Missed Opportunities, Regulatory Challenges, and the Dilemma of Balancing Economic Growth with Climate Goals

Introduction

Welcome to Part 3 of our series, fact-checking Pierre Poilievre’s recent interview with Dr. Jordan Peterson. This time, we’re exploring Canada’s energy and resource policies, particularly Poilievre’s claims about Canada’s inability to capitalize on its natural gas and oil reserves. He criticized “excessive regulation” and a lack of export infrastructure as the primary reasons for missed opportunities with international partners like Germany and Japan.

Peterson, as usual, didn’t shy away from asking sharp questions, noting that, “You can’t blame everything on regulation. There are global economic and environmental forces at play that no government can control.” Let’s break down these claims and see how they hold up under scrutiny.

Claim 1: Canada’s Missed Opportunities in Natural Gas and Oil Exports

Poilievre pointed to specific missed opportunities with Germany and Japan, both of which have been actively seeking new energy partners. Let’s look at the facts.

• Germany’s Energy Crisis:
  • Following Russia’s invasion of Ukraine, Germany scrambled to secure natural gas supplies, turning to LNG imports from the U.S. and Qatar. Canadian LNG was seen as a potential solution, but no infrastructure exists to export LNG from Canada’s East Coast.
  • Prime Minister Trudeau commented in 2022 that there was “no strong business case” for East Coast LNG exports due to high infrastructure costs and uncertain long-term demand.
  • Peterson challenged this view, arguing, “Germany would have paid a premium. This wasn’t just about economics; it was geopolitics.”
• Japan’s LNG Needs:
  • Japan, a major global LNG importer, has expressed interest in Canadian LNG. However, delays in projects like LNG Canada have prevented Canada from competing with the U.S. and Qatar.
  • Peterson remarked, “If Canada had moved faster on LNG infrastructure a decade ago, we wouldn’t be having this conversation today.”
• The U.S. Comparison:
  • The U.S. began building its LNG export infrastructure in earnest around 2010 and now has multiple operational facilities. In contrast, Canada still has zero operational LNG export terminals, with the first (LNG Canada) expected in 2025—a timeline Peterson called “embarrassingly slow.”

Claim 2: Excessive Regulation and Export Infrastructure Gaps

Poilievre repeatedly blamed regulation for Canada’s slow progress on energy infrastructure. Here’s how the evidence stacks up:

• Regulatory Hurdles:
  • Bill C-69 (Impact Assessment Act): Known by critics as the “No More Pipelines Bill,” this legislation requires comprehensive environmental and social reviews for major projects. While intended to ensure sustainable development, it has slowed project approvals significantly.
  • Carbon Tax: The federal carbon tax increases operational costs for energy companies, making Canadian LNG less competitive globally. However, Peterson countered Poilievre’s stance, noting, “It’s easy to blame regulations, but the truth is, companies also face global competition and shifting markets.”
• Infrastructure Delays:
  • Canada’s lack of pipeline capacity has led to “stranded” oil and gas resources. For example:
  • The Keystone XL pipeline was cancelled after years of political and legal battles.
  • The Trans Mountain expansion, while underway, has faced delays and cost overruns, ballooning from $7.4 billion to $30.9 billion.
• Global Market Dynamics:
  • Peterson highlighted a critical point: “Even if Canada streamlined regulations tomorrow, would LNG be profitable long-term given the global pivot to renewables?” This underscores a key challenge—balancing fossil fuel development with the transition to cleaner energy.

Can Canada Build LNG and Still Meet Climate Targets?

This is the crux of the issue. Poilievre’s plan to rapidly expand Canada’s LNG exports raises valid economic arguments, but it also presents a significant environmental dilemma.

• Carbon Intensity of LNG:
  • LNG facilities are energy-intensive, emitting substantial CO₂ during production. For example, LNG Canada’s first phase will emit around 4 million tonnes of CO₂ annually.
  • Methane leakage throughout the natural gas supply chain further increases its carbon footprint.
• Potential Mitigation Strategies:
  • Electrification: Using renewable energy to power LNG facilities could reduce emissions. LNG Canada plans to utilize British Columbia’s hydropower for some operations.
  • Carbon Capture and Storage (CCS): Integrating CCS technology into LNG projects could help offset emissions, though this technology remains costly.
• Global Perspective:
  • While LNG can help displace coal in countries like China and India, Peterson questioned its net impact, stating, “Are we just shifting emissions from one country to another without solving the bigger problem?”

Key Takeaways:

• Missed Opportunities: Poilievre’s critique holds weight. Canada has lagged behind global competitors in building LNG infrastructure, missing chances to supply energy to Germany and Japan.
• Regulation Isn’t the Only Issue: Excessive regulation and delays have hindered progress, but market economics, climate commitments, and public opposition also play major roles.
• Balancing Economic and Environmental Goals: Canada must decide whether it can develop LNG infrastructure in a way that aligns with its climate targets. As Peterson put it, “Canada’s long-term strategy can’t just be about digging things out of the ground and shipping them overseas.”

Read Part 4 Here.

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