The lack of a “strong business case” to export Canadian natural gas to allied countries, as stated by Prime Minister Justin Trudeau, is affected by the federal government’s own regulations, according to information it tabled in the House of Commons on Jan. 30.
“Ultimately, project investment decisions are made by proponents based on their ability to comply with federal and provincial regulatory standards while competing within the global market,” says the Inquiry of Ministry signed by Liberal MP and Parliamentary Secretary to the Prime Minister Greg Fergus.
The document was filed in response to a question submitted last December by Clifford Small, a Conservative MP from Newfoundland and Labrador, an oil-producing province.
“With regard to the prime minister’s claim that there has never been a strong business case to export liquefied natural gas from Canada to Europe: on what specific evidence or analysis, if any, did the prime minister base such claim?” Small wrote.
“The federal Government is focused on growing Canada’s economy and creating good jobs for Canadians, while protecting our environment for future generations,” the government responded.
It says that “in order for any liquified natural gas project to go ahead, they must ensure that upstream emissions associated with gas production, and those from liquefaction facilities, fit within Canada’s emissions reduction targets; and demonstrate that exports from these facilities will be used to displace either higher emitting energy sources like coal and unabated natural gas, or Russian-supplied oil and gas.”
The government added that proponents of natural gas projects need to plan to transition facilities to hydrogen production and export.
Trudeau made the comments on the viability of the business case last August during a joint press conference with German Chancellor Olaf Scholz, who was visiting Canada.
Germany has been badly hit by retaliation from Moscow who cut gas exports due to its support for Ukraine.
Trudeau said there were ongoing discussions between ministers on whether it made sense to export liquified natural gas (LNG) from the East Coast to Germany.
“We are looking right now and companies are looking at whether or not the new context makes it a worthwhile business case to make those investments,” he said, according to the Financial Post, adding that his government could ease some regulatory hurdles.
Canadian Gas Association CEO Timothy Egan had told the Post at the time that the business case was stronger than Trudeau let on.
“If you revisit the regulatory framework, those business cases become stronger fast,” he said.