QUESTION PERIOD — Ministry of Natural Resources
Oil and Gas Industry
December 14, 2022
Thank you, and welcome, Mr. Wilkinson. In late August, German Chancellor Olaf Scholz came to Newfoundland and Labrador, the province I represent, for an official visit. One of his objectives was to seek contracts for natural gas to replace the gas that he is under pressure to replace that he is getting from Russia. Chancellor Scholz noted that Canadian gas was his first choice, and I’ve heard from others in Europe that Canada is the first choice for natural gas and for oil-alternate energy.
He came to make a deal, minister, and he was shown the door. In fact, Prime Minister Trudeau said at a joint press conference that there has never been a strong business case. Of course, we know that’s not the case. We have also now heard that Germany has signed a multi-billion dollar, 15-year agreement with Qatar on natural gas.
Minister, there is an existing regulatory regime, a market supply and there is a market. Germany is an ally and a CETA trade partner. When can Canadian industry get clarity from your government on these opportunities?
Thank you for the question. As I said before, we are very interested in supporting, in any way we can, our friends in Europe at a time of great stress. That is why we augmented the production and supply of oil and gas through the United States by 300,000 barrels a day and we are on track to achieve that. There will be liquid natural gas flowing from Canada as early as 2024 through the Kitimat plant that is being built by LNG Canada.
On the East Coast, what the Germans have said very publicly — and often to me — is that they need something that could be up and running within three years, and if not, they are not interested. They feel they will be in a position to have fully displaced Russian gas by that time, partly through the transition they are trying to make on an accelerated basis to renewables and hydrogen, and partly through contracts they may secure with others who have the ability.
We have been working. There is really only one project that could meet that timeline. You would need to have an existing pipeline and, ideally, you would have some existing infrastructure. There is such a plant in New Brunswick, but it requires upgrades to the pipeline, some in Canada and through the United States; it runs through Maine and New Hampshire. We have been looking at that and working actively with Premier Higgs on that. If you ask TC Energy, which is the pipeline operator, they are concerned about the ability for the regulatory process in the United States to get approval. It’s not in Canada that it concerns them.
As for the issue around the business case, I think we may have found a way around that, but it costs a lot of money to ship gas from Alberta all the way to New Brunswick. There may be a different funding mechanism where they don’t pay exactly what they would pay from the Gulf of Mexico. We are still working on that, but we should understand that the regulatory issue actually lies with the Americans not the Canadians.
