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

Prime minister Justin Trudeau stated that the government was open to relaxing regulatory requirements to facilitate projects that would allow for the export of Canadian natural gases to Europe. However, he questioned whether there is a business case for such investments.

The comments were made Monday at a news conference held in Montreal with German Chancellor Olaf Scholz. This was during the visit of the prime minister to Toronto and Newfoundland.

The question of Canada’s role in the process floated over proceedings like a cloud as leaders claimed Russia was using energy exports from Europe to undercut public support for Ukraine.

They also stressed the need to wean Germany and Europe from Russian oil and gas in the short-term and shift away from these energy sources in the long-term.

Trudeau said to reporters that the federal government was ready to make it simpler for companies to obtain regulatory approval for transporting liquified gas from Canada’s other provinces to the east coast to be exported to Germany. Scholz listened.

” From the government’s perspective, to make sure we can get through regulatory hurdles faster is something that we are willing to do.” he stated.

The prime minister said that it would ultimately be up the industry to decide if it is a good business decision to make investments in infrastructure to transport Canadian natural gas to Europe.

“There is a lot of potential projects. One in Saint John and others are already on the books. But, because of their distance to the gas fields, there’s never been strong business case.” he stated.

” Companies are currently looking at whether it is a good business decision to invest in LNG from the east coast. Germany should be receiving LNG from the east coast .”

.
Trudeau said that

Canada could export LNG to foreign markets and free up gas from sources other than those used by Germany or Europe.

” We are aware of the fact that the world must decarbonize, and we need to get rid fossil fuels. However, it is urgent to address the Russian energy crisis,” he stated.

Canadian Gas Association CEO Timothy Egan was pleased with the Prime Minister’s speech about easing regulatory obstacles for industry. He described it as crucial for progressing various projects.

” I don’t believe industry needs financial assistance from the government but it wants to see regulatory processes clarified and speeded up,” he stated.

” The prime minister expressed a desire to speed up and make regulatory processes clearer. That’s enormous.”

Chrystia Freeland, Deputy Prime Minister of Canada, first suggested that government take action to facilitate LNG exports from Canada. She was visiting Saint John at the beginning of July and met representatives from all industries.

While the government held some meetings and consultations since then, Egan stated that more engagement was needed.

” We have certainly been in contact with Natural Resources Canada at various times about this situation and we know the government will be meeting with European counterparts,” said he.

“I would disagree with that statement. We have received more offers from European government and industry than from our government .”

.

Both Trudeau AND Scholz stressed the importance of moving away from fossil fuels to clean energy in Monday’s news conference. They are likely to conclude a hydrogen deal later in the week.

Yet, Scholz painted an image of Germans using extreme measures in order to secure their energy supply in the near term in order to weather the next winter while Russia’s energy exports decline.

Russia cut the gas flow in Nord Stream 1 to Germany by 20% and announced that it will shut the line down completely for three days at end of month citing unscheduled maintenance.

Germany has made massive investments in new ports and pipelines that will receive gas from Norway and the Netherlands. This is a reverse of recent efforts to eliminate oil and coal in Germany.

The leaders also defended Canada’s decision to issue a permit allowing Montreal-repaired gas turbines to be returned to Gazprom, the Russian state-owned energy company that operates Nord Stream 1.

Ukraine criticized Trudeau’s government and for agreeing to Germany’s request last month for Canada to be exempted from the sanctions on Russia to allow it to return a turbine to its pipeline.

The turbine was in repair at Siemens’ Montreal plant, which is the only place worldwide that can maintain the equipment. The turbine was originally intended to be shipped to Germany, and then it was to be sent to Russia by the Siemens Montreal facility. However, Russian authorities refused to allow it to leave Russia.

Trudeau, Scholz and others accused Russia of using the issue to cover up for cutting down on gas exports. The two men also claimed that Russia was trying to use the issue as a cover for cutting gas exports.

While they claim to have called Russia’s Bluff, as demonstrated by Gazprom refusing to take the turbine, Trudeau dodged questions about whether Canada would block import, repair, and return five more turbines.

On Monday evening, Trudeau held an official dinner at The Royal Ontario Museum for Scholz, in which the prime minister of Canada and the chancellor gave brief remarks.

About 300 Trudeau raised glasses to toast the friendship between the “two unyielding democracys” and the possibility of working with an “progressive and democratic vision for the economy .”

By Lee Berthiaume, and Virginie Anne

Read More