Despite the considerable environmental risk and a potentially oversaturated market over the next two years, Pierre Poilievre, the man who may be Canada’s next prime minister, wants to go all in on liquified natural gas (LNG).
Poilievre, the leader of Canada’s opposition Conservative Party, discussed his outlook on LNG in December on noted climate-change denier Jordan Peterson’s podcast.
“Why are we still importing oil when we have the world’s third-biggest supply?” Poilievre asked rhetorically. “Why is it we can’t export our natural gas overseas?”
Peterson interjected, stating that Germany and Japan had both asked for Canadian natural gas, and Poilievre agreed. Both men argued that a lack of political will and what they claim is government interference and bureaucracy prevent Canada from exporting natural gas. Peterson claimed that both Japan and Germany offered Canada “multi-decade contracts [for LNG] at distressed prices because they’re so desperate for energy.”
But is this vision rooted in reality — or is it simply another shortsighted play that ignores environmental urgency and market trends? Also, U.S. President Donald Trump has paused 25 percent tariffs on Canadian goods for 30 days, with a possible reduced tariff for oil and gas exports. But Canada’s fossil fuel market could be much more volatile if tariffs do go into effect next month.
Logistical Hurdles
Despite Peterson’s and Poilievre’s rhetoric, expert analysis consistently demonstrates that Canadian LNG faces considerable economic and logistical hurdles: An Institute for Energy Economics and Financial Analysis (IEEFA) report from October 2024 states that while Japanese politicians have stressed the importance of Canadian, American, and Australian LNG sources for what they claim is energy security, the IEEFA found that Japanese LNG imports have fallen every year for the last decade. Moreover, Japanese energy plans estimate LNG demand will drop another 25 percent by 2030, as LNG use gives way to nuclear and renewable energy sources. According to the report, Japanese interest in LNG is primarily to resell it to other Asian markets.
Though Peterson and Poilievre say government bureaucracy stands in the way of LNG exports, in reality, the Trudeau administration supported some LNG projects, while arguing against federal government subsidies for the LNG sector. In March 2024, Energy and Natural Resources Minister Jonathan Wilkinson stated that the government would not invest in LNG facilities because it was opposed to funding “inefficient fossil fuel subsidies.” He claimed that such investments were for the private sector to make. Wilkinson acknowledged that LNG production would need clean energy for Canada to meet a 2030 goal of greenhouse gas emissions reduction. Still, he did not commit government funding to assist in this electrification.
Rhetoric aside, Canada’s federal government has, in fact, invested considerable sums in LNG development, particularly in British Columbia. LNG Canada Phase 1 – an LNG export facility on the shores of the Douglas Channel in B.C.’s Kitimat – received at least $1 billion CAD from Justin Trudeau’s Liberal government and another $5.4 billion from recent British Columbia New Democratic Party (BCNDP) governments.
Government support in recent years helped develop LNG export facilities on Canada’s Pacific coast. But exporting Canadian natural gas to European markets would likely depend on considerable direct investment in developing new infrastructure. As with Asia, European demand for LNG also appears to be waning. A new report by the European Electricity Review published by the think tank Ember, reveals that European solar and wind energy production is replacing the use of gas. It also notes that gas use in Europe has declined for the past five years, since the start of the European Green Deal in 2019.
“Fossil fuels are losing their grip on EU energy,” said Chris Rosslowe, Ember senior analyst and lead author of the report, in an emailed statement to DeSmog.
“Gas power is in structural decline in the EU. Cheap homegrown renewables are already cutting Europe’s fossil fuel import bill,” Rosslowe said. “Europe will always pay a premium for LNG, so it is unlikely to find much favor, especially as cutting energy costs becomes a top EU priority.”
Rosslowe cautions that Canadian politicians should keep a close eye on Europe’s clean power transition, which he argues is occurring much faster than many thought possible.
Did Germany Want LNG from Canada?
Peterson and Poilievre’s assertion that Germany has repeatedly asked Canada for natural gas doesn’t align with numerous statements from German leadership. In the wake of the Russian invasion of Ukraine in 2022, politicians and industry leaders first seriously considered the idea that Canada might supply Germany with LNG. However, both Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz appeared cool to the suggestion at the time.
