Globe & Mail Canadian natural gas will soon be labelled with its country of origin, much like that “Grown in California” sticker on an orange from the local grocery store, says Mark Fitzgerald, outgoing chief executive officer of Petronas Energy Canada Ltd.
Mr. Fitzgerald is on his way to the parent company’s head office in Kuala Lumpur, Malaysia, where he will become vice-president of international assets.
His comments underscore a shift in the Canadian energy landscape, in which more companies are now keen to address the environmental, social and governance (ESG) measures that increasingly influence global investors and consumers. Suncor Energy Inc. CEO Mark Little, for example, said recently that ESG discussions have changed the conversation around oil to some degree, because investors and consumers are no longer focused solely on the price of a barrel of crude.
In the case of natural gas, Mr. Fitzgerald said the commodity will be differentiated in the future based not only on the greenhouse gas emissions that come from its production, but the country of origin’s environmental protections, respect for Indigenous rights, social policies and poverty reduction measures.
And on that scorecard, he said, Canada can nudge ahead of competitors.
This country already has a reputation as a relatively low-cost producer, he said. And while price is always a consideration in selling any commodity, how the gas is produced and companies’ sustainability plans are becoming all the more important.
“In my opinion and in our company’s opinion, we will see differentiation based on those measures, and so we want to continue to position ourselves in that space,” Mr. Fitzgerald told The Globe and Mail in an interview ahead of his move.
Right now, it’s mainly financial institutions that are laser-focused on ESG, but he said he expects consumers to follow suit.
Still, he said, the industry has work to do on educating Canadians about how the sector works to reduce its environmental footprint.
“We’ve shown a history of improving our emissions and energy intensity,” he said.
“Not only is there a lack of understanding on the global stage of the differences in brands, there’s also a lack of understanding in Canada about the contributions and how well this industry actually performs” on ESG measures.
The idea of branding Canadian natural gas to differentiate it from the products from other countries has been floating around for a few years. In 2020, about a year after the U.S. Department of Energy started referring to its liquefied natural gas as “freedom gas,” Alberta’s associate minister responsible for natural gas, Dale Nally, proposed similar branding for Western Canada’s product.
North America has a certification system that signifies lower-emissions production via adherence to environmental measures such as using recycled water and reduced methane emissions.
Paul Cheliak of the Canadian Gas Association said there would be industry support for a Made in Canada brand.
“We’re already world class in what we do, and we’re only getting better, so looking at a Canadian brand to our certified natural gas, I think it has some merit,” he said.
“We believe we’re already best in the world. Why don’t we talk about it?”
With or without branding, Mr. Fitzgerald said, Canadian natural gas will be an integral part of the global energy supply in the long term.
The Paris-based International Energy Agency says natural gas can be a transition fuel as the world tries to reduce emissions. It noted in a January report that while burning natural gas emits greenhouse gases, it contributes far less carbon dioxide and air pollutants than many of the fuels it is increasingly replacing, especially coal.
Mr. Fitzgerald acknowledged the debate about whether it’s a transition fuel or a long-term solution.
Either way, he said, Canadian “natural gas, in our opinion, is the cornerstone of that transition to a low-carbon future.”