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The Dubious Environmental Science Behind a $36B Energy Project in British Columbia

Petronas' proposal to ship gas out of a terminal off the coast of British Columbia has been touted as a massive job creator, but First Nations, environmental groups, and scientists insist its true environmental impact is being obscured.

by Jake Bleiberg
Nov 25 2015, 4:00pm

Photo by Tavish Campbell

On August 22, Don Wesley Sr. loaded supplies into a small boat and pushed off the shore near his tribal village of Lax Kw'alaams, bound for an uninhabited island 600 miles north of Vancouver. As the hereditary chief motored through the chill coastal waters of British Columbia, his son, Don Wesley Jr. put out a call to arms over social media. "We need about 50 to 100 ppl to come help save Lelu Island," Wesley Jr. wrote on Facebook. "Stand up for ur rights."

By the time the pair arrived at the small island off the coast of Prince Rupert, the call had been answered by boats from First Nations communities up and down the Skeena River. "Lelu Island's occupation was started by social media," Wesley Sr. told VICE News. "We told them if our tribe wasn't involved in the negotiations there'd be feedback from us."

The negotiations are over Pacific Northwest LNG's intent to use Lelu Island as the site of its planned $11.4-billion (CAD) liquid natural gas terminal — one small part of a massive petroleum company's plan to export natural gas from Canada. Underwritten by Petronas, the Malaysian national energy giant that wholly owns Pacific Northwest, the project begins in the highlands of northeast BC, where hydraulic fracturing is used to mine gas that would then be funneled by pipeline hundreds of miles overland to Lelu Island, and from there into tankers bound for energy-hungry markets in Asia.

Economists forecast that the project could generate billions in revenue and create tens of thousands of jobs over a decade, and it has received hearty support from Canada's federal and provincial governments. But it has also been met with staunch resistance from First Nations, environmental groups, and scientists, all of whom claim the project's true environmental impact is being obscured and that it will devastate salmon fisheries that support the local Aboriginals' way of life, along with BC's billion-dollar fishing industry.

Despite Canadian environmental regulators' decision in June to stop the clock on their assessment of the project until the company provides more information, Pacific Northwest's president has emphasized his confidence that the the terminal would do little, if any, harm. "We understand the issue is salmon and salmon habitat," Michael Culbert told The Globe and Mail in October. "We can demonstrate from a scientific perspective that indeed the salmon habitat is safe."

But a report, obtained by VICE News and since released publicly, commissioned by federal regulators from government scientists casts doubt on Pacific Northwest's claim and finds some of the research on which it is based to be riddled with "numerous and significant deficiencies and errors in the modeling procedures, input data, and assumptions." The report suggests that these errors likely resulted in the company significantly underestimating the environmental impact of the proposed gas terminal, and appears to support long-standing concerns about changes to the Canadian environmental assessment process — in particular the fact that it places the responsibility of gathering data about projects' environmental impact in the hands of the energy companies that stand to profit from seeing them approved.

Skeena River salmon habitat/photo by Brian Huntington

Legal Changes and Layoffs

Under the recent decade-long rule of Stephen Harper's government, Canada made dramatic changes to its environmental protection laws. They were undertaken with intent of strengthening the Canadian economy by encouraging investment like Petronas' and streamlining an environmental assessment process that members of the Conservative government called "duplicative, cumbersome and uncertain." According to critics, however, the effect of these changes was to gut the scientific capacity of regulators and turn the environmental assessment into a rubber stamp.

The changes began in 2010 with a modest 6.9 percent cut to the budget of the Canadian Environmental Assessment Agency (CEAA) — which has been the primary federal authority responsible for evaluating the environmental risks of proposed developments since 1995. The next year, the government slashed the budget by 43.1 percent, from $30- to $17-million — a sum that then CEAA president Elaine Feldman told lawmakers might require laying off as much as a third of the agency's staff, according to a CBC report.

While the CEAA was mulling over how to operate on its newly halved budget, the Canadian energy industry was riding a decade long boom and looking for ways to expedite future projects. In December 2011, four major industry lobbying groups sent a letter, later obtained through an access to information request by Greenpeace, to the ministers of Environment and Natural Resources suggesting changes to the extant "'environmental' legislation [which] is almost entirely focused on preventing bad things from happening rather than enabling responsible outcomes." The letter pointed specifically to the "Canadian Environmental Assessment Act" as a law the industry would like to see changed.

