In this week’s EconMinute, we’re talking about North American LNG exports.
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This month, the Business Council of British Columbia (BCBC) released a report on Canada’s opportunity to develop a liquefied natural gas (LNG) export industry.
LNG is in high global demand, and prices prove it—especially in Europe where natural gas supply has been throttled by Russia for geopolitical reasons. Countries able to supply the world with LNG are enjoying a revenue windfall.
Despite being the world’s fifth largest natural gas producer, Canada has not seized the opportunity to export LNG.
The United States is a different story. Despite neither country having any LNG export facilities as recently as 2015, Canada and the US have gone in entirely different directions:
- As of August 2022, Canada has zero LNG export facilities, while the US has eight facilities producing 106 million tons per year (MTPA).
- In addition, the US has four projects approved and under construction, 11 approved but not yet under construction, six under regulatory review, and two in the pre-review stage. Together, these facilities represent an additional 305 MTPA.
- At one point, Canada had 18 export facilities proposed. Today, only one major facility (LNG Canada) and one smaller facility (Woodfibre) are under construction (combined 16.1 MTPA).
- Canada has three more projects under regulatory review and one project expansion awaiting a final investment decision (together representing an additional 31.6 MTPA).
- If every proposed Canadian LNG project were built, Canada would produce just 45% of the United States’ existing output, and 11.6% of their total production if all proposed US facilities are built.