By Mitchell Beer

With Prime Minister Mark Carney and Energy and Natural Resources Minister Tim Hodgson just back from their liquefied natural gas (LNG) sales trip to Germany, the nation-building projects they crave are busting out all over.

Just not in the way they seem to expect, or in the places they’re most avidly looking for them.

During their sojourn in Berlin Tuesday and Wednesday, the PM and his former Goldman Sachs and Bank of Canada colleague distinguished themselves by touting the promising market they see in Germany for a fuel that much of the world is looking to leave behind, or will be soon enough. LNG is emerging as a centrepiece of their quest for “nation-building” projects to diversify Canada’s economy and assert our sovereignty against Donald Trump’s tariff warfare and annexation threats.

“I think you’re probably talking about five to seven years,” Hodgson told Politico EU in an interview Wednesday, adding that he’d been surprised by long-term interest from German industry in LNG supplies that are typically seen as climate-unfriendly. “They believe that there will be more LNG required and for longer as a transition fuel,” he said.

Wow! The German gas and utility industry is touting strong future demand for gas? Stop the virtual presses!

In fairness, Hodgson’s department, Natural Resources Canada (NRCan), responded with good detail and substance when The Energy Mix asked where they saw reliable demand for a 15- to 20-year gas export contract. A senior media advisor cited modelling by energy analytics firm Wood Mackenzie that shows European gas demand peaking by the mid-2030s, with export opportunities beyond 2035.

But NRCan acknowledged that Canada is a long way from a firm LNG deal. “These are very much exploratory discussions at this time,” the advisor told The Mix in an email. “Commercially viable projects that have the support of the province, and affected Indigenous communities will be considered by the federal government. Regulatory approvals would follow existing processes and the decision to build lies with proponents and investors.”

Big Questions About Gas

No one is seriously suggesting we can shut down gas production tomorrow. But the uncertainties around global gas markets and future demand date back a decade or more, and the case is getting weaker, not stronger. Users of all kinds, from households to big data centres, are looking for affordable, hyper-reliable energy that is quick to install and keeps the lights on in a heat wave or storm. On any of those criteria, gas can’t match the performance of wind or solar with battery backup, supported by heat pumps and building retrofits to boost efficiency.

At some point, you have to wonder…if economic diversification through new trading partners is the point of the exercise, can you call it a nation-building project if you can foresee a time when no other nation will want you to build it?

In Europe, in particular, countries learned another brutal and heartbreaking lesson over the last 3½ years. After Vladimir Putin invaded Ukraine, then tried to use oil and gas dependency as a pressure point on European neighbours, energy independence became the continent’s rallying cry. The EU couldn’t turn on a dime (or a Eurocent) to dump gas completely. But faster energy efficiency improvements and wider renewable energy deployment were the quickest, best ways to prevent a dictator from using fossil fuel exports as a weapon of war. Fast forward to this year’s tariff negotiations between the EU and the Trump administration, and getting out from under fossil fuels is the way to avoid a $750-billion shakedown by another dictator.

It’s good to know that there was some actual number-crunching behind Hodgson’s very optimistic, five- to seven-year timeline. But the WoodMac modelling runs counter to a small mountain of analysis, all of it suggesting that more LNG is the last thing Germany or Europe will need.

“In the medium and long term, we’re not anticipating an increase in gas demand, certainly not in Western Europe,” Pawel Czyzak, Europe programme director at the Ember energy think tank, told The Mix in an email last week, with consumption already down 17% between 2021 and 2024 and set to shrink further through 2030 as the economy electrifies. The continent “is already heavily oversupplied towards 2030,” he added, and “that oversupply will get even more severe if the questionable fossil fuel imports from the EU-U.S. trade [and tariff deal] are implemented.”

