Because of the possible drying up of gas imports from Russia, Germany is looking for alternatives. One of them: Canada. The country is one of the largest natural gas producers in the world and also an important ally and close partner of Germany and the EU. Chancellor Olaf Scholz (SPD) and Economics Minister Robert Habeck (Greens) traveled to Canada with a business delegation to explore the possibilities.
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On their trip, Scholz and Habeck are accompanied by a delegation of business representatives. Visits to Montréal, Toronto and Stephenville, a coastal city in Newfoundland, are planned with Trudeau until Tuesday. The focus of the trip is bilateral cooperation in the areas of climate and energy. Specifically, the signing of an agreement on cooperation on the subject of hydrogen is planned. Liquefied natural gas (LNG) is also on the agenda. However, importing Canadian gas is difficult.
Russia or the important gas producer Algeria have the advantage of being able to deliver gas by pipeline as neighbors of the EU. A pipeline through the Atlantic, on the other hand, is not feasible, so imports from Canada and the USA are only possible in liquid form on tankers – so-called LNG (Liquefied Natural Gas).
The problem is not new and also affects potential gas imports from the Arab region and from Qatar. In Germany and other European countries, work has therefore been going on at full speed for some time to build LNG terminals for unloading gas tankers. The first ones are scheduled to go into operation on the German North Sea coast before the end of this year. However, in the case of Canada, there are also no terminals to load the tankers at all.
In Canada, natural gas production is concentrated in the western provinces of British Columbia, Alberta and Saskatchewan. There are also export opportunities there, but these are aimed at the Asian market. Within Canada, gas is routed simultaneously to the East and the USA via pipelines – but so far it has not been exported from there on a large scale.
Because construction projects for export terminals on Canada’s east coast have progressed slowly in recent years and have even been frozen at times. With Russia’s invasion of Ukraine and increasing demand in Europe, however, they received a new impetus. The government in Ottawa has promised support and explicitly refers to Europe’s dependence on Russian gas.
However, the expansion of the LNG infrastructure is not expected to be smooth and timely. The focus is on two possible locations for LNG export terminals in New Brunswick and Nova Scotia. In both cases, however, gas could be shipped to Europe in a few years at the earliest.
In addition, the topic is problematic for the government of Prime Minister Justin Trudeau in terms of domestic policy. Ottawa has formulated ambitious climate goals itself – new plants for fossil fuels are inconvenient. Because of the long-standing resistance of the population against the development of shale gas deposits, there has been an organized protest movement for years anyway.
There are also conflicts with indigenous groups. Gas plants and pipelines often run through their areas. This is why protests are common in western Canada, some of which have turned violent in the past. The lines to the east would now at least have to be expanded, and conflicts with the indigenous people are also threatening the construction of new terminals.
Ottawa points to the potential to use gas infrastructure for hydrogen in the future. Scholz’ and Habeck’s journey is also about this future technology. They visit Stephenville, Newfoundland, where a company is planning a wind turbine to produce hydrogen.
The German economy is meanwhile pushing for quick agreements with the North American country. The Federal Association of Wholesale, Foreign Trade and Services (BGA) hopes that the visit to Canada will increase the pressure on the government coalition in Germany to finally ratify the German-Canadian trade agreement CETA in the Bundestag, association president Dirk Jandura told the Düsseldorfer Rheinische Post (Monday edition).
Above all, cooperation in energy supply and in supplying the German economy with so-called rare earths must be strengthened, stressed Jandura. By accelerating the completion of its liquefied natural gas (LNG) export plants, Canada could also help “keep the European economy running and households warm,” said the BGA President.
The Federal Association of Energy and Water Industries (BDEW) emphasized that the development of a hydrogen economy is not possible at national level alone. Germany and Europe are therefore dependent on importing hydrogen. “It is all the more important to conclude reliable international partnerships at an early stage,” said Kerstin Andreae, Chair of the BDEW Executive Board, to the “Rheinische Post”.