Canada is assessing whether it can come up with a “business case” for exporting liquefied natural gas (LNG) to Europe, Prime Minister Justin Trudeau has said, as European nations seek alternative energy sources to wean themselves off Russian supplies.
Trudeau, along with Chancellor Olaf Scholz, said at a press conference in Montreal on Monday that such exports pose logistical and financial challenges, but his government will do everything it can to boost global energy supplies amid the war in Ukraine.
Business talks are being held between Canadian and German companies about potential LNG exports, Trudeau told reporters.
“We will do what we can to contribute to global energy supply by increasing our capacity in the short term and assess whether it makes sense … and whether there is a business case for exporting LNG directly to Europe,” Trudeau said.
However, he added that one of the challenges is the investment needed to build LNG export infrastructure, stressing that Canada’s “best capacity” at the moment is to increase global energy supplies in general.
“LNG conversion facilities are typically located close to the LNG sources, and when we explore the possibility of east coast LNG facilities that can be shipped to Germany, we are a long way from the gas fields in western Canada,” Trudeau said said.
“It’s doable, we have the infrastructure to do it, but we’re looking very closely at how best to help, and right now our best ability is to continue contributing to the global market and displacing gas and energy, which then Germany and Europe.” replace from other sources.”
Russian President Vladimir Putin has repeatedly warned that his country’s natural gas supplies to Europe could be dramatically curtailed in the face of international sanctions over the war in Ukraine.
“Russia is no longer a reliable business partner,” said Scholz on Monday. “She has reduced gas supplies all over Europe, always citing technical reasons that never existed. And that’s why it’s important not to fall into Putin’s trap.”
Russia’s state gas company Gazprom reduced gas deliveries through the Nord Stream 1 pipeline to Germany by 60 percent in June. The reason was alleged technical problems with the turbine, which partner Siemens Energy sent to Canada for an overhaul and which could not be returned due to sanctions imposed on the war.
The pipeline will also be shut down for three days for maintenance later this month, Gazprom announced last week, increasing economic pressure on Germany and other European countries that depend on the fuel industry to generate electricity and heat homes.
Canada, home of Alberta’s tar sands, is the world’s fifth-largest oil producer, according to government figures, and earlier this year announced plans to increase oil and gas production to help its allies in Europe distance itself from Russia.
The European Union is heavily dependent on Russia for its energy needs, with Moscow supplying about 40 percent of the bloc’s natural gas last year.
“Our European friends and allies need Canada and others to get involved,” Jonathan Wilkinson, Canada’s natural resources minister, said in March. “They tell us they need our help to phase out Russian oil and gas in the short term while accelerating the energy transition across the continent. Canada is uniquely positioned to help with both.”
Pro-oil lobby groups and conservative politicians in Canada have urged the government to boost energy production, but environmentalists have rejected this push, saying any increase – even in the short term – would prevent Canada from delivering on its promise to tackle the climate crisis.
Experts have also pointed out that Canada will not be able to increase LNG exports in time to meet Europe’s needs.
“Due to climate commitments and energy security concerns, Europe is accelerating plans to reduce gas consumption by increasing energy efficiency and using renewable energy sources. While there may be a demand for some fossil fuels, markets like Norway are more logical to meet immediate needs,” the International Institute for Sustainable Development, an international think tank, said recently.
“This creates a fundamental mismatch with Canadian delivery capabilities. Canada cannot ramp up supply before 2025, while Europe’s energy needs will be largely met by then.”
Canada is considering an LNG roll-out deal with Germany to meet near-term energy needs.
Not only will this deal make it impossible for Canada to meet its climate commitments, it won’t help the EU move away from Russian gas in time, New finds @IISD_Energy meager. pic.twitter.com/bdFsRzd34S
— Tzeporah Berman (@Tzeporah) August 16, 2022
Germany fears a further cut in natural gas supplies from Russia this winter in retaliation for Western sanctions after invading Ukraine, Economy Minister Robert Habeck told ARD on Monday.
In an interview with Portal last week, Canada’s natural resources minister, Wilkinson, underscored the country’s potential to supply Germany and the rest of Europe with clean hydrogen, rather than trying to build LNG terminals while the world is moving away from fossil fuels fuels moved away.
Canada and Germany will sign an agreement in Newfoundland on Tuesday to develop clean hydrogen for export to Germany by 2025, Wilkinson said.
“Canada has a really, really pivotal role in the development of green hydrogen,” Chancellor Scholz said during Monday’s press conference with Trudeau. “We are therefore very pleased to be able to expand our cooperation in this area again this time.”