Canadian Federal Politics Thread v5

[cal_guy]

Originally Posted by opendoor

Isn't every existing US liquefaction facility simply a regasification facility that was retrofitted to export LNG? And most of the ones under construction are also just expansions of existing facilities? That's a little bit different than building facilities from scratch both in terms of approvals and investment dollars.

And the one big one in the US that's currently under construction that is purpose-built (Driftwood) is still 4-5 years from being operational, much like the ones under construction in Canada.

I'm sure if Canada had a bunch of unneeded LNG regasification facilities kicking around we could have begun exporting sooner, but we have historically had almost zero need for imported gas.

The were plans for construction of LNG Import Terminals in Canada, but none of them got of the ground before it became clear that North America would not be a gas importer. There's is a LNG Import Terminal in New Brunswick that had plans in 2016 to convert to export but failed because it couldn't find any outside investors.

[Mr.Coffee]

Originally Posted by Suave

That plus construction costs for LNG plants in Canada are twice that of the Gulf coast, that makes a large difference in companies moving ahead with these.

Correct and why is that?

Canada should be dominating this space and there is simply no debate that lack of government support is a factor, I’ve literally experienced these meetings first-hand and heard such discussions from the producer side, and people may not like what these groups say about Canada (and, they’re right). I also worked for a midstreamer that managed to launch an export facility for NGL in Prince Rupert, which was like a miracle it worked. There are now two of them and expansion plans for the main location just outside of Prince Rupert and plans for other export products- but not gas… why?? I would agree that it isn’t the biggest factor but I can tell you it 110% is a factor. There is absolutely blame for the feds on this file (kind of regardless of political stripe, and is more an Ottawa / Canadian people failure to realize the importance of these projects).

Canada has a locational advantage to shipping to Asia over the US even from California. Not only is it shorter routing, we also have colder climates and better atmospheric conditions working to our advantage which significantly reduces operating costs to run these facilities.

Canada makes itself expensive, it doesn’t just magically become this way. Hell, we pay our people in a currency worth 25% less…

[iggy_oi]

How many LNG pipelines or other projects are currently in the approval process?

[Mr.Coffee]

Originally Posted by iggy_oi

How many LNG pipelines or other projects are currently in the approval process?

They are gas pipelines. So they transport gas to the facility, it liquifies it at the coast (cools it) and then onto the boat in liquid form.

I think there are only 2 new pipes being built now? I forget. I believe the main one in the works is Pacific Trails which is for Kitimat LNG. Not sure the details on LNG Canada’s pipe but I believe they were experiencing some protests / pushback, and anyway this project may fall down still given lack of appetite from Woodside / Chevron. Then there’s Woodfibre LNG which is Pacific’s, it heads south from the northwest BC regions via existing lines but had to get into an existing pipeline that was operated by Fortis and needed to be retrofitted, which I believe they’re going ahead with. This is a very small LNG terminal though.

We looked at econs to build new gas pipe all the time but it required partners because the cost of terrain and rivers and protests and timing and regulatory delays and red tape and requirement to partner with FN’s (extortion costs) were exorbitant. It’s not going to happen again. Not without government literally pushing things ahead and good luck with that.

[Fighting Banana Slug]

Originally Posted by Mr.Coffee

They are gas pipelines. So they transport gas to the facility, it liquifies it at the coast (cools it) and then onto the boat in liquid form.

I think there are only 2 new pipes being built now? I forget. I believe the main one in the works is Pacific Trails which is for Kitimat LNG. Not sure the details on LNG Canada’s pipe but I believe they were experiencing some protests / pushback, and anyway this project may fall down still given lack of appetite from Woodside / Chevron. Then there’s Woodfibre LNG which is Pacific’s, it heads south from the northwest BC regions via existing lines but had to get into an existing pipeline that was operated by Fortis and needed to be retrofitted, which I believe they’re going ahead with. This is a very small LNG terminal though.

We looked at econs to build new gas pipe all the time but it required partners because the cost of terrain and rivers and protests and timing and regulatory delays and red tape and requirement to partner with FN’s (extortion costs) were exorbitant. It’s not going to happen again. Not without government literally pushing things ahead and good luck with that.

The LNG Canada pipeline is TCE's Coastal Gas Link, which is being built (and protested).

