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ECONOMIC POLICY AND INSTITUTIONS

BRIEFING NOTE #1

Submitted by- Bhanupratap Singh Sisodiya

SECTION EC
Concordia ID – 40202831
Instructor- Anthony Nice
Admitted to John Molson School of Business
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UNCLASSIFIED
FOR INFORMATION ONLY
CANADIAN GLOBAL AFFAIRS
SENIOR ECONOMIST (6th February, 2023)

BRIEFING NOTE FOR THE MINISTER OF GLOBAL AFFAIRS

Title – Canada on supplying LNG to its allies

Issue
Should Canada consider supplying LNG to some of its allies? This would involve Canada
to build new LNG export terminals and pipelines. Currently, Canada has none, although
one is under construction in Kitimat B.C.

Background
Canada is the world’s fifth-largest natural gas producer in the world. Recently, due to the
Russian invasion on Ukraine, many European countries learnt that they have been very
reliant on Russian energy. Before the invasion, 45% of the Europe natural gas was supplied
by Russia. With that supply now being cut off, Europe is trying to rebuild their energy
security for the coming decades.
The European Commission has proposed a four-step plan to rely less on Russian fossil fuels
and decided to go green. The four-step plan includes, first, energy efficiency measures by
households. Second, rethinking Europe’s energy-intensive industrial process to reduce oil
and natural gas usage. Third, relying more on renewables. Fourth, finding new and
diversified suppliers of natural gas. In order to help Europe, achieve their goals, they asked
Canada to supply LNG to few of the European countries. Canadian natural gas could help
many European countries to reduce 50% CO2 per energy unit. Shifting Coal to natural gas
would definitely help Europe to reduce CO2 emissions but it would affect the local
Canada’s domestic climate. Therefore, the Canadian government are now caught up on how
to both expand natural gas production for foreign policy reasons and at the same time think
about meeting domestic climate change goals.

Current Status
Canada will have to build new LNG export terminals and pipelines. Given our lack of
capacity, Canada cannot begin to meet Europe’s energy crunch anytime soon. The transition
to clean energy will take decades from now.
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Options
1. Canada could take the lead in LNG production by proposing an alliance with energy
exporters such as the United States and Australia. Alternatively, Canada could begin on
its own by developing its own methodology and inviting others to join. Such leadership
may benefit both climate change and energy security.
2. Canada could collaborate with Ottawa and other provinces to create a clear, supportive,
and predictable regulatory environment so that we can begin building pipelines and
LNG export terminals on both our west coast to service Asia and our east coast, which
is closer to Europe than US gulfs are.

Considerations
Canada should assess the energy crisis in a way that accounts for and works to reduce
domestic emissions, while also ensuring that any resulting emissions are consistent
with Canada's climate plan.
This project would only move forward if it could show that exports will be used to
replace either higher emitting energy sources like coal or unrestricted natural gas.
As long as the new infrastructure is strictly regulated, Canada can expand its LNG
exports while meeting its climate targets. This will include ensuring that any gas
extracted and transported to a terminal emits less than 0.5 percent fugitive methane, as
well as electrifying new pipelines and liquefaction processes.
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