Canadian energy producers dismayed by Biden’s move to pause U.S. LNG

Canada’s energy industry is reacting with dismay to U.S. President Joe Biden’s move to pause approvals of new liquefied natural gas export terminals in that country.

The Canadian Association of Petroleum Producers said it sees LNG as a lower-emission source of secure energy that can help 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,” said CAPP president and CEO Lisa Baiton in an emailed statement on Friday.

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

Canadian pipeline giant Enbridge Inc. also expressed its displeasure with the decision. The company currently supplies natural gas to five operating LNG export facilities on the U.S. Gulf Coast and has previously said it is interested in expanding its export strategy through further acquisitions in the region.

“Our immediate view is any delay in the development of U.S. liquified natural gas is a loss for the U.S., our Allies, for U.S. jobs and for efforts to cut emissions around the world,” said Enbridge spokeswoman Gina Sutherland in an email.

Biden’s election-year decision comes as gas shipments from the U.S. to Europe and Asia have soared since Russia’s invasion of Ukraine. From having zero LNG export facilities a decade ago, the U.S. has grown to become the world’s largest LNG exporter, averaging 20.4 billion cubic feet per day in the first half of 2023.

But a White House statement on Friday cited climate risk as the reason for pausing new LNG approvals, adding the current process the Energy Department uses to evaluate LNG projects doesn’t adequately account for the impact of greenhouse gas emissions.

Deeply concerning: Business Council of Canada

Canada does not yet have its own LNG export capacity. This country’s first LNG export facility, being built near Kitimat, B.C., is not expected to become operational until later this year.

But Heather Exner-Pirot, special advisor to the Business Council of Canada, said Friday’s decision by the U.S. president is deeply concerning for the Canadian energy sector.

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

“But Canadian natural gas companies are so integrated with the North American market that there isn’t really a separation. If it’s bad for American energy, it’s bad for Canadian natural gas producers and mid-stream companies.”

The pause is not expected to immediately affect U.S. supplies to Europe or Asia, since seven LNG terminals are currently in operation, with several more expected to come online in the next few years.

But Exner-Pirot said she believes Europe, in particular, is likely very concerned with Friday’s announcement as it had come to depend on the U.S. as a replacement source for Russian energy.

She added Canadian natural gas companies should also be concerned about…

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