“Cutting dependency on gas from Russia or any other country can be achieved if gas consumption reduction measures continue in place,” added Ana Maria Jaller-Makarewicz, lead energy analyst, Europe at the Institute for Energy Economics and Financial Analysis. With an affordable energy action plan in place, “the bloc could satisfy demand without additional gas infrastructure or increased imports.”

It’s Also a Climate Bomb

All of those legit, important arguments against gas are proxies for the reality that it’s also a climate bomb.

The gas industry everywhere has done a great job of spinning its product as a “clean” transition fuel and a reasonable gateway to a low-carbon future. But the main component of natural gas is methane, a climate super-pollutant with 84 times the warming potential of carbon dioxide over the crucial, 20-year span when we’ll all be scrambling to get climate change under control.

Methane leaks into the atmosphere at every step in the gas production process—from fracking, to pipeline transport, to the ships that carry LNG across oceans—and the industry has been famously inept at accurately measuring and reporting leaks. Methane controls are widely recognized as one of the quickest, cheapest paths to the deepest possible emission reductions through 2030. Yet methane regulations are always on the hit list when fossil lobbyists and their hired hands like Alberta Premier Danielle Smith insist on killing off the minimal, often ineffective government regulations they face.

Nation-Building That Builds Our Future

LNG is the dominant but not the only flavour of nation-building project on the federal government’s agenda. In Germany last week, Carney also signed a declaration of intent for critical mineral development. Regional clean power grids are on the agenda, although completing an east-west grid doesn’t seem to be a priority. And the PM has talked in general terms about energy efficiency as a goal for the emerging Build Canada Homes affordable housing program.

But that’s just one corner of the menu of nation-building projects the government could adopt to build Canada’s strength and solidarity from the ground up—while bringing us the ultimate safety and security of helping to get climate change under control.

• The first piece of this puzzle must be a good idea, because it comes directly from our readers (or as public broadcasting would have us say, from readers like you!).

After emergency physician Nicolas Chagnon submitted this well-argued case for a federal rooftop solar program, two other readers, Martin Benum and Ron Moore, chimed in with detailed comments on what it would take to make those projects work. It wasn’t that the post received dozens of replies, more that the discussion immediately got so specific and substantive. It brought home to me that, just like the push for balcony solar in Europe and the U.S. state of Utah, the obstacle to faster renewable energy deployment isn’t public demand. It’s the rules, regulations, and financing models that are holding us back.

• Quebec is going all-in on wind power with a target of 10,000 megawatts of new capacity by 2035, much or most of it developed in partnership with Indigenous communities. “In Quebec, we spend $10 billion a year on fossil fuel supplies,” said Energy Minister Christine Fréchette. “That’s crazy. So let’s take some of that money and invest it in renewable energy, which will generate benefits for Quebecers and clearly transform the Quebec economy, in addition to contributing to the well-being of the planet.”

“Prediction: this sentiment is going to catch on in other Canadian provinces and in fossil fuel import-dependent jurisdictions worldwide, as it should,” Dan Woynillowicz, principal of Polaris Strategy + Insight, commented on LinkedIn.

• Efficiency Canada is pushing hard on the arguments for energy efficiency as a nation-building project that can produce quick results, boost productivity, support Canadian businesses and technology, deliver regional fairness, and help build a “more adaptable and tariff-proofed economy”. But the Building Decarbonization Alliance warned last month that the clock is beginning to tick on a deep energy retrofit initiative that could be a “megaproject moving in slow motion” if it’s allowed to meet its full potential, but will sink without a trace if Carney’s government forgets or neglects to renew it.

Which may happen if they’re too preoccupied with their LNG adventures to pay attention to the stuff that is actually poised to deliver results.

• In new construction, modular housing companies like CABN are setting the pace with affordable, factory-built homes that are quicker to complete and, in CABN’s telling, can be net-zero or even net-negative for emissions. There are a lot of detailed claims baked into that calculation and it’s up to regulators to verify the results. But with housing already high on the federal agenda, there’s an opportunity for Ottawa to turn the affordability crisis into an essential nation-building moment—and make the net-zero performance pioneered by CABN a baseline requirement for grants and incentives when bigger players enter the prefab space.

