DeepDives is a bi-weekly essay series exploring key issues related to the economy. The goal of the series is to provide Hub readers with original analysis of the economic trends and ideas that are shaping this high-stakes moment for Canadian productivity, prosperity, and economic well-being. The series features the writing of leading academics, area experts, and policy practitioners. This particular DeepDive is made possible by RBC and readers like you.
In the wake of the 2025 G7 summit in Kananaskis, Alberta, leaders from the world’s major liberal democracies came together to reaffirm their commitment to energy security, the clean energy transition, and the need for reliable and responsible sources of energy and critical minerals. In doing so, they were responding not just to the geopolitical shocks of recent years—notably Russia’s weaponization of energy exports—but also to emerging economic and technological demands, including the soaring energy needs of artificial intelligence.
The G7 recognition of the economic and geopolitical importance of economic security is a big step. The key will be to maintain the momentum and get the implementation right.
In the spirit of translating G7 aspirations into action, RBC Thought Leadership has released The Kananaskis Agenda: An Action Plan for Natural Gas. It’s a blueprint for how Canada and its G7+ allies—including non-G7 EU members, Australia, Korea, and possibly India—can reconcile energy security with climate goals through a renewed commitment to investment and a policy framework for responsibly produced, geopolitically secure natural gas strategy. The strategy combines a new multilateral G7 action plan on methane emissions with renewed support for developing a G7 gas compact that accounts for an increasingly risky geopolitical environment where natural gas is playing an outsized role.
Why energy security is key
Energy security is a core tenet of economic growth, social stability, and geopolitical resilience. Without it, inflation soars, industrial production falters, and strategic autonomy weakens. The 2020s have made this reality starkly clear. The war in Ukraine exposed Europe’s vulnerability to natural gas dependency. Meanwhile, the global AI revolution is pushing energy demand to unprecedented levels. The International Energy Agency, for instance, projects that electricity demand from data centres will more than double by 2030 to around 945 terawatt hours due to surging AI workloads—pointing to a trajectory that could require several thousand additional terawatt hours globally by 2040, or roughly 15 percent of today’s electricity output.
Artificial intelligence, while still in its formative stages, has already begun to reshape everything from logistics and communications to defence and health care. But the computational infrastructure needed to run these systems is energy-intensive and increasingly dependent on uninterrupted, reliable power. Data centres—the backbone of this digital transformation—consume vast amounts of electricity, requiring stable and scalable energy inputs. As countries race to build their AI capacity, the pressure on energy systems will intensify.
This energy crunch is compounded by demographic and economic trends. By 2040, the planet will be home to more than 9 billion people, with global economic output potentially increasing by over 40 percent. Much of this growth will come from the developing world, where urbanization, industrialization, and rising living standards will drive higher energy demand.
The role of natural gas to meet these increasing energy demands is debated, and there is a wide range of plausible futures for natural gas dependent upon a variety of drivers in our geopolitical environment and resulting decisions made today. RBC’s report offers four scenarios for the future of natural gas, with profoundly different outcomes: total global gas exports could grow from 411 mtpa in 2024 to as high as 737 mtpa by 2050—or shrink to just 366 mtpa. The net swing of 371 mtpa is nearly equivalent to current LNG exports. This wide range of outcomes creates uncertainty for policymakers and gas producers and consumers alike.
A major driver in these different scenarios is the geopolitics of energy security, which today looks dramatically different from those of the last couple of decades. The rise of China and its expanding technological innovation and manufacturing dominance, combined with Russia’s aggressive energy posturing, have assisted in creating a bifurcated global order.
Piping is seen on the top of a receiving platform of a natural gas pipeline terminus in Kitimat, B.C., on Wednesday, Sept. 28, 2022. Darryl Dyck/The Canadian Press.
In two of the report’s four modelled scenarios—i.e., the “Divided World” and “Dystopian World”—gas demand continues to rise, but under highly fragmented and unstable conditions. These scenarios illustrate the dangers of an uncoordinated approach: volatile prices, supply disruptions and resulting demand destruction, weakened alliances, and derailed climate progress.