[opendoor]

I'd be curious to see the actual numbers laid out for LNG export from Canada, in terms of costs and benefits. Because based on Australia, it doesn't look all that enticing for people who don't work in the industry or who aren't shareholders of the companies that profit from it. Their tax/royalty revenue from LNG is pretty modest and in return they've seen a pretty significant escalation in energy costs. There's even suggestion that some manufacturing activities won't be viable if gas/electricity costs there stay elevated:

Australia's biggest building materials manufacturers are cutting back operations, hiking prices and considering moving production offshore to manage a spike in power and gas bills, adding to pressure on the government to resolve the country's energy crisis.

The CEOs of Brickworks Ltd (BKW.AX), the country's largest brickmaker, and Boral Ltd (BLD.AX), the top maker of most other construction materials, flagged the changes even as Australia's new Labor government scrambles to try to beef up power supplies and bring down electricity prices.

Brickworks pays just $3 per gigajoule for gas in the United States, where it owns Pennsylvania-based brickmaker Glen-Gery Corp.

"If we rolled over and you had to pay A$40, and I could buy gas in the U.S. for $3, then it's a pretty easy equation to work out," added Partridge.

The United States generates just one-sixth of Brickworks' earnings from building materials, but the company could save money by shipping product back to Australia, he said.

https://www.reuters.com/business/ene...ts-2022-06-20/

I'm assuming relatively modest export amounts won't have a huge impact on domestic prices, and Canada is probably less reliant on gas than most countries, but I do see how there are some downsides.

[Mr.Coffee]

Originally Posted by opendoor

I'd be curious to see the actual numbers laid out for LNG export from Canada, in terms of costs and benefits. Because based on Australia, it doesn't look all that enticing for people who don't work in the industry or who aren't shareholders of the companies that profit from it. Their tax/royalty revenue from LNG is pretty modest and in return they've seen a pretty significant escalation in energy costs. There's even suggestion that some manufacturing activities won't be viable if gas/electricity costs there stay elevated:

https://www.reuters.com/business/ene...ts-2022-06-20/

I'm assuming relatively modest export amounts won't have a huge impact on domestic prices, and Canada is probably less reliant on gas than most countries, but I do see how there are some downsides.

That's definitely a fair question and I'd be very curious too.

I guess the other thing that is odd with this is that Trudeau is saying there needs to be a business case, but isn't this a geopolitical issue? How / why does the government pick / choose which resources geopolitical benefits to Canada and which require a business case? For example, we can donate and give money to random countries but when it comes to oil and gas and our allies need it? Business case required.

[BlackArcher101]

Frankly if the business case was there, how utterly stupid of Germany then not to partner and invest into a LNG facility themselves. Why wait for middlemen to make it happen? What's more secure for your own supply than having a say in it directly?

[opendoor]

I think a big part of it is that most European countries are thinking (even if it's totally unrealistic) that they'll be a long way towards cutting their gas usage within the next decade. So building facilities to export gas to Europe for 2030 (particularly ones that will require elevated prices to remain viable) is a bit of a losing proposition.

Now you can certainly argue that Europe is absolutely kidding themselves, but if that's what they believe and they're not willing to put their money where their mouths are, then it's not surprising that investors and the Canadian government aren't lining up to throw billions at export projects for Europe. I think the ones for Asia make much more sense, and that's why there are 2 of them under construction currently.

I mean, it would have been great if countries like Germany had realized the risk of relying on Russia for energy and had built robust LNG import facilities, and if countries like Canada had built out export facilities. But there wasn't really a great economic case for it for a long period of time. Russia deliberately undercut LNG prices to stop that from happening in Europe, and given how energy costs permeate every single part of the economy, it's understandably difficult for countries with already high energy costs to buy the more expensive option for geopolitical reasons.

[Azure]

Originally Posted by BlackArcher101

Frankly if the business case was there, how utterly stupid of Germany then not to partner and invest into a LNG facility themselves. Why wait for middlemen to make it happen? What's more secure for your own supply than having a say in it directly?

Germany was openly laughing at Trump when he told them that being dependent on Russian gas with no viable alternative is going to be a problem.

One would think that Europe in general would have made sure they had long-term contracts in place with countries like Canada & the US to ensure gas supply, but it seems like they thought farts, turds and fairy ####s, would heat their homes instead.

[Azure]

Originally Posted by opendoor

I think a big part of it is that most European countries are thinking (even if it's totally unrealistic) that they'll be a long way towards cutting their gas usage within the next decade. So building facilities to export gas to Europe for 2030 (particularly ones that will require elevated prices to remain viable) is a bit of a losing proposition.

Now you can certainly argue that Europe is absolutely kidding themselves, but if that's what they believe and they're not willing to put their money where their mouths are, then it's not surprising that investors and the Canadian government aren't lining up to throw billions at export projects for Europe. I think the ones for Asia make much more sense, and that's why there are 2 of them under construction currently.

