Skip to main content

Canada is poised to become one of the world’s largest exporters of liquefied natural gas, on paper at least.

The International Gas Union’s annual LNG report, released last week, says that Canada has the planet’s second-largest pipeline of LNG projects at the “pre-final investment decision” phase. One-quarter of all new liquification capacity on the drawing board is in Canada.

If all these projects were built, Canada would be exporting three times as much LNG as last year’s largest exporting country, Australia, where LNG exports were worth $83.4-billion in 2022.

Yes, Canada is poised to become one of the world’s largest exporters of LNG – but that’s old news. Canada has been poised, like a sprinter stuck in the blocks, for a very long time.

Way back in 2012, British Columbia aimed to have its first LNG plant up and running by 2015, with two others on stream by 2020. All those targets have been missed.

Canada’s LNG exports were zero then, and they’re zero today.

Meanwhile, others are off and running. To feed gas demand from Europe and especially Asia, there are dozens of LNG projects under construction or set to begin, from Congo to Qatar – and, above all, in the United States.

Between 2016 and 2022, our neighbours vaulted from no exports of LNG to second place on the world’s league tables. They will be the No. 1 exporter this year. The U.S. did it by building, or rather allowing private industry to build, pipes carrying gas to the Gulf of Mexico, and LNG facilities to liquefy the gas so it can be sent abroad by ship.

And Canada? One facility, LNG Canada in Kitimat, B.C., is under construction. Phase 1 is expected to open in 2025, exporting 14 million tonnes of LNG a year. (To put that in perspective, Australia exported 81.4 million tonnes last year.)

The project is an economic juggernaut, with estimated costs, including the Coastal GasLink pipeline, of $48.3-billion. There are 6,500 workers currently on site. Phase 2, which has not yet been given the green light, would add another 14 million tonnes of export capacity.

Beyond that, however, Canada has lots of plans on drawing boards, but no shovels in the ground. What’s the hold up?

Part of it is economics: the route from the gas deposits of the Western U.S. to the Gulf Coast is a flat run across mostly desert. The geography of the Interior of B.C. is more challenging.

But a big part of our challenge is something else. It’s Canada’s inhospitable political geography.

If Canada became a major LNG supplier, that would mean tens of billions of dollars in construction activity, and hundreds of billions of dollars worth of exports in the coming decades. Since gas is about half as carbon intensive as coal, sending gas to countries reliant on coal – much of Asia – would also reduce emissions.

But the Trudeau government and B.C.’s New Democratic government are all kinds of uncomfortable when talk turns to LNG. It’s off brand.

Ottawa’s discomfort was on full display last week at LNG2023, the global industry’s largest conference. It was to have been held last year in Russia but was postponed, and moved to Vancouver.

Who was the government of Canada’s keynote speaker at a flagship event dedicated to a Canadian industry with the potential to grow into one of the world’s biggest? Not the Prime Minister. Not the Natural Resources Minister. The Tourism Minister, Randy Boissonnault.

That speaks volumes. So did what Mr. Boissonnault said, and didn’t say.

On the plus side, he had a sentence about how “the development of an at-scale, LNG economy is a strategic priority for Canada.” It’s good to hear. It’s also hard to believe.

Most of the words Mr. Boissonnault was asked to read on behalf of the government were about anything but supporting LNG. He talked about subsidies for clean technology and clean manufacturing, name-checked critical minerals and referenced four energy projects in light of Indigenous reconciliation, of which only one had to do with gas.

It was rather like getting up in front of the Canadian Cattle Association and having a lot of say about chicken. And pork. And tofu. Lots of tofu.

Canada doesn’t have to build an LNG industry. But we need to be honest about the benefits of doing so; the costs of not doing so; and the degree to which we may be putting roadblocks in front of the industry, particularly by demanding that future projects have zero greenhouse gas emissions.

The industry has to be subject to reasonable environmental conditions. But there’s no logic in subjecting it to unreasonable conditions that can’t be fulfilled except through cancelling projects or reducing output.

A report from S&P Global says Canada’s oil sands will have to reduce production to meet 2030 emissions reduction targets, and the situation for some proposed LNG projects is related but far worse, as they’re being told to meet a net-zero target.

It feels like a potential industry is being given an ultimatum it cannot meet. There simply isn’t enough unused hydroelectricity in B.C. to power all the LNG projects on the drawing board, and there likely never will be.

A successful LNG export sector, its revenues financing governments and a higher national standard of living, should be a goal of Canadian policy. Instead, it’s being treated like an inconvenience and an embarrassment.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe