Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk

The document assesses the viability of Canada's planned LNG expansion, concluding that it is incompatible with 1.5°C global warming targets and economically precarious. It highlights that new facilities would increase domestic emissions and divert clean energy resources. Economically, the brief warns of a global supply glut by 2030, with Canadian projects struggling to compete against lower-cost producers in Qatar and the United States, thereby risking significant losses for taxpayers and investors.

• New LNG facilities threaten Canada's climate goals by increasing emissions and diverting clean energy. Six advanced projects in British Columbia could add 13 Mt of CO2e annually by 2030, potentially breaching BC's sector-specific emissions target by 200%. Furthermore, the massive clean electricity required to decarbonize these facilities creates an opportunity cost, as that power could instead be used to decarbonize other sectors like transport.
• The argument that Canadian LNG exports reduce global emissions by replacing coal is uncertain and potentially flawed. High rates of fugitive methane emissions in the supply chain can weaken or reverse the climate advantage of coal-to-LNG switching. Additionally, increased LNG supply may lower prices and disincentivize investment in renewable energy in emerging economies.
• Planned LNG expansion is incompatible with the 1.5°C global temperature target. Major international bodies, including the IEA and IPCC, conclude that no new long-term oil and gas projects can be supported if this target is to be met. Canada's pursuit of LNG expansion may also send a "non-cooperative signal" to other nations regarding the Paris Agreement.
• Global market fundamentals for LNG are weakening due to falling demand and rising supply. Demand is peaking in advanced economies like Europe and South Korea, while supply is expected to outpace demand by 2030, with the US and Qatar adding significant capacity. The IEA suggests there is already enough capacity under construction to meet demand through 2040 under current policies.
• Canadian LNG projects face a lack of competitiveness due to high production and capital costs. Qatar is the lowest-cost producer, and LNG Canada is estimated to have double the production costs per unit of capacity compared to US Gulf Coast exporters. This makes Canadian projects vulnerable to being priced out of the market.
• There is a significant risk of asset stranding, with taxpayers bearing much of the financial burden. Projects like LNG Canada have received billions in direct investments, steel tariff exemptions, and infrastructure support (such as the CAD 16 billion Site C dam). If market conditions deteriorate, these assets may close prematurely, leaving taxpayers to cover losses and decommissioning costs.

APA

Rempel,, S. H. D. (2024). Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/lng-expansion-canada-not-worth-risk

Chicago

Rempel,, Steven Haig,Nichole Dusyk,Zachary. Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk. International Institute for Sustainable Development, 2024. https://www.iisd.org/articles/deep-dive/lng-expansion-canada-not-worth-risk.

Wikipedia

{{cite report |last1=Rempel, |first1=Steven Haig,Nichole Dusyk,Zachary |title=Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk |publisher=International Institute for Sustainable Development |date=4 June 2024 |url=https://www.iisd.org/articles/deep-dive/lng-expansion-canada-not-worth-risk |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rempel2024why, author = {Rempel,, Steven Haig,Nichole Dusyk,Zachary}, title = {{Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = jun, url = {https://www.iisd.org/articles/deep-dive/lng-expansion-canada-not-worth-risk}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }