Canada wallows on LNG sidelines, paralyzed by Ottawa’s onerous regulatory system

From the Frontier Centre for Public Policy

Mitsotakis said Greece has built a major facility outside the city of Alexandroupolis to process incoming LNG tankers. He said Greece will pump LNG to the rest of Europe and needs more at home as the country abandons coal.

When it comes to fossil fuels, the world wants what Canada’s got. The problem is, Prime Minister Justin Trudeau doesn’t care.

Fresh proof came with the recent visit of Kyriakos Mitsotakis, the first Greek leader to come to Canada in more than 40 years.

According to the office of the Prime Minister Trudeau, Mitsotakis was simply here to march in Montreal’s Greek Independence Day Parade, discuss “shared interests” and cut the ribbon as Greece purchased Canadian-made firefighting planes.

But, during an interview with CTV, Mitsotakis said his country would “of course” like to start importing Canadian liquified natural gas (LNG).

“We are a big entry point for LNG, not just for the Greek market, but also for the Balkans, for Eastern Europe. Theoretically, we could even supply Ukraine,” said Mitsotakis.

“In principle, yes, we are very interested in obtaining LNG at competitive prices.”

Mitsotakis said Greece has built a major facility outside the city of Alexandroupolis to process incoming LNG tankers. He said Greece will pump LNG to the rest of Europe and needs more at home as the country abandons coal.

Much of Europe’s energy has traditionally come from Russia or Middle Eastern autocracies. More than a decade ago, author Ezra Levant made the case for Canada’s “Ethical Oil” as a better alternative. Canada’s status as a democratic state that respects human rights and extracts oil with a minimal environmental footprint is as good as it gets. Mitsotakis, a Harvard-educated investment banker, understands that quite readily today.

“Canada is a country (for) which we share so many values,” said Mitsotakis. “I think we see eye-to-eye on many of the challenges that we face.”

Still, there was no mention of energy exports in Trudeau’s public comments regarding Mitsotakis, nor in official government communications about the visit.

Mitsotakis can take little consolation that his treatment is not unusual, as true as that may be. In the past 18 months, both the Japanese prime minister and the German chancellor returned home without official assurances that Ottawa was eager to offer bulk quantities of Canadian LNG.

Japanese Prime Minister Fumio Kishida came to Canada in January, 2023 making no secret of his “high expectations” to reach an LNG export agreement with Canada.

In August 2022, German Chancellor Olaf Scholz came to Canada hoping to reach an LNG deal. “Canada is our partner of choice,” Scholz said at the time.

Somehow, Trudeau said at a press conference with the German leader that there was no “business case” for LNG exports to Europe. Instead, he took the chancellor to an empty field in Newfoundland that was the chosen site for a future Canadian facility to export carbon-neutral hydrogen.

That will help Germany a little, but not nearly enough. The country turned to Qatar and signed a 15-year LNG export deal.

Canada is currently the world’s fifth largest producer of natural gas. But, as is the case with oil, facilities to sell it overseas are very limited. Canada has no LNG export facilities currently operating. Any LNG exports to Europe would have to go through a US export terminal.

Kitimat, BC will open a major export facility in early 2025, but plans to build an LNG pipeline to ports on the East Coast have fallen apart due to high costs.

On Monday, Alberta Energy Minister Brian Jean said “onerous” regulatory procedures were more to blame.

“With massive natural gas reserves, Canada can no longer wait on the LNG sidelines, burdened by an onerous regulatory system. Our allies and trading partners need us. We must have more LNG export facilities approved and built,” Jean said in a statement.

Jean is right. Canada has scuttled one opportunity after another during the Trudeau era, first by smothering pipeline development in onerous regulations. The Northern Gateway pipeline was the only one the nation banned, citing environmental concerns off the coast of northern B.C., despite the fact that 50 tankers passed the same waters every day with exports from Alaska.

Other proposals, such as the Energy East pipeline, were held up in red tape until its proponents decided the project wasn’t worth it. A 30,000-page application went for not, as did the hope that refineries in the Maritimes could refine Canadian products instead of those from the Middle East.

The trans mountain pipeline was also bound up until the government bought it, after which its progress still went painfully slowly. Years late and six times over-budget at a cost of $34 billion, the “long delayed” pipeline is finally ready for crude deliveries.

