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Energy

Canada badly misjudged the future of LNG

Published

9 months ago

6 minute read

 

Canada’s failure to push more strongly for LNG has put us in a weaker position, but there is time to recover

Earlier this month, President Donald Trump and Japanese Prime Minister Shigeru Ishiba  announced a joint American-Japanese venture for the Alaska LNG Project. Once built, the $44 billion project will ship gas from northern Alaska through an 800-mile pipeline to a liquefaction facility in Nikiski for export.

It is another sign that Canada needs to step up its LNG industry.

For years, Canada has been indecisive about liquefied natural gas (LNG), while others seized the moment. Now, with global demand for LNG surging and allies like Germany, Poland, and Japan needing stable energy sources, Canada finds itself left behind, and forced to regret regulatory missteps, political foot-dragging, and underestimating LNG’s long-term value.

The warning signs have been there for years. In 2022, as Europe scrambled to replace Russian gas after the invasion of Ukraine, German Chancellor Olaf Scholz personally came to Canada to request LNG exports. Instead of seizing the moment, only to be told there was no “strong business case” for Canadian LNG exports to Europe.

The same story followed with Japanese Prime Minister Fumio Kishida in 2023 and Greek Prime Minister Kyriakos Mitsotakis and Polish President Andrzej Duda in 2024. Each time, Canada’s response was the same, with no commitment, no plan, and no urgency.

Meanwhile, others acted. The U.S. and Qatar ramped up their LNG exports, locking in long-term contracts with European and Asian buyers. Germany, despite its push for renewables, invested in floating LNG terminals, recognizing that natural gas would be essential for energy security. Canada, despite having some of the world’s largest natural gas reserves, failed to position itself as a global supplier.

Canada’s failure isn’t just about hesitation, it’s about active obstruction. The federal government’s Bill C-69, the so-called “no more pipelines” law, created an onerous and unpredictable regulatory process for major energy projects. The CleanBC plan made it clear that investment in the sector would face endless hurdles.

The results have been severe. Since 2015, Canada has seen $670 billion in cancelled resource projects, including multiple LNG terminals on the Atlantic and Pacific coasts. The Energy East pipeline, which could have supplied LNG facilities in New Brunswick and enabled exports to Europe, was cancelled due to regulatory delays. The proposed expansion of Repsol’s LNG terminal in Saint John faced the same fate. Investors, spooked by uncertainty and government hostility, took their money elsewhere.

While Canada dithered, the world moved. As Stewart Muir, CEO of Resource Works, has written, LNG is not just a “bridge fuel”, it’s a destination fuel for much of the world. Despite heavy investment in renewables, countries like China are building coal-fired power plants because they lack secure, low-emissions alternatives.

If Canada had been exporting LNG between 2020 and 2022, it could have displaced an entire year’s worth of Canada’s domestic emissions in coal-dependent countries. Instead, Canada chose climate protectionism, prioritizing domestic emissions cuts over global impact.

The irony is that Canada’s hesitation to embrace LNG has hurt the climate more than it has helped. As coal consumption rises in Asia and Europe, emissions continue to soar, emissions that Canadian LNG could have displaced. A National Bank of Canada report found that transitioning India from coal to natural gas could cut four times more emissions than Canada’s total annual output, a massive missed opportunity.

Beyond environmental costs, the economic consequences are enormous. LNG projects in B.C. have been job engines, revitalizing communities once dependent on fishing, mining, and forestry. The Atlantic provinces, struggling economically, could have experienced the same boom had LNG infrastructure been developed there. Instead, they’ve been left behind.

There’s still time for Canada to change course, but it will require a complete reversal of policy. The federal government must:

  • Reform permitting and regulatory processes to make LNG projects viable and competitive.
  • Acknowledge LNG’s role in global emissions reduction and align climate policies with global realities.
  • Develop Atlantic LNG infrastructure to serve European markets, capitalizing on growing demand.

As Enbridge CEO Greg Ebel said at LNG2023, Canada’s allies have been “knocking on our door…to which we’ve said…no.” It’s time to stop saying no, to LNG, to economic growth, and to a cleaner energy future. If we don’t act now, we’ll be left behind forever.

