Juno News - Trudeau’s war on natural gas is bad for everyone

00:00:00.000 you're tuned in to the andrew lawton show

00:00:05.920 uh we'll move on to another subject here i said we'd talk about lng so this is has become a bit

00:00:14.040 of a hobby horse for me because i love when you have on one hand uh you know justin trudeau will

00:00:19.900 get up there and say there's no business case for lng export and then as i've joked in the past and

00:00:25.300 it keeps happening vashi capellos will interview all these foreign heads of government and heads

00:00:29.700 of state that come to canada like the prime minister of greece and the i forget it was the

00:00:33.300 prime minister or president of spain and the chancellor of germany and you know ask all of

00:00:37.300 them about lng and they're all like oh yeah we'd love to buy canadian lng so so there is actually

00:00:42.520 a market there is a business case one of the holdups though has always been the limitation

00:00:47.140 of refineries and export terminals well we have an export terminal at long last nearing completion

00:00:52.900 in british columbia so i think it's time to have a bigger picture discussion about the future of lng

00:00:58.880 philip cross is back it's been a little while but it's always good to have him on the show

00:01:02.580 he is a senior fellow with both the fraser institute and mcdonald laurie institute and had

00:01:07.680 a an interesting piece about this in the financial post the figures show canada needs more lng projects

00:01:14.520 philip always good to talk to you thanks for coming on today my pleasure andrew thanks for having me back

00:01:19.680 so so where does this argument that there's no business case come from because every time you see

00:01:25.000 people lining up to buy it that strikes me as a pretty compelling business case well it certainly

00:01:29.700 doesn't come from the business community and as you noted it doesn't come from our potential

00:01:33.400 customers overseas who uh were very anxious to access canadian lng um the idea that it's not

00:01:42.240 economic only seems to uh occur in the head of uh our prime minister and and perhaps some bureaucrats

00:01:49.160 who don't know anything about business cases uh but clearly there is a there isn't just a business

00:01:54.680 case there is an outstanding business case uh it's been proven by the americans who built any number

00:02:00.280 of lng terminals and made up uh fortune exporting from them uh to europe at the peak of the uh when lng

00:02:09.480 prices hit a extremely high levels just after putin's invasion of russia uh but there also are

00:02:15.480 opportunities in asia and um you know that's that's uh the main advantage is we're going to get a higher

00:02:22.840 price for a product we're already producing instead of selling it for a very low price to the united

00:02:28.360 states we can access prices overseas so it's not even clear that it's going to have a major impact

00:02:33.480 on emissions or any of that yeah and what's interesting too is that when canada exports lng

00:02:40.200 or you know canadian oil and gas in general it allows other countries that are not as quote unquote

00:02:45.880 green realizing that's a loading term to have an alternative to say coal and and you know one of the

00:02:50.840 things that has always been missing from this discussion from a lot of people is that emissions are

00:02:55.800 a global calculation not a domestic one so when and i've heard michael binion of the modern miracle

00:03:01.800 network make this point that you know we could increase emissions in canada and have a net reduction

00:03:07.400 of emissions globally if we allow canadian energy which is produced with very high standards to access

00:03:13.320 the international market but that part's missing and there's so many barriers that are put up really

00:03:18.360 by ideology towards canada being a major player on this market it seems yeah i can't agree with you

00:03:25.160 more about the global emissions i mean i have to laugh i heard on the local radio station this morning

00:03:29.800 driving into ottawa that ottawa is finally conceding that it's not going to achieve its target of a 43

00:03:36.280 reduction in emissions well my goodness i can't imagine anything more pointless than calculating the

00:03:42.520 emissions at the local level uh global warming in the city the city boundaries of ottawa is going to

00:03:48.680 be one way and once you get out it'll be different yeah yeah i mean it's it's a purely theoretical

00:03:53.560 calculation anyways even at the national level um in fact i'll be writing about this in an upcoming uh

00:03:59.800 op-ed in the post of it how you know when we measure emissions there isn't somebody from stack

00:04:05.080 hand doesn't go outside and and you know measure something uh or stand on top of the coach building

00:04:11.000 and start measuring you know emissions uh it's it's a theoretical calculation emissions in this

00:04:16.520 country for example blew through the roof last year when we had all those forest fires

00:04:21.000 uh and yet that doesn't enter into the official calculation so um the whole business of of calculating

00:04:29.000 emissions is is uh uh very vague and and uh model based uh at the best of times but you know the

00:04:39.080 broad lines are that we can be sure that lng from bc is going to have lower emissions than coal being

00:04:45.960 burned in in china so uh if emissions are your only focus it's still a no-brainer how much does i mean

00:04:55.720 if it's possible to even quantify but but how much does investor confidence and investor tolerance wane

00:05:02.520 on these sorts of projects when you see activists that in some cases very successfully disrupt these

00:05:08.680 things because i know there have been a couple of isolated examples where companies have said

00:05:12.840 listen this just isn't worth the hassle anymore well they certainly have had an impact i mean you know

