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HomeUncategorizedBiden's Move Hits Canadian Energy: U.S. LNG Approval Freeze Raises Concerns in...

Biden’s Move Hits Canadian Energy: U.S. LNG Approval Freeze Raises Concerns in the Sector

Biden’s Move

Canadian Association of Petroleum Producers and Enbridge Express Displeasure Over White House Decision

U.S. President Joe Biden’s decision to suspend approvals of new liquefied natural gas export facilities in Canada has alarmed the energy industry.

The Canadian Association of Petroleum Producers sees LNG as a secure, low-emission energy supply that can assist countries get off coal.

“LNG facilities on the U.S. Gulf Coast are also offering Canadian producers an opportunity to export their natural gas globally,” CAPP president and CEO Lisa Baiton emailed Friday.

“Given the highly integrated nature of the North American energy market, CAPP is disappointed in the White House decision.”

Enbridge Inc. also criticized the ruling. The company distributes natural gas to five LNG export plants on the U.S. Gulf Coast and has expressed interest in expanding its export strategy through acquisitions.

“Our immediate view is any delay in the development of U.S. liquified natural gas is a loss for the U.S., our Allies, U.S. jobs and global emission reduction efforts,” said Enbridge spokesperson Gina Sutherland via email.

Biden’s election-year decision comes as U.S. gas imports to Europe and Asia have increased since Russia invaded Ukraine. With 20.4 billion cubic feet per day in the first half of 2023, the U.S. became the world’s largest LNG exporter from zero a decade earlier.

On Friday, the White House cited climate risk as the rationale for suspending new LNG permits, noting that the Energy Department’s LNG project evaluation process doesn’t account for greenhouse gas emissions.

Canada lacks LNG export capacity. The country’s first LNG export facility at Kitimat, B.C., won’t open until later this year.

However, Business Council of Canada special advisor Heather Exner-Pirot said Friday’s U.S. president’s decision is very worrying for the Canadian oil sector.

“Your first instinct might be, maybe this is good for Canadian LNG, you know, because our main competitor is having its wings clipped,” said.

“Canadian natural gas businesses are so interwoven with North America that they’re not separate. It hurts Canadian natural gas producers and mid-stream companies if it hurts American energy.”

The suspension is not expected to immediately impair U.S. supply to Europe or Asia, as seven LNG facilities are operational and several more will open in the coming years.

However, Exner-Pirot says Europe, which relied on the U.S. to replace Russian energy, is likely quite disturbed about Friday’s news.

She said Canadian natural gas businesses should worry about how this decision portrays their product as an environmental “bogeyman.”

“There’s a segment of US environmental activism that doesn’t favor natural gas, fossil fuels, or coal as a bridge. Therefore, those groups are happy today “said.

LNG proponents have long argued that replacing coal with cleaner-burning natural gas will help fight climate change.

LNG Canada’s vice-president of corporate communications Teresa Waddington said Friday that Kitimat’s greenhouse gas emissions will be lower than any similar plant worldwide.

“Canada’s lower-carbon LNG will provide security of supply for global markets that can rely on our country’s natural gas reserves to advance their economies and reduce global GHG emissions,” Waddington wrote via email.

LNG is criticized for its many climate impacts.

“If you only consider burner tip emissions, then yes, natural gas is about half the emissions of coal,” said Global Sustainability Research Inc. president David Hughes.

“But if you consider the full life-cycle emissions of LNG, you’ve got the emissions from transporting it from B.C. to Asia, you’ve got emissions from the liquefaction process, you’ve got emissions from drilling and flaring and methane leakage across the entire value chain.”

Hughes said adding LNG capacity “locks in” greenhouse gas emissions for the long term, making it impossible for countries to reach their climate goals.

“It’s already a horror show from an environmental point of view because all of these existing projects were built with 30- or 40-year lifespans,” stated.

Julia Levin, associate director of Environmental Defence, said the U.N. climate summit in Dubai agreed to phase out fossil fuels. Increasing LNG capacity contradicts that aim, she said.

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