I mean, it would have been great if countries like Germany had realized the risk of relying on Russia for energy and had built robust LNG import facilities, and if countries like Canada had built out export facilities. But there wasn't really a great economic case for it for a long period of time. Russia deliberately undercut LNG prices to stop that from happening in Europe, and given how energy costs permeate every single part of the economy, it's understandably difficult for countries with already high energy costs to buy the more expensive option for geopolitical reasons.

Europe was also happy to take Russian gas, and even now they keep buying it through China.

I think it is fairly obvious that European leaders screwed the pooch big time when it comes to what is realistically possible in terms of energy supply, and what is essentially pie in the sky bull####. German solar & French nuclear are great examples of this.

If you are dependent on a despot dictator to heat your homes and run your manufacturing, perhaps an alternative should be looked at before he blows the world up? Its laughable how short-sighted European leadership was in that regard.

[Azure]

Originally Posted by Fighting Banana Slug

The LNG Canada pipeline is TCE's Coastal Gas Link, which is being built (and protested).

And it isn't getting any 'screw you this is being built' support from the government.

Remember when we all said that the RCMP should physically remove the protestors at the different border blockades? Coastal Gas Link is the same thing.

[Mr.Coffee]

Originally Posted by Azure

Germany was openly laughing at Trump when he told them that being dependent on Russian gas with no viable alternative is going to be a problem.

One would think that Europe in general would have made sure they had long-term contracts in place with countries like Canada & the US to ensure gas supply, but it seems like they thought farts, turds and fairy ####s, would heat their homes instead.

Which is what leaders and a huge portion of our country think as well. But the huge strategic difference is that… Canada has resources, mass infrastructure, technical horsepower and ability to use the resources. Germany needs Russia, and as a strategic decision really was inevitable in it’s stupidity.

[Roughneck]

For all this talk of how much European gas supply was short-sighted and that we should have forseen providing that supply, it was less than five years ago that a lot of people, especially in this province, were really pushing for an existing gas pipeline to the Ontario-Quebec border to be converted to transport bitumen instead.

[GGG]

Originally Posted by Azure

And it isn't getting any 'screw you this is being built' support from the government.

Remember when we all said that the RCMP should physically remove the protestors at the different border blockades? Coastal Gas Link is the same thing.

The RCMP have repeatedly removed protestors and enforced injunctions to facilitate coastal gas link.

[DiracSpike]

Originally Posted by opendoor

Isn't every existing US liquefaction facility simply a regasification facility that was retrofitted to export LNG? And most of the ones under construction are also just expansions of existing facilities? That's a little bit different than building facilities from scratch both in terms of approvals and investment dollars.

And the one big one in the US that's currently under construction that is purpose-built (Driftwood) is still 4-5 years from being operational, much like the ones under construction in Canada.

I'm sure if Canada had a bunch of unneeded LNG regasification facilities kicking around we could have begun exporting sooner, but we have historically had almost zero need for imported gas.

A portion of US plants started their lives intended as regas sites before they were turned into LNG. But that's a minority of plants, and regas and liquification terminals are not 1:1, you need different infrastructure at both that allows for some economies of scale but you're still basically building a new facility. Cooling the gas to liquify is more complicated and energy intensive than reheating. And of course, for any of these sites to be useful, you need to actually have a pipeline attached and we all know how that goes in this country. There's really no defending our record on this, the US, Australia, and Qatar have completely eaten our lunch. We were all starting from the same point and we've been lapped.

Originally Posted by Roughneck

For all this talk of how much European gas supply was short-sighted and that we should have forseen providing that supply, it was less than five years ago that a lot of people, especially in this province, were really pushing for an existing gas pipeline to the Ontario-Quebec border to be converted to transport bitumen instead.

But that was to get oil to export markets, coincidentally also a product Alberta produces a lot of that's also been hemmed in, where we also compete with bad actor countries like Russia for market share. That's not a counter point, that project wasn't at the expense of any remotely feasible LNG projects, it was that or nothing. Getting our products to any coastline possible is much more important than whichever specific coastline that may be. Sure, the distances to Asia or Europe are shorter depending on which one but at the end of the day both oil and LNG are essentially global markets and fungible between them. A cargo of LNG heading to South Korea from Kitimat means one less buyer on the global spot market for that moment competing with Europe on LNG from the US Gulf coast. Same goes for oil.

