Newfoundland project and Kitimat exports highlight Canada's potential role in energy sector
Europe’s shift away from Russian energy has renewed interest in Canadian oil and gas. European Parliament president Roberta Metsola said this week that Canadian LNG could play a role in Europe’s supply mix.
Asked on CTV’s Question Period whether there is a customer in Europe for Canadian energy exports, Metsola replied, “yes.” She said the European Union has nearly completed its divestment from Russian oil and gas and is “looking across the Atlantic” for reliable sources.
“We have to look across the Atlantic, and the discussions are absolutely in that direction,” Metsola said.
Prime minister Mark Carney has also promoted closer energy ties with Europe, citing interest from leaders in Greece and Poland, as well as demand from Germany.
New LNG projects
The comments come as Canadian developers are moving forward with new projects. St. John’s-based Fermeuse Energy Ltd. and UK-based Crown LNG announced a $15-billion project off Newfoundland. The development would involve a 380-kilometre pipeline from the Jeanne d’Arc Basin to a liquefaction facility in Fermeuse, Newfoundland and Labrador, the Globe and Mail reported.
Fermeuse Energy CEO Swapan Kataria said the project was enabled by federal policy changes. “Without that, we would not be having a conversation today,” Kataria told The Energy Mix. He said exports could begin within five years if approvals proceed on schedule.
The federal Building Canada Act, passed earlier this year, grants Ottawa new powers to approve projects deemed of national interest. Energy minister Tim Hodgson has said buyers in Europe are ready to secure long-term supply.
Emissions cap debate
While projects advance, Ottawa is also considering an emissions cap for oil and gas. A study by the Centre for North American Prosperity and Security (CNAPS) estimated the cost of the cap at up to $289,000 per tonne of reduced emissions – more than 3,600 times the former $80-per-tonne federal carbon tax.
Heather Exner-Pirot, lead author of the CNAPS study, said the policy could deter investment. “Why would any proponent invest in Canada with this hanging over it? That’s why no other country is talking about an emissions cap on its energy sector,” she said.
The report also noted that reducing Canadian production could lead to “carbon leakage,” where global demand is met by producers with weaker environmental standards.
Dennis Darby, CEO of Canadian Manufacturers & Exporters, said the measure could also impact other industries. “Our industries run on Canadian energy. Canada should not unnecessarily hamstring itself relative to our competitors in the rest of the world,” he said.
