German Envoy’s Comments on Natural Gas a Sign of Energy Discussions to Come?

In late September, Jennifer Morgan, the German state secretary and special envoy for international climate action made a relatively innocuous comment that seemed to prod a wide range of responses from businesses and political leaders across Canada. As an environmentalist and former executive director of Greenpeace, she said "all studies show that the market is going to shrink," referring to the reliance Germany and other European countries have on Canadian natural gas imports. "Germany will be driving forward on renewables, and gas demand will decline."

This is not a comment that exists outside of the realm of reality. It’s actually quite reasonable when we think about the lead many nations are taking on reducing their dependence on fossil fuels and becoming energy independent, particularly in Europe as many nations divert importing LNG from Russia following their illegal invasion of Ukraine. Europe has been actively reducing their imports following the invasion, moving from importing around 40 percent of their LNG from Russia in 2021 to approximately eight percent in 2023. A significant drop, to be sure, but it also follows a trend of Europeans using less natural gas than they have in the past. They have still been importing LNG, but the dominant countries in which they are importing have been Norway, the U.S., North Africa, and Qatar, with Canada not really being a factor.

The Germans have been taking a much harder track towards reducing their carbon emissions than we have. They are seeking to become net-zero emitters by 2045, five years ahead of current Canadian targets. Germany is both Europe’s largest economy, and currently its largest carbon emitter. By the country’s current projections, Germany seeks to reduce its gas imports by 30 percent by 2030 and a whopping 96 percent by 2050. Those aren’t targets, but their predictions, according to Morgan.

But her commentary on this matter isn’t simply speculation. A recent report from the International Institute for Sustainable Development (IISD) states that Canadian LNG isn’t the answer for Europe’s short-term energy needs. With no liquefied natural gas export infrastructure available until at least 2025 and accelerating climate commitments from member states, it seems as if the timeline to export LNG to Europe is rapidly shrinking. That’s not to say that there wouldn’t be a market for Canadian LNG elsewhere in the world. According to Natural Resources Canada, there are eight LNG export projects in various stages of development across Canada. It’s just that Europe is using far less LNG. According to the U.S. Energy Information Administration, natural gas consumption declined 18% from the previous five-year (2017–21) average across the EU.

It’s evident that Germany and other EU countries remain interested in our other natural resources. This summer, both Canada and Germany committed to a $600 million pact to export hydrogen. There is a need for critical minerals across the world that Canada is happy to export, to the tune of $153.1 billion in 2022 and accounting for 21% of all Canadian merchandise exports, including iron, steel, gold, nickel, potash, and other critical commodities.

However, it’s Morgan’s comments on LNG specifically that seem to have riled up people uninterested in addressing climate change. The Deputy Leader of the Conservatives, following Morgan’s interview, stated “while the CBC interviews climate activists associated with Greenpeace from foreign countries to make the case for killing Canadian paycheques, the fact is that Europe came knocking begging for our world class LNG..." Perhaps insulting foreign leaders is not the best approach to selling LNG in foreign markets. It’s somewhat understandable that Conservatives would get up in arms about Morgan’s comments. The party’s national council has a number of oil lobbyists helping form their opinion on these matters. But that doesn’t change whether foreign markets are looking to buy our LNG.

Foreign markets are looking to buy our resources, and that’s a good thing. But we can’t sell them what they aren’t willing to buy. Given the state of the climate crisis we are experiencing, we should be following the lead of countries like Germany in prioritizing a reduction in our use of fossil fuels.