Study: Reaching Canada’s LNG goals could generate $1 trillion

Key Takeaways:

• Reaching 100 million tonnes per annum in LNG exports by 2050 would generate nearly $1 trillion in capital investment, $888 billion in GDP, and roughly 250,000 jobs per year.
• Associated natural gas liquids output would nearly triple by 2050, adding $300 billion in value and supplying domestic condensate to support up to 1.2 million barrels per day of oilsands production.
• S&P Global cautions that pipeline permitting delays, high construction costs, and a 3.1-gigawatt B.C. power requirement threaten Canada’s ability to capture global market share before the current investment window narrows after 2027.

The Whole Story:

Achieving the federal government’s target of exporting 100 million tonnes of liquefied natural gas (LNG) per year by 2050 would attract nearly $1 trillion in total capital investment and support almost 250,000 jobs annually across Canada, according to a new study released by S&P Global Energy.

Supported by the Calgary Chamber of Commerce, the report estimates that scaling export capacity from a baseline trajectory of 36 million tonnes to 100 million tonnes per annum would position Canada as the world’s third-largest LNG exporter. Over the next quarter-century, the expansion would contribute $888 billion to national gross domestic product—equivalent to $50,000 per household—while generating $1.6 trillion in business revenues, $151 billion in tax revenues, and $405 billion in labour income. Roughly 20% of those economic and employment gains would accrue outside Western Canada’s producing provinces.

Researchers point to Canada’s low-cost resource base—including 375 trillion cubic feet of gas economic below approximately $4.20 ($US3) per million British thermal units—and dual-coast access free of maritime chokepoints as structural advantages. Canada’s Montney formation alone could supply the incremental nine billion cubic feet per day of feedgas required to meet the export target. Meanwhile, associated natural gas liquids (NGLs) such as condensate, propane, and butane would nearly triple in output by 2050, generating $300 billion in incremental value and providing domestic diluent to support up to 1.2 million barrels per day of oilsands production at peak output in 2040.

On the environmental front, the study notes that Canadian export projects carry a 55% lower greenhouse gas intensity than comparable international developments due to electric-driven compression and low methane emissions. Displacing coal, oil, and higher-emission gas in Asian markets could avoid 44 million tonnes of carbon dioxide equivalent annually, roughly equal to removing 10 million gasoline-powered vehicles from the road.

Despite those fundamentals, S&P Global warns that Canada faces a narrow investment window as global LNG supply is projected to surge by 50% over the next five years, sharply reducing commercial opportunities after 2027 until the early 2030s. Meeting the 100-million-tonne goal requires a 2.5-fold increase in upstream and infrastructure investment, a tripling of drilling activity, and roughly 3.1 gigawatts of new electrical generating capacity in British Columbia—double the province’s pace of net capacity additions over the past decade.

Daniel Yergin, Vice-Chairman of S&P Global, stated that Canada’s current standing in global energy falls short of its resource and geographic strengths, adding that the country must move quickly to overcome regulatory and cost hurdles. The study highlights that Canadian pipeline permitting takes 27 months longer than in Texas, construction costs run 160% higher, and nine major fiscal policy shifts over the past two decades have weighed on investor certainty.