The false promise of natural gas
Canada is staking its energy future on exporting LNG. But will there be a buyer when the projects are complete?
New energy projects in Canada typically lead to political turf wars at both the federal and provincial levels. But when it comes to Liquefied Natural Gas (LNG), there seems to be eternal optimism.
The Federal Government, including Energy Minister Tim Hodgson, have stated an ambitious long-term target of reaching up to 100 million tonnes per year to make Canada a top global LNG supplier. As of June 2025, Canada exports a total of 14 million tonnes of LNG per year from a Shell-owned facility in Kitimat, B.C.
In 2014, I attended a B.C. LNG forum which attracted dozens of potential project investors. Optimism abounded. Yet only one of the projects presented that day, the LNG Canada facility in Kitimat, made it to the starting gate.
Four new projects
B.C.’s NDP government continues to promote LNG projects as a win-win-win for the environment, the economy and nation building. The export of LNG to Asia-Pacific markets will help Canada diversify its trading partners and be less reliant on the U.S. First Nations are taking a leading role, and the reliance on hydroelectric power will keep the carbon footprint low. But will the projects deliver on these promises?
In the coming months, four project proposals in B.C. deserve scrutiny. They include two projects in the north: Cedar LNG in Kitimat, which is majority-owned by the Haisla Nation and Ksi Lisims LNG on Pearse Island, which is a collaboration between the Nisg̱a’a Nation, Western LNG and Rockies LNG.
There are also two LNG projects closer to Vancouver: Woodfibre LNG near Squamish, which is 80 percent complete and the expansion of Fortis BC’s Tilbury LNG terminal in Delta. This site has been processing LNG since 1971, but will have increased capacity in the coming years.
LNG demand
LNG imports in Japan, South Korea and Europe – which account for more than half of the world’s demand – fell in 2023 and will likely continue falling.
“40 percent of all LNG volumes handled by Japanese companies are sold elsewhere,” according to Sam Reynolds from the Institute for Energy Economics and Financial Analysis (IEEFA). This is up from 16 percent in 2018.
In 2024, Japanese LNG resales were approximately 1.7 times Japan’s total direct imports from Australia, its largest LNG supplier. Resales amounted to around four times the volumes purchased from Malaysia, Japan’s second-largest LNG supplier.
Other countries are also taking steps to curb their import of LNG: since March 2026 Vietnam, the Philippines, Taiwan and South Korea have made energy and infrastructure changes that could reduce their LNG demand by 16 million tonnes per year.
According to IEEFA, global supply of LNG will probably increase by about 40 percent in the next five years. Robust supply growth will likely lead to lower prices, encouraging an uptick in short-term buying, posing ongoing fiscal challenges and lengthy delays for new gas and LNG infrastructure. This could be bad news for B.C.’s new LNG projects.
The alternative: Plan B
Energy planners from Canada’s federal government and B.C.’s provincial government are focused on diversifying trade and shipping more LNG supplies to Asia. Yet Asia may not be interested. Asian countries see LNG increasingly as an unreliable fuel source and are going back to coal, nuclear reactors and renewable energy.
How will the ensuing low-cost LNG market affect LNG Canada’s project expansion in Kitimat? The Phase 1 project faced major budget pressures, running roughly 30 percent over its original construction budget and dealing with steep cost escalations tied to complications with the Coastal GasLink pipeline.
Yet opposition has been forthcoming.
Grand Chief Stewart Phillip has stated: “The Union of B.C. Indian Chiefs (UBCIC) is gravely concerned that the Government of Canada continues to deliberately sidestep its duty to consult and cooperate with First Nations. Rather than being met with partnership, we are given an ultimatum: accept fossil fuel expansion or be pushed aside. LNG Canada is not only a massive source of greenhouse gas emissions but also drives destructive fracking, further threatening our lands, waters and communities – emissions do not recognize territorial boundaries. Through resolution, the UBCIC Chiefs Council has recognized the health and environmental hazards of the fracking/LNG industry. We reject any process that tramples our inherent and constitutionally protected title and rights, ignores free, prior and informed consent, and sacrifices the climate for foreign corporate profits. True nation-building requires working with us, not against us.”
Shell Canada will probably make it to the finish with its Phase 2 extension. But the company will try to ensure there are no extensive cost overruns.
Ian Sanderson, senior analyst at the Pembina Institute in Vancouver, B.C. summarizes Canada’s LNG future as follows: “Canadian LNG investments now face a dual threat: demand destruction in the near term from high prices, followed by a likely glut of supply later this decade . . . together, these forces increase the likelihood of stranded assets, elevate risks to public finances and undermine Canada’s climate commitments.”
The green promise
The low-cost LNG future may not arrive as promised. Exporting more LNG is not a step towards a green transition nor a step closer to renewables. It seems that Canadians are being sold scenarios of energy insecurity which future generations must resolve.
What is missing is a roadmap which can lead to energy diversification and zero emissions as set out in the Paris Climate Accord of 2015. Canadians cannot pretend that fossil fuels will continue to play a dominant role in our future economy. A role, yes, but a sharply diminished one. Yet by focusing exclusively on new LNG projects, which must still come to fruition, we seem to have lost sight of the need to create a renewable future. What will a renewable future look like? A roadmap in which wind power, sun and Canada’s huge resources of hydropower will play key roles. A roadmap which will appear perhaps not as a national roadmap but piecemeal as we inch towards a challenging future.
