Canadian LNG is not path to energy security, stronger domestic economy

The report contends that Canadian LNG projects are high-risk investments due to capital intensity, market volatility, and declining global demand. It highlights that importers in Europe and Asia are shifting toward renewables to avoid the price spikes and supply shocks associated with LNG. The authors argue that new LNG infrastructure threatens to become stranded assets, potentially requiring further taxpayer subsidies, while simultaneously increasing global greenhouse gas emissions and delaying the energy transition.

• Canadian LNG projects face significant economic risks due to high capital intensity and a history of budget overruns. For example, the LNG Canada Phase 1 terminal and the Coastal GasLink pipeline experienced cost overruns of 29% and 263% respectively, totaling an estimated CAD 14.5 billion in unexpected costs.
• Canada's competitiveness in the LNG market is challenged by cheaper producers like Qatar and the United States, as well as the U.S. using tariffs to pressure importers to buy American LNG.
• Global LNG markets are characterized by extreme volatility where regional supply shocks can drive up prices globally, impacting domestic costs for exporters. In May 2022, diverted shipments to Europe caused domestic gas costs in Canada to reach unprecedented highs.
• Market analysts expect a global LNG oversupply starting as early as 2026 and extending into the 2030s, which threatens the profitability of high-cost projects like those in Canada.
• Major importing regions are reducing their reliance on LNG in favor of renewables. The EU's RePowerEU plan aims for a gas demand decline of over 40% from 2024 to 2030, while Japan and South Korea saw LNG imports fall by 8% and 4.9% in 2023, respectively.
• In South and Southeast Asia, a price gap exists between what emerging economies can afford and what new export projects require for profitability; importers generally need prices around USD 3-5/MBtu, while new projects need average delivered costs of around USD 8/MBtu.
• LNG expansion increases global greenhouse gas emissions across the value chain and may delay the transition to renewables abroad. The U.S. Department of Energy concluded that exporting U.S. LNG leads to an overall increase in global GHG emissions.
• Public financial support for LNG projects from the governments of Canada and British Columbia is projected to reach CAD 3.93 billion by 2030.

APA

Haig, S., & Dusyk, N. (2025). Canadian LNG is not path to energy security, stronger domestic economy. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/canadian-lng-is-not-path-to-energy-security-stronger-domestic-economy

Chicago

Haig, Steven, and Nichole Dusyk. Canadian LNG is not path to energy security, stronger domestic economy. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/deep-dive/canadian-lng-is-not-path-to-energy-security-stronger-domestic-economy.

Wikipedia

{{cite report |last1=Haig |first1=Steven |last2=Dusyk |first2=Nichole |title=Canadian LNG is not path to energy security, stronger domestic economy |publisher=International Institute for Sustainable Development |date=10 July 2025 |url=https://www.iisd.org/articles/deep-dive/canadian-lng-is-not-path-to-energy-security-stronger-domestic-economy |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{haig2025canadian, author = {Haig, Steven and Dusyk, Nichole}, title = {{Canadian LNG is not path to energy security, stronger domestic economy}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = jul, url = {https://www.iisd.org/articles/deep-dive/canadian-lng-is-not-path-to-energy-security-stronger-domestic-economy}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }