G7 supports Canada as major global energy supplier to reduce dependence on Strait of Hormuz
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Canada is poised to become the main and most reliable supplier of energy to the G7 after the leaders of France agreed to the country’s ability to bring “extra energy” to global markets to reduce dependence on oil and gas coming through the Strait of Hormuz.
“We are committed to accelerating the diversification of electricity supply routes to reduce global risks in the Strait of Hormuz and increase our energy stocks,” it said. a joint statement by the G7 leaders in Évian-les-Bains, France, on Wednesday.
“We welcome the potential for Canada to bring additional strength to global markets in the coming years.”
Prime Minister Mark Carney also announced a new partnership in essential minerals that his office said would “unlock more than $5 billion in investment in projects across Canada’s essential minerals supply chain.”
In his closing press conference, Carney said it was important for the global economy to diversify its electricity supply routes away from the bottleneck in the Strait of Hormuz.
“One of the points I brought up in the room, in our discussions around Iran and geopolitics was: we have to use the lessons of recent events,” he said.
Before the war, about 20 percent of the world’s crude oil was shipped from the Persian Gulf states, passing through the Strait of Hormuz and the Gulf of Oman before reaching the rest of the world.
An Iranian attack on energy tankers in the Strait of Hormuz has shut down access to the Persian Gulf, halting most oil shipments and driving up global energy prices.
The way to more power
Carney said Canada is already “on track” to increase its energy production, with several major liquefied natural gas projects underway.
Combined with the increased production of the TMX oil pipeline, and the potential for the construction of two additional pipelines from Western Canada – one to the US and the other to the West Coast – Carney said Canada’s energy production potential has been recognized.
CBC business correspondent Peter Armstrong explains why – even when the Strait of Hormuz is reopened – restoring markets to pre-war levels will be a huge undertaking.
“It’s huge and important to our European partners. It’s important to our Asian partners,” Carney said. “It has been suggested to me in many areas of the two countries.”
The prime minister said that beyond the power from Western Canada, there are “other ways in the east” that could help diversify the G7 power away from the Persian Gulf.
Essential minerals
The G7 leaders issued joint statements on a number of other issues where they found a common promise to cooperate on: growth, the wars in Ukraine and the Middle East, drug trafficking, smuggling, cyber security, the Ebola outbreak, cancer research and other areas.
One of those statements focuses on how the G7 countries can cooperate in the production of essential minerals to significantly reduce the group’s dependence on “a single supplier outside the G7” by the end of the year.
Building on the Critical Minerals Production Alliance, established when Canada hosts the G7 in 2025, the leaders said Wednesday they will work together to “develop the necessary processing and industrial capabilities to separate the critical minerals supply chain.”
A separate statement from the Prime Minister’s Office (PMO) said Canada “adopted 13 new partnerships and programs with more than eight countries” at the summit.
That comes after 26 key mining partnerships with nine countries were announced during the G7 energy and environment summit in Toronto in October.
These new partners, the PMO said, will work within the alliance “to reduce market concentration, and create a loyal buyer club that can attract investment and accelerate the production of projects.”
The new deals include an agreement with RCT Solutions, a German company that will partner with Canada’s Sio Silica and others on a high-purity silica project and a solar manufacturing hub in Manitoba.
Other countries that discussed minerals with Canada at the conference in France include: Japan, Italy, Denmark, the Netherlands, France and Portugal.
“At the G7 leaders’ summit in Évian, we found new partnerships to build energy projects in Canada, new agreements to make it easier for our businesses to sell abroad and new agreements to equip the Canadian Armed Forces with the hardware they need,” said Carney.
Canada is wrong, says Conservative MP
Ellis Ross, the BC Member of Parliament for the Skeena-Bulkley Valley riding, which includes parts of the province’s Pacific coast that is home to many LNG fields, said Canada’s process for permitting new energy projects is convoluted and will hinder the Liberal government’s efforts to significantly increase oil and gas production.
“They won’t do it,” he said. “They can’t even figure out what their acceleration process will look like.”
Ross says there are important unanswered questions when approving new plans, including how Indigenous communities will be consulted, and who will be responsible for issuing permits.
“What they say in national games is different as they struggle at home here in Canada,” said Ross.