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Thawing the freeze on oil and gas development in Treaty 8 territory

Energy

Thawing the freeze on oil and gas development in Treaty 8 territory

Published on November 8, 2025

By

From Resource Works 

Will direct tenure awards to First Nations unlock Montney gas?

By Nelson Bennett

An innovative approach to facilitating natural gas production in B.C. while respecting treaty rights could become a case study for future cooperation and partnerships between First Nations, government and industry.

In an attempt to open an area that producers have essentially been shut out of in northeastern B.C., the B.C. government directly awarded oil and gas tenure to the Halfway River First Nation, giving them greater control over how oil and gas extraction in the area might happen.

That tenure is now getting “farmed out” to companies like ARC Resources.

“The granting of the tenure by the B.C. government to the nation is new,” said Greg Kist, executive manager for Tsaa Dunne Za Energy, the Halfway River First Nation’s energy business.

Greg Kist, former president of Pacific NorthWest LNG and current managing executive for Tsaa Dunne Ta Energy, THE CANADIAN PRESS/Jeff McIntosh.

Depending on the outcome of the experiment, it’s the kind of thing that might one day be showcased at a future Indigenous Partnership Success Showcase event.

For more than two decades, a large area in Halfway River First Nation traditional territory in northeastern B.C. has been off limits to industrial activities like logging and oil and gas exploration and extraction, due to treaty rights.

In 1999, the BC Supreme Court quashed a timber harvesting permit approved by the province for Canfor, based on Halfway River First Nation’s Treaty 8 rights.

An extraction moratorium of sorts was placed over core HRFN territory, which happens to be in the “fairway” of the Montney natural gas formation.

“All of the lands were deferred from any further development,” Kist said. “And that meant everything from logging it, to oil and gas activities.”

This “deferral” of industrial activities in the area has been one of the question marks hanging over the oil and gas-rich Montney formation in northeastern B.C.

The 2021 BC Supreme Court Yahey decision had also left Treaty 8 territory dotted with question marks.

In Yahey, the court ruled cumulative impacts of activities like oil and gas development constituted a breach of the treaty rights of the Blueberry River First Nation, one of eight B.C. signatories to Treaty 8.

These various treaty rights rulings in northeastern B.C. create a serious challenge: How can B.C. continue to benefit from an abundance of natural gas to feed a burgeoning LNG industry without infringing the rights of Treaty 8 First Nations?

In the case of Halfway River, the B.C. government, the First Nation and industry are taking an innovative approach, using oil and gas tenure.

Last year, the B.C. government and HRFN signed a treaty settlement agreement that grants the nation more control over land use and development. As part of the agreement, the B.C. government directly awarded HRFN oil and gas tenure over 34,000 hectares of land. It was the first time the province has directly awarded oil and gas tenure to a First Nation.

In turn, the HRFN is now farming out its tenure rights to companies like ARC Resources, whose existing land holdings in the Attachie play are directly adjacent to the HRFN tenure.

“The resource quality is comparable to ARC’s existing Attachie asset, further extending the development runway at one of ARC’s most profitable assets,” ARC said in its second quarter financials at the end of July.

The tenure awarded to HRFN through its energy business, Tsaa Dunne Ta Energy, encompasses prime Montney real estate that had been essentially sterilized from development for decades.

“That 34,000 hectares is right in the middle of the Montney fairway,” Kist said.

Under an “earning and development” agreement with Tsaa Dunne Za Energy, ARC Resources will gain access to 36 parcels of land contiguous with its existing land parcel in the Attachie play. This expands its Attachie holdings by 10%.

Green area denotes Halfway River First Nation tenure; blue represents ARC Resources tenure.

“Think of it as Tsaa Dunne farming that land out to ARC, and we have an agreement that benefits us financially,” Kist said.

“The tenure award and landscape planning pilot will help to ensure that oil and gas development in these areas is sustainable and managed in accordance with the values of the Halfway River First Nation,” Chief Darlene Hunter said last year with the signing of the treaty settlement agreement.

Kist notes that the agreement with ARC represents only 25% of the land tenure granted to HRFN. So 75% of the land tenure could be open to further agreements with other natural gas producers.

