Statement by Alex Walker, Energy Analytics Program Manager 

Toronto | Treaty Lands and Territory of the Mississaugas of the Credit First Nation, and the traditional territory of the Anishinaabeg, the Haudenosaunee, and the Wendat – Today’s announcement of the final investment decision in LNG Canada Phase 2 is another example of what has become the hallmark of Prime Minister Carney’s “nation-building” agenda: taxpayer money going to foreign investors for a project that makes life worse for Canadians.

LNG Canada Phase 2 will double the capacity of a facility that is already violating its environmental permit requirements, including releasing record-breaking quantities of polluting, carcinogenic smoke into the community of Kitimat. In 2025, LNG Canada Phase 1 flared more polluting gas into the atmosphere than any other facility in the world. Doubling this problem before trying to fix it isn’t nation-building; it’s reckless.

The world doesn’t want more LNG. Countries, including Germany, are currently phasing out fossil fuels, including gas. Canada’s existing LNG customers in Asia are actively cancelling new LNG projects and instead building out affordable, secure renewable energy. Global LNG supply is rapidly expanding over the next few years, and even without accounting for output from LNG Canada Phase 2, experts anticipate a supply glut.

This project can move ahead only because Canadians are footing part of the bill. The government’s sweeping new super-deduction tax break hands massive subsidies to the entirely foreign owners of LNG Canada –  Shell, PETRONAS, MidOcean, PetroChina, Mitsubishi Corporation and KOGAS. Additionally, the crown-corporation Export Development Canada gave up to $700 million to MidOcean for LNG Canada in the last year alone.

This project is dangerous, won’t bring economic benefits to Canadians and may even drive up gas prices for Canadians. Methane is classified as a toxic substance and a very potent greenhouse gas. No amount of rebranding into ‘natural gas’ changes the environmental and economic harms it causes. The economic benefits are overhyped, and the harms are underreported.

Background

• For full additional context, see our recent backgrounder
• This announcement comes in tandem with the confirmation of Coastal GasLink Pipeline Phase 2. This expansion will nearly double CGL’s capacity by adding new compression stations along the pipeline route.
• 21st May 2026, Export Development Canada listed LNG Canada on its ‘Category A’ page of environmentally harmful projects, which it was considering financing https://www.edc.ca/en/about-us/corporate/disclosure/reporting-transactions/category-a.html
• LNG Canada Phase 1 was found to be in violation of its marine, flaring and bird monitoring permit requirements in a recent inspection.
• According to the International Energy Agency (IEA), more than 345 billion cubic meters per year (bcm/yr) of new LNG export capacity, which has received a final investment decision/ is under construction, is expected to come online by 2030, expanding global supply by almost 50 per cent. Global demand is not currently expected to absorb this additional supply. Under current price trajectories, the IEA is also anticipating an LNG surplus of 65 bcm by 2030. This data also excludes added capacity from LNG Canada Phase 2 and Ksi Lisims, which would add a further 35 bcm/ year of LNG supply by the early 2030s.
• Methane is a greenhouse gas which can create effects exceeding 80 times the warming effect of carbon dioxide. Methane has also contributed two-thirds as much warming as CO₂ since the Industrial Revolution.
• LNG Canada is currently flaring excessively due to engineering issues that will take multiple years to fix. In 2025, the facility burned off the equivalent amount of gas that could have powered 157,942 homes. LNG Canada has retroactively amended operating documents and requested permit changes, as this environmentally harmful flaring represents a shift from how the facility was designed.

ABOUT ENVIRONMENTAL DEFENCE (environmentaldefence.ca): Environmental Defence is a leading Canadian environmental advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.

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For more information or to request an interview, please contact:

Midhat Moini, Environmental Defence, media@environmentaldefence.ca