goldstein: why natural gas is crucial to canada's economic growth
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if prime minister mark carney is going to fulfil his promise to make canada a conventional and green energy superpower, fossil fuels are going to be instrumental in achieving it.
among carney’s major economic goals are:
doubling canadian exports to non-u.s. markets in a decade.
doubling canada’s residential construction rate to 500,000 new homes per year in a decade.
catalyzing $1 trillion in new foreign investments in five years, to make up for the more than $1 trillion that fled the country during the justin trudeau era from 2015 to 2025, described by rbc in an april report as “the largest capital exodus in canadian history. for every dollar of inward foreign direct investment, two dollars exited.”
doubling the capacity of canada’s electricity grid by 2050.
fossil fuels will help achieve targets
if any of these targets are to be achieved they will only happen because of the use of fossil fuels, most critically natural gas, in the crucial area of electricity generation.
anonymous liberal mps privately complain that carney has betrayed his principles from his pre-political life as the un’s special ambassador for climate change, committed to achieving net zero emissions by 2050, and as the world’s leading corporate spokesman for higher carbon taxes.
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they should ask themselves instead how did the justin trudeau government they supported for a decade become so divorced from reality that even carney, a key economic adviser to trudeau, is now backtracking on some of the signature climate change and energy policies of the trudeau era.
one reason is that without reliable electricity when demand is rising exponentially because of ai data centres, battery manufacturing, critical mineral supply chains and the electrification of society, including the auto sector, all other efforts to grow our economy will fail.
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companies aren’t going to invest in a country that lacks reliable competitively-priced electricity, just as oil investors aren’t going to be interested in a country where it takes 12 years to build a pipeline from conception to operation, as was the case with tmx, and only then because the federal government bought it.
disjointed electricity grid big challenge
of all the economic challenges canada faces, one of the most significant is our outdated, aging and disjointed electricity grid.
disjointed because in canada, jurisdiction over electricity rests primarily with the provinces, each with their own energy mixes, where the necessary upgrading of the system is expected to cost over $1 trillion by 2050.
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that’s why carney has proposed a national electricity strategy, the primary focus of which is to restore the use of natural-gas-fired electricity — a fossil fuel — as a key component of the energy grid.
it overhauls trudeau’s so-called clean energy strategy, which, while not banning natural gas outright, downgraded its vital importance to electricity generation, which made no sense.
natural gas can help during high demand periods
natural gas is needed in electricity generation because it can be fired up quickly to provide base load power to the grid during periods of high demand, unlike wind and solar power that don’t generate electricity unless the wind is blowing and the sun is shining.
ontario, for example, used a combination of nuclear power, which does not emit greenhouse gases, and natural gas, which burns at half the carbon-dioxide intensity of coal, to eliminate coal-fired electricity, which was supplying 25% of its power grid, between 2003 and 2014.
that was the single-largest reduction of industrial greenhouse gas emissions in north america.
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when ontario’s independent electricity system operator was asked in 2021 what would happen if natural gas was eliminated from the electricity grid and replaced with renewable alternatives, as some politicians were advocating, it warned this would lead to blackouts, cost $27 billion and increase hydro bills by an average of $100 a month.
this in an electricity system that was already 90% emissions free — across canada, it’s 80% — meaning canada has one of the cleanest electricity grids in the world.
according to the latest government data, canada’s electricity sector produces only 7.2% of canada’s emissions, which were almost cut in half from 94.4 million tonnes in 1990 to 49.6 in 2024, according to the latest government data.
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