Canada Warms Up to Fossil Fuels With New LNG Export Terminal
- Canada has recently shifted its energy policy, exemplified by the first cargo shipment from its LNG export terminal, moving away from previous government opposition to oil and gas.
- This policy change, under the new administration, is driven by market demand and aims to position Canada as an energy superpower, despite earlier net-zero focused rhetoric.
- The private sector’s investment in LNG facilities, despite government hesitation, highlights the economic viability and global demand for Canadian energy resources, particularly in Asian markets.
In March 2024, Canada’s then resource minister, Jonathan Wilkinson, declared, “We are not interested in investing in LNG facilities.” This month, LNG Canada, the country’s first operating export terminal for the fuel, shipped its first cargo. Many believe this is the beginning of a beautiful friendship between Canada’s energy resources and world markets.
The last couple of Canadian federal governments have been vocal opponents of the oil and gas industry in the country that is home to some of the world’s most abundant hydrocarbon resources. For two terms, the Justin Trudeau-led administration worked hard to make life as hard as possible for the companies that exploit those resources by increasing red tape for expansion and tightening emission-related requirements as far as they would go.
This was the context in which Jonathan Wilkinson made his declaration, adding to it the claim that “The government is opposed to using government money to fund inefficient fossil fuel subsidies.”
Instead, said government chose to bet on carbon taxes and supposedly efficient subsidies for things such as EV batteries and EVs themselves—a field where one major Canadian subsidy beneficiary declared bankruptcy earlier this year and others are reconsidering their Canadian growth plans.
While the Canadian government was doing this, the private sector, as advised by Wilkinson, by the way, assessed the business case and made the investments. A group of energy majors led by Shell and also including Malaysia’s Petrobas, Japan’s Mitsubishi, Korea’s Kogas, and PetroChina, got together and built LNG Canada—the country’s first ever LNG export facility that targets specifically the Asian energy market.
There are two big reasons for this choice of market. First and simplest, Canada’s west coast is close to Asia. Geographical proximity means lower transportation costs, leading to a lower end-price. Second, Canadian natural gas is trading more cheaply than U.S. gas right now, which adds to the cost advantage, regardless of earlier claims that Canadian gas was too expensive for exports to make any sense.
Mitsubishi Corporation “strongly believes that further development of LNG Canada is an optimal option to explore,” one senior executive at the company told the Financial Times following the news of the first LNG shipment from Kitimat. The FT included the quote in a report describing Prime Minister Mark Carney’s stated aim of turning Canada into an energy superpower—a marked departure from the Trudeau administration, whose first, second, and third priority was reducing emissions of carbon dioxide, whatever the cost.
Carney has publicly embraced all forms of energy and packaged his own departure from his earlier fixation on emissions as a response to U.S. President Trump’s tariff offensive, which now offers Canada a chance to develop its energy resources.
As stated by Carney’s energy minister, “President Trump’s tariffs are disrupting trade, threatening Canadian jobs and industries, and rewriting the rules of the game.” Also, “These [LNG] projects are part of our broader strategy to protect Canada’s energy security, diversify our trade, and enhance our long-term competitiveness, all while building the most reliable, low-carbon energy possible,” Tim Hodgson said, as quoted by the FT.
This does seem like a marked departure from past positions for the man who set up as many net-zero financial alliances as he managed to have time for, and who, for all intents and purposes, built a reputation as a most active net-zero champion not only in Canada but globally. And yet, Carney has paused the carbon tax that many Canadians blame for the drop in living standards, he has embraced gas, and he even appears not to be against new pipelines.
That said, not everyone believes that Carney means what he says. The carbon tax, for instance, has only been paused for households but not for companies. Canada is still very much on board with net-zero. But the shift in federal government narrative at the very least might be an indication that some in that government are acknowledging the realities of energy and the fact that oil and gas continue to be very much in demand, despite Mark Carney’s own claim in a 2021 book that “To meet the 1.5C [global warming] target, more than 80 per cent of current fossil fuel reserves (including three-quarters of coal, half of gas, one-third of oil) would need to stay in the ground, stranding these assets.”
Naturally, net-zero advocates claim demand for LNG does not justify more LNG capacity anywhere in the world, with a glut coming due to overcapacity. Serious analysts, meanwhile, point to things like a lack of infrastructure as a challenge for further LNG growth in Canada because it increases costs for new projects. Yet, as usual, it will be the market that will have the final word. If there is enough demand to motivate all these costs—LNG plants are never cheap, anywhere in the world—there will be more LNG export facilities in Canada. Net-zero advocates would just have to swallow that.
