Visit of Olaf Scholz to Canada | The question of liquefied natural gas resurfaces

Four days before his arrival, the visit to Canada by German Chancellor Olaf Scholz has sparked speculation about a hypothetical sale of Canadian liquefied natural gas (LNG) to Germany, a possibility that divides business people and environmentalists.

Andre 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.”

For their part, environmental groups announce a press conference this Wednesday morning to ask “the federal government to reject any gas export projects on the East Coast because of climate and economic risks”.

This commotion is obviously attributable to the fact that Germany depends heavily on Russian natural gas for its energy needs, particularly for heating. However, with the war in Ukraine, Russia is threatening to reduce or completely cut off its gas exports to Western Europe, a worrying situation as the coldest months of the year approach.

“Energy Diplomacy”

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 “ways to work together to preserve energy security and accelerate the global transition to clean energy”.

The press release refers to hydrogen and critical minerals, not gas, oil, coal or LNG. Nevertheless, the situation in Germany is tense; the country will have to face a hard winter, and all kinds of initiatives, including the restarting of nuclear and coal-fired power stations, are gauged to compensate for the shortfall due to the lack of Russian gas.

Can Canada be an LNG supplier to Germany? Certainly not in the short term, says Pierre-Olivier Pineau, holder of the Chair of Energy Sector Management at HEC Montréal.

“It is difficult for Canada to increase its export capacity,” he said in an interview.

We must look elsewhere to explain Mr. Scholz’s visit, continues Mr. Pineau. “There is a German energy diplomacy that dates back a very long time,” he says. The Germans know that they are in energy deficit and the diversification of their sources of supply is not new. Canada, with its hydroelectric resources, natural gas and its potential for hydrogen, could play an important role. So we want to maintain the relationship and try to make it progress in this time of crisis. »

“Canada must promote its resources”

A lecturer in economics at Concordia University, Professor Moshe Lander says Mr Trudeau must try to promote Canadian LNG to his German counterpart.

“Canada needs to promote 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. First, because Mr. Scholz belongs to the Social Democratic Party (SPD), as does former Chancellor Gerhard Schröder who is now a paid consultant to the Russian giant Gazprom [il a renoncé à la présidence du conseil, mais est en froid avec la Chambre des députés]. In this situation, I find it hard to see 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 transport costs are lower. »

In Ottawa, the Conservative Party supports the export of LNG. “The situation in Ukraine and Russia’s control over exports are a trigger for us,” said the Conservative MP for Charlesbourg–Haute-Saint-Charles, Pierre Paul-Hus. Canada can export LNG – and why not help Europe? Yes, we must be less dependent on fossil gases, but they are still necessary. »

On July 21, 2021, the Quebec government rejected the LNG Quebec gas project in Saguenay, considering that it did not meet the required conditions: obtaining social acceptability, promoting energy transition, contributing to the reduction of greenhouse gas.

Olaf Scholz will be in Canada from August 21-23 and will pass through the cities of Montreal, Toronto and Stephenville, Newfoundland and Labrador to visit a hydrogen trade show.