Conversely, a “Democratic World” scenario outlines a more optimistic future in which the G7+ countries align around common energy and climate objectives. Here, natural gas supports both economic growth and decarbonization, especially in emerging markets shifting from coal to cleaner fuels. In this vision, G7+ cooperation expands influence, stabilizes global markets, and provides a counterweight to authoritarian energy producers.
These scenarios aren’t mere hypotheticals. They’re plausible futures that depend on choices made today. But the G7 and its core allies need to recognize the risks of some very divergent paths if a coordinated approach is not taken.
At the end of the day, the G7+ have an interest in securing long-term supplies of reliable and affordable gas, having experienced price shocks over the last two decades. A coordinated G7+ approach can stabilize markets through more cohesive policy alignment and joint investments around infrastructure. Leveraging democratic, rules-based gas markets can also ensure environmental standards across the supply chain, and further add to economic growth through industrial decarbonization, including investments in carbon capture, utilization, and storage (CCUS), and low-carbon fuels for industrial heat and heavy transportation.
The Kananaskis Agenda: Five pillars of action
RBC’s Kananaskis Agenda sets out a clear and coordinated path forward. It proposes five interrelated pillars designed to stabilize markets, reduce emissions, attract capital, and expand access to clean, secure energy.
1. Declare a G7 compact to support decarbonized natural gas
The G7 should formally adopt a shared framework recognizing natural gas—particularly certified, low-emissions gas—as a strategic component of the energy transition. This would provide investment certainty, encourage coordinated infrastructure development, and help break the boom-and-bust cycle that has long plagued global gas markets.
A G7 compact goes beyond symbolic alignment. It would establish clear roles and responsibilities for member states, create common definitions and metrics for decarbonized gas, and lay the foundation for future cooperation on infrastructure, certification, and trade. It would also send a powerful signal to markets that the world’s leading democracies are united in their approach to responsible energy development and ensuring long-term security of supply. Importantly, it would bridge the gap between producers, consumers, and capital providers, ensuring a more balanced and resilient gas ecosystem.
2. Develop a stable and well-functioning global gas market
To reduce volatility and support long-term planning, the G7 must foster deeper, more liquid global LNG markets. This includes establishing transparent price benchmarks, supporting risk management tools, and building infrastructure that connects democratic producers with emerging market demand in Asia, Africa, and Latin America.
A more stable gas market—similar to a more mature oil market—could offer a wider range of contracts, pricing mechanisms, and investment vehicles such as futures contracts or exchange-traded funds. It would also reduce price shocks like those seen in 2022, when Russia’s invasion of Ukraine sent European gas prices soaring.
By advancing a more integrated and resilient global gas market, the G7 can enhance affordability, reduce carbon leakage, and ensure democratic nations—not authoritarian regimes—can become a growing, more meaningful source of supply and LNG flows.
3. Invest in decarbonization technologies
Methane mitigation, carbon capture and storage (CCS), and the development of low-carbon fuels like ammonia and hydrogen must be scaled urgently, alongside standardized performance metrics, market transparency, and regulations for the creation of a certified gas market. These technologies can significantly reduce the climate impact of natural gas and make it a credible long-term option in a decarbonizing world.
Methane, the primary component of natural gas, is a potent greenhouse gas—84 times more powerful than CO2 over a 20-year period. Yet much of it is leaked or vented during production and transportation. Deploying advanced leak detection and repair technologies, electrifying gas infrastructure, and setting international standards for methane measurement and reporting can dramatically lower emissions.
Quest carbon capture and storage facility in Fort Saskatchewan Alta, on Friday November 6, 2015. Jason Franson/The Canadian Press.
Meanwhile, CCS can enable gas to remain part of the energy mix without compromising climate targets. When combined with hydrogen production or ammonia synthesis, it creates pathways for cleaner fuels that can be used in heavy industry, shipping, and even power generation. Governments must invest in demonstration projects, create incentives for early adopters, and develop regulatory frameworks that support innovation and deployment.
