Presenting Canada as a reliable supplier of clean energy and a solution to European countries’ dependence on Russian oil and gas, Prime Minister Justin Trudeau says he is unconvinced by the idea that liquefied natural gas exports be part of the long-term plan.
Speaking alongside German Chancellor Olaf Scholz at a press conference on Monday – part of a three-day visit to Canada focused on energy security and clean technologies that is expected to culminate in the signing of an agreement hydrogen export contract in Newfoundland on Tuesday – Trudeau appeared to question the “business case” for pursuing LNG developments.
“We are in a short-term situation, where we will do what we can to contribute to the global energy supply by increasing our capacities…And will explore ways to see if it makes sense to export LNG and if there is a business case for this, to export LNG directly to Europe,” Trudeau said.
“But in the medium to long term, Canada can and will position itself to be a key supplier of energy to the world in a net zero economy. And that means investment in hydrogen, that means more investment in critical minerals… that means investment in a range of solutions.”
Pressed on whether Canada is in a position to export liquid natural gas to Germany, Trudeau said Canada recognizes the need to address the energy supply crisis, but would require a significant investment to build the necessary infrastructure.
“Conversion plants are usually placed close to LNG sources. And, as we examine the possibility of LNG plants on the east coast, capable of shipping directly to Germany, we find ourselves far from the gas fields of western Canada. It’s doable, we have an infrastructure around it, but we’re looking a lot at how we can best help,” Trudeau said.
Europe is facing an energy supply crisis and countries are urged to reduce their gas consumption in the face of continued uncertainty over Russia’s energy supply. Dramatic reductions in the flow of natural gas have led countries to clamor to bolster their reserves and prompted countries like Germany to seek alternative sources.
Scholz said his country was taking steps to seek alternative energy resources and accelerating the construction of new ports and pipelines, while keeping German climate goals in mind.
“It is on this basis that we are now talking to other countries that have opportunities. Canada is one of them. We are talking to these countries in order to help us tap into new sources of inputs” , did he declare.
Ahead of Scholz’s visit, Trudeau said Canada was looking at ways to supply more oil and gas to Europe “in the short term,” while considering how the world could dump oil and gas together, more rapidly. At the time, the Prime Minister indicated that Canada was considering short-term proposals for liquefied natural gas that could eventually be converted to export hydrogen, which is a clean fuel alternative.
On Monday, Trudeau said Canadian companies were still discussing with Germany whether “the new context” was now worth investing in proposed but unsuccessful liquefied natural gas projects, including in Atlantic Canada. and in Quebec, bearing in mind that Germany also has plans to switch to cleaner energy sources.
“From a government perspective, easing processes – because of the difficulty Germany is facing – to make sure we can get through regulatory hurdles more quickly, is something we are prepared to do,” he said. said Trudeau. “But there has to be a business case. It has to make sense for Germany.”
Scholz’s visit signals a shift in Canada’s energy relationship with Germany, according to Marla Orenstein, director of the natural resources center at the Calgary-based think tank Canada West Foundation.
She said that while Western Canada’s energy industry is unlikely to get a big boost from this visit itself, “she continues to reaffirm that Canada is a powerhouse for energy and other resources that are really essential to the energy transition”.
Orenstein warned, however, that any deal reached during or as a result of this visit is unlikely to be something that can help Germany this winter or possibly even next winter.
“There has been little appetite on the part of our federal government to have LNG export terminals built in Canada. At the same time, we also know that Germany is not ready to receive LNG no plus, they don’t have ports that are built now to receive it, so it will take them a few more years,” she said.
With a file from Judy Trinh of CTV National News