• In agriculture, Canadian farmers were eager enough to embrace soil carbon storage, nitrogen fertilizer reductions, and other emission reduction options that the $200-million On-Farm Climate Action Fund ran out of funds ahead of schedule—making it the first but not the last Trudeau-era program that federal financial minders declared too successful to continue. Agrivoltaics are quickly emerging as a win-win for farmers, rural communities, solar developers, and even avowedly hostile regimes like the Danielle Smith government—as the Vatican is now showing with a project outside Rome. (Hat tip to another reader, Diane Beckett, for pointing us to that last link.)

• To help rural communities build stable, diversified economies that don’t begin and end with fossil fuels, we’re hearing more and more that a local solar or wind farm won’t be a big source of long-term jobs once it’s built—once the installation is done, the main job “baaa-nefit” will go to the sheep or goats brought in to clear the brush around the panels. (Yes, we went there. Again.) But the prospect of reliable, local power at 6¢ per kilowatt hour will draw the investors that will make a local economic development officer’s heart sing.

• And no nation-building effort will be complete without facing down the massive rise in youth unemployment, across Canada and particularly in Ontario. If Carney and his team want to get serious about job creation for the generation we always say we’re thinking of when we talk about climate change, a Youth Climate Corps would get the job done—but not if it’s just a token pilot project. Watch The Energy Mix for an upcoming feature interview with Climate Emergency Unit Team Lead Seth Klein, who distinguishes the YCC’s promise of meaningful work for a living wage with some of the recent calls for mandatory national service.

[Disclosure: Energy Mix community engagement staffers Mike Hager and Lella Blumer are on part-time assignment with the Climate Emergency Unit, where part of their job is to help amplify the case for the Youth Climate Corps.]

All of these initiatives are practical, affordable, and ready to scale up. And, unlike the government’s economically tenuous LNG agenda, they all bring climate solutions and PM Carney’s stated Value(s) back to the centre of the conversation.

A Plan That Meets the Moment

It’s easy enough to sort through the spin and pick apart the Carney government’s latest LNG adventure. But those facts and arguments miss the point if they don’t get at the real point of the exercise.

For better and for worse, Carney was elected with one overarching job: to protect Canada from the predatory sociopath currently occupying the White House. If in doubt, Job #2 is to refer back to Job #1. It isn’t the way we should have to spend our time and resources when we have climate change and a host of overlapping crises to address. But it’s what we’ve got, largely thanks to obscene levels of campaign financing from the U.S. fossil industry.

And now, Canada and Germany seem to have concluded that anything else they hope to achieve depends on projecting strength in terms that Donald Trump will understand. If that’s what was going on last week in Berlin—and I’ve heard no one say that out loud—it wouldn’t be the first time that Trump theatre has taken the place of real, practical policy in the international sphere.

But nations are built on real results, not theatre. So even if a desperation move to embrace LNG is seen as one way to keep our #ElbowsUp, we also have to keep our hearts, minds, and hands open to real nation-building initiatives that will bring us the country we want in a liveable, zero-carbon future.

Which isn’t anything that Carney doesn’t already know, hasn’t already told us in his own words.

“Climate policy has never been just about the environment,” writes Simon Donner, co-chair of Canada’s Net-Zero Advisory Body, last seen warning Team Carney that the “grand bargain” they want on oil and gas could get them in trouble with the new trading partners they’re trying to develop.

“The reality is that good climate policy is good economic policy,” Donner adds. “Despite headwinds south of the border, climate action and the transition to clean energy are accelerating. Emissions have decreased across the G7 over the last two decades. The global market for the six key clean energy technologies—solar cells, wind turbines, electric vehicles, batteries, electrolysers, and heat pumps—quadrupled in size over the last decade, buoyed by >90% drop in costs. The real question is whether we are willing to make the up-front policy and infrastructure investments today to build future low-carbon industries and transition to a low-carbon energy system.”

