LNG: Not in Our National Interest

As the U.S.-Israeli war on Iran sends oil and gas prices skyrocketing, Canadian fossil fuel executives are racing to pitch BC liquefied “natural” gas (LNG) as the answer. Meanwhile, Prime Minister Carney is attempting to fast-track controversial megaprojects like LNG Canada Phase 2 and Ksi Lisims LNG.

But market shocks and government boosterism can’t obscure the fundamental truth about LNG: it’s a risky investment that stands to make foreign owners richer while Canadians pay the bill. Simply put, Canada should invest in cheap, reliable renewable energy that insulates us from oil and gas’s boom and bust cycles, not gamble public money on expensive, volatile LNG.

Yet federal and provincial governments have already committed $3.9 billion to the LNG industry by 2030, according to analysis from the International Institute for Sustainable Development. This is just the tip of the iceberg: Carney’s government plans to direct even more public funding into megaprojects that are designated “Projects of National Interest”. The proposed 2025 budget suggests increasing the Canada Infrastructure Bank’s capital envelope by $10 billion in order to invest in projects referred to the Major Projects Office.

That’s why Indigenous leaders, community advocates and climate activists are calling on  PM Carney and his ministers: not another taxpayer dollar for dirty megaprojects. Will you join us?

• What is LNG?

LNG, or liquefied “natural” gas, is methane gas that is cooled to -162°C, compressing it into a liquid that is 600 times smaller and can be shipped on tankers. Once it reaches its destination, LNG is turned back into a gas and used for heating, as fuel, for electricity generation, and other uses. 

It sounds straightforward, but the reality is that LNG is expensive, volatile, and polluting. 

In Canada, massive new LNG export projects are being proposed, including Ksi Lisims LNG, LNG Canada Phase 2, and Tilbury LNG. Despite the risks, federal and provincial governments are brazenly offering billions in financial support, via public financing, foregone revenue, tax breaks, and more, shifting the risks of backing these projects from their foreign owners onto the public.

Here’s Why Public Money for LNG is a Bad Bet:

• It will raise energy bills for Canadians.

While many Canadians are already struggling to make ends meet, a rush to export LNG threatens to raise energy bills at home. Australia’s LNG export boom contributed to a doubling of electricity prices, while evidence in the US also suggests that the export frenzy increased household gas bills. 

LNG’s exposure to global price spikes worsens the picture: if a company can sell LNG for a higher price by exporting it than selling it domestically, residential gas prices go up. This happened in the U.S. after Russia’s invasion of Ukraine caused skyrocketing wholesale gas prices, which raised residential gas bills long after wholesale prices came down. It could happen again with the spike in gas prices caused by the war on Iran or the next war after that.

Carney’s government should take heed and not invest in projects that are subject to global market volatility and will make life even more expensive for Canadians.

• It’s a risky investment of taxpayer dollars.

The volatility of global gas markets combined with Canada’s delayed, over budget record of costly megaprojects makes new LNG a risky long-term investment for Canada. 

The war on Iran is reminding Asian gas buyers of its inherent volatility, incentivizing them to invest in renewables to ensure reliable, cheap energy. This is what happened in Europe after the energy crisis caused by Russia’s invasion of Ukraine. Analysts are now predicting that the Iran war will supercharge a similar shift to renewables in Asia, as volatile, high prices scare LNG buyers into seeking other sources of energy. 

This spells doom for an LNG buildout in Canada, which has long been targeting Asian markets for its gas exports. 

The dim market outlook is further compounded by Canada’s apparent inability to build LNG projects on time, on budget—or at all. Eighteen proposed LNG export projects have failed so far because the costs of building mega projects in Canada’s remote, mountainous northern regions are higher than in other LNG producers. The remaining proposed projects face a laundry list of obstacles: runaway construction costs, legal challenges, and more.

If any projects make it past these obstacles, by the time they come online years later, demand will have already shifted and lower-cost suppliers will win out, leaving Canadian LNG projects unprofitable and footing taxpayers with the bill.

• Projects don’t have full Indigenous consent.

The proposed LNG megaprojects lack full consent from Indigenous Nations. Yet, Prime Minister Carney and key Ministers have all publicly committed to respect the right of Indigenous communities to Free, Prior, and Informed Consent—while also attempting to fast track multiple projects without consent.

Ksi Lisims LNG has already faced multiple legal challenges from Indigenous peoples—including by members of the Nisga’a Nation, one of the project’s proponents—despite being touted by the government as a supposed model of Indigenous partnership. The BC Environmental Assessment Office, in issuing its approval for Ksi Lisims, acknowledged that multiple participating Nations have not given their consent for the project.

Meanwhile, LNG Canada and its associated Coastal GasLink pipeline have faced years of strong opposition from First Nations. Indigenous leaders from the Wet’suwet’en Nation filed a formal complaint against the Japan Bank for International Cooperation (JBIC) for financing the project in violation of its social and environmental policies. The UN Rapporteurs on Indigenous Rights and Defenders of Human Rights have both condemned the treatment of First Nations related to the building of Coastal GasLink. 

It is not only immoral, but hypocritical for Canada to give public lip service to respecting Indigenous Nations’ rights, while blatantly supporting megaprojects that lack full consent. Indigenous communities have and will continue to loudly reject these projects. The question is: when will Canada listen?

LNG Is Not In Our National Interest

LNG is a risky investment for Canada, and taxpayers and Indigenous communities shouldn’t be left to pick up the tab. Yet, federal and provincial governments have already committed nearly $4 billion to LNG projects, and are pushing for even more. Our leaders are effectively withdrawing money from our bank accounts to fill the coffers of foreign billionaires and then leaving us with the tab. 

This money should instead fund community-owned renewable projects, electrification, and energy efficiency upgrades that will truly lower costs for Canadians, not line the pockets of foreign billionaires. Renewable energy is cheaper than fossil fuels, and it offers stable costs that aren’t tied to geopolitical conflict or global market volatility. Investing in clean energy creates the jobs and industries that will power Canada’s future. 

Don’t make Canadians pay for risky, foreign-owned LNG projects. Join us in calling on Carney’s government to invest public funds into our clean energy future — not the fossil-fueled past.

For further information, see this Stand.earth briefing prepared for elected officials on subsidies for LNG projects in the Great Bear Rainforest.