources that are not emitting. Um how is that going?
SPEAKER_00I think it's gonna be challenging to build all the projects that people want to build solely using uh hydropower or other non-emitting sources. Now, I think you can reduce emissions intensity. I think more projects can be built using hydro. Uh natural gas can be subject to carbon capture. So I think down the road you can have lower emissions intensity, but you might not be able to have projects that are zero emitting right from the get-go. And I think what British Columbia should be looking at is not whether we're increasing emissions on a gross basis, but how it impacts the world and whether our products are more environmentally friendly and have a lower emissions intensity than products produced elsewhere.
SPEAKER_01Suppose you're faced with an LNG project where the developers of it say, um, we can do this using electricity rather than in almost everywhere else in the world, using natural gas to create the power, because it creates a ton of power. I mean, it's a giant freezer, you're cooling that gas down. So much energy has to be pumped into that. And if you can do it from green electricity, fantastic. You've got an even greener project in Canada. But if there's this bottleneck and projects are being told no, you can't develop that, you might say there's a market for it, you might say it's going to create these jobs, but we don't want it because you don't have a perfect uh zero emissions form of energy to run it, so can't do the project. Um what what would you foresee as the the uh public conversation around such a uh possibility, which maybe is not a purely hypothetical one?
SPEAKER_00I mean, look, I think if there are projects that have ready access with transmission and so on to hydroelectricity, we should absolutely be prioritizing those and building those because on a global basis, those are going to be the cleanest projects in the world. And there is going to be LNG demand. We don't know exactly how much, but there's going to be LNG demand for the next four or five, six decades. And it's important to remember that LNG is not only used for electricity production, but all kinds of chemical production, for fertilizer, for many other uh products that are needed around the world. So if we can produce the cleanest LNG in the world, we're actually doing global climate a favor by building those projects.
SPEAKER_01One of the arguments against uh Canadian LNG, and I suppose it any LNG is that you can't necessarily prove very easily that that LNG is going to displace coal. But you've mentioned food production, you've mentioned manufacturing uses, non-combusting uses where the natural gas isn't actually burned instead of coal being burned. So I've heard this uh situation as being an argument against LNG because it can't be proved. I've even heard it suggested that, well, if you want to make that claim, it can only be accepted if there's a certificate issued that your LNG was used to replace coal. Are we kind of losing the point if we are
The Ottawa–Alberta MOU Explained
SPEAKER_01drawn into that argument that you have to certify?
SPEAKER_00Yeah, I mean, I think that kind of certification can be useful if we were able to document that we have an LNG project that is going to displace coal from a specific facility and get some carbon credit for that. That would be advantageous. We could use that to uh uh help meet our own climate obligations, can potentially lower the cost of emissions reductions. But we shouldn't say that that's a sine qua non. You have to have proof that you're displacing coal. I mean, just getting Canadian LNG into the Asian market is going to reduce the emissions intensity of energy production in Asia.
SPEAKER_01Aaron Powell At a certain level, if a buyer is saying we're buying it because we want to improve the environmental performance of our economy, you can kind of take that at face value, don't you think?
SPEAKER_00Yeah, you can. As I say, I think there's a value in pursuing these kinds of certification criteria under Article VI and trying to get some credit for it. But some people have argued that we can't or shouldn't export LG unless we can prove molecule for molecule that's replacing coal. And I think that's creating an artificial standard.
SPEAKER_01Aaron Powell Well, I would imagine your new report, which I found very insightful in a lot of detail, and you've worked with Navius, that is a highly credentialed, um, widely used modeler in this space. I I I don't I don't think um the debate is now closed because there will be more studies that come out. But I think you've provided something that I felt was missing. And the reason uh I really wanted to get you on right away, I mean it just came out a few days ago, and uh it it seems like a very topical thing. What what impact did this report have in the first couple of days?
