Germany’s top envoy is pouring cold water on calls for Canada to increase natural gas exports to Europe.
Jennifer Morgan, Germany’s state secretary and special envoy for international climate action, warned at a press conference at the German Embassy in Ottawa on Friday that Germany and Europe will likely see less demand for natural gas from countries such as Canada in the future.
“All the research is pointing to a contracting market,” Morgan said. “Germany will move towards renewables and gas demand will fall.”
Morgan, a US-born former head of Greenpeace International, is Germany’s first international climate envoy. She represents Europe’s largest economy and biggest emitter, and works frequently with Steven Guilbeault, Canada’s Minister of Environment and Climate Change.
Morgan said Germany, like Canada, has binding legislation to reduce emissions but plans to reach net zero by 2045, five years earlier than Canada is on track to reach that goal. He suggested the role of natural gas in the German economy would shrink.
“This is part of a transition, but it’s not long-term,” Morgan told reporters.
She cited studies and forecasts that show Germany is expected to cut its natural gas imports by 30 percent by 2030 and by 96 percent by 2050. She said Europe is also expected to cut its natural gas imports by about 25 percent by the end of the decade.
Morgan said these are projections, not targets.
The main cause of Europe’s declining natural gas demand is Russia’s war in Ukraine. Russia, once a major supplier of natural gas to Europe, has been accused of curbing supplies in retaliation for crippling sanctions imposed by Germany and other Western allies.
More than 40% of Europe’s natural gas It imported gas from Russia before Russia launched a full-scale invasion of Ukraine in 2022. Its share of the European natural gas market has now plummeted to less than 15%. Norway will be the EU’s largest gas supplier in 2023, followed by the United States and North Africa.
Asked whether Germany needed Canadian natural gas to replenish its reserves, Morgan said the country was becoming increasingly reliant on renewable energy.
“While we will need to continue to import LNG in future, our gas reserves are currently full,” Morgan said.
Morgan noted Germany’s increasing reliance on energy efficiency measures in its power grid and renewable energies, which now account for 60 percent of electricity production.
The envoy’s remarks come as no surprise to energy market experts, who argue: Canadian liquefied natural gas cannot meet the European Union’s short-term energy needs.
Morgan said Germany needs Canada’s critical minerals and hydrogen – the two countries recently agreed to a $600 million hydrogen export pact in Atlantic Canada.
When the announcement was made in July, German Vice President Karina Hauslmeyer said her country was “equally committed” to developing Canada’s burgeoning clean hydrogen industry.
Karina Hauslmeyer, Deputy Chief of Mission at the German Embassy in Ottawa, outlined Germany’s multi-million dollar commitment to export hydrogen to Atlantic Canada.
Melissa Lanzmann, deputy leader of the Conservative Party of Canada, said despite the German envoy’s message, her party remains committed to expanding Canada’s LNG industry and replacing energy produced by “foreign competitors and dictators.”
Conservatives also attacked the German minister’s approach to environmental issues.
“CBC interviewed overseas environmental activists with ties to Greenpeace to make claims that they are the reason for Canada’s payroll suspension, when in fact Europe is vying for Canada’s world-class LNG. [Prime Minister] Prime Minister Justin Trudeau slammed the door in their faces and said there was no business case for them,” Lanzmann said in a media statement.
Conservative Leader Pierre Poirievre has vowed to send more Canadian natural gas to Germany and other European countries.
“Japan, Greece and Germany all want our natural gas to help them break their dependency on oil. [Russian President Vladimir] “Mr. Putin, Prime Minister Trudeau said there is no business basis for this,” Poirievre said at a July press conference.
“Of course, there are business reasons. I intend to export Canada’s natural resources, particularly to end Europe’s dependence on Putin and turn dictators’ dollars into people’s paychecks.”
According to Natural Resources Canada, Canada will be the world’s fifth-largest producer and sixth-largest exporter of natural gas in 2022. Most of it goes to the United States, but that should change by the end of the century when projects such as LNG Canada Phase 1, Woodfibre LNG and Cedar LNG come online in British Columbia. These projects are expected to open up Asian markets to Canadian gas.
Energy for a Secure Future, a Canadian group that supports Canadian natural gas exports, said its president, Shannon Joseph, said Canadian politicians and business leaders should take Germany’s comments seriously, but that Canadian natural gas production and exports should continue to expand.
“There’s a lot of demand growth in Asia and it’s always going to be the region where we’re going to see the most demand growth, so I think Canada needs to take a big-picture approach and get resources to where they’re needed,” Joseph said.
