Canada’s Federal Government Not Interested in Investing in LNG

The federal government of Canada is not interested in investing in any LNG projects or subsidizing such plans, Energy and Natural Resources Minister Jonathan Wilkinson told CTV in an interview aired on Sunday.

The Canadian government doesn’t plan to subsidize the electrification of ongoing LNG projects, the federal minister of energy added.

“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,” Wilkinson told CTV.  

Investments in LNG plants is the job of private companies, not of the federal government, the minister said.

“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,” Wilkinson noted.

Germany, Greece, and Japan have expressed interest in buying LNG from Canada, which could benefit from the pause in the approvals of new permits for U.S. LNG export facilities announced by the Biden Administration earlier this year.

But Canada’s federal government has said that under its climate plan, all LNG export projects – of which the country doesn’t have any at the moment – must run 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 percent reductions. You have to actually, by using electricity, clean electricity,” Wilkinson told CTV.

“You can't just burn natural gas in order to liquefy, or the carbon footprint that you leave is far too large,” the minister added.

While the federal government is lukewarm about Canada’s LNG export prospects, the industry and the Premier of Alberta, Danielle Smith, see an opportunity for Canada to step in amid the U.S. pause in new project approvals.

“I hope we don’t blow it,” Smith said in February. 

“I hope if the Americans are going to take a pause, that we use this as an opportunity to accelerate some of those (Canadian) projects.”  

By Charles Kennedy for Oilprice.com

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