Friday, July 19, 2024

Ottawa endorses Indigenous-led Cedar LNG as climate activists raise concerns

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The site of the US$3.4-billion Cedar LNG facility outside Kitimat, B.C. In June, Export Development Canada provided a commercial loan facility of $400-million to $500-million to Cedar, which plans to start shipments to Asia in late 2028.Jesse Winter/The Globe and Mail

The federal government is endorsing an Indigenous-led project to export liquefied natural gas from British Columbia even as climate activists raise environmental concerns.

Cedar LNG serves as a model for how Canada’s natural resources should be developed, said François-Philippe Champagne, the Minister of Innovation, Science and Industry.

The Haisla Nation has a 50.1-per-cent stake in the joint venture while Calgary-based Pembina Pipeline Corp. PPL-T owns 49.9 per cent.

The US$3.4-billion Cedar project will be developed on the Haisla’s traditional territory in Kitimat in northwest British Columbia.

“This project is about economic reconciliation, it’s about energy security, it’s about clean energy,” Mr. Champagne said in a statement on Monday after he visited Kitamaat Village, the seat of government of the Haisla located a 15-minute drive south of Kitimat.

Last month, Export Development Canada provided a commercial loan facility of $400-million to $500-million to Cedar, which plans to start shipments to Asia in late 2028.

Climate activist groups and environmental organizations have criticized the federal financing for Cedar, which made a final investment decision last month to forge ahead with building a floating production unit in South Korea and constructing various infrastructure in Kitimat.

“We fully respect the Haisla Nation’s authority on their territory. But we disagree with the decision to move ahead with this project because of the damage it will wreak on climate, nature and people at the point of extraction,” Thomas Green, senior climate policy adviser at David Suzuki Foundation, said in a statement last week.

The Suzuki Foundation and other critics are concerned about the pace of fracking in northeast British Columbia. In fracking operations, large amounts of water and sand are mixed with chemicals, and then pumped under high pressure into the ground to extract natural gas. There are potent methane emissions, which contribute to climate change, during the production of natural gas through fracking.

Critics of B.C. LNG include hereditary chiefs from the Wet’suwet’en Nation. They are questioning claims by the LNG industry that B.C. projects will be able to comply with what the provincial government calls credible plans to reach net-zero emissions of greenhouse gases such as methane.

A report earlier this year by Clean Energy Canada, a think tank at Simon Fraser University, said the focus on fossil fuels such as LNG ends up delaying the global transition to renewable energy.

The B.C. government led by Premier David Eby, however, has thrown its support behind Cedar, saying that it will be one of the lowest emitting LNG projects in the world.

In Kitimat, Cedar will use electricity from BC Hydro for powering electric motors that drive compressors for liquefaction.

On Monday, federal Finance Minister Chrystia Freeland added her voice to the pro-Cedar camp that portrays LNG as a transition fuel that is cleaner than thermal coal. “Indigenous equity ownership in major projects in the natural resource and energy sectors is about ensuring Indigenous peoples can fully share in the benefits of Canada’s economic growth,” Ms. Freeland said in a news release.

Haisla chief councillor Crystal Smith said she is grateful to have the federal government recognize that Cedar will respect Indigenous values that include protecting the environment.

Cedar will become only the third LNG export project to be under construction in Canada, after LNG Canada in Kitimat and Woodfibre LNG near Squamish, B.C.

The contentious Coastal GasLink pipeline across northern B.C. will supply natural gas to LNG Canada and Cedar. LNG Canada is considering a Phase 2 expansion.

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