It's gonna be really tough to retroactively argue that no one could see this coming you guys. It was the most predictable situation in the world, and years of dithering from Canada has left us with our pants down and unable to help anyone in a meaningful way. I ranted and raved, to the annoyance of many I'm sure, for years on these awful policies and now it's all happening. The best time to get serious about building out our infrastructure was 2017 and 2018 when just me and Mr. Coffee were pissed off and energy weaponization was a hypothetical but still inevitable eventuality, but now would be the second best time. But instead of seeing our leaders taking it seriously i have to watch the PM talk about freaking hydrogen and lie to my face saying there's business case for LNG. Lets get real.

[opendoor]

Originally Posted by DiracSpike

A portion of US plants started their lives intended as regas sites before they were turned into LNG. But that's a minority of plants, and regas and liquification terminals are not 1:1, you need different infrastructure at both that allows for some economies of scale but you're still basically building a new facility. Cooling the gas to liquify is more complicated and energy intensive than reheating. And of course, for any of these sites to be useful, you need to actually have a pipeline attached and we all know how that goes in this country. There's really no defending our record on this, the US, Australia, and Qatar have completely eaten our lunch. We were all starting from the same point and we've been lapped.

A portion? Which existing US facility wasn't originally built as a regasification facility? Freeport was, Sabine Pass was, Cove Point was, Hackberry was, Elba Island was, and Cheniere's Corpus Christie facility started construction as a regasification terminal. Maybe Kenai? But the export capacity of that one is basically nothing.

So they currently have 7 facilities, and at least 6 of them (which make up about 98-99% of their export capacity) were existing LNG import facilities that they were able to repurpose relatively quickly. Sure, there's a huge amount of work required to make that happen, but the site already exists, most of the permits/approvals would be relatively simple, and there would virtually always already be some kind of pipeline in place to the site (or somewhat close to it). That removes a significant number of hurdles that allows these facilities to get going much more quickly and provide a better return on investment. There's a reason why none of the planned purpose-built LNG export facilities have come online in the US yet.

[Cowboy89]

Originally Posted by DiracSpike

It's gonna be really tough to retroactively argue that no one could see this coming you guys. It was the most predictable situation in the world, and years of dithering from Canada has left us with our pants down and unable to help anyone in a meaningful way. I ranted and raved, to the annoyance of many I'm sure, for years on these awful policies and now it's all happening. The best time to get serious about building out our infrastructure was 2017 and 2018 when just me and Mr. Coffee were pissed off and energy weaponization was a hypothetical but still inevitable eventuality, but now would be the second best time. But instead of seeing our leaders taking it seriously i have to watch the PM talk about freaking hydrogen and lie to my face saying there's business case for LNG. Lets get real.

A lot of people who refuse to take an ‘L’ on their previous takes on energy security have trouble admitting it because geopolitics is essentially the Achilles heel from the world they want to see built for the future. Getting to net-zero in 2050 requires not only international cooperation but also the continuation of Western dominance of said geopolitics. There needs to be a world in 2050 to be saved and you can’t count on countries like China or Russia to do it or cooperate towards it because they are ruled by people unaccountable to their own populations let alone to the broader world in any way. This means that energy security, food security, and enough military deterrent to keep Russia out of Former USSR countries and China out of Taiwan are preconditions to anything we need to do to get to Paris targets.

[Suave]

Originally Posted by Mr.Coffee

Correct and why is that?

Canada should be dominating this space and there is simply no debate that lack of government support is a factor, I’ve literally experienced these meetings first-hand and heard such discussions from the producer side, and people may not like what these groups say about Canada (and, they’re right). I also worked for a midstreamer that managed to launch an export facility for NGL in Prince Rupert, which was like a miracle it worked. There are now two of them and expansion plans for the main location just outside of Prince Rupert and plans for other export products- but not gas… why?? I would agree that it isn’t the biggest factor but I can tell you it 110% is a factor. There is absolutely blame for the feds on this file (kind of regardless of political stripe, and is more an Ottawa / Canadian people failure to realize the importance of these projects).

Canada has a locational advantage to shipping to Asia over the US even from California. Not only is it shorter routing, we also have colder climates and better atmospheric conditions working to our advantage which significantly reduces operating costs to run these facilities.

Canada makes itself expensive, it doesn’t just magically become this way. Hell, we pay our people in a currency worth 25% less…

Yes we pay them in a currency that is 25% less but we pay them 50-100% more. That plus terrain and weather make construction projects here a lot more expansive. I am not saying their isn't a regulatory or "Canada" risk, just that it is often overblown and a easy bogeyman.

[Monahammer]

The Government of Canada should pre approve 3 export port locations on each coast. Then sell them to the highest bidder with all regulatory approvals already in place.