Poilievre Promises LNG Canada Approval. There’s Just One Hitch

If elected prime minister, Conservative Leader Pierre Poilievre would approve LNG Canada’s second phase, an expansion of the Kitimat gas processing facility that would double its export capacity.

Poilievre made the promise at a campaign stop in Terrace Monday. “I’m announcing today that I’m approving Phase 2 of LNG Canada. It will go ahead if I am elected, and we will make sure that it will be jobs for local people.”

The only problem: the project’s already approved. It received its provincial permits in 2015 and its federal export licence the following year. The approvals included permission to build LNG Canada’s Phase 2.

John Young, LNG senior strategist with Climate Action Network Canada, described Poilievre’s announcement as disingenuous and “kind of comical.”

“This project’s been approved for a long time,” Young told The Tyee. “That’s done and dusted. No approval required.”

What stands in the way of the second phase beginning construction is a final investment decision from LNG Canada investors Shell, Petronas, PetroChina, Mitsubishi and Korea Gas Corp. That decision is likely to hinge on financial incentives from government that would make a stronger economic case for the expansion, Young said.

“Public dollars, our dollars, were instrumental in that project getting to a final investment decision,” he said about LNG Canada’s first phase, which the company approved in 2018. It is expected to begin exporting liquefied gas this year.

“Since that time, the market conditions have become more complex,” Young said. “LNG Canada Phase 2, if it were to proceed, would be entering a market that is even harder.”

That means it would likely require bigger incentives, he said, adding that industry lobbyists are meeting with the federal and provincial governments “on pretty much a daily basis” to push for concessions that would see the project move ahead.

In a statement Monday, B.C.-based environmental organization Stand.earth said LNG Canada’s first phase went ahead after the project received “significant subsidies” from both the provincial and federal governments.

The incentives included $275 million in federal funding announced by the Liberal government in 2019.

“Phase 2 of LNG Canada has all the permits it needs. It isn’t being built yet because Shell and the other big oil companies that own it need another handout from Ottawa to make this project viable,” Stand.earth oil and gas program director Sven Biggs said.

‘Monstrous, big, beautiful projects’

Poilievre said four things stand in the way of the second facility being built.

He blamed the industrial carbon tax, plans for an emissions cap on the oil and gas sector and Bill C-69, the Impact Assessment Act. The same federal regulations were among those cited in a recent letter to political leaders from oil and gas executives who identified them as a barrier to growing the energy sector, including LNG terminals.

Poilievre also said a requirement that future LNG development in B.C. run on renewable energy — a provision made by B.C.’s provincial government in 2023 that Poilievre blamed on federal Liberal policies — was standing in the way of LNG Canada Phase 2.

“The project will not go ahead if it cannot run on natural gas. It won’t happen,” Poilievre said. “When the Liberals say that they’re going to ban LNG Canada from using gas to power the plant, what they’re saying is the plant will not be allowed to happen.”

While the federal government sets things like carbon emissions targets and clean energy regulations, it doesn’t have a say in how companies power their projects.

The provincial government didn’t immediately respond to The Tyee’s request for comment on the jurisdictional issues.

When asked about them on Monday, Poilievre promised a “one and done” approval process that would bring First Nations, municipalities and provinces “under the same tent” and guarantee decisions on resource development projects within a year.

“If you want these monstrous, big, beautiful projects to go ahead, you are going to need a change in government, with a ‘Canada first’ Conservative prime minister,” he said.

Not necessarily false but ‘wildly misleading’

While it’s technically true that Poilievre could approve a project that already has prior approval, University of British Columbia political science lecturer Stewart Prest said, his comments are “wildly misleading.”

“It's always a little concerning when politicians are so free to colour outside the lines and to create a narrative out of a factual situation that actually isn't there,” he said.

Prest said political parties often push certain narratives when speaking to committed supporters. He pointed to Liberal talking points around gun control and abortion access as examples of a party “assigning positions” to the opposition.

“I don't want to say it's only a Conservative thing, but it does seem like it comes quite freely to this kind of populist Conservative world view to frame things starkly and in seemingly misleading terms,” he said.

