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Home » Canada » Jim Prentice sees urgency in grabbing LNG markets – Business – CBC News

Jim Prentice sees urgency in grabbing LNG markets – Business – CBC News


Jim Prentice sees urgency in grabbing LNG markets – Business – CBC News.

There is a currently a window of opportunity open for Canada to set up shipping of natural gas to Asia, says former federal industry minister Jim Prentice, but it will have to move quickly to stay abreast of U.S. competition.

Prentice, now a vice-president at CIBC, says there is some urgency for Canada to adjust to the new reality of the North American energy market, in which the U.S. is a major producer.

“We’ve gone from being a comfortable natural gas producer to the U.S., to now competing with the U.S.,” he in an interview with CBC’s Lang & O’Leary Exchange.

“The changes that have driven all this, the technological changes have taken place so quickly, I think it caught people off guard,” he said.

There is now considered to be a glut of natural gas production in North America because of new technology that allows the capture of shale gas.

‘We are going from being a continental energy producer to being a global energy player. And in order to do that we have to secure market access’– Jim Prentice

Canada US Business 20121119Former Conservative federal cabinet minister Jim Prentice says Canada has a ‘window of opportunity’ on shipping natural gas to Asia. (Fred Chartrand/Canadian Press)

There are severalproposals for liquefied natural gas terminals to export from British Columbia to markets in China, Japan and India, but nothing is near being realized.

Prentice acknowledged that the projects require multi-billion-dollar financial commitments, but says Canada risks losing out to the U.S., which has moved faster on buiiding natural gas shipping terminals.

“People are only going to launch those kinds of projects if they have the certainty they require and that relates to the royalty regime, that relates to the fiscal regime, that relates to their capacity to export. These are all things we’re good at as Canadians, but we need to make sure we’re focused on it,” he said.

His comments came the same day that  Exxon Mobile Corp is predicting worldwide demand  for natural gas will jump 65 per cent over the next 25 years.

Exxon issued its annual review of energy supply and demand, a closely watched report that sets the course for production and alerts policymakers to the changes they might have to prepare for.

Exxon, the U.S. largest gas producer, is preparing for surging demand from developing countries, even as developed countries embrace emissions controls and greater energy efficiency.

Natural gas prices fall

Natural gas prices have been falling as the U.S. production of shale gas surges. That has prompted some Canadian energy firms to reduce their exposure to natural gas.

Prentice said Canada has to be prepared to invest in the opportunities for Canadian energy opening up overseas.

“The world is awash in natural gas, what it doesn’t have is an ample supply of stable nation states that can fulfill contracts over a 50 year period – that’s what’s needed,” he said.

“We are going from being a continental energy producer to being a global energy player. And in order to do that we have to secure market access,” he added.

Prentice said he is optimistic that the correct groundwork is being laid to complete projects such as LNG terminals on the West Coast and the Northern Gateway pipeline. He has urged the federal government to continue to engage with First Nations in communities that will be affected by the projects.

Exxon’s predictions

The long-term outlook by Exxon predicts that world energy demand will grow 35 per cent by 2040.

“People want a warm home, a refrigerator, a TV, someday a car, and a cellphone,” said William Colton, Exxon’s vice-president for corporate strategic planning.

Among its predictions:

  • Oil demand will rise 25 per cent by 2040 as it will remain “the fuel of choice for transportation.”
  • Deepwater, oilsands and shale oil production will be necessary to meet demand.
  • Demand for coal will rise until 2015, but fall by 2040 as countries abandon coal-fired power.
  • Nuclear power will see “solid growth.”
  • Supplies of renewable energy will increase nearly 60 per cent by 2040, led by increases in hydro, wind and solar.

Exxon prefaced its long-term outlook report with a call to lift the U.S. ban on exporting domestic crude oil, which dates back to the 1973 oil crisis.

Ken Cohen, Exxon’s vice president of public and government affairs, told the Wall Street Journal the ban no longer makes sense because the U.S. is “dealing with a situation of abundance.”

 


1 Comment

  1. My posted comment:
    It appears that Mr Prentice has not remained abreast of production developments in the shale gas business (or perhaps he has and has chosen to remain silent on the facts that would undermine his position).

    Shale gas wells are showing anything but huge production increases; in fact, the large shale plays in the States, such as the Bakken and Eagle Ford sites, are both showing quick depletion rates. These wells exhibit significant production at the start but then quickly peter-out, requiring more and more wells to be drilled just to maintain production rates.

    If they’re lucky, these large shale plays might produce for another half-dozen to a dozen years but then they’re toast…and these two large shale plays make up almost two-thirds of American production.

    In addition, oil and gas giants like Exxon will never admit to these facts since it would undermine capital investments, but a number of players are exiting the shale business because of this.

    Finally, as a banking executive, he has a huge vested interest in his suggestions as it is the financial institutions that help to fund these initiatives.

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