CEAA Letter—June 2, 2015

Three months later, the government tabled a 425-page omnibus bill that amended some 60 laws, many of them focused on the environment, repealed half a dozen more, and proposed several new ones. It passed after the Conservatives shot down 871 opposition amendments.

The "Canadian Environmental Assessment Act" was chopped, and replaced with the "Canadian Environmental Assessment Act, 2012."

Despite their names, the two pieces of legislation are deeply different. The new law narrowed the types of projects that would be assessed; exempted over a thousand "small" projects from federal assessment, more than 90 percent of those previously pending review; bumped many reviews down to the provinces; set strict timelines for assessments; eliminated the "comprehensive studies" that had previously determined the baseline data a company needed to provide on a project; limited public participation in the formal review process to persons "directly affected"; gave cabinet ministers discretion to approve or reject projects regardless of an assessment's findings; and consolidated the assessment process that had previously been spread across 40 organizations to three: the CEAA, the Canadian Nuclear Safety Commission and the National Energy Board.

The Conservatives and energy industry have trumpeted these changes as likely to spur on the economy and investment in new developments. But Katie Gibbs, director of Evidence for Democracy, worries that Canada no longer has the means to properly evaluate such projects. "If you want to increase those things you also need to increase safeguards, and that's what I see the scientists and the environmental assessment process doing," Gibbs told VICE News.

According to a report, "Vanishing Science," by the Canadian public service union, between 2008 and 2013, in the wake of the global financial crisis, the government eliminated the jobs of 1,030 full-time scientists. Seventy-three came from Fisheries and Oceans, 159 from Environment Canada and 798 from the National Research Council: three of the agencies primarily relied on for scientific expertise in environmental assessments.

Fish and Foreign Money

Petronas' $36-billion proposal to ship gas out of a terminal on Lelu Island is exactly the sort of investment that the Conservative government was hoping to attract with its new regulatory framework. Indeed, Bloomberg reported that Stephen Harper personally stepped in to reverse the initial rejection of Petronas' bid to enter the Canadian natural gas market after being lobbied by Malaysian Prime Minister Mohd Najib, who promised the country would invest an additional $24-billion over 30 years.

"Look, we view the Petronas investments very positively and all the indications I have is that Petronas is looking at further investment," Harper told the Canadian Press after a 2013 meeting with Najib. "The government of Canada is very excited about that possibility, as are all those I've talked to in the energy sector."

Lelu Island is Crown land managed by the Prince Rupert Port Authority, but in September the Lax Kw'alaams Band filed legal action with the BC Supreme Court seeking Aboriginal title over it. Despite this and the ongoing native occupation, the project is still seen as the frontrunner in the race to capitalize on BC's wealth of natural gas. It has also been championed by provincial Premier Christy Clark's Liberal government, which projects that the industry could create as many as 100,000 jobs and $8.6 billion for the province in tax revenue and royalties by 2030. But in Canada, although the legal niceties in a given case are complex and uncertain, sole authority to approve such projects does not rest with the provincial government, federal regulators nor even the Prime Minister. Section 35 of the "Canadian Constitution Act" recognizes pre-existing Aboriginal rights that the Supreme Court of Canada has found to include rights to land, fisheries, and establishing treaties. And the area around Prince Rupert is primarily inhabited by First Nations that have lived there for millennia.

 Related: Energy and Forestry Firms Say Indigenous People Should Have Power to Nix Projects in Canada

Pacific Northwest has been negotiating with these First Nations groups, offering a share of its profit in return for assent to the development. Some groups have signed deals with the company, but others have rejected the project.

In May, the roughly 3,000-member Lax Kw'alaams Band voted against approving the natural gas project, spurning an offer of $1.15-billion to be paid over 40 years. According to Garry Reece, who was the Band mayor at the time, the community rejected the offer because Pacific Northwest hasn't taken seriously the concerns about protecting local fisheries.

"Our science team has spent the last four years compiling irrefutable evidence that the PNW project poses a significant risk to our sea resources, in particular to our wild salmon," said Reece in a statement emailed to VICE News in early November. "PNW has stated that our science is wrong and you can't go into a culture of people who have lived for the last 20,000 years with fish and tell them they're wrong."

"Protecting our fisheries is our first priority because it's how we make a living, it's our culture and our way of life," wrote the mayor, who lost a reelection bid last Friday.

