New Brunswick LNG project latest casualty of Ottawa’s energy policy
Last month, the energy company Repsol S.A. announced it would not proceed with a liquefied natural gas (LNG) export terminal in Saint John, adding to a growing list of dead or dying energy projects across Canada, which could have produced badly needed investment, well-paying jobs and economic opportunity.
Premier Blaine Higgs has been clear about who’s to blame, stating recently that “Trudeau’s stewardship has been a disaster” and that “the federal government could be an ally and a part of the solution… but they’re not helping us develop natural gas.”
Let’s examine Higgs’s claims in light of available research.
According to a recent survey of energy sector investors, substantial portions of investors in Canada’s oil and gas industry listed “uncertainty concerning environmental regulations” and “the cost of regulatory compliance” as major barriers to investment. This should not come as a surprise given the Trudeau government’s policies including Bill C-69, which made the assessment process of major energy projects much more subjective and less certain.
In fact, last year Trudeau said he saw “no business case” for exporting natural gas off Canada’s east coast, and that Canada must “accelerate away from natural gas.” This at a time when the war in Ukraine and the energy crisis in Europe have driven global demand for natural gas to new heights.
Meanwhile, our neighbours to the south are taking advantage, with 36 natural gas export terminals approved by the U.S. Department of Energy and at least 13 already in operation. In contrast, 19 LNG export facilities (including Repsol S.A. in Saint John) have been proposed in Canada since 2011, but none are currently operational. Despite Trudeau’s comments, there’s a great deal of interest in developing Canada’s ability to export natural gas.
What’s more, the federal government’s own policies are contradictory. While it has mandated significant emissions reductions by 2030 and a "net zero" policy by 2050, it’s actively discouraging natural gas development, which is a relatively clean-burning fuel that can contribute to emissions reduction by replacing more carbon-intensive fuels such as coal. According to Higgs, natural gas development in New Brunswick could reduce emissions by “30 to 40 per cent” by shutting down five coal plants within two years.
Aside from emissions reductions, it’s important to understand the enormous economic potential for natural gas. Canada has the 17th largest natural gas reserves in the world, which represent billions in potential economic activity and tens of thousands of jobs. And the opportunity to produce and export natural gas is not limited to traditional oil and gas producing provinces such as Alberta. Recoverable (unconventional) natural gas exists in Atlantic Canada, Quebec and in the West.
While the Repsol S.A. facility is the latest casualty of Canada’s energy policies, there’s still time to change course. The Trudeau government should remove the regulatory barriers it’s enacted and allow these environmental and economic opportunities to proceed.