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

The document assesses the viability of Canadian LNG expansion, concluding that it is incompatible with climate goals and economically precarious. It highlights that new facilities would increase domestic emissions and potentially strand assets due to a projected global supply glut and declining demand in advanced economies. The brief specifically notes that Canadian projects face higher production costs than competitors in Qatar and the United States, making them reliant on substantial public subsidies. It recommends a shift in investment toward green industries to avoid economic shocks and environmental damage.

• Expanding LNG production in Canada would undermine domestic climate targets by increasing upstream and midstream emissions. For example, the six most advanced projects in British Columbia could add 13 Mt of CO2e annually by 2030, potentially causing the province's oil and gas sector to exceed its emissions target by 200%.
• The claim that Canadian LNG exports reduce global emissions by replacing coal is uncertain and potentially offset by high fugitive methane emissions. Furthermore, an increase in global LNG supply may disincentivize investments in renewable energy in emerging economies rather than just displacing coal.
• Global LNG market fundamentals are weakening, with demand expected to peak in advanced economies like Europe and South Korea. The IEA suggests that current global capacity under construction may be more than twice the necessary amount to meet forecasted demand by 2050 under announced climate policies.
• Canadian LNG projects are likely to struggle against lower-cost producers, particularly Qatar and the United States. LNG Canada is estimated to have double the production costs per unit of capacity compared to U.S. Gulf Coast exporters, while Qatar's production costs can be as low as USD 0.03 per mmBtu.
• There is a significant risk of asset stranding for Canadian LNG projects, with taxpayers bearing much of the financial burden through subsidies and infrastructure funding. Examples include CAD 275 million in federal direct investments and CAD 5.4 billion in provincial incentives for LNG Canada, as well as the CAD 16 billion Site C dam.

APA

Haig, S., Dusyk, N., & Rempel, Z. (2024). Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-06/bottom-line-lng-expansion-canada-not-worth-risk.pdf

Chicago

Haig, Steven, Nichole Dusyk, and Zachary Rempel. Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-06/bottom-line-lng-expansion-canada-not-worth-risk.pdf.

Wikipedia

{{cite report |last1=Haig |first1=Steven |last2=Dusyk |first2=Nichole |last3=Rempel |first3=Zachary |title=Why Liquefied Natural Gas Expansion in Canada Is Not Worth the Risk |publisher=International Institute for Sustainable Development |date=June 2024 |url=https://www.iisd.org/system/files/2024-06/bottom-line-lng-expansion-canada-not-worth-risk.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{haig2024why, author = {Haig, Steven and Dusyk, Nichole and Rempel, 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/system/files/2024-06/bottom-line-lng-expansion-canada-not-worth-risk.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }