Prime Minister Justin Trudeau’s reported skepticism about the business case for Canada to accelerate liquefied natural gas (LNG) exports to Europe and the world is misleading to Canadians.
It also goes against the statements of German Chancellor Olaf Scholz, who this week emphasized his desire to access Canadian LNG.
“As Germany is moving away from Russian energy at warp speed, Canada is our partner of choice,” Scholz said in Toronto. “For now, this means increasing our LNG imports. We hope that Canadian LNG will play a major role in this.”
Here are five key facts to illustrate the strong business case to connect Canadian LNG to Europe and the world.
Fact: Canada has natural gas pipeline connections from west to east
Canada’s east coast is far from natural gas production in B.C. and Alberta, but to suggest it is disconnected is simply wrong, given North America’s integrated natural gas pipeline system.
Seven Canadian provinces are directly connected to the U.S. natural gas pipeline network, enabling trade between the two countries. Canada can build a more direct connection to the east coast by encouraging and streamlining pipeline development.
This includes expanding the existing Canadian natural gas mainline system that ends in Montreal, connecting natural gas production in western Canada to potential LNG projects on the east coast.
Fact: The world needs more LNG
Global LNG demand is skyrocketing, and it’s not just from the fallout of Russia’s invasion of Ukraine.
LNG is a reliable and lower emitting energy source that is rising in importance as the world’s population grows and nations look to get off high emitting coal power.
Even before the invasion, a shortage of LNG was expected by the middle of this decade as demand surges on the path to doubling by 2040.
The situation has changed from a challenge to a crisis, as European countries including Germany prepare emergency measures to make sure there is enough natural gas in storage to stay warm this winter.
Meanwhile, in part due to a lack of available natural gas, global electricity generation from coal this year will be the highest ever in history, according to the International Energy Agency (IEA).
Canada is among the world’s largest natural gas producers and reserve holders; a “reliable partner” and “cornerstone of global energy markets,” according to IEA executive director Fatih Birol.
Fact: Indigenous communities see a ‘ray of hope’ in Canadian LNG
For a decade, dozens of First Nations have been tirelessly preparing to be part of the LNG boom, from planning upstream production to equity in pipelines to ownership of terminals, according to B.C. Indigenous business leader Chris Sankey.
“We are now global players, sitting at the boardroom table as partners,” Sankey wrote recently in the National Post.
“After 150 years of colonization, marginalization and poverty, this is a game-changing ray of hope for our peoples.”
In B.C., the LNG Canada project and associated Coastal GasLink pipeline have spent a combined $5.1 billion with Indigenous and local businesses so far.
Sixteen Indigenous communities along the Coastal GasLink route from near Chetwynd, B.C. to Kitimat will become equity owners in the project when it is up and running.
Meanwhile, LNG Canada, being built on the traditional territory of the Haisla Nation, has been “transformational” for the community, says Chief Councillor Crystal Smith.
There are employment opportunities and the ability to invest in social programming, as well as a new apartment complex and a new health centre that for the first time includes space for traditional healing.
The Haisla Nation is 50 per cent owner of the proposed Cedar LNG project, which is planned to start operating in 2027. Near the Alaska border, the Ksi Lisims LNG project proposed by a joint venture with the Nisga’a Nation is planned to start operating around the same time.
In Atlantic Canada, the Miawpukek First Nation is part owner of LNG Newfoundland and Labrador, a proposed project to start operating “no later than 2030.”
“Indigenous people are in support of major projects,” says Karen Ogen-Toews, former elected chief of the Wet’suwet’en First Nation and CEO of B.C.’s First Nations LNG Alliance.
“We must do this responsibly, continuing to make sure that we have the highest environmental standards.”
Fact: Analysts are ‘super bullish’ about new LNG projects
In the days following the invasion of Ukraine, energy analysts were quick to point out the implications for new LNG projects around the world.
“It is a super bullish signal to LNG developers in the U.S., Qatar and beyond,” said Simon Flowers, chair of global consultancy Wood Mackenzie.
That should include Canada, where projects offer advantages like lower emissions per tonne and shorter shipping times.
Projects on Canada’s east coast would be closer to Europe than competing locations in the U.S., and terminals on Canada’s west coast are closer to Asia.
The reality is that once LNG is on ocean tankers, it can go wherever in the world the right customer will buy it.
Consider that last winter, before Russia’s invasion of Ukraine, European buyers took LNG shipments that would have otherwise gone to Asia by bidding higher prices, according to RBN Energy.
More Canadian LNG on global markets, regardless of which coast it comes from, can help improve global energy security while benefiting Canadians.
Fact: LNG benefits all Canadians
At last count, about 10,000 people were employed building the LNG Canada plant and Coastal GasLink pipeline.
Over its lifetime, LNG Canada is expected to generate approximately $23 billion in government revenues that can help pay for services like schools and health care.
The Conference Board of Canada estimates that growing Canada’s LNG industry could generate over $90 billion in government revenue across Canada through 2064, with over $64 billion going to the federal government.
A thriving LNG sector could also add 96,550 direct, indirect and induced jobs annually across the country in the same time frame, the Conference Board said.
The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.