Study calls for scaling back Canada gas projects

CALGARY, Alberta (Reuters) - Canada should limit approvals for new natural gas projects and step up environmental enforcement on shale gas developments, according to a study released on Thursday by two environmental groups.

The Pembina Institute and the David Suzuki Foundation say increasing the use of natural gas as a substitute for dirtier fuels such as coal may bring unwelcome environmental effects and not help meet targeted cuts in greenhouse gas emissions.

The report says that rising natural gas production is not consistent with government promises to lower emissions of greenhouse gases. Though natural gas is cleaner than other hydrocarbon fuels, meeting targeted cuts will require more renewable power, said Matthew Bramley, research director at Pembina and the author of the study.

"You can have a massive expansion of wind and solar power without needing a to have a massive expansion of natural gas, Bramley said on a conference call.

Bramley said that increasing development of shale gas and other unconventional reserves carries a higher environmental cost than conventional natural gas. More wells are needed because of high decline rates, while substandard casings have sometimes allowed gas to leak into groundwater.

Among its recommendations, the report also calls for the government to make producers disclose chemicals in fracturing fluids, used to crack open the shale deposits containing natural gas, as well as to mandate the installation of carbon-capture equipment at gas-processing plants.

The report is being released just ahead of a meeting of Canadian energy ministers at a resort in the Rocky Mountains west of Calgary. The ministers are expected to talk about the possibility of launching a national strategy that would encourage development of the country's energy supplies.

"We know the idea of a national energy strategy is on the agenda," Bramley said. "We think our findings are very relevant to the discussion."

(Reporting by Scott Haggett; editing by Rob Wilson)