The economic and (faux) environmental arguments for a liquefied natural gas boom in Canada are rapidly evaporating, the Globe and Mail editorial board argues in a detailed analysis this week.
“Oil and gas greatly increased Canada’s wealth over the past two decades,” the Globe acknowledges, and “LNG has been touted by industry and some governments as another windfall to come, one that could even help reduce global emissions. But the veracity of that promise, and the ever-increasing risks brought by climate heating, are rapidly changing the calculus.”
From failed projects in British Columbia, to a provincial regulator’s blockbuster decision last month to block the GNL Québec LNG megaproject, the Globe traces a history “littered with multi-billion-dollar schemes” that fail on the economics—or, more recently, on their environmental impact.
“Failing to attract billions of dollars from investors to build an LNG plant is typical, in Canada and elsewhere,” the editors write. “The projects are complicated, the global market is intensely competitive, and the outlook for future demand is modest.”
But the GNL decision by Quebec’s Bureau d’audiences publiques sur l’environnement (BAPE) was something new. The project’s backers tried to make the usual case for climate benefits, but the regulatory review “found that the project’s benefits would not outweigh the negatives,” the Globe recalls, and “questioned whether the claim of Canadian gas displacing coal elsewhere was real.”
The oil industry “often touts Canada’s natural gas exports as good for the environment, on the theory they will displace coal burned for electricity in other countries,” The Globe says. But “what oil and gas companies do not say is whether LNG exports simply perpetuate the burning of fossil fuels and slow the necessary jump to renewable energy, as urged by the International Energy Agency.”
The fossils’ case “also ignores major shifts in the international market,” the editors add. “In July, Japan said it aims to more than double its use of renewable energy in power generation, to 38%, by 2030. The target is far higher than Japan’s previous 2030 goal of 22%.”
All in all, the Globe says the GNL decision brings sharper focus to the looming choices facing Canada and other countries.
“Canada has for years benefited from its oil and gas industry,” and “these are not easy decisions,” the editorial states. “But given the worsening spectre of climate heating—and the call from the IEA to stop investing in new oil and gas production—it is becoming more difficult for fossil fuels to win the argument based on economic growth potential alone.”