Bill C-69, dubbed by former Alberta Premier Jason Kenney as the “No More Pipelines Act”, was declared unconstitutional by the Supreme Court of Canada last fall. The development is welcome but cannot restore lost time.

Canada remains poorly positioned to capitalize on another historic opportunity–the European thirst for oil as it tries to distance itself from Russia. Unfortunately, this problem seems more convenient to Ottawa than not. The Canadian government seems more interested in having zero carbon emissions even if that means zero economy. Too bad that makes zero sense.

Lee Harding is a Research Fellow at the Frontier Centre for Public Policy

Related Topics:#CanadaLNGParalyzed #FrontierCentreForPublicPolicy #JustinTrudeau #LeeHarding #LNGCanadaGermanyJapanGreece

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Federal government’s GHG reduction plan will impose massive costs on Canadians

Published on July 26, 2024

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From the Fraser Institute

By Ross McKitrick

Many Canadians are unhappy about the carbon tax. Proponents argue it’s the cheapest way to reduce greenhouse gas (GHG) emissions, which is true, but the problem for the government is that even as the tax hits the upper limit of what people are willing to pay, emissions haven’t fallen nearly enough to meet the federal target of at least 40 per cent below 2005 levels by 2030. Indeed, since the temporary 2020 COVID-era drop, national GHG emissions have been rising, in part due to rapid population growth.

The carbon tax, however, is only part of the federal GHG plan. In a new study published by the Fraser Institute, I present a detailed discussion of the Trudeau government’s proposed Emission Reduction Plan (ERP), including its economic impacts and the likely GHG reduction effects. The bottom line is that the package as a whole is so harmful to the economy it’s unlikely to be implemented, and it still wouldn’t reach the GHG goal even if it were.

Simply put, the government has failed to provide a detailed economic assessment of its ERP, offering instead only a superficial and flawed rationale that overstates the benefits and waives away the costs. My study presents a comprehensive analysis of the proposed policy package and uses a peer-reviewed macroeconomic model to estimate its economic and environmental effects.

The Emissions Reduction Plan can be broken down into three components: the carbon tax, the Clean Fuels Regulation (CFR) and the regulatory measures. The latter category includes a long list including the electric vehicle mandate, carbon capture system tax credits, restrictions on fertilizer use in agriculture, methane reduction targets and an overall emissions cap in the oil and gas industry, new emission limits for the electricity sector, new building and motor vehicle energy efficiency mandates and many other such instruments. The regulatory measures tend to have high upfront costs and limited short-term effects so they carry relatively high marginal costs of emission reductions.

The cheapest part of the package is the carbon tax. I estimate it will get 2030 emissions down by about 18 per cent compared to where they otherwise would be, returning them approximately to 2020 levels. The CFR brings them down a further 6 per cent relative to their base case levels and the regulatory measures bring them down another 2.5 per cent, for a cumulative reduction of 26.5 per cent below the base case 2030 level, which is just under 60 per cent of the way to the government’s target.

However, the costs of the various components are not the same.

The carbon tax reduces emissions at an initial average cost of about $290 per tonne, falling to just under $230 per tonne by 2030. This is on par with the federal government’s estimate of the social costs of GHG emissions, which rise from about $250 to $290 per tonne over the present decade. While I argue that these social cost estimates are exaggerated, even if we take them at face value, they imply that while the carbon tax policy passes a cost-benefit test the rest of the ERP does not because the per-tonne abatement costs are much higher. The CFR roughly doubles the cost per tonne of GHG reductions; adding in the regulatory measures approximately triples them.

The economic impacts are easiest to understand by translating these costs into per-worker terms. I estimate that the annual cost per worker of the carbon-pricing system net of rebates, accounting for indirect effects such as higher consumer costs and lower real wages, works out to $1,302 as of 2030. Adding in the government’s Clean Fuels Regulations more than doubles that to $3,550 and adding in the other regulatory measures increases it further to $6,700.

The policy package also reduces total employment. The carbon tax results in an estimated 57,000 fewer jobs as of 2030, the Clean Fuels Regulation increases job losses to 94,000 and the regulatory measures increases losses to 164,000 jobs. Claims by the federal government that the ERP presents new opportunities for jobs and employment in Canada are unsupported by proper analysis.

The regional impacts vary. While the energy-producing provinces (especially Alberta, Saskatchewan and New Brunswick) fare poorly, Ontario ends up bearing the largest relative costs. Ontario is a large energy user, and the CFR and other regulatory measures have strongly negative impacts on Ontario’s manufacturing base and consumer wellbeing.

