This week, Armando, David, and I couldn’t resist doing an episode on COP27 and its non-achievements.Irina Slav on energy is a reader-supported publication.
There is no buisness case for LNG exports from Canada to Europe because Europe is unwilling to commit to a long enough term, given the investment renquired.
Your chat is starting to jump the shark into conspericy theory.
Europe's not the only potential big buyer but in any case, I don't think it's the Canadian government's job to make investment decisions for such projects.
Given we would need pipeline built as well since we don't have the capacity anywhere near the coast needed.
So from that standpoint the government would have to be heavily involved as well. Given the investment and permitting required, there is no private entity that is going to spend on even preliminary work without long term commitments. Europe has been unwilling to give them, hence the statement "no buisness case" was correct. If that changes, maybe?
That's very true and it's also true for green hydrogen, even truer, if that's possible, and yet the government is pushing it actively. Yet I would argue that "no business case" is a statement for private investors to make, not governments, government role in making a business case or killing it notwithstanding. Demand for LNG globally exceeds supply, and from that perspective, there's a strong business case for a lot of new production capacity. Yet since it's not politically and transitionally correct, the fundamentals are being carefully overlooked.
In a general sense, sure there is a lot of LNG demand now.
To build one on a Canada’s East coast they need ~1000km of pipeline across a province that doesn’t want it, to make an LNG terminal that is farther away from the source than the ones on the US gulf coast.
The federal government would have to spend a pile of political capitol to even get a project to a feasibility study stage. Why should they if Germany can’t even make a commitment?
The risk is not that LNG demand drops, but that it doesn’t rise and stay up to the current plus future planned global export capacity. The terminal that doesn’t have a long term contract gets hosed if that happens.
Sure, in principle private investors should say if there is a business case or not, but if it is so obviously not there with the conditions as they stand, I take that as a bit of a rebuke to say “get serious, what you have come with is a joke”.
The hydrogen plan is also a joke, but there does appear to be some private money chasing it (I’m sure with their hands out), but at least for that one they are leaving it to the business to make their case.
Given that a east coast LNG project would be starting from scratch, including pipelines, an in service date of 2030 would be optimistic. Who knows if Germany will even have the industrial users left by then to justify such a late project?
Indeed, any fossil fuel project in Canada is fraught with... let's call them challenges. And one definitely cannot rely on a single country, even if it's a big gas consumer, for such a project. But since Shell's decided there's a case for LNG on Canada's West Coast not all is lost yet as far as LNG business cases in Canada go, opposition and all.
It definitely makes more sense on the west coast. In the end if we send a cargo to Japan, which frees up one from UAE to go to Europe, it’s just as good as sending it direct.
It just makes no logistic sense to go east. ~3000km of pipeline!
That and US LNG exports are partially CAN NG anyway. It’s an integrated pipeline network. Where ever the actual terminal is, it pulls from the same continental scale system.
A lot of the diesel shortage is caused by the increased demand for diesel being used in global shipping to meet the new IMO requirements for a low sulfur fuel for ocean shipping. Bunker fuel is being phased out.
Another good example of a problem caused my regulators that don't look at the consequences of their regulation.
This reminds me how some thought LNG will at some point become the default replacement for high-sulfur bunker fuel. Now it sounds like a joke but it wasn't.
There is no buisness case for LNG exports from Canada to Europe because Europe is unwilling to commit to a long enough term, given the investment renquired.
Your chat is starting to jump the shark into conspericy theory.
Europe's not the only potential big buyer but in any case, I don't think it's the Canadian government's job to make investment decisions for such projects.
Given we would need pipeline built as well since we don't have the capacity anywhere near the coast needed.
So from that standpoint the government would have to be heavily involved as well. Given the investment and permitting required, there is no private entity that is going to spend on even preliminary work without long term commitments. Europe has been unwilling to give them, hence the statement "no buisness case" was correct. If that changes, maybe?
That's very true and it's also true for green hydrogen, even truer, if that's possible, and yet the government is pushing it actively. Yet I would argue that "no business case" is a statement for private investors to make, not governments, government role in making a business case or killing it notwithstanding. Demand for LNG globally exceeds supply, and from that perspective, there's a strong business case for a lot of new production capacity. Yet since it's not politically and transitionally correct, the fundamentals are being carefully overlooked.
In a general sense, sure there is a lot of LNG demand now.
To build one on a Canada’s East coast they need ~1000km of pipeline across a province that doesn’t want it, to make an LNG terminal that is farther away from the source than the ones on the US gulf coast.
The federal government would have to spend a pile of political capitol to even get a project to a feasibility study stage. Why should they if Germany can’t even make a commitment?
The risk is not that LNG demand drops, but that it doesn’t rise and stay up to the current plus future planned global export capacity. The terminal that doesn’t have a long term contract gets hosed if that happens.
Sure, in principle private investors should say if there is a business case or not, but if it is so obviously not there with the conditions as they stand, I take that as a bit of a rebuke to say “get serious, what you have come with is a joke”.
The hydrogen plan is also a joke, but there does appear to be some private money chasing it (I’m sure with their hands out), but at least for that one they are leaving it to the business to make their case.
Given that a east coast LNG project would be starting from scratch, including pipelines, an in service date of 2030 would be optimistic. Who knows if Germany will even have the industrial users left by then to justify such a late project?
Indeed, any fossil fuel project in Canada is fraught with... let's call them challenges. And one definitely cannot rely on a single country, even if it's a big gas consumer, for such a project. But since Shell's decided there's a case for LNG on Canada's West Coast not all is lost yet as far as LNG business cases in Canada go, opposition and all.
It definitely makes more sense on the west coast. In the end if we send a cargo to Japan, which frees up one from UAE to go to Europe, it’s just as good as sending it direct.
It just makes no logistic sense to go east. ~3000km of pipeline!
That and US LNG exports are partially CAN NG anyway. It’s an integrated pipeline network. Where ever the actual terminal is, it pulls from the same continental scale system.
A lot of the diesel shortage is caused by the increased demand for diesel being used in global shipping to meet the new IMO requirements for a low sulfur fuel for ocean shipping. Bunker fuel is being phased out.
Another good example of a problem caused my regulators that don't look at the consequences of their regulation.
This reminds me how some thought LNG will at some point become the default replacement for high-sulfur bunker fuel. Now it sounds like a joke but it wasn't.