Reviving Quebec LNG project would be costly, likely unprofitable: new report
Investors for Paris Compliance, a shareholder advocacy group, has raised concerns about the potential revival of a liquefied natural gas (LNG) export project in Quebec’s Saguenay region. The group believes that the project would be costly and likely unprofitable, especially in the current economic climate where demand for LNG in Europe has dropped significantly.
According to Renaud Gignac, an economist and senior adviser for the group, investing in infrastructure that may not be profitable could weaken the economy rather than strengthen it. Gignac highlights that LNG production is expected to increase significantly in the coming years, driven by projects in the United States and Qatar, leading to downward pressure on prices.
The cancellation of a previous project to transport natural gas from Western Canada to the Saguenay region in 2021 due to environmental risks and public opposition serves as a cautionary tale. However, Quebec Premier François Legault has recently expressed openness to pipeline development in the province as a means to reduce Canada’s energy dependence on the U.S.
The advocacy group estimates that the cost of reviving the LNG export project in Saguenay could exceed $33 billion, with public funding likely necessary. Gignac emphasizes that investing in such projects requires careful consideration, as resources allocated to them could be utilized more profitably elsewhere.
While there is ongoing debate about the utility of pipeline projects, particularly in light of threats from U.S. President Donald Trump regarding tariffs on Canadian exports, Gignac believes that reviving such projects is a “false solution” to enhancing the Canadian economy’s resilience. The group suggests alternative ways to stimulate the economy, such as integrating provincial electricity grids and mining critical minerals essential for the electrification of transportation.
Despite potential environmental concerns associated with mining, Gignac asserts the importance of exploring responsible ways to extract and market critical minerals. Additionally, the group views the federal government’s plan to build a high-speed train linking Quebec City, Montreal, and Toronto as a promising economic project that could benefit the country.
In conclusion, the advocacy group’s analysis underscores the need for careful consideration and strategic planning when it comes to infrastructure projects like the revival of the LNG export project in Quebec. By evaluating the economic viability and potential risks associated with such endeavors, policymakers can make informed decisions that align with long-term economic sustainability and growth.