Canada’s stagnant income and output levels are matters of serious policy concern. The Trudeau government has signalled it wants to fix this, but its climate plan will make the situation worse. Unfortunately, rather than seeking a proper mandate for the ERP by giving the public an honest account of the costs, the government has instead offered vague and unsupported claims that the decarbonization agenda will benefit the economy. This is untrue. And as the real costs become more and more apparent, I think it unlikely Canadians will tolerate the plan’s continued implementation.

Author:

Ross McKitrick

Professor of Economics, University of Guelph

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Kamala Harris’ Energy Policy Catalog Is Full Of Whoppers

Published on July 25, 2024

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From the Daily Caller News Foundation

By DAVID BLACKMON

The catalog of Vice President Kamala Harris’s history on energy policy is as thin as the listing of her accomplishments as President Joe Biden’s “Border Czar,” which is to say it is bereft of anything of real substance.

But the queen of word salads and newly minted presumptive Democratic presidential nominee has publicly endorsed many of her party’s most radical and disastrous energy-related ideas while serving in various elected offices — both in her energy basket-case home state of California and in Washington, D.C.

What Harris’s statements add up to is a potential disaster for America’s future energy security.

“The vice president’s approach to energy has been sophomorically dilettantish, grasping not only at shiny things such as AOC’s Green New Deal but also at the straws Americans use to suck down the drinks they need when she starts talking like a Valley Girl,” Dan Kish, a senior research fellow at Institute for Energy Research, told me in an email this week. “To be honest, she’s no worse than many of her former Senate colleagues who have helped cheer on rising energy costs and the fleeing American jobs that accompany them. She doesn’t seem to understand the importance of reliable and affordable domestic energy, good skilled jobs or the national security implications of domestically produced energy, but maybe she will go back to school on the matter. No doubt on her electric school bus.”

During her first run for the Senate in 2016, Harris said she would love to expand her state’s economically ruinous cap-and-trade program to the national level. She also endorsed then-Gov. Jerry Brown’s harebrained scheme to ban plastic straws as a means of fighting climate change.

Tim Stewart, president of the U.S. Oil and Gas Association, told me proposals like that one would lead during a Harris presidency to the “Californication of the entire U.S. energy policy.” “Historically,” he added, “the transition of power from a president to a vice president is designed to signal continuity. This won’t be the case, because a Harris administration will be much worse.”

But how much worse could it be than the set of Biden policies that Harris has roundly endorsed over the last three and a half years? How much worse can it be than having laughed through a presidency that:

— Cancelled the $12 billion Keystone XL Pipeline on day one.

— Enacted what many estimate to be over $1 trillion in debt-funded, inflation-creating green energy subsidies.

— Refused to comply with laws requiring the holding of timely federal oil and gas lease sales.

— Instructed its agencies to slow-play permitting for all manner of oil and gas-related infrastructure.

— Tried to ban stoves and other gas appliances.

— Listed the Dunes Sagebrush Lizard as an endangered species despite its protection via a highly-successful conservation program.

— Invoked a “pause” on permitting of new LNG export infrastructure for the most specious reasons imaginable.

— Drained the Strategic Petroleum Reserve for purely political reasons.

As Biden’s successor for the nomination, Harris becomes the proud owner of all these policies, and more.

But Harris’ history shows it could indeed get worse. Much worse, in fact.

While mounting her own disastrous campaign for her party’s presidential nomination in 2020, Harris endorsed a complete ban on hydraulic fracturing, i.e., fracking. She later conformed that position to Biden’s own, slightly less insane view, but only after being picked as his running mate.

Consider also that while serving in the Senate in early 2019, Harris chose to sign up as a co-sponsor of the ultra-radical Green New Deal proposed by New York Rep. Alexandria Ocasio Cortez. It is not enough that the Biden regulators appeared to be using that nutty proposal and climate alarmism as the impetus to transform America’s entire economy and social structure: Harris favors enacting the whole thing.

As I have detailed here many times, every element of climate-alarm-based energy policies adopted by the Biden administration will inevitably lead the United State to become increasingly reliant on China for its energy needs, in the process decimating our country’s energy security. By her own words and actions, Harris has made it abundantly clear she wants to shift the process of getting there into a higher gear.

She is an energy disaster-in-waiting.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.