SPEAKER_00Well, I think our timing was fortuitous. We've been working on this for a number of months. We didn't know that the MOU would be signed two weeks before. But the way the MOU is structured, that it talks about increasing oil and gas exports while reducing emissions, which many people have said is impossible. This report says, no, that's not impossible. It's actually quite achievable.
SPEAKER_01Aaron Powell You made a passing reference to Pathways Alliance, which you actually know a lot about because you spent some years in Pathways. Um just to um describe it, uh what is your elevator pitch? And I'm sure you've had lots of chances to hone your description of Pathways Alliance. What is it?
SPEAKER_00Aaron Powell The Pathways Project would be the world's largest LNG or not LNG carbon capture and storage project. Uh it would take carbon dioxide from about 14 um oil sands facilities, either upgraders or in situ uh SEGD facilities, would uh sequester the carbon, put it into a pipeline. The pipeline would run from Fort McMurray down to the Cold Lake area, and then it would uh pump it basically a mile underground into deep saline aquifers and permanently store that uh carbon dioxide. And it would achieve roughly 12 uh megatons per year of carbon capture in the first phase, and then it could increase carbon capture from that.
SPEAKER_01From a technology point of view, what's the hard part of doing that chain of actions?
SPEAKER_00I think the hardest part is the capture. There's different kinds of capture technology. The current uh capture technology is what they call an amine-based process. There are new processes being developed, but once the carbon is captured from the flue gas from the facilities, putting into a pipeline and putting underground is actually pretty well known and well understood technology. And Alberta has the Quest project outside of Edmonton, which is already doing this in very similar geological territory. So I think it's pretty well understood that part of the operation.
SPEAKER_01And what is the expensive part?
SPEAKER_00The expense part is the capture as well. It would probably be 75-80% of the capital cost would be on capture. And then the remainder would be on the pipeline and the storage.
SPEAKER_01Okay. So once you've got it, then you're really just doing things that are already done, not necessarily with carbon dioxide pipelines, but Alberta's pretty good at building pipelines. Yes. Already.
SPEAKER_00And there are carbon dioxide pipelines. So Alberta's got the Alberta carbon trunk line already.
SPEAKER_01So it's going to go to the part of Alberta where there's these geological caverns or or pores underground. And a question I get a lot is well, how do you know it's going to stay underground?
SPEAKER_00Well, this is about a mile underground, beneath sort of heavy bedrock. And then it's in deep saline aquifers where it's in a supercritical state, sort of a semi-liquid state. So it's not able to leak or bubble up. I mean, as I say, they've done this for a number of years in the Quest Scott from facility, and they've got extensive monitoring. So there's really no chance of leakage.
SPEAKER_01Now, when Prime Minister Cardi uses the term decarbonized oil, is this what he's talking about?
SPEAKER_00Aaron Powell I think so. It's oil that is produced, but a lot of the production emissions, I mean the most of the production emissions in oil sands come from burning natural gas to generate steam. So you take about 80% of those emissions out of the process.
SPEAKER_01Aaron Powell From the point of view of what you've got, that the oil doesn't look any different as a result of that. The consumer experience of it is not different, right? Aaron Powell Sure.
SPEAKER_00If the net product is the same, I mean important to keep in mind that this is heavy
Regulation Pancaking And Carbon Pricing
SPEAKER_00oil. Heavy oil is different from light oil. Light oil is essentially just used for gasoline, whereas heavy oil is more chemically complex and is used for other things, petrochemicals, asphalt, et cetera, which is why heavy oil refineries are different from light oil refineries. But within the heavy oil class, this could be among the cleanest in the world.
SPEAKER_01You might say that the pathways and what you've been describing as the supply side. So everything being done that can be done to make that oil as decarbonized as it can be, then it goes over to the consumer, the demand side, right? Supply and demand. What's happening on the demand side to contribute to the reduction of emissions?