The post Opinion: When ‘nation-building’ goes wrong: Carney, Hodgson must think bigger than LNG exports appeared first on Thoughtful Journalism About Energy's Future.

By Mitchell Beer

The Canadian government will depend on continuing gas demand from Europe and “exploratory discussions” with potential trading partners in Germany to back up Energy and Natural Resources Minister Tim Hodgson’s pledge last week to deliver a first LNG shipment to Europe in “as little as five years”.

The emerging gas export plan may also hinge on the prospect of liquefied natural gas “swaps” on international markets, according to news reports.

Last week, Hodgson joined Prime Minister Mark Carney in Berlin to launch a major LNG export push, including new port infrastructure under consideration in Churchill, Manitoba and Montreal. The announcement has Canada positioning itself as a key supplier of gas and critical minerals to Europe’s energy transition and resource security.

In an email to The Mix Friday afternoon, a senior media relations advisor in Hodgson’s department, Natural Resources Canada (NRCan), laid out some of the conditions and assumptions behind the top-line announcement.

“While in Germany, [fossil] energy companies and stakeholders expressed strong interest in Canadian LNG,” she wrote. “This was also part of discussions with industry and government. Lower-carbon Canadian LNG could offer Germany the opportunity to displace Russian gas with reliable, stable supply from Canada that would advance their goal of ending imports of Russian energy.”

But “these are very much exploratory discussions at this time,” the advisor added.

“Commercially viable projects that have the support of the province, and affected Indigenous communities will be considered by the federal government. Regulatory approvals would follow existing processes and the decision to build lies with proponents and investors.”

Future Gas Demand Vs. Massive Energy Savings

The NRCan advisor acknowledged projections from the International Energy Agency that European gas demand will fall 9 per cent between 2023 and 2030, but said the continent’s total consumption will “remain substantial” at decade’s end, at 44.7 billion cubic feet (bcf) per day.

“LNG demand in particular will remain robust,” she wrote, citing the Wood Mackenzie energy analytics firm. WoodMac’s modelling “anticipates that European LNG demand will peak by the mid-2030s (roughly 30 million tonnes above current anticipated demand of 116 million tonnes, in 2025). The majority of that LNG demand is uncontracted beyond 2035, which offers opportunities for Canadian exports.”

But that doesn’t indicate any certainty for projects that require 15 or 20 years of demand to justify major new investment. Last week, a joint reporting effort by The Mix and Berlin-based Clean Energy Wire found multiple analysts who see limited prospects for future LNG trade.

“In the medium and long term, we’re not anticipating an increase in gas demand, certainly not in Western Europe,” Pawel Czyzak, Europe programme director at the Ember energy think tank, said in an email. EU gas demand fell 17 per cent between 2021 and 2024, spurred largely by the energy shock following Vladimir Putin’s invasion of Ukraine, and consumption will continue to shrink through 2030 as Europe electrifies its economy.

That means the continent “is already heavily oversupplied towards 2030,” he said, and “that oversupply will get even more severe if the questionable fossil fuel imports from the EU-U.S. trade [and tariff deal] are implemented.”

Ana Maria Jaller-Makarewicz, lead energy analyst, Europe with the Institute for Energy Economics and Financial Analysis (IEEFA), said the EU is on track to reduce its gas imports 25 per cent by 2030 under REPowerEU, its plan to end its dependency on Russian fossil fuels by 2027 through increased energy efficiency, faster growth in renewable energy, and diversified energy supplies. The plan included voluntary gas reduction targets for 2022, 2023, and 2024, an the bloc exceeded its targets for the first two years, though Jaller-Makarewicz warned in a May, 2024 commentary that EU targets for 2024 and 2025 could allow for increased gas use.

