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Canadian government backing LNG in court
GARY PARK For Petroleum News
The Canadian government is sticking to its endorsement of British Columbia’s LNG industry in the face of a legal challenge from First Nations and environmental groups.
Environment Minister Catherine McKenna said the administration of Prime Minister Justin Trudeau is “standing behind the science” that supported its decision to approve the Petronas-led Pacific NorthWest LNG project and is ready to “consider what steps need to be taken next” in the face of legal action.
The opponents launched their fight at the Federal Court of Canada in Vancouver on Oct. 27 through a series of actions based on aboriginal title to the affected land and environmental interests.
They are attempting to remove LNG as a key plank in B.C. Premier Christy Clark’s economic strategy platform ahead of a provincial election next spring.
UN declaration an issue The legal case is accompanied by growing pressure on the Trudeau government to fully adopt the United Nations Declaration on the Rights of Indigenous Peoples that would effectively give aboriginal communities a veto over resource development.
In 2007, Canada was one of only four countries to oppose the UNDRIP that 144 UN member states agreed to, affording protection to the survival, dignity and well-being of the world’s indigenous peoples.
Since its election a year ago, the Trudeau government has pledged to “adopt and implement” the UNDRIP in accordance with the Canadian Constitution, although more recently it has warned the declaration “cannot simply be incorporated word for word into Canadian law.”
The British Columbia government, which is dealing with billions of dollars of proposed resource development on lands that are subject to aboriginal land claims, warns that adoption of the UNDRIP could put thousands of jobs and millions of revenue dollars at risk.
Projects that might be affected include Pacific NorthWest LNG, Kinder Morgan’s expansion of its Trans Mountain oil pipeline and British Columbia Hydro’s C$9 billion Site C hydroelectric dam.
Perry Bellegarde, Canada’s national chief of the Assembly of First Nations, while rejecting the notion that aboriginal communities will have “veto” power over projects, agreed that “not all projects will get built. The ones that are done in a proactive way, with the full involvement and inclusion of (First Nations) from square one, will have a greater likelihood of success.”
Mergers urged Meanwhile, Canada’s LNG developers are being urged to weigh the prospect of banding together and merging ventures to overcome a commodity price crash that consulting firm IHS Markit said is limiting the investment cash available to build LNG facilities.
Bob Fryklund, the chief upstream strategist for IHS Markit, said that if companies such as Malaysia’s Petronas, Royal Dutch Shell, ExxonMobil and Chevron are to improve their chances of starting LNG operations by 2022 they should consider following the lead of ExxonMobil, Total and Oil Search which are considering a merger in Papua New Guinea.
He said the model for Papua New Guinea could see each of the companies owning individual trains, while combining their resources for a liquefaction plant and export terminal.
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