Hit the throttle: BC’s LNG engine is ready to go

Indigenous-led projects are helping create a historic boom in BC that should not be stalled by provincial uncertainty, writes Margareta Dovgal.

Margareta Dovgal is the managing director of Resource Works and the event lead for the Indigenous Partnerships Success Showcase.

The Cedar LNG project headed by the Haisla First Nation has been given the green light by the British Columbia and federal governments.

With its environmental review approved, Cedar LNG now enters a period of applications and permitting, working on 250 federal requirements and 16 provincial ones. That said, a final investment decision is still a long way off. Meanwhile, the Ksi Lisims LNG project led by the Nisga’a Nation in BC, is just a step behind in the process as it enters the environmental review stage on Cedar’s tail.

Both developments are good news. The Cedar project, for example, means massive benefits for the Haisla Nation, while Ksi Lisims means benefits for the Nisga’a.

BC Premier David Eby’s news release announcing that the Cedar project will enter the environmental review process emphasized that Indigenous-led projects are truly here, and that's a big win for reconciliation and for economic development for Indigenous communities.

There are going to be major benefits to First Nations who engage in such developments. The Haisla have been a leader in this respect, starting with its partnership with LNG Canada, which is built on their territory. That partnership, followed by the path to Cedar LNG, is unlocking opportunities for the Haisla to invest in everything from social spending and infrastructure to massively improving people's quality of life.

That could mean bringing living standards up to par with the Canadian average. After all, Canada and its standard of living ranks sixth in the world according to the UN Human Development Index. But apply that index and its measurements to Canada’s Indigenous people, and they rank not sixth but 63rd. This continues to be one of the most egregious disparities in Canada today – if not the world.

For a country this prosperous, having such stark socio-economic gaps is no longer acceptable. Fortunately, highly productive private development in partnership with Indigenous communities is changing that, and the province holds the potential to further unlock this essential form of poverty eradication.

These projects enable investments in more Indigenous-owned businesses, and to a transformative new model we have seen pick up pace in recent years, of Indigenous peoples having direct equity in major natural-resource projects.

It’s not just a good news story for those nations and Indigenous peoples more broadly, but for the entire British Columbian and Canadian economy. Many construction and skilled labourers have received training and work through projects all across the North and Interior of BC as projects have created a boom in the region. Those workers are now ready to get to work on other initiatives, as construction on the first phase of Coastal GasLink wraps up and Site C moves towards estimated completion in 2025.

Yet, the BC government’s New Energy Action framework also featured in the announcement on Cedar LNG. Details on the framework are still being developed and are expected later this year, but one major condition has already been shared — that major projects to export LNG will have to meet the net-zero emissions requirement by 2030.

That’s a high bar. For LNG, you get there through the electrification of the LNG process. But, unfortunately, that needed capacity isn't coming online at the pace that it's needed for a competitive and timely LNG export industry in the north, unlike in southern BC, where Woodfibre LNG was able to recently announce its remarkable plan to achieve net-zero by 2027 using a combination of hydroelectricity and carbon credit offsets.

The 2030 requirement creates considerable uncertainty about future projects in the north, given as-of-yet unresolved constraints to the ample, affordable hydroelectric capacity on which net-zero LNG production hinges and the province’s lack of foresight in developing the regional grid ahead of such a requirement.

LNG Canada, for example, is looking at expansion of its project, but at this stage such expansion would have to generate its own electricity by burning natural gas, not from BC Hydro.

Premier Eby appears to be trying to have it both ways, approving projects with First Nations involvement but at the same time setting environmental standards that mean uncertainty about future projects.

Meanwhile, the US has built seven LNG-for-export plants, has three more under construction, and another 15 at various stages in planning or approvals processes. The US will see its LNG exports doubling by 2050, and in January alone, the US shipped 102 export cargos of LNG.

Even Mexico has announced plans to develop eight LNG terminals that would ship either US or Canadian natural gas via the US. Four plants would be on Mexico’s west coast and thus could compete with BC LNG providers for Asian buyers.

While Canada’s total potential contribution would still be dwarfed by many leading producers, we have an enviable edge: the Montney Basin boasts some of the cleanest burning LNG on the planet. Our production, transportation and liquefication processes are among the best-in-class. Even with changes in land use planning arising from agreements with Treaty 8 nations, the upstream industry is able to increase the pace of production by employing innovative, low-footprint extraction methods via horizontal drilling to harness our abundant northeast BC natural gas.

Pipeline and export terminal companies and their Indigenous partners can proudly point to a track record that aligns with incredibly robust environmental and social conditions for construction and operations.

And the demand for our LNG in Asia is astronomical, as major developed and developing economies on the continent designate natural gas as the primary fuel in the transition away from thermal coal.

Ultimately, all of these pieces need to be connected — everything from drilling permits to pipelines, and then the export terminals that liquefy the product so LNG can go across the Pacific Ocean to where it's most needed.

It all needs clarity, and certainty, from Victoria.

Margareta Dovgal is the managing director at Resource Works. Follow her on Twitter and LinkedIn for more hot takes on natural resources and making the world a better, more secure and prosperous place.

Do you like this?