Trudeau questions the business case for Canada’s natural gas exports to Europe

Prime Minister Justin Trudeau said the government is open to relaxing regulatory requirements for projects that would facilitate the export of Canadian natural gas to Europe, but questioned whether there was a business case for such investments.

Prime Minister Justin Trudeau said the government is open to relaxing regulatory requirements for projects that would facilitate the export of Canadian natural gas to Europe, but questioned whether there was a business case for such investments.

The comments came Monday during a joint press conference with German Chancellor Olaf Scholz in Montreal as the prime minister welcomed the German leader on a visit that will also include stops in Toronto and Newfoundland.

The question of what role Canada could play floated like a cloud above the debates as the two leaders accused Russia of using its energy exports to Europe as a weapon to undermine public support for the Ukraine on the mainland.

They then stressed the importance of weaning Germany and the rest of Europe from Russian oil and gas in the short term, and moving away from these energy sources in the medium and long term.

The federal government is ready to do its part by making it easier for companies to obtain regulatory approval to transport liquefied natural gas from other parts of Canada to the east coast for export to Germany, Trudeau said. to reporters as Scholz looks on.

“From a government perspective, easing processes ⁠—due to the difficulty Germany is facing ⁠—to ensure we can get through regulatory hurdles more quickly is something we are prepared to do,” did he declare.

Yet the Prime Minister has hinted that it will ultimately be up to industry to determine whether it is cost-effective to invest in the facilities and other infrastructure needed to transport Canadian gas to Europe.

“There are a number of potential projects, including one in Saint John, and others that are underway for which there has never been a solid business case due to the distance from the gas fields,” did he declare.

“We are currently looking ⁠— and companies are looking ⁠— to find out whether or not, in the new context, it is worth making these investments. … Germany must receive LNG directly from the east coast. »

Canada could also export its LNG to other markets around the world and, in doing so, free up gas from other sources that could be used by Germany and Europe, Trudeau added.

“We are certainly aware that even if the world needs to decarbonize and move away from fossil fuels, there is a need now to counter the energy crisis created by Russia,” he said.

Canadian Gas Association President and CEO Timothy Egan hailed the Prime Minister’s speech on easing regulatory hurdles for the industry, which he called essential to moving various projects forward .

“I don’t think the industry is looking for financial support from the government, but they want to see the regulatory process clarified and made faster,” he said.

“The Prime Minister has indicated his desire to make the regulatory process faster and clearer. It is enormous.

Deputy Prime Minister Chrystia Freeland first raised the idea of ​​government action to facilitate LNG exports from Canada during her visit to Saint John in early July, where she met with representatives from across the ‘industry.

Still, while the government has since held a handful of meetings and consultations, Egan said significant engagement was needed.

“We have certainly been in contact with Natural Resources Canada on several occasions about the situation, and we know that the government is meeting with European counterparts,” he added.

“But I would say we’ve had more overtures from European governments and industry… than from our own government.”

During Monday’s press conference, Trudeau and Scholz stressed the need to switch from clean energy to fossil fuels in the medium to long term. The two leaders are expected to sign a hydrogen deal later this week.

Still, Scholz painted a picture of the Germans taking extreme measures to shore up their short-term energy supplies to survive the coming winter as the country grapples with a drop in Russian energy exports.

Russia has reduced gas flows from the Nord Stream 1 pipeline to Germany to 20% of capacity and recently announced it will shut the line entirely for three days at the end of the month, citing the need for maintenance unexpected.

Germany’s moves include massive new investment in ports and pipelines to receive gas from Norway, the Netherlands and other parts of Europe, and a reversal of recent moves to phase out l use of oil and coal in the country.

The leaders also defended Canada’s decision to issue a permit allowing gas turbines repaired in Montreal to be returned to Russian energy giant Gazprom, which operates the Nord Stream 1 gas pipeline.

Ukraine has criticized Trudeau and his government for accepting Germany’s request last month to exempt Siemens Canada from sanctions against Russia so it could return a turbine for use in the pipeline.

The turbine was being repaired at Siemens’ facilities in Montreal, the only place in the world capable of servicing the equipment. He was delivered to Germany and was to leave from there for Russia, but the Russian authorities refused to accept him.

Trudeau and Scholz accused Russia of trying to use the problem as a cover to cut gas exports. They also said Moscow was trying to pit Canada and Germany against each other and deflect public anger over the resulting rise in energy prices.

Yet while they claimed to have effectively called Russia’s bluff, as evidenced by Gazprom’s refusal to take the turbine, Trudeau avoided questioning whether his government would now block the import, repair and return of five other turbines.

This report from The Canadian Press was first published on August 22, 2022.

Lee Berthiaume and Virginie Ann, The Canadian Press

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