Trudeau said his government preferred to export green hydrogen to Germany, and also noted that shipping natural gas from Canada’s Western provinces to as yet unbuilt liquefication facilities on Canada’s Atlantic coast was further complicated due to a lack of infrastructure. Trudeau also pointed out that there wasn’t much of a business case to export Canadian LNG to Europe. More recently, in September 2024, Germany’s special envoy for international climate action warned that both German and European demand for Canadian gas was waning.
The belief that Canadian LNG could be used to displace fossil fuel use in other nations, particularly in Asia, is common among Canadian politicians as much as among advocates of the fossil fuel sector.
However, multiple studies indicate this is not the case: The oft-mentioned possibility of Asian energy juggernauts like China and India transitioning from coal to gas simply isn’t happening. Ember’s Global Electricity Review report estimated that electricity generation from gas was about three percent for each, and isn’t increasing. In both cases, India and China appear to be transitioning directly from coal to renewables. Arguments that Canadian LNG could help displace fossil fuel use in Europe and Asia fail to recognize that LNG is a fossil fuel, that transitioning to it would only delay the transition to renewables, and also that the production of fossil fuels for export is in and of itself carbon intensive.
A recent report from the International Institute for Sustainable Development (IISD) also throws cold water on the idea that Canada can become a major global LNG superpower, and that doing so would help the environment. The report notes that the development of new LNG facilities would not only undermine Canada’s domestic and international climate commitments because of increased upstream and midstream emissions, it would further divert financial and clean energy resources away from more cost-efficient decarbonization efforts, and instead towards fossil fuel production. The IISD report further notes that by the time most Canadian LNG projects would come online by the end of this decade, global LNG supply is expected to have already far outpaced demand and that Canadian LNG would struggle to compete with other suppliers without considerable subsidies.
Could LNG Help India Wean Off of Coal?
In his conversation with Jordan Peterson, Poilievre makes specific reference to a National Bank of Canada (NBC) financial markets briefing note issued in February 2024. That report, prepared by Stéfane Marion and Baltej Sidhu, posits an unlikely hypothetical to make the case for Canadian LNG expansion by suggesting that Canadian LNG exports could help India wean itself off the use of coal. Marion is listed as an expert who works with Canada’s C. D. Howe Institute, a conservative and often pro-fossil fuel think tank that has received financial support from Gwyn Morgan. Morgan, a former oil industry executive and climate-change denier, has made substantial financial contributions to right-wing media in Canada, as well as pro-fossil fuel lobby groups.
The report uses an announcement by the Indian government to double coal production by 2030 as its jumping-off point and argues that Canadian LNG is better for the environment than Indian coal because of “policy and stringent regulation.” What isn’t mentioned is the environmental impact of extracting, transporting, and liquefying Canadian LNG, or the cost of converting Indian coal power plants to natural gas. The NBC report concludes that renewables will not be easily deployed in India by 2030, but fails to recognize that supplying India with LNG will only further delay the deployment of renewable energy systems.
In May 2024, Canada’s Ads Standards Council determined that advertisements claiming Canadian LNG exports would reduce global emissions — the central hypothesis of the aforementioned NBC briefing note — were misleading.
Poilievre’s belief that Canada is on the verge of becoming an energy superpower — if only bureaucracy would get out of the way — is a central tenet of contemporary Canadian conservative platforms. The reality reveals considerable economic, infrastructural, and political obstacles stand in the way — to say nothing of the severe environmental consequences of doing so — urgent points that rarely get mentioned in conservative discourse. Also ignored is the ever-expanding volume of research and expert analysis proving that expansion of Canadian fossil fuel exports would be economically unwise and environmentally catastrophic.
Poilievre, like Peterson, is well known for his strong anti-climate action record. A 2024 analysis by DeSmog revealed that Poilievre voted against the environment and climate at least 400 times throughout his 20-year career as a politician. Despite considerable evidence demonstrating the environmental and economic benefits of carbon taxes, Poilievre has vowed to eliminate them. His amped-up rhetoric on the subject — supported in no small part by third-party advertisers and fossil fuel sector lobby groups parroting the same debunked talking points — influenced all three leading Liberal Party leadership candidates, as well as the current environment minister, to distance themselves from consumer carbon pricing.