00:05:19.000 uh kinder morgan sold uh got out of the oil pipeline business in uh for trans mountain

00:05:25.720 uh because uh the fears about the delays uh i was just reading the um stephen mayer's book about

00:05:33.400 uh justin trudel in which he talks about how um premier morgan out in bc he wasn't that opposed to uh

00:05:41.800 pipelines he certainly wasn't opposed at all to lng he let that one go ahead but he was just worried

00:05:48.200 he wanted to keep his coalition together and he was worried about environmental activists

00:05:52.360 disrupting uh the work sites and embarrassing the government so uh you know the the militant

00:05:58.440 environment environmentalists do have an impact and uh have a disproportionate uh and excessive voice

00:06:07.480 in determining whether these projects go ahead or not so what's happening now because you noted that

00:06:14.680 there's already been since the uh i think it was the kitamat project was you know basically nearing

00:06:19.560 completion that there's already been a bit of a resurgence in discussions about others

00:06:25.160 well and not just because we've finally completed one in canada i mean you know only in canada

00:06:33.080 and yeah let's uh let's break up the champagne but uh it's it's a combination of a project finally being

00:06:40.760 completed here in in canada but at the same time the biden administration has given in to their

00:06:46.200 environmental lobbyists and have for temporarily frozen any issue of permits for any new projects

00:06:53.800 now there are several projects already underway in the u.s that will continue to go ahead so

00:06:58.040 it's not like there's a moratorium you know like they impose on the keystone pipeline

00:07:03.640 but nevertheless it's an indication that particularly biden should get re-elected and and

00:07:10.440 next year or this year later this year and then you know doesn't care about getting re-elected again and

00:07:15.640 therefore you know gives into the environmental lottery even more that uh you know there may be

00:07:21.320 a real opportunity for canada to gain back some of the very large amount of market share that we've

00:07:26.360 lost to the u.s in developing lng up to now so uh but these projects take decades uh to get the

00:07:33.640 permitting and in the building done so it's something we have to start on right now we can't wait for

00:07:40.040 um you know another administration in the u.s to come and go before we decide oh yeah maybe there's

00:07:46.440 a market here uh i think what happened in europe you know with the german chancellor and so on

00:07:52.120 uh coming over here in a panic shows that you know you have to have that capacity ready well ahead of

00:07:57.720 emergencies uh you never know when emergencies are going to come along or when extraordinary events

00:08:02.760 will happen uh and so it's it's best to have the capacity in place and be ready for them yeah and

00:08:10.280 one of the biggest i think counterpoints when uh olaf schultz so i think triggered the discussion of of

00:08:16.040 this uh certainly from you know the perspective of the the business case aspect of it when that came up

00:08:22.440 one of the arguments that was made by critics of of canadian lng or of expanding it was well yeah i mean

00:08:28.200 if we started it you know way back sure but the whole point is we couldn't do anything now to serve

00:08:33.640 uh what he's wanting uh now so when you hear that argument happening it's like well great well that

00:08:39.560 means you know the best time was yesterday but the second best time is today yeah and at one point

00:08:44.680 you know when lng canada finally went ahead it was part and parcel of what were at the time 20 project

00:08:51.400 proposals uh now some of them were just never going to go were just flyers but clearly there was

00:08:57.400 serious commercial interest in developing several of them uh and some of them needed to be in the

00:09:03.160 east coast to access the european markets most of the discussion now is on the west coast to access

00:09:08.840 asian markets we should diversify i mean the important thing to understand in all of this is that

00:09:14.760 right now we are landlocked into just the u.s market for basically all of our oil and gas

00:09:22.280 we have to and as a result the americans not being stupid pay us very low prices knowing that we

00:09:27.240 don't have an alternative we need to access overseas markets uh it will get us a better price and it 0.90

00:09:33.480 will give uh these overseas markets a diversified source of uh supply and they won't just be held

00:09:40.920 hostage by the americans so uh it's in everybody's interest to diversify to access higher prices

00:09:48.040 uh and and to do that you know you have to build capacity and you have to do it preferably on both

00:09:54.520 coasts but there's any number of proposals out there on both coasts uh businesses have indicated

00:10:01.080 that they're willing to i mean even if some politicians think that there isn't a business case

00:10:06.440 as long as businesses are willing to take the risk and absorb the losses i don't know why it's any

00:10:10.840 business of anybody except them um you know and as long as firms are willing to to take that risk i i

00:10:19.080 think it's in our national interest to diversify our our markets and get higher prices very well said

00:10:27.640 philip cross senior fellow with the mcdonald laurie institute author of this great piece in the

00:10:32.200 financial post uh that we were talking about here the title of which is the figures show canada needs

00:10:38.760 more lng projects philip good to talk to you thank you my pleasure thank you thanks for listening to the

00:10:44.600 andrew lawton show support the program by donating to true north at www.tnc.news

Juno News - June 16, 2024

Trudeau’s war on natural gas is bad for everyone

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