Germany-Qatar LNG Deal a Sorely Missed Opportunity for Canada

DEC 2, 2022
Canada Action

germany qatar deal a sorely missed opportunity for canada - cover cover - - Copy

Germany has signed a long-term 15-year deal to buy 2 million tonnes of liquefied natural gas (LNG) from Qatar annually, with deliveries starting in 2026. What an opportunity that could have been for Canada -- if only we were as keen on shipping our natural gas abroad as Qatar, Nigeria, Australia, Mozambique, Tanzania, and several other countries are.

Three months ago, the Germans came knocking on our doorstep and asked for more responsibly produced Canadian natural gas to help quell their energy security woes. German Chancellor Olaf Scholz made it clear that Canadian-made LNG was Europe’s first choice in his search for new energy supplies abroad.

"As Germany is moving away from Russian energy at warp speed, Canada is our partner of choice," said Scholz at an economic conference in Toronto according to Reuters. "For now, this means increasing our LNG imports. We hope that Canadian LNG will play a major role in this."

Our response? To send the Germans hydrogen produced with wind power by 2025.

Olaf Scholz Says Germany wants and prefers Canadian-made LNG as a choice supplier for European energy needs - Copy

Not to be mistaken, it’s great news that Canada is investing in green hydrogen (a near-zero emission type of hydrogen power) and plans to export it abroad. However, I am sure you’ve heard the saying somewhere before:

One person’s loss is another person’s gain.

Or in this case, one democratic country’s loss is another autocratic country’s gain.

How did Canadians lose anything, you might ask?

For starters, 2 million tonnes per annum of LNG sales would have generated roughly $100 million in taxes/royalties every year in Canada ^[1]. Canadians could have benefitted immensely from those revenues, creating new jobs while also generating public revenues to pay for our schools, roads and hospitals.

Let’s take it a step further. Is the world better off with more energy production in the hands of democratic energy producers, or autocratic ones?

If the oil embargoes of the 1970s or the recent war in Ukraine have provided us with any lessons, it would be that democracies are the better choice for the West.

This is the case with the recent LNG deal between Germany and Qatar.

Apart from being an environmental leader, Canada is also a bastion of democracy and one of the last major democratic energy exporters worldwide. Today’s energy crisis in Europe shows exactly why choosing reliable and democratic producers over autocracies is the right choice.

Energy security matters. And what better place is there for Europeans to source LNG than a long-time ally and trade partner that has proven to be a responsible and reliable energy supplier for decades.

Sanna Marin says democracies have become too dependent on autocracies for - Copy

Sanna Marin, Prime Minister of Finland, explains perfectly in a recent interview with ABC News the controversy with democracies sourcing precious natural resources from autocracies.

“In increasingly critical areas, from medical equipment to new technologies and energy, we have become far too dependent on cooperation with regimes which do not share our common values,” explained Marin, as her country deals with the ramifications of Europe’s energy crisis.

Additionally, Canada prides itself on being one of the most sustainable, regulated and environmentally conscious energy producers worldwide. While building out our wind and solar energy across the country, we continue to pursue reducing carbon emission intensities for our oil and natural gas. We are a leader in renewables, and our LNG projects are expected to be some of the least carbon-intensive of their kind on the planet largely due to the hydroelectricity grids that will power them.

Therefore, Canada missing out on obtaining more global LNG market share isn’t just a loss for Canadian families, but also for the global environment.

The Germany-Qatar LNG deal should be a wake-up call for Canada. We must begin to see the value in expediting more LNG export projects before more global market share is lost to other producer-nations that don’t have the same values as we do.

More Canadian energy on global markets is a win for social progress, human rights AND climate action.

What country would you choose to source your energy from?

Canada is the right choice.

The potential impacts of Europe’s energy crisis on consumers, businesses, and the wider global economy. https://t.co/62hMfPuDFQ
— Canada Action (@CanadaAction) December 6, 2022