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 an 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.
The Inquiry stated 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 a 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, which cut gas exports due to Germany’s 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 at the press conference in Montreal on Aug. 22, 2022.
“It needs to make sense for Germany to be receiving LNG directly from the East Coast.”
“If you revisit the regulatory framework, those business cases become stronger fast,” he said.
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