Salmon or LNG? What's at stake in the Pacific Northwest decision

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"The undersigned First Nation leaders and citizens of the Nine Allied Tribes of Lax Kw'alaams hereby declare that Lelu Island, and Flora and Agnew Banks, are hereby protected for all time, as a refuge for wild salmon and marine resources, and are to be held in trust for all future generations."

- From the Lelu Island Declaration, signed January 23, 2016 at the Salmon Nations Summit

Environment Minister Catherine McKenna is sitting on a big decision. In the face of opposition from First Nations, she is charged with granting environmental approval for a Liquefied Natural Gas (LNG) export project on Lelu Island off of Prince Rupert, near the mouth of the Skeena River, a major salmon habitat.

In March, the minister announced that the Canadian government would take an additional three months before announcing a decision.

The Trudeau government has made it clear it wants a partnership with Indigenous peoples. Approving a project opposed by a coalition of B.C. First Nations peoples, including Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs, would refute that pledge less than a year into the government's mandate.

Why is the federal minister hesitating before acting? Four NDP members of Parliament, scientists, and environmental campaigners, as well as local First Nations, have already said no to supporting the Pacific Northwest project.

The B.C. Liberal government is fourscore behind LNG plants. Building up export capacity to serve the Asian market was a major pitch made by Premier Christy Clark in the last election campaign.

Asia needs to replace coal-fired power plants with cleaner-burning natural gas, Christy Clark has responded when questioned by environmental critics. But as CCPA Senior Economist Marc Lee concludes from detailed study, the Pacific Northwest project itself represents a "carbon bomb," and there is no guarantee B.C. LNG will replace coal as an Asian energy source.

The B.C. Liberal government sees the $36-billion Pacific Northwest project, slated to take four years to complete, as the biggest private investment project in the province's history. Environmental approval is needed to build a port, a terminal, a TransCanada Ltd. pipeline, and the facilities needed to liquefy fracked gas, store it, and ship it.

While LNG projects have the backing of important B.C. building trades unions, the NDP opposition have identified recourse to temporary foreign workers for as much as 70 per cent of the Pacific Northwest project workforce.

The Malaysian state-owned Petronas Group, the most profitable company in Asia, has a controlling stake in the Lelu Island LNG project. Back in November 2014, fully 17 LNG projects in B.C. were going through the regulatory review process. Today the Pacific Northwest project at Lelu Island is seen as the best -- maybe the only -- bet to go ahead by industry observers.

In November 2014, Asian prices for LNG were near $20 (per million of British Thermal Units or MBTU). Today prices are closer to $5 MBTU.

At current and foreseeable prices, no new LNG projects are viable. There is excess supply of gas in Asia, and prices continue to move down, not up.

Typically importers sign long-term contracts for LNG. Now, given the glut of LNG production destined for Asia, the main importers, such as China, are buying for short-term delivery. Prices are low on daily-priced "spot" markets so buyers do not want to sign long-term contracts.

Without long-term contracts at good prices, it makes no sense to build LNG plants in B.C., and Petronas presumably knows this.

Rather than delay, expecting the Malaysian company to walk away from the $36-billion project, the federal minister should deny it environmental approval.

The Trudeau government needs to make it clear that Canadians stand in solidarity with First Nations, sharing the desire to protect the Skeena River salmon habitat against environmental degradation.

Whatever the B.C. Liberal government may think, Minister McKenna needs to endorse the Lelu Island Declaration, and ensure it is respected.

Duncan Cameron is the former president of and writes a weekly column on politics and current affairs.

Photo: Province of British Columbia/flickr

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