Why natural gas is key to lowering Canada’s carbon footprint

Harvard’s Michael Porter argues that cutting coal in favour of natural gas is the most pragmatic solution at the moment

How to Build A Greener Business

Natural gas storage tanks

Natural gas storage tanks (Prasit/Getty)

While the Leap Manifesto—an urgent plan to shift Canada’s economy away from fossil fuels—proved a divisive force at the NDP’s national convention in Edmonton earlier this month, a prominent voice at the Globe 2016 green business conference in Vancouver in March argued there is no cause for conflict: Canada can have its competitive advantage in hydrocarbons and eat it too.

Economist Michael Porter, director of the Harvard Business School’s Institute for Strategy and Competitiveness, lauded Canadians for their pragmatic attitude—neither denying climate change nor the need for pipeline capacity—in contrast to the “holy war” he sees going on in the U.S. “I feel something different and better is happening here,” he told delegates.

Key to reducing emissions quickly, in Porter’s mind, is the aggressive use of natural gas to drive coal out of the energy system. “We’re going to need a lot of natural gas if we are going to make the transition to renewable energy,” he said. And not just for domestic consumption, either. Energy pipelines and LNG exports should be a big part of this country’s climate policy, he said. (Porter’s full report is available here.)

In an interview with Canadian Business, Porter said that diversification of Canada’s export markets for energy is still needed, because unconventional energy sources such as shale gas and tight oil have turned the United States from a net energy importer into (potentially) an exporter. “I think that there’s a gigantic global market, particularly for gas,” he said, noting that Canada is the only nation other than the U.S. to have a competitive advantage in unconventional energy. “I also think Canada can become an energy technology innovator, exporter and investor.”

So where does he think the opportunities are for Canadian companies? “Every business uses energy at some level—to heat the office, to run the plant, to move the trucks, to do whatever the business does. So there’s an energy dividend there for everybody,” Porter said. But for energy- and input-intensive businesses such as plastics and glass manufacturing, “this can be a game-changer. It can make you competitive in ways that you never were before,” he said. “I think there’s an opportunity to rethink how competitive you can be in a variety of different businesses now based on either the power cost and/or the feedstock costs.”

Still, Porter’s vision has plenty of skeptics. In a panel discussion following his Globe address, climate activist Tzeporah Berman insisted that the math behind Porter’s plan will not limit global warming to the 2ºC average increase targeted by policymakers. “That’s a 6-degree world,” she said.