Federal Energy Minister Tim Hodgson says his talks with allies about energy security led the Liberal government to emphasize liquefied natural gas (LNG) in Canada’s energy-export strategy, a sharp break from the outlook of former prime minister Justin Trudeau.

“When you talk to governments, their conclusion is, I will need more of this transition fuel,” Hodgson said in a recent interview with The Logic in Toronto.

While Trudeau argued that the business case for LNG was weak as Europe phased out fossil fuels, Hodgson said he faces a different “reality,” as allies like Germany try to wean themselves off Russian oil and gas. But he stressed that Canada’s commitment to the energy transition, and its record of not using energy “for political coercion,” still matter.

The long shadow Russian president Vladimir Putin has cast over Europe helped rekindle LNG trade talks in Germany last month, Hodgson said. The next major LNG project, which is being developed in B.C. in partnership with Nisga’a Nation, just cleared its last major hurdle. Ottawa now intends to expand the Port of Churchill into a natural-gas trade hub, and is accelerating approvals for a major project that would double domestic LNG production.

“Being the responsible producer of energy has an important place in the world,” Hodgson added.

Hodgson’s fossil fuel strategy is likely to be watched closely abroad and at home, with a growing list of energy projects tabbed for streamlined regulatory treatment. In Canada, some First Nations leaders have warned that they will fight plans affecting their land made without adequate consultation.

In his wide-ranging conversation with The Logic, the minister acknowledged he’s counting on the First Nations Major Projects Coalition, an Indigenous-led organization that supports First Nations participation in projects; and a newly created body, the Indigenous Advisory Council, to work with First Nations considering big projects for the first time. 

“There will be some who say, ‘I don’t want a project.’ Okay, fine. That’s cool,” he said. “There will be others who say, ‘I want my Nation to participate in the benefits of this project, but I need help,’ and that’s where we have to engage, and we have to make it easy.”

Hodgson expanded on that issue and more in the interview.

On capacity-building to help First Nations scope out major projects: “We have provided funding for the First Nations Major Projects Coalition, we view them as incredibly important to help member First Nations increase their capacity… Maybe this analogy will work, or it won’t. When I was 16 and I wanted to go buy my first car, I wasn’t comfortable. I felt there was information asymmetry. What the First Nations Major Projects Coalition does is, instead of walking onto the lot alone, you’ve got your grandfather who’s bought 20 cars and says, ‘This is what you need to worry about.’ 

“There are 640-plus First Nations. Some are as sophisticated as they come. I’m not worried about those folks. It’s the ones who haven’t done this before who need the First Nations Major Projects Coalition. 

“In the Major Projects Office, one of the things the Indigenous Advisory Council is going to be tasked with is best practices to figure out what a Nation needs, and how we get that to them in the most efficient way possible.”

On the role of fossil fuels among Canada’s trade allies: “Vladimir Putin invading the Ukraine brought home very clearly to our allies in Europe that energy security is national security. Secondly, the world is going through a fundamental shift in the demand for electricity.

“The reality is, for baseload dispatchable power, the most economic, most reliable fuel for a good period of time is going to be natural gas. Given what’s happened with artificial intelligence, where am I going to get these gigawatts and gigawatts of energy? Some of it will come from renewables, but I’m going to need a lot more baseload dispatchable power. 

“We didn’t ask for our world to be turned upside down. But if our world is going to be turned upside down and our allies are asking us for this energy and that energy produces high-paying jobs—if it means that we’ll use more Canadian steel and aluminium when former allies are trying to shut our mills down, that we’ll have new income streams to pay for $10-a-day child care [or] dental benefits, that we take cards out of the hands of authoritarian states—I think Canadians expect us to do that. 

“Canada has some of the best cleantech companies in the world. By producing it, we help those companies.

“I think that’s the shift.”

On competing with the U.S. ‘drill, baby, drill’ mentality: “Allies are telling us, ‘You share our values, our belief in a responsible transition, our views on multilateralism.’

“So if a country wants to abrogate, or take a different view around, climate transition, that’s their right. I don’t think that’s the view of the majority of our like-minded allies.” 

The reaction: While the trade war with the U.S. has prompted more Canadians to see energy independence as a priority, many others will need convincing. 

Mark Podlasly, CEO of the First Nations Major Projects Coalition, didn’t dispute Hodgson’s characterizations of his group’s role, but he said Ottawa will need to clear two important bars to execute its vision: getting consent of Indigenous First Nations for projects, and providing them with access to affordable capital so they participate in those developments—money that has been constrained by the Indian Act. 

“What we’d also like to see here,” Podlasly said, “is the convening power of the ministry to bring together First Nations and industry to make this happen.”

Janetta McKenzie, director of the oil and gas program at the Pembina Institute clean energy think tank, said producing clean gas domestically is important, since demand won’t drop to zero tomorrow. But she expects potential key trading partners like Germany and China will continue to pursue domestic, renewable sources, creating an uncertain market for Canadian LNG. 

Rather than depend on public financing, she said, “these LNG projects should be able to stand on their own two feet.” 

This interview has been edited for length and clarity.