The role of certification is also critical. Independent third-party certification—such as those already underway in Canada’s Montney basin and across the U.S.’s Marcellus shale—helps establish the credibility and market value of cleaner natural gas. With consistent performance metrics, the use of satellite imagery to track methane emissions and standardized reporting, certified gas could fetch a premium in global markets and open the door to new trade and investment opportunities.
4. Promote new financing tools for developing economies
Many developing countries lack the infrastructure and financial capacity to transition to cleaner fuels. G7 nations should work through multilateral development banks and export credit agencies to unlock concessional financing, support certified gas markets, and channel capital to LNG infrastructure aligned with emissions reductions.
Too often, developing economies are left behind in the energy transition, with natural gas prices frequently too high and volatile to sustain a key role in the energy mix. Yet these countries are also expected to be the largest contributors to aggregate energy growth through the remainder of the century, and all responsibly produced fuels and technologies will be needed.
The G7 can support new financing tools such as transition bonds, concessional loans for certified LNG infrastructure, and risk-sharing mechanisms to attract private capital. The G7 should also coordinate with initiatives like Japan’s GX Transition Bonds or the EU’s Global Gateway to provide clear signals and practical support. Carbon markets and verified emissions reduction credits from methane mitigation or coal-to-gas switching projects can offer additional revenue streams.
5. Create a G7 centre of excellence
Canada is well-positioned to host a new international Centre of Excellence for Natural Gas and Clean Energy Transition. This hub would advance research, coordinate standards, share best practices, and track methane and carbon performance. It would signal the G7’s commitment to responsible gas development and act as a platform for global collaboration.
Such a centre would serve multiple functions: as a technical advisor, policy incubator, convening forum, and clearinghouse for best practices. It could sponsor research on methane abatement, carbon markets, and certification schemes. It could facilitate collaboration between governments, industry, Indigenous communities, and civil society. And it could help coordinate G7+ engagement with developing countries, ensuring that solutions are scalable, inclusive, and aligned with local contexts.
By locating the centre in Canada, the G7 would also acknowledge the country’s growing role as a global energy player and its leadership in responsible and inclusive resource development. With experience in Indigenous partnerships, regulatory innovation, and clean tech, Canada can offer practical models for others to follow.
What this means for Canada
Canada stands to benefit enormously from a global shift toward cleaner, secure natural gas. As one of the world’s top producers, with vast reserves, established infrastructure, and a track record of Indigenous partnerships, the country can be a pillar of the G7’s energy security architecture. But this will require real policy alignment at home—including regulatory reform, infrastructure investment, and support for innovation and certification.
Canada must also reconcile its climate ambitions with its energy potential. That means embracing the dual role of natural gas: as a near-term solution to energy security and emissions reductions, and as a long-term resilient, decarbonized energy carrier and exporter to the world. It means investing in certification, emissions tracking, and technologies that differentiate Canadian gas in global markets. And it means fostering genuine partnerships with Indigenous communities and enabling their meaningful participation in projects, ensuring that development is inclusive and beneficial for all.
For Prime Minister Mark Carney, the Kananaskis Agenda represents more than an economic opportunity. It’s a chance to exercise global leadership at a moment of rising energy nationalism, geopolitical uncertainty, and climate urgency.
As a former central banker and climate finance advocate, Carney is uniquely positioned to champion a pragmatic, principled approach to energy transition. By advancing the Kananaskis Agenda, he can demonstrate how Canada can lead—proposing international standards for certified gas; convening a G7 task force on methane; brokering financing for LNG infrastructure in emerging markets; or piloting CCS-linked hydrogen projects with strategic allies. In every case, the goal should be the same: to turn commitment into capacity, aspiration into action.
The Kananaskis Agenda offers a powerful vision for what that future can look like. If embraced, it can transform the role of natural gas from a source of volatility and division into a foundation for prosperity, security, and decarbonization. For Canada and its allies, that’s a prize worth pursuing.
This DeepDive was made possible by RBC and the generosity of readers like you. Donate today.