Between Data and Conclusions

Much of the dispute over the project boils down to competing scientific claims. Pacific Northwest maintains that it will have minimal environmental impact, while studies commissioned by Lax Kw'alaams suggest that it poses a grave threat to local fisheries. The highly technical nature of the science involved make adjudicating these claims difficult. To do so the CEAA recruited the help of scientists at Fisheries and Oceans Canada, commonly called the DFO. In a technical review obtained by VICE News of a report Pacific Northwest commissioned from engineering firm Hatch Ltd., the DFO found the impact modeling the company submitted as part of the environmental assessment to be full of inaccuracies, unjustified assumptions, and erroneous methodology.

Among the most troubling findings in the May 20 review are that the Hatch report "essentially filters out storms and extreme events, underestimating or eliminating the state's most likely to" affect the ocean ecology; assumes that modeled winds blow from only one direction, an assumption the DFO states "is bound to be invalid"; uses data from a single buoy to map waves over a massive stretch of water, at odds with the "present standard for the waves research community"; and uses modeling software in a way that is explicitly prohibited in the user manual and creates a modeled environment that "is completely different" from the reality.

DFO Report—2015

The review notes many other highly technical errors and at one point the DFO scientists write: "In this assessment, the proposed infrastructure is designed with the assumption that climate is stationary, with an unchanging mean state; even though it is widely accepted that climate change is occurring, and that climate means, variability and extremes may be changing." In its conclusion, the DFO review states that many of the problems with the model had already been pointed out to Pacific Northwest in previous reviews and that, "given the nature of these deficiencies, it is likely that the magnitude and extent of the impact of the marine structures is underestimated."

When VICE News contacted Hatch about these findings, an employee said they could not discuss the work without prior approval from Pacific Northwest. When called for an interview, Pacific Northwest spokesperson Spencer Sproule declined to speak on the record and asked for questions to be submitted in writing. After being sent questions about the DFO report and Hatch's modeling, the company refused comment. The DFO scientists also declined to be interviewed for this piece, but a CEAA spokesperson confirmed the authenticity of the report and that it had been sent to Pacific Northwest along with a June 2 letter informing the company that the approval process would be put on hold until it addresses the issues raised by the report.

A professor of engineering at the University of British Columbia with expertise in the type of modeling used told VICE News that the problems pointed out by the DFO are undeniably major errors and expressed confusion as to how some of the issues could have been overlooked. "The work that's been done by Hatch is kind of cut-rate" said Bernard Laval. "Some of their approach I don't really get, and it looks like they're cutting corners, for instance, well, really there's stuff all over the place."

Another scientist familiar with the DFO review and Pacific Northwest's submissions to the CEAA was less surprised by the quality of the work. Jonathan Moore, a professor of aquatic ecology at Simon Fraser University, has been doing his own research on the Skeena fisheries and working with the Lax Kw'alaams band to submit science to CEAA. He said in an interview that a previous report commissioned by Pacific Northwest from the science consultancy Stantec Consulting Ltd. had gathered no data on fish, but still concluded the area around Lelu Island, known as Flora Bank, was not an important habitat.

The May 4 Stantec report states, "survey data suggest that salmon do not use Flora Bank eelgrass habitat for nursery habitat or other life dependent processes." This conclusion runs in direct contradiction to Moore's contemporary research and government documents going back decades. In 1973, the DFO issued a report urging the government to reject a plan to build a major shipping port on another island around Flora Bank, less than two kilometers from Lelu Island. It concluded that the area is "of high biological significance as a fish (especially juvenile salmon) rearing habitat," and that "the construction of a superport at the Kitson Island — Flora Bank site would destroy much of this critical salmon habitat."

"I'm not going to say that they're doing anything dishonest, but what I'll say is that I don't think the science supports their conclusions," Moore said. "There's a disconnect between what the data are and what their conclusions are."

Stantec Report

The Right Consultant

In Canada, in contrast to the United States where such research is conducted by a branch of the government, the science used in environmental assessments is the responsibility of the company proposing a project. The way the system usually works is that a proponent company like Pacific Northwest will hire consultants, sometimes large companies like Hatch or Stantec and sometimes independent contractors, to gather data and generate a scientific report that is then submitted to the CEAA.

