A recently published DeepDive authored by Shaz Merwat, the energy policy lead at the RBC Climate Action Institute, outlines a comprehensive vision for positioning Canadian natural gas as an economic driver, a contribution to global energy security, and an effort to address climate change.
With countries seeking reliable, cleaner alternatives to coal and geopolitical tensions reshaping energy supply chains, Canada finds itself at a crossroads. The Kananaskis Agenda envisioned by the RBC Climate Action Institute offers strategic pathways that could position Canadian natural gas as an economic powerhouse, a major contributor to global energy security, and an environmental solution, provided policymakers and industry leaders act decisively in the coming years.
Here are five key takeaways from the DeepDive.
1. Declare a G7 compact to support decarbonized natural gas
The report calls for a formal multilateral agreement to recognize certified low-emission natural gas as a strategic component of the clean energy transition. This compact would establish universal definitions for “low-emission” gas, including methane intensity thresholds and carbon capture benchmarks, with Canada’s Montney Basin and America’s Marcellus Shale serving as early adopters of certification programs.
By providing long-term policy signals, the agreement would aim to attract capital for critical infrastructure like LNG terminals and pipeline networks, reducing the volatility that has plagued global gas markets. The geopolitical implications are significant, as a coordinated G7+ approach could counterbalance authoritarian energy exporters like Russia, whose weaponization of gas supplies during the Ukraine crisis demonstrated the risks of energy dependence.
The DeepDive presents starkly divergent scenarios for natural gas demand, warning that without this compact, global exports could either surge to 737 million tonnes per annum (mtpa) by 2050 or plummet to 366 mtpa, with severe economic and climate consequences depending on policy choices.
2. Develop a stable and well-functioning global gas market
To mitigate price volatility and ensure reliable supplies, the Kananaskis Agenda proposes fundamental reforms to global LNG trade structures. Creating transparent, diversified pricing mechanisms would reduce reliance on Russia-linked indexes, mirroring the stability seen in oil markets where benchmarks like Brent and WTI provide liquidity. The introduction of sophisticated risk management tools, including futures contracts and exchange-traded funds, could protect consumers and producers from sudden price shocks like Europe’s 300 percent gas price spike in 2022.
Infrastructure expansion forms a critical component of this pillar, with priority given to LNG export terminals and import hubs in emerging markets across Asia and Africa, where demand growth is projected to be strongest. The report highlights Japan and South Korea as key partners in financing these projects, noting that a well-functioning global market would also reduce “carbon leakage” by ensuring cleaner gas from democratic nations dominates international trade.
3. Invest in decarbonization technologies
The Kananaskis Agenda underscores the urgent need to scale technologies that reduce the climate impact of natural gas operations. Methane mitigation takes centre stage, with the potent greenhouse gas being 86 times more powerful than CO₂ over 20-year periods. Advanced solutions, including satellite-based leak detection systems like NASA’s EMIT program, drone surveillance networks, and stricter venting regulations, could potentially cut 40 percent of methane emissions at no net cost using existing technologies, according to IEA estimates.
Carbon capture and storage (CCS) emerges as another critical technology, with projects like Canada’s Quest CCS facility and Norway’s Northern Lights initiative serving as models for large-scale deployment. The production of low-carbon fuels such as hydrogen and ammonia from natural gas with CCS applications could play a transformative role in decarbonizing heavy industries, including steel manufacturing and maritime shipping. The report emphasizes that certification programs will be essential for verifying emissions reductions and establishing premium pricing structures for cleaner gas products in global markets.
4. Promote new financing tools for developing economies
Emerging markets face unique structural challenges in transitioning from coal to gas, including prohibitive upfront costs and exposure to volatile price swings. The Kananaskis Agenda proposes innovative financial mechanisms to overcome these barriers, with multilateral development banks like the World Bank and export credit agencies, such as EXIM in the U.S., being called upon to provide low-interest loans for LNG infrastructure development, similar to recent expansions in India’s LNG terminal capacity.
Transition bonds modelled after Japan’s Climate Transition Bonds could mobilize private capital for emissions-reducing gas projects, while carbon credit systems would create new revenue streams from methane reduction initiatives and coal-to-gas switching programs in countries like Indonesia. These financial innovations take on added significance considering that developing nations are projected to account for 70 percent of global energy demand growth through 2040, making their inclusion in the gas transition absolutely imperative for achieving both climate and energy security goals.
5. Create a G7 Centre of Excellence in Canada
Canada’s unique combination of resource wealth, regulatory experience, and commitment to Indigenous partnerships positions it as the ideal host for a new international hub focused on gas innovation and policy coordination. With the large gas reserves, Canada possesses ample supply capacity to meet growing global demand while serving as a living laboratory for best practices in responsible resource development.
The proposed Centre of Excellence would fulfil multiple critical functions as a research hub sponsoring cutting-edge studies on methane abatement and CCS technologies, as a policy incubator developing standardized certification frameworks, and as a global platform facilitating partnerships between G7 nations, industry leaders, and emerging economies. Alberta’s methane regulations targeting 45 percent reductions by 2025 and British Columbia’s carbon pricing regime provide proven policy models, while initiatives like the First Nations LNG Alliance demonstrate how Indigenous communities can participate as equity partners in major energy projects.
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Generative AI assisted in the production of this story.
