Canada would be unimaginably farther ahead today if it had done all it could to extract and refine fossil fuels and built ports and pipelines to ship them. Taking that path now could still prove lucrative. The alternative is continued economic stagnation.In 2016, the Liberal government under Justin Trudeau cancelled the Northern Gateway Pipeline project. The 1,177-kilometre pipeline would have taken 525,000 barrels of oil daily to Kitimat, BC, leading to an estimated $300 billion of economic activity over 30 years.Regulators approved the pipeline in 2014, but the Federal Court of Appeal ruled that more consultation with First Nations was due under Canadian law. This ruling was an excuse enough for the federal government to cancel it.The Energy East project would have transported 1.1 million barrels of oil from Alberta and Saskatchewan to Atlantic Canada, a boon for the West and for refineries in New Brunswick. The construction jobs along the 4,500-kilometre route would have also been substantial for the $15.7 billion project.Despite submitting a thorough 30,000-page application, TC Energy abandoned the project in 2017, citing excessive regulatory hurdles, changing environmental review processes, and a slump in commodity prices. Canada made it so difficult to get anything done that it missed the chance to facilitate tens of billions of dollars per year in potential exports.By 2019, Bill C-48 forbade oil tankers off the northern BC coast, while C-69 empowered the government to subject more project proposals to cabinet review. Then-premier of Alberta, Jason Kenney, coined C-69, “The No More Pipelines Act,” given its foreseeable impact..In 2020, Teck Resources withdrew a $20.6 billion oil sands mine application, citing federal climate policy and investor pressure as the reasons for its abandonment.Strangely, upstream (production) and downstream (combustion) carbon emissions are considered in approvals of Canadian energy projects, but do not apply to imports from other countries. The new Clean Fuel Standard also ignores scrutiny of upstream emissions. Federal regulation tilts the playing field against Canada.These decisions have left Canada unable to respond to a surge in energy demand driven by geopolitical events. Russia’s invasion of Ukraine has left many countries scrambling for other sources of liquefied natural gas (LNG), as Europe reduced reliance on Russian gas after 2022. Germany, Japan, Poland, Ukraine, Greece, South Korea, the Philippines, and the EU have expressed interest in Canadian LNG.This demand is not theoretical. In February, Indian High Commissioner to Canada, Dinesh Patnaik, told CBC, “On energy, there is an appetite which even Canada cannot fulfill, and we are willing to buy whatever Canada is offering on crude, on LPG, on LNG,” Patnaik said, LPG signifying liquefied petroleum gas. India is one of the world’s fastest-growing energy markets and a major importer of oil and gas.Somehow, amidst this gong show, the $40 billion LNG Canada project in Kitimat, BC, a joint venture led by Shell and international partners, was brought to completion. Trudeau himself called it the largest private sector investment in Canadian history.The 670-kilometre Coastal GasLink pipeline carries natural gas from Dawson Creek, BC, to the LNG Canada facility in Kitimat, BC, and on to Asian markets. Thus, from a region where oil tanker traffic was restricted, 14 million tonnes of LNG will go annually to Asian markets, with expected additions of about $7.4 billion annually to the national economy and about $575 million annually to the BC government..When world leaders came begging Canada for natural gas, Trudeau usually insisted there was no business case for East Coast LNG facilities. He argued the projects lacked long-term contracts and sufficient private investment commitments. Instead, he tried to push hydrogen, even though doing so shifts focus away from readily exportable natural gas resources.BC has an estimated 93 trillion cubic metres of natural gas resources, though Canada’s economically viable proven reserves — resources recoverable with current technology — are “only” two trillion cubic metres. At current prices, that has a value of $200 billion to $300 billion.Meanwhile, Canada’s oil reserves, most of which are in the oil sands, number 171 billion barrels. At $70 USD per barrel or $95 CAD, Canada’s oil reserves are worth $18.8 trillion.Canada produces only 1.4% of global greenhouse gas emissions and owes nothing on the climate front. Its better and more lucrative contribution would be to share its conventional energy and offset more expensive and carbon-intensive forms of production used in booming regions of the world.That reality contrasts with arguments for leaving resources undeveloped. In his 2021 book Value(s), Prime Minister Mark Carney claimed it was better for the world that some petroleum be left in the ground. Few countries would lose more than Canada by that approach.Canada does not lack resources or demand. It lacks the will to act. Until that changes, it will continue to forgo growth, cede markets to others, and accept economic stagnation by choice.Lee Harding is a research fellow for the Frontier Centre for Public Policy.
