Crystal Smith, Chief Councillor of the Haisla Nation, in Kitamaat Village, B.C., in February, 2020.Jimmy Jeong/for The Globe and Mail
Cedar LNG, an Indigenous-led project in British Columbia, is hoping to become one of the first energy proposals in Canada to win approval in a new regulatory process that is designed to pay greater scrutiny to climate impacts.
Cedar, co-owned by the Haisla Nation and Pembina Pipeline Corp., plans to build a $3-billion liquefied natural gas export terminal in Kitimat, B.C., and wants to start shipping LNG to Asia in 2027. The period for the public to submit comments to environmental regulators begins on Wednesday and ends on Oct. 14.
The regulatory scrutiny over Cedar’s application for environmental approval comes as Europe faces an energy crisis after Russia invaded Ukraine in February. Industry analysts say LNG shipped from B.C. to Asia would indirectly help Europe by adding to global supplies, as the continent seeks to reduce its dependence on natural gas from Russia.
Environment and Climate Change Canada filed an eight-page regulatory document this month, describing Cedar as the first energy proposal to undergo a provincial-led review under the federal Impact Assessment Act (IAA), which replaced the Canadian Environmental Assessment Act in 2019.
Cedar “will also likely be the first project decision under the IAA,” according to the federal environment department.
The emphasis on the effects of climate change underscores the changes to regulatory assessments since August, 2019, when the federal IAA came into force.
LNG Canada, led by Shell PLC, is constructing a separate export terminal in Kitimat. That larger project is on track for completion in 2025, when it would become the first one in the country to ship the fuel aboard ocean-bound tankers. The facility will have an initial export capacity of 14 million tonnes a year to Asia, compared with Cedar’s three million tonnes annually.
The Haisla Nation, a member of the B.C.-based First Nations Climate Initiative, is touting Cedar’s plans to use hydroelectricity to power turbines for super-cooling natural gas into liquid form, instead of using traditional gas-fired turbines.
The B.C. Environmental Assessment Office is leading the review of Cedar in collaboration with the Impact Assessment Agency of Canada, formerly known as the Canadian Environmental Assessment Agency.
Helped by turbines powered by hydroelectricity, Cedar believes it will have lower greenhouse gas (GHG) emissions when compared with existing facilities abroad such as Gorgon LNG and Wheatstone LNG in Australia. The floating LNG facility in Kitimat would aim to operate at 0.08 carbon-dioxide equivalent tonnes for each tonne of LNG produced, a level below British Columbia’s limit of 0.16 for emissions intensity.
“The project’s key mitigation measure to use BC Hydro’s clean grid electricity provides significant GHG emissions reductions, and may offer further reductions as renewable electricity expands,” Environment and Climate Change Canada said in its document. “The project is likely to be one of, if not the lowest emission intensity producers of LNG globally, largely because of its reliance on clean B.C. electricity.”
The First Nations Climate Initiative has released its own document, calling it a climate action plan for global decarbonization. “Canada has the capacity to help other countries with much greater emission profiles to reduce their GHG emissions,” said the Indigenous think tank, co-founded in 2019 by elected leaders from the Haisla, Nisga’a and Metlakatla.
Crystal Smith, the Haisla’s elected chief councillor, said First Nations have a key role to play in Canada’s energy industry. “By acting to mitigate climate change globally as well as here at home, we can create meaningful economic development for First Nations communities and make a greater contribution to mitigating climate change,” Ms. Smith said in a statement.
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Environmental groups such as the International Institute for Sustainable Development disagree with the emphasis on LNG, saying the focus should be on renewable energy sources instead of fossil fuels.
“Canada has no ready LNG export infrastructure, and it will take at least three years before new projects come online,” the institute said in a recent report. “Naturally, Canada is considering how to best support the energy needs in Europe. Building new LNG infrastructure is not the solution.”
Cedar and another project, Woodfibre LNG, are both striving to start LNG exports to Asia in 2027. Woodfibre wants to export 2.1 million tonnes a year of LNG from an industrial site near Squamish, B.C., 65 kilometres north of Vancouver.
After studying proposals to export LNG from Canada’s West Coast and East Coast, Enbridge Inc. announced in July that it chose to invest US$1.5-billion in Woodfibre for a 30-per-cent stake. Pacific Energy Corp. Ltd. will own the remaining 70-per-cent interest.
Cedar said in a regulatory filing that it plans to build an 8.5-kilometre pipeline that would connect to the Coastal GasLink natural gas pipeline, which is currently under construction from northeast B.C. to Kitimat on the West Coast.
TC Energy Corp., an energy infrastructure company, is constructing the 670-kilometre pipeline.
Twenty elected First Nations councils along Coastal GasLink’s route have approved the contentious pipeline, which would feed LNG Canada’s $18-billion export terminal.
But Wet’suwet’en Nation hereditary chiefs who oppose Coastal GasLink say elected Indigenous leaders don’t have jurisdiction over the Wet’suwet’en’s traditional territory.
“Wet’suwet’en territory is unceded, unsurrendered and sovereign,” said a release posted this week on the website for Gidimt’en, one of five hereditary clans within the Wet’suwet’en Nation.
TC Energy, which currently owns 35 per cent of the $11.2-billion Coastal GasLink project, announced a deal in March to set aside a 10-per-cent stake for the planned equity sale to as many as 20 elected First Nation councils along the pipeline route.
Separately, a group of natural gas producers known as Rockies LNG is promoting the Ksi Lisims LNG proposal in northern B.C., in collaboration with the Nisga’a.
“Climate policies and programs at all levels of government, including First Nations governments, are evolving quickly to meet stated 2030 and 2050 emission reduction