By Irina Slav for Oilprice.com
Norwegian company has plans for LNG export project in Quebec
By The Canadian Press
July 04, 2025
MONTREAL — As Canada looks to fast-track major projects that could reduce its dependence on the United States, a new subsidiary of a Norwegian energy company says it wants to build a liquefied natural gas export facility in Quebec.
Marinvest Energy Canada says there is a strong business case for an LNG project in Quebec that would supply markets in Europe.
The project is in early stages, and the company has not publicly shared many details, but its representatives have been meeting with officials in Quebec and Ottawa for months.Latest updates on commodities here
The plans were first made public Friday by Quebec newspaper Le Devoir, which reported the development would include a liquefaction plant and marine export terminal, as well as several hundred kilometres of pipeline.
Speaking to reporters in Sept-Îles, Que. on Friday, Premier François Legault confirmed that members of his team have met with the proponents of the project, which he said would be located in Baie-Comeau, Que., along the north shore of the St. Lawrence River in the province’s Côte-Nord region.
But he added the project is “very preliminary.”
“The first thing we’ll look at is the economic benefits. Are there paying jobs for Quebecers? Is there revenue that can flow to Quebecers?” he said. “If it pays off for Quebecers, we’ll look at it. If it doesn’t pay off for Quebecers, we won’t look at it.”
The news comes days after Parliament passed a major projects bill, which gives the government sweeping new powers to speed up permitting for what Prime Minister Mark Carney calls “nation-building projects.”
In Alberta on Friday, Energy Minister Tim Hodgson declined to say whether an LNG project in Quebec would be deemed in the national interest. “If Quebec wants to advance that project with the proponent, I’m sure they’ll bring it forward and it will be evaluated,” he told reporters.
The Quebec government rejected a proposal for an LNG facility in Quebec’s Saguenay region in 2021, amid widespread opposition to the project.
But in recent months, Legault has repeatedly said Quebecers are more open to fossil-fuel projects in the province, due to the ongoing trade war with the United States.
Greg Cano, chief operating officer for Marinvest Energy Canada, said there is a “clear and growing demand” for LNG in Europe, and Quebec is “strategically well-positioned to meet this need.”
“In our view, Quebec can play a key role in helping diversify export options for Canadian natural gas, especially at a time when relying solely on the U.S. market presents growing challenges,” he said in an email statement.
Marinvest Energy AS was registered in 2020, with its head office in Bergen, Norway. Its Canadian subsidiary was listed in Quebec’s business registry last month. It has no employees in the province, according to the registry. Cano is listed as the company’s sole Canadian shareholder, with an address in Calgary.
Four lobbyists with the public relations firm National have registered to lobby the federal government on behalf of the company. Two are also listed in Quebec’s lobbyist registry.
In Ottawa, one lobbyist reported an interaction in May with officials from Invest in Canada, an arm’s-length organization that promotes foreign investment.
Another lobbied Conservative Leader Pierre Poilievre and his Quebec lieutenant, Pierre Paul-Hus, in June.
Marcel Furlong, prefect of the regional municipality that includes Baie-Comeau, said the company began discussions with the municipality in early 2025. He said the municipality has not taken a position on the project, and would need more information to form an opinion, including with regard to its environmental impact.
On Friday, Greenpeace Canada was quick to express concerns about the plan.
“There is no way that a fossil fuel project with so little consultation and such a weak business case should be on Mark Carney’s list of projects that can bypass environmental laws,” senior energy strategist Keith Stewart said in a statement.
In 2021, the Quebec government axed plans for an LNG plant in the Saguenay region, saying it risked “disadvantaging the energy transition.”
Quebec’s environmental review agency had concluded the project’s risks far outweighed its benefits. It found the proponent had failed to demonstrate that public opinion was favourable, that the project would reduce greenhouse gas emissions or that it would accelerate the transition to clean energy.
The following year, the federal government also rejected the project, after the Impact Assessment Agency of Canada found it was likely to harm the environment.
The agency concluded that the plant would increase greenhouse gas emissions, that increased shipping traffic would harm the beluga whale population, and that there would be negative effects on nearby Innu communities.
By Maura Forrest and Caroline Plante in Montreal
– With files from Lauren Krugel in Cochrane, Alta.
This report by The Canadian Press was first published July 4, 2025.
No comments:
Post a Comment