SPEAKER_00Aaron Powell Well, right now we sell about 80% of Canada's oil sands into U.S. refineries in the Midwest or the Gulf. That's a pretty stable, well-understood market. But we now have access to Asia. And Asia is putting in more of these complex heavy oil-based refineries. So it we now have with the opportunity to sell into those markets. I know it's interesting when the first phase of transmount was built, many people said there's not really demand from Asia because you'd have to bring large ships and then get small ships to transship into the large ships, and it would be too expensive, too far, there wouldn't be interest. But there's already been significant interest from China and India. So if we were able to get larger ships going a shorter distance, there would definitely be interest in those Asian markets.
SPEAKER_01And those markets will continue to adapt how they use the long-chain hydrocarbon molecule, kind of a miracle that we have this incredibly flexible chemical available for human use. One would think that over time people will just get better and better at using that molecule, just like the molecules that make up medicines or any other thing in our daily life in the most efficient, environmentally acceptable way. I mean, isn't that a reasonable projection?
SPEAKER_00I mean, I think it is. Historically, heavy oil has been sold at a discount to light oil because you had all these extra products that were seen as essentially waste. But now people are realizing more ways of using these complex uh chemicals to develop more products. So you have more potential to develop uh uh more complex products from heavy oil than from light oil.
SPEAKER_01It's gonna be interesting to see how it unfolds for Canada. Um just a last couple of questions, Mark. And I just want to go to the bigger picture because you you have been your whole career uh for a lot of years at the intersection of climate policy, you've gone to the cop gatherings, right? You've been involved in the politics of energy in Canada and the the policy development of Canadian economic policy, and you've been an advocate for a particular point of view. Um just just closing out here, a sense of big picture. Uh what can the greatest possible number of Canadians unify around where we can have some common purpose? Because if this MOU is the real deal, and um I actually feel as you do, I I think I think it is. I think it's good intention turned into these threads parallel to go places. Um, you know what what do you think is the acceptance that Canadians are willing to give this if it's real?
SPEAKER_00That's a good question. I think there are a couple of opposed perspectives of Canada. You have those who think that Canada should just maximize the production of oil and gas or uh the development of all of our natural resources without really worrying too much about emissions or climate. Uh and then on the other side, you have those who say we should stop everything because we're facing a global climate crisis. I think where most Canadians are is somewhere in the middle that we should develop our resources, particularly oil and gas, but we should do so in a responsible way. And for a long time, that sensible political point of view didn't really have a home. But I think now with this MOU, there really is a way to see how those two things can go together.
SPEAKER_01Mark, I know you're a dad. Uh what what do you think the next generation or a couple of generations coming up behind us is seeing as their future?
SPEAKER_00Aaron Powell It's a good question. I think young people, first and foremost, they need jobs. This is a terrible time for the Gen Z in terms of unemployment, uh access to housing, uh, all these things that earlier generations took for granted. So to the extent that developing oil and gas and our natural resources can help create jobs, particularly blue-collar jobs for young men, that's really important for the younger generation. But in the longer term, young people still want to
Competitiveness And Near-Term Growth
SPEAKER_00know that we're going to treat our planet responsibly. And I think this MOU really does still have carbon pricing and emissions reductions and carbon capture and some of these goals at his heart.
SPEAKER_01Mark, this has been a fascinating conversation. It's all we have time for. We've been joined by Mark Cameron. He's co-authored a new report with Arash Golshan. It's called Refuel: What Canadian LNG and Oil Exports Could Mean for Global Emissions. So thanks for that contribution to a really important public discourse, Mark. I appreciate what you've done. Thank you very much. If you're watching or listening to Power Struggle today, please share it. We look for your feedback, your comments, we read them all. We want to know what you think of how we're doing here. We're looking at the challenges for Canada, the struggle for power, for energy in our lives, and all of the different dimensions of it. So uh Mark, you've brought, I think, the the the full 360 of what these conversations need to be about. It's not every guest who brings it uh uh as fully as you do. So really appreciate that.
SPEAKER_00No, I appreciate it. Thanks very much for having me on sure. Thank you.
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