“There will likely be more deals over time as we look at the different opportunities that are out there,” Kist said.

Kist is the former president of Rockies LNG and, before that, president of Pacific Northwest LNG. He and Jim Stannard, a former Petronas executive, are now managers for Tsaa Dunne Za Energy.

The tenure award does not represent a transfer of subsurface rights. All subsurface rights to things like minerals, coal, and oil and gas belong to the Crown.

“And at the end of the day, the B.C. government still gets its royalties,” Kist said. “But now the nation is very much in control of that activity.”

The recent agreement with ARC to develop 36 parcels adjacent to its Attachie lands is just the first one to be signed so far. There may be more such agreements in the future, Kist said.

Kist said the First Nation tenure model could end up being used elsewhere.

“I think the B.C. government’s going to look at these sorts of opportunities in areas where maybe there is a lack of development moving things forward,” he said.

“I think this could potentially be the model for development, with First Nations leading the way.”

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Alberta

Alberta’s number of inactive wells trending downward

Published on November 7, 2025

By

Aspenleaf Energy vice-president of wells Ron Weber at a clean-up site near Edmonton.

From the Canadian Energy Centre

By Deborah Jaremko

Aspenleaf Energy brings new life to historic Alberta oil field while cleaning up the past

In Alberta’s oil patch, some companies are going beyond their obligations to clean up inactive wells.

Aspenleaf Energy operates in the historic Leduc oil field, where drilling and production peaked in the 1950s.

In the last seven years, the privately-held company has spent more than $40 million on abandonment and reclamation, which it reports is significantly more than the minimum required by the Alberta Energy Regulator (AER).

CEO Bryan Gould sees reclaiming the legacy assets as like paying down a debt.

“To me, it’s not a giant bill for us to pay to accelerate the closure and it builds our reputation with the community, which then paves the way for investment and community support for the things we need to do,” he said.

“It just makes business sense to us.”

Aspenleaf, which says it has decommissioned two-thirds of its inactive wells in the Leduc area, isn’t alone in going beyond the requirements.

Producers in Alberta exceeded the AER’s minimum closure spend in both years of available data since the program was introduced in 2022.

That year, the industry-wide closure spend requirement was set at $422 million, but producers spent more than $696 million, according to the AER.

In 2023, companies spent nearly $770 million against a requirement of $700 million.

Alberta’s number of inactive wells is trending downward. The AER’s most recent report shows about 76,000 inactive wells in the province, down from roughly 92,000 in 2021.

In the Leduc field, new development techniques will make future cleanup easier and less costly, Gould said.

That’s because horizontal drilling allows several wells, each up to seven kilometres long, to originate from the same surface site.

“Historically, Leduc would have been developed with many, many sites with single vertical wells,” Gould said.

“This is why the remediation going back is so cumbersome. If you looked at it today, all that would have been centralized in one pad.

“Going forward, the environmental footprint is dramatically reduced compared to what it was.”

During and immediately after a well abandonment for Aspenleaf Energy near Edmonton. Photos for the Canadian Energy Centre

Gould said horizontal drilling and hydraulic fracturing give the field better economics, extending the life of a mature asset.

“We can drill more wells, we can recover more oil and we can pay higher royalties and higher taxes to the province,” he said.

Aspenleaf has also drilled about 3,700 test holes to assess how much soil needs cleanup. The company plans a pilot project to demonstrate a method that would reduce the amount of digging and landfilling of old underground materials while ensuring the land is productive and viable for use.

Crew at work on a well abandonment for Aspenleaf Energy near Edmonton. Photo for the Canadian Energy Centre

“We did a lot of sampling, and for the most part what we can show is what was buried in the ground by previous operators historically has not moved anywhere over 70 years and has had no impact to waterways and topography with lush forestry and productive agriculture thriving directly above and adjacent to those sampled areas,” he said.

At current rates of about 15,000 barrels per day, Aspenleaf sees a long runway of future production for the next decade or longer.

Revitalizing the historic field while cleaning up legacy assets is key to the company’s strategy.

“We believe we can extract more of the resource, which belongs to the people of Alberta,” Gould said.

“We make money for our investors, and the people of the province are much further ahead.”

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