This system has the advantage of sparing taxpayers from paying for what are often massively expensive scientific undertakings. But it can also place the consultants doing the work in a difficult position, strained between their contractual obligations to the companies trying to get projects approved and their professional obligation to do fair and accurate science.

One former environmental consultant, who spoke under condition of anonymity, told VICE News that while conducting a riverbed survey near Kitimat, BC for an energy company, they found a rare and ecologically important sponge reef that might have required altering the proposed project. According to the consultant, after receiving their report with information about the reef, the company asked that all confidential documents be returned and that the consultant delete copies of the report and the data used in it from any "non-client computer or device, laptop, or cell phone, BlackBerry or any other technical/electronic device." In 2010, as the consultant tells it, when the company delivered its report to CEAA, the language describing the reef had been changed in a way that downplayed its significance and the original reports that mentioned the reef were not appended.

In 2011, the consultant said they submitted another report to the same company on the presence of humpback whales feeding in the area around the proposed construction sites. The report also noted that humpbacks are designated as threatened under the "Species at Risk Act" and that it is illegal to destroy their habitat. The consultant alleges that a company employee then asked that the sections referencing the whales be removed from the report. The consultant refused to do so and after a long delay the report was published with reference to the whales included. (VICE News could not independently verify this account.)

"I am not sure what changed their opinion about asking me to alter my work … however the end result for me was that I was black-listed with the big environmental consulting firms," the consultant said in an interview. "I have not been able to get much work since."

Pierre Lachetti, the executive director of British Columbia's College of Applied Biology, which certifies and disciplines many of the professional scientists who do consultancy work in the province, said that horror stories like this are likely rare and that the College has not been presented with any evidence on which to bring disciplinary action for this sort of violation. However, he also said that he's received second-hand reports of such problems and warned that the issue can also crop up in more subtle ways.

Related: A Small Victory for Accurate Climate Science — And in Texas of all Places

"Even if one of our professionals follows the letter of the law and the code of ethics, some clients or proponents may go professional shopping," Lachetti told VICE News. "They go, 'Okay, I don't like these results that you've given me.' And they'll go and find another professional who will give them the results that they want to see."

A Stantec employee, who also agreed to speak only if left unnamed, said that she and her colleagues work extremely hard to produce high quality science and abide by their professional code of ethics, behavior she believes to be the norm through most of the industry. But asked about her company's report for Pacific Northwest that found the area around Lelu Island to be insignificant as a fish habitat and Moore's allegation that it was scientifically unsound, she conceded the point: "In terms of that particular report, I'd say he's not mistaken. Internally, when it came out, there were quite a lot of people in our fisheries and marine group who were very, very unhappy with the report and could not believe that it had been produced."

When contacted by VICE News, a Stantec spokesperson declined comment, saying that questions about the report would have to be brought to Pacific Northwest. The energy company again refused to comment.

Since the problems with the Stantec and Hatch reports were identified, however, Pacific Northwest has been doing a tremendous amount of research to try to address the deficiencies and errors in the existing science. In September, Patrick McLaren, a geologist hired by Lax Kw'alaams, received a 417-page update to Hatch's modeling. Although he is not a modeler and stressed the the First Nations' science team is just beginning its review, McLaren has doubts about the document. "They're claiming now that the model is in total agreement with what our studies showed, but they're still saying no harm is going to be done," McLaren told VICE News.

Lax Kw'alaams are continuing to submit their own science to the CEAA and Don Wesley Sr. along with other Band members, prominent environmentalists, and scientists recently sent a letter to Canada's new Prime Minister Justin Trudeau and Minister of the Environment and Climate Change Catherine McKenna asking them to reject the Pacific Northwest project and fulfill a promise to restore the CEAA. New Lax Kw'alaams' Band mayor, John Barry Helin, is not listed among the signatories.

A CEAA spokesperson said Pacific Northwest recently submitted draft materials in response to the June 2 letter and they were once again sent to the DFO and Natural Resources Canada for review. In statements to the press the company has continued to express confidence that the project will move ahead and have minimal negative impact on the environment.

For his part, Professor Bernard Laval took it as comforting that — despite the years of cuts and changes to the environmental assessment process — the DFO still has the scientific muscle to have caught the errors in the Hatch report.

"I'd like to think that this is the process working as it should, and either Hatch will have to figure itself out or Pacific Northwest will need to get itself some better consultants," he said.  

DFO Report—1973

Follow Jake Bleiberg on Twitter@JZBleiberg