Everything You Need to Know About the $36-Billion LNG Project That Has Turned Many First Nations Against Trudeau

The Liberal-approved project could make their climate targets impossible to hit.

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Sep 28 2016, 5:44pm


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The federal government has approved a $36 billion liquefied natural gas (LNG) project just south of Prince Rupert, British Columbia that, if built, will add thousands of construction jobs, will be one of the largest GHG emitters in Canada, and will very likely cause mass protests and social unrest on Canada's west coast.

Known as Petronas' Pacific Northwest LNG plant, BC and the federal government hope the project will add more than a billion dollars in annual taxes and royalties.

But if construction begins on the project, First Nations along the coast have threatened a "Standing Rock of the northwest." Already, there is a growing encampment on Lelu Island, the site of the proposed LNG export terminal, and several First Nations in the area have threatened legal action against the project.

Before it's built, though, Petronas has to reassess whether it makes economic sense to build an LNG plant and export terminal when the price of the fuel has plummeted in the last three years as the project jumped through federal regulatory hoops.

What is the project, exactly?

Built and operated by Malaysian oil and gas company Petroliam Nasional Berhad, a.k.a. Petronas, the gas plant would receive natural gas extracted in northeast BC, which would be transported by a TransCanada pipeline. The plant would liquefy that natural gas and export it to Asian markets from a terminal near Prince Rupert.

Petronas has promised the project will add 4,500 jobs at peak construction, as well as 330 operating jobs and 300 local spin-off jobs.

READ MORE: Meet the Indigenous Occupiers Challenging LNG Development on BC's Lelu Island

How have people reacted to its approval?

People in Fort Saint John, BC are overjoyed, with many posting in the Facebook group "FSJ for LNG" that their coffee tasted better this morning when they heard the announcement. "Must be a little LNG in that coffee!" one resident wrote. The community, the hub of BC's natural gas sector, had pushed for the project's approval following mass job losses in the oil sector.

But First Nations surrounding the location of the proposed terminal were shocked and disappointed when the news broke. The export terminal would be built at the mouth of the Skeena River, a delicate wild salmon habitat on the second-largest salmon river in BC.

Christine Smith-Martin of Lax Kw'alaams First Nation crashed the press conference yesterday with a jar of salmon to say, "The salmon that we're talking about in our community is a very important piece, and you're not addressing the salmon, what about the salmon?"

While Lax Kw'alaams' elected council supported the project in a letter after the deadline to the Canadian Environmental Assessment Agency, many from the First Nation have called the council's approval a betrayal.

Members of the Haida Nation posted on Facebook that they would wear "No LNG" T-shirts when the royals visit their nation on Friday.

READ MORE: Trudeau Just Approved a Massive Gas Terminal in BC

Erica Ryan-Gagne of the Haida Nation told VICE News that the approval of this project would lead to a "Standing Rock of the northwest."Ryan-Gange recently returned from Standing Rock in North Dakota, where she made connections, contributed supplies, and handed out "No LNG" T-shirts. She called the experience "empowering."

She predicted that while the group of volunteers on Lelu Island is small, "they're ready, and they've been there through the winter as well."

She said other First Nations, including members of the Haida Nation, are on standby for when Lelu Island calls for backup. And it won't just be support from the Haidas, she said, it will be "all up and down the coast"

"It's going to happen at the drop of a hat," she said. "If they put the call out, people will come."

Meanwhile, environmentalists have said it will be challenging, if not impossible, for Canada to meet its Paris climate commitments once the plant and terminal are up and running.

Earlier this year, 90 scientists sent a letter to Catherine McKenna, minister of environment and climate change, calling on her to reject the LNG proposal because the GHG emissions from the project and its upstream effects "are significant and represent material challenges to BC and Canada toward meeting their climate change targets."

The scientists pointed out that the GHG emissions reported by the proponent "are likely underestimated," and said the CEEA has found that the GHG emissions from the project will be "high in magnitude, continuous, irreversible and global in extent," and would emit 11.5 million tonnes of carbon dioxide each year, not including downstream emissions when the gas is burned in Asia.

So if it's such a huge GHG emitter, why would the government approve it?

Petronas has said the project would add $1.3 billion annually in taxes and royalties to three levels of government.

The federal government has been under pressure from Canada's struggling oil sector and the Conservative opposition to approve energy projects that would add jobs in the west.

"The Pacific Northwest LNG will provide thousands of jobs and billions of dollars in investment at no cost to taxpayers," Conservative leader Rona Ambrose declared during Question Period on Tuesday as the federal environment and climate change minister flew to BC to announce its approval.

Trudeau has repeatedly said Canada needs to get its resources to market, but must do so in a responsible way with proper consultation with First Nations.

What happens next?

Before the project is built, Petronas has to re-do its math on LNG to decide whether the project makes business sense. Regulatory hurdles have delayed the project for three years, and in that time LNG prices have plummeted as supply has outstripped demand.

"It's a very tough environment. We are entering a period of oversupply and prices for both oil and LNG are low. To commit to additional capital expenditure for Petronas and its partners over the next four years will be very challenging, especially as budgets are being cut," one LNG analyst told the Financial Post.

In order to build the project, Petronas also has to meet 190 legally binding environmental conditions.

Follow Hilary Beaumont on Twitter.

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