Green power from natural gas must be exported to Europe • Troy Media

German Chancellor Olaf Scholz recently traveled to Canada to discuss, among other things, Europe importing Canadian natural gas. With the invasion of Ukraine and subsequent sanctions, Germany, which imported 55% of its natural gas from Russia in 2021, had to reopen some coal-fired power plants and began looking for other sources to meet. to its natural gas needs.

As difficult as this situation is for the German population, this transfer of consumption to natural gas from other countries is an integral part of the Western response to Europe’s first conventional conflict in decades.

Still, this is a unique opportunity for Canada to help both its own economy and that of its allies. Quebec alone has natural gas reserves estimated at between 2.8 trillion m3 and 8.5 trillion m3. According to the Canadian Energy Research Institute, the development of these reserves could bring nearly $15 billion in tax and royalty revenues to the province over a 25-year period.

Despite these significant economic benefits, the governments of Quebec and Canada refuse to give the green light to the development of natural gas or to the construction of the energy infrastructures necessary for the export of the gas already produced. Citing a lack of infrastructure that can be used in the short term and claiming that the consumption of natural gas emits GHGs, the Canadian and Quebec governments are blocking any measure that could facilitate exports.

The absence of pre-existing infrastructure is not a valid reason to justify these government refusals. Indeed, given the speed with which Germany expects to complete the construction of its LNG terminal and have it operational in just over a year, it is clear that Canada could act in a similar time frame. . There’s no reason Canada shouldn’t build a terminal so quickly – and the longer we wait, the worse things will get for our European allies.

The environmental argument does not hold water either. Natural gas is a transition energy. Less polluting than coal, the transformation of coal-fired power plants into natural gas-fired power plants has enabled the reduction of 500 million tonnes of CO2 worldwide between 2010 and 2018, i.e. the equivalent of replacing 200 million gas vehicles with electric vehicles. by electricity that does not generate GHGs.

In addition, the European Union has recently classified natural gas as a green energy source. As for the Énergie Saguenay natural gas liquefaction plant project, it was expected to reduce global emissions by 28 million tonnes per year, with lower GHG emissions during liquefaction than comparable plants in the United States. United and Qatar. In addition to the environmental benefits of the project, the plant is expected to generate more than $800 million annually in economic benefits and $110 million in tax revenue for the federal and provincial governments.

Despite the substantial economic and environmental benefits of Canadian natural gas development and liquefaction projects, governments continue to refuse to allow these projects to proceed.

Canada is not just shooting itself in the foot; it also hurts its European allies who are trying to present a united front against Russia. And on top of that, Canada refuses to reduce global GHGs by further developing an energy source that the European Union considers green. Clearly, Canada can and must do better.

Olivier Rancourt is an economist at the Montreal Economic Institute.

For interview requests, click here.

The opinions expressed by our columnists and contributors are their own and do not inherently or expressly reflect the opinions of our publication.

© Troy Media
Troy Media is an editorial content provider for news outlets and its own hosted community media across Canada.

Olivier Rancourt

Olivier Rancourt holds a master’s degree in economics from the University of Montreal. His master’s thesis project examined political bias in the filing of antitrust cases by the US Department of Justice. During his university career, he held several positions within the Economics Student Association of the University of Montreal (AÉÉSÉUM). He joined the MEI team in January 2021.

Read more from the same author:

Mary I. Bruner