Feds 'not interested' in investing in LNG facilities: energy minister

Energy and Natural Resources Minister Jonathan Wilkinson says the federal government is “not interested” in subsidizing future liquefied natural gas (LNG) projects, including the electrification of projects currently in the works.

In an interview with CTV Question Period host Vassy Kapelos airing on Sunday, Wilkinson said those investments are up to the private sector.

“The government is opposed to using government money to fund inefficient fossil fuel subsidies. We’re the first country in the world to actually do that. We are not interested in investing in LNG facilities. That's the role of the private sector. They need to assess the business case and make the investments,” said Wilkinson.

The minister’s comments come just days after Greek Prime Minister Kyriakos Mitsotakis exclusively told CTV Question Period that Greece would “of course” be interested in purchasing Canada’s LNG if the resource was available.

“We are a big entry point for LNG, not just for the Greek market, but also for the Balkans, for Eastern Europe,” Mitsotakis said. “Theoretically, we could even supply Ukraine.”

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When asked whether Canada could be an ideal partner in that, Mitsotakis said “absolutely.”

“Canada is a country with which we share so many values,” he said, pointing to his country’s alignment with Canada on several geopolitical issues, including Ukraine and the Israel-Hamas war.

Germany and Japan have also voiced interest in purchasing Canada’s LNG. But in August 2022, Prime Minister Justin Trudeau said he wasn’t sold on the idea of LNG exports being part of Canada’s long-term plan when it comes to becoming a reliable supplier of clean energy to Europe.

"We are in a situation in the short-term, where we will do what we can to contribute to the global supply of energy by increasing our capacities … and explore ways to see if it makes sense to export LNG, and if there's a business case for it, to export LNG directly to Europe," Trudeau said.

Whether Canada can and should plan to export to European countries in the future has been an ongoing political debate for years. Supporters of LNG argue the energy source can play a key part in working towards a lower-carbon future. But environmental critics are concerned the expansion of LNG will prolong the use of fossil fuels.

On Thursday, New Brunswick Premier Blaine Higgs testified before a House of Commons committee meeting and made a plea to Ottawa to export LNG to Europe to replace the federal carbon tax. Last year, Repsol decided against developing a LNG terminal in Saint John due to the associated costs.

Wilkinson says New Brunswick can move forward on its own if it wants to ship LNG to Europe.

“Certainly Premier Higgs, who has gas resources in New Brunswick, if he chooses to develop them, could look to actually develop a project that could ship LNG to Europe, but obviously that would need to be done in a manner that's consistent with New Brunswick’s climate plan,” said Wilkinson.

Any future LNG projects would need to meet Canada’s 2030 climate goals, which includes a target to reduce oil and gas methane emissions by at least 75 per cent from 2012 levels by 2030. Wilkinson says meeting that reduction target will require LNG production to rely on clean electricity.

“You have to do a lot to reduce emissions of methane in the upstream and we're bringing in place regulations to require 75 per cent reductions. You have to actually, by using electricity, clean electricity. You can't just burn natural gas in order to liquefy, or the carbon footprint that you leave is far too large,” Wilkinson said.

When asked by Kapelos whether he is ideologically opposed to exporting LNG as a resource, Wilkinson pointed to projects moving forward in Western Canada, but reiterated the importance of projects meeting climate commitments.

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“We support the work that can be done to displace heavier hydrocarbons, but it's got to be within a frame that fits with respect to the commitments we and others have made,” Wilkinson said.

According to Natural Resources Canada, there are currently eight LNG export projects “in various stages of development across Canada.” The Shell-led LNG Canada in Kitimat, B.C. will be Canada’s first large-scale LNG export facility and is aiming for first exports by 2025 to Asian markets.

With files from CTV News’ Parliamentary Bureau reporter Spencer Van Dyk and CTV News Senior Digital Parliamentary Reporter Rachel Aiello