June 30, 2022
The Right Honourable Justin Trudeau
Prime Minister of Canada
80 Wellington Street
Ottawa, Ontario K1A 0A3
Subject: Further Update on Positioning Canada to Lead in the Global Gas Energy Conversation
Dear Prime Minister,
The conversation continues to grow about Canada’s LNG export prospects and how they could help Europe (and the broader world) in a time of energy crisis. This letter provides you with some notes/comments on recent events within that conversation, further to CGA’s earlier correspondence to you of March 25, April 29th, and May 27th.
(1) European Union Engagement: We continue to engage with European governments bilaterally and have held 16 individual embassy briefings in Ottawa. We also met recently with the EU delegation to Canada (at their request) where they gathered representatives from 24 of the 27 countries. The discussion demonstrated several key areas of common interest. First, the EU members recognize common long-term objectives with Canada on questions of energy and the environment including affordability and reliability for energy consumers, and a cleaner energy system for the world. Second, all seek a more robust and long-term energy trading relationship with Canada – and all recognize the urgent need to develop that relationship now. Third, there is recognition that Canada holds, and produces, world-class natural gas resources and EU members want to help to get these into the global market as soon as possible. Finally, we learned that the Government of Canada has been meeting regularly with EU representatives and we stand ready to engage in that discussion to bring industry’s perspective.
(2) The Recent G7 Communique: We were delighted to see the communiqué from the recent G7 meeting you attended in which the statement was made that, “with a view to accelerating the phase out of our dependency on Russian energy, we stress the important role increased deliveries of LNG can play, and acknowledge that investment in this sector is necessary in response to the current crisis.” The G7 countries remain some of the most significant economies in the world, ranking at the highest levels in terms of environmental performance. All want to continue to raise those standards, but all clearly recognize that access to affordable, reliable energy is an essential prerequisite to that performance. Significant LNG supply from new market entrants like Canada is necessary to achieve our shared goals. We note, in particular, the serious actions being taken by several other G7 countries like the US and Germany to improve their ability to address the crisis and we stand ready to help Canada do more as well.
(3) The Government of Canada’s direct engagement with Germany: We note with interest your direct engagement with Germany, a country that is rapidly developing its capacity to import LNG, and that is seeking a relationship with Canada as a long-term supplier. We are encouraged by the potential for a meeting between you and the German Chancellor in August where we understand LNG will be a priority discussion topic. Germany is focused on imports while still respecting the very high environmental standards in place in that country. We believe Canada can learn from how Germany is advancing projects quickly through the regulatory process while adhering to principles of environmental performance. We stand ready to discuss with the Government of Canada how Canada might assist with the Germany-Canada LNG cooperation opportunity.
(4) Minister Wilkinson’s leadership on the LNG file: The Minister’s clear recognition of the need to address the natural gas shortages in Europe is a very positive signal. As he noted, the private sector must lead the process in identifying and bringing projects forward. As you know, several projects have been brought forward by companies and these offer Canada an opportunity to advance new LNG exports. While we stand ready to deliver, we require an assurance from government that the regulatory process will not delay or hamper development. The current timelines for project approval are simply not aligned with the near-term LNG needs set out by our EU partners. We remain open to discussing areas where regulatory streamlining might be achieved.
We note in all of this there will be questions about emissions. We think it is important to emphasize the point that Canada’s emission profile in our natural gas sector is extraordinarily low compared to the global marketplace, driven by several industry-led initiatives and regulations. This means that getting more of our natural gas to the world will help lower global emissions dramatically. On the other hand, if we do not export Canadian LNG, it will result in European natural gas needs being met by higher-emitting projects around the world.
We have been tracking European markets closely and note stories of growing concern about volatile energy markets, rapidly rising prices, spiraling inflation, food shortages because of the lack of fertilizer made from natural gas, and the prospect of rolling blackouts. Canada should work to help Europe address these challenges by becoming the most reliable natural gas trading partner for our allies in the wake of Russia’s invasion of Ukraine.
I will continue to report out on our progress as we continue to define the elements of our gas vision and would welcome any questions you might have about our efforts, and engagement with you on them.
Respectfully,
Timothy M. Egan
President & CEO, Canadian Gas Association
Chair, NGIF Capital Corporation