Germany’s LNG Loan Guarantee in Nova Scotia Would Contradict Domestic Ban, Delay Post-Carbon Transition
Germany must withdraw a US$4-billion loan guarantee that would enable Calgary-based Pieridae Energy Ltd. to build a 10-million-tonne-per year liquefied natural gas (LNG) terminal at Goldboro, Nova Scotia, a coalition of Canadian and German environmental groups argues in an open letter released last week.
“A publicly covered guarantee of the Federal Government for the promotion and import of fracked gas from North America to Europe must not be granted,” states the letter, addressed to German Environment Minister Svenja Schulze and Minister of Economics Peter Altmaier. It describes the loan guarantee as “rather a gross financial mistake against the German and international climate goals.”
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The groups note that the promise of financing has prompted a commitment from one investor, Uniper S.E., to buy at least half of the terminal’s total capacity for 20 years.
(Disclosure: Energy Mix Productions was one of the letter’s 34 signatories.)
The letter notes that new LNG infrastructure “delays the transition to 100% renewable energies in Germany and abroad,” thereby undermining Germany’s “intended role as an international pioneer in tackling the climate crisis.” It points to the financial risk of issuing a loan guarantee in spite of a looming carbon bubble, and warns that most of the gas to be liquefied at Goldboro would be obtained through fracking.
That extraction process is “particularly harmful to the environment and climate,” and “endangers groundwater and rivers by contamination with toxic chemicals,” the letter notes. “For these reasons, fracking in Germany has been banned in slate and coal bedrock since 2016,” and that ban “should not be undermined by the import of fracked gas from the U.S. and Canada.”
“Germany should not support the proliferation of fracking projects in Canada while this technique is hotly criticized on its own territory,” said Carole Dupuis of Regroupement vigilance hydrocarbures Québec. “Fracking destroys ecosystems and communities everywhere it is practiced, and natural gas contributes powerfully to global warming, no matter where it is extracted or burned. Germany, as well as Canada, must move away from fossil fuels.”
“The Goldboro plant is one of three major LNG terminals with provincial approvals in Nova Scotia, which together would increase provincial emissions by more than 75% by 2030 and greatly increase fracking across North America,” said Stephen Thomas, Energy Campaign Coordinator at Halifax’s Ecology Action Centre.” This project is a terrible investment, and would simply be ignoring the realities of climate change and our collective responsibility to support a just transition to a low-carbon economy.”
“Neither Germany nor the electric utility Uniper buying the LNG would use the gas to retire coal-fired electricity production,” added Ken Summers of the Nova Scotia Fracking Resource and Action Coalition (NOFRAC). “And even if that changed in the future, the small decrease in greenhouse gases emitted in Germany would not compensate for the significant emission increases from Canadian gas fields, and from the giant LNG compressors in Nova Scotia.”