Even so, “EU efforts to curb gas demand and diversify energy sources have been vital for Europe’s security of supply,” she told The Mix in an email. “Cutting dependency on gas from Russia or any other country can be achieved if gas consumption reduction measures continue in place.”

With an affordable energy action plan set to replace up to 100 billion cubic metres (more than 3,500 billion cubic feet) of gas by 2030, she added, “the bloc could satisfy demand without additional gas infrastructure or increased imports.”

IEEFA energy finance analyst Clark Williams-Derry said a “reshuffling of deck chairs” might see Germany importing more LNG while the United Kingdom imports less, with the net result that Europe as a whole needs no additional supply. With significant new LNG capacity coming online in the near future, he said the global market will be over-supplied between 2026 and 2036—well past the five- to seven-year delivery target that Hodgson laid out last week—with the peak expected to hit in 2029.

Jaller-Makarewicz said the EU is also operating under Fit for 55, a set of laws aimed at reducing the continent’s climate pollution by at least 55 per cent by 2030. Some of its key elements include a carbon border adjustment mechanism, higher emission reduction targets for industry, and energy savings for vulnerable populations.

A ‘Climate Wake-Up Call’

Meanwhile, European decision-makers heard a stark warning in the last week that the Atlantic Meridional Overturning Circulation (AMOC) could begin shutting down as early as the 2060s, in what European Climate Commissioner Wopke Hoekstra called a “wake-up call” from researchers at Utrecht University. “Shutdown of the AMOC would see temperatures in Europe plummet even as global warming marches on. This would also reduce rainfall and likely bring even drier summers, with devastating consequences for agriculture,” Politico EU reported.

“There’s a sense out there that climate change has taken a backseat because we’re so busy dealing with [other] pressing concerns,” Hoekstra wrote on social media. “So a big thanks to these scientists for giving us another serious climate wake-up call.”

East Coast LNG Vs. West Coast ‘Swaps’

Although much of the initial reaction to Carney’s and Hodgson’s European tour focused on the limited prospects for new LNG terminals in Atlantic Canada, discussions in Berlin centred on two other possibilities: treating Churchill, which Carney cited as “essentially a new port”, as an eastbound export terminal for LNG, or having European companies buy up West Coast LNG and trade it on global markets for suppliers that are closer to home.

“Many of the buyers are prepared to buy LNG off the West Coast of Canada and trade those products in the international market for LNG,” Hodgson told media Berlin.

That line of thought matched up with recent remarks by British Columbia Energy and Climate Solutions Minister Adrian Dix, who told the Globe and Mail he sees his province becoming a leading global supplier of fossil fuels while boosting renewable energy at home.

“At the centre of the strategy is an investment in wind and solar power that Mr. Dix likened in scale to the dawn of B.C.’s modern hydroelectricity system in the 1960s. He suggested it has the ability to draw capital displaced from the United States amid that country’s anti-renewables turn,” wrote Globe columnist Adam Radwanski.

“While the new capacity would partly enable a climate-friendly shift in energy usage—from gasoline-powered cars to electric vehicles, for example—it’s also meant to power the growth of the province’s LNG industry, as well as new mining activity.”

But “B.C.’s version of Mr. Carney’s grand bargain between resource extraction and sustainability remains tenuous,” Radwanski added. Dix’s “overarching message was that Ottawa’s backing—financial, rhetorical and, in some cases, regulatory—could go a long way toward ensuring investor confidence, as well as social licence.”

Dix did contrast B.C.’s wish list of nation-building projects with the westbound oil pipeline that has been loudly championed by Alberta Premier Danielle Smith and opposed by the B.C. government. He said B.C.’s top pick, the 450-kilometre North Coast Transmission Line from Prince George to Terrace, would help electrify the province’s gas industry while opening up critical mineral reserves to supply electric vehicle supply chains.

The project is ready to roll, he told Radwanski, and is no less than “the best national project existing in Canada now.”

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