Prest added that debate has been emerging for more than a decade, and crystallized as the United States levied a series of tariffs on Canada over the past month, about how invested the federal government should be in the development and transportation of energy resources.

While he said there appears to be increased willingness for federal involvement in economic co-ordination, inserting the federal government's authority into an area that's “pretty unambiguously provincial jurisdiction” would lead to political confrontation.

Prest said he hopes voters take the political rhetoric “with a grain of salt and try to verify those statements using different and reliable news sources.”

LNG projects and electrification

When LNG Canada was approved a decade ago, it was permitted to use gas piped from northeast B.C. via the Coastal GasLink pipeline to power the facility.

And not only is LNG Canada exempt from the provincial requirement to use electricity, which was implemented years after its approval, but B.C.’s Energy Ministry recently softened its position on requiring electrification for future LNG development.

B.C. brought in its electrification requirements in order to help meet its carbon emissions targets. The process of turning gas into liquid for overseas export is energy intensive, requiring cooling the gas to below -160 C. Powering the facility with gas would make it significantly harder to reach carbon emissions targets.

B.C.’s Energy Ministry told The Tyee that in 2018 each phase of the LNG Canada facility was expected to produce roughly 3.5 megatonnes of carbon a year, a tally that includes the export terminal, pipeline and production in B.C.’s northeast. That’s about five per cent of the province’s annual emissions.

B.C. has committed to reducing its carbon footprint by 40 per cent by 2030.

In 2023, the province announced its energy action framework, which required that all newly proposed LNG facilities have a “credible plan to be net zero by 2030.” That meant using electricity from the province’s power grid for any future LNG development.

The framework also promised to “accelerate the electrification of B.C.’s economy.”

Last year, B.C. Premier David Eby told Bloomberg News that the province was in discussions with LNG Canada about how to proceed with the project while sticking to emissions targets.

In January, after extensive lobbying by the LNG industry, the province announced it would fast-track plans to extend an upgraded power supply to Terrace, in northern B.C., by not requiring the planned North Coast Transmission Line to undergo an environmental assessment.

But while B.C., with financial support from the federal government, works to provide renewable energy for industrial expansion on the north coast, the province also has a limited power supply.

A 2023 report by the Pembina Institute showed that LNG Canada’s Phase 2 would require more than 2.5 times the power produced by the recently completed Site C hydroelectric project in the province’s northeast.

BC ‘clarifies’ net-zero requirements

Young of Climate Action Network Canada said there may be a “marketing advantage” to electrifying LNG Canada’s second phase, despite there being no formal requirement.

B.C.’s LNG industry has been pitched as a low-carbon alternative to other fossil fuels, in part because of the province’s access to renewable power sources.

But Young added that “the whole conversation seems to have gone somewhat quiet” as U.S. tariffs create a sense of urgency around reaching overseas export markets.

Last month, B.C. quietly stepped back from its commitment to make new LNG development net zero by 2030.

In a March 21 letter, Energy Minister Adrian Dix offered a “clarification” to the B.C. Environmental Assessment Office’s chief executive assessment officer, Alex MacLennan.

While projects must have a “credible plan” to be net zero by 2030, the requirement is subject to the availability of electricity from the power grid, Dix wrote.

In a statement, environmental law society Ecojustice called the change “problematic,” noting the amendment did not set a new deadline for making the LNG industry net zero.

“B.C. now appears to recognize that electricity is in short supply, but instead of seeing this as a limit on LNG development, the minister has simply changed the rules to allow new LNG facilities to contribute more climate pollution,” Ecojustice lawyer Matt Hulse said.

Young said that allowing more LNG projects to proceed would “completely blow B.C.’s climate targets and make a bit of a laughingstock of any kind of claim that B.C. is a climate leader.”

He added that while the federal Liberals may support electrification, it’s “100 per cent a provincial decision” to require electrification of the LNG industry.

“It’s a pretty dishonest and almost laugh-out-loud announcement that Poilievre made on something that’s been approved for years,” Young said, adding that the Conservative leader is “casting jurisdictional aspersions” on the federal government over what is a provincial responsibility.

“I get the politics. I understand, I guess, why he was doing what he was doing,” he said. “It just doesn’t add up very well for somebody who wants to be prime minister to be so factually incorrect.”