Four days before his arrival, Chancellor Olaf Scholz’s visit to Canada has sparked speculation about a hypothetical sale of Canadian liquefied natural gas (LNG) to Germany, a possibility dividing businesspeople and environmentalists.
Posted yesterday at 5:00am
André Duchesne The press
In a statement released Tuesday by the Business Council of Canada, business groups from Canada and Germany are calling for a stronger partnership between the two countries “on LNG, hydrogen and critical minerals.”
Environmental groups, for their part, are announcing a press conference this Wednesday morning to “call on the federal government to reject gas export projects on the east coast because of climate and economic risks”.
This excitement is evidently due to Germany’s heavy reliance on Russian natural gas for its energy needs, particularly heating. However, with the war in Ukraine raging, Russia is threatening to reduce or halt its gas exports to western Europe, a worrying situation as the coldest months of the year approach.
In a press release announcing the German Chancellor’s visit to Canada from August 21-23, Prime Minister Justin Trudeau’s office said the two leaders will discuss many things, including “opportunities for working together to safeguard energy security and to accelerate the global clean energy transition”. .
The press release covers hydrogen and critical minerals, not gas, oil, coal or LNG. Nevertheless, the situation in Germany is tense; The country faces a severe winter and all sorts of initiatives, including restarting nuclear and coal-fired power plants, are being considered to make up for the shortage of Russian gas.
Can Canada become an LNG supplier for Germany? Certainly not in the short term, says Pierre-Olivier Pineau, Chair of Energy Sector Management at HEC Montréal.
“It’s difficult for Canada to increase its export capacity,” he said in an interview.
It is physically impossible to export more natural gas to Germany in the coming months. Even oil is impossible. There is no infrastructure for that.
Pierre-Olivier Pineau, Chair of Energy Sector Management at HEC Montréal
We must look elsewhere to explain Mr Scholz’s visit, Mr Pineau continues. “German energy diplomacy has existed for a very long time,” he says. The Germans know that they have an energy deficit and that diversifying their sources of supply is nothing new. Canada, with its hydroelectric resources, natural gas and hydrogen potential, could play an important role. So we want to keep the relationship going and try to move it forward in this time of crisis. »
“Canada must develop its resources”
Professor Moshe Lander, a lecturer in economics at Concordia University, says Mr Trudeau must try to promote Canadian LNG to his German counterpart.
“Canada needs to develop its resources, including natural gas,” says Lander, who also teaches at McGill and Calgary. It should be a topic of discussion. But I don’t think Germany will be interested in that. First, because Mr Scholz belongs to the Social Democratic Party (SPD), as does former Chancellor Gerhard Schröder, who is now a paid adviser to Russian giant Gazprom [il a renoncé à la présidence du conseil, mais est en froid avec la Chambre des députés]. In this situation, it is difficult for me to imagine how Mr. Scholz could undermine the work of his predecessor. And then for reasons of distance. Germany can buy cheaper gas from the Middle East because the transport costs are lower. »
In Ottawa, the Conservative Party supports the export of LNG. “The situation in Ukraine and Russia’s export controls are a trigger for us,” said Conservative Charlesbourg-Haute-Saint-Charles MP Pierre Paul-Hus. Canada can export LNG – and why not help Europe? Yes, we need to be less dependent on fossil gases, but they are still necessary. »
On July 21, 2021, the Quebec government rejected Quebec’s LNG gas project in Saguenay because it did not meet the required conditions: gaining social acceptance, promoting the energy transition, contributing to the reduction of greenhouse gases.
Olaf Scholz will be in Canada from August 21-23, visiting the cities of Montreal, Toronto and Stephenville, Newfoundland and Labrador to attend a hydrogen fair.
400 billion cubic meters of natural gas consumption in Europe in 2021, of which 155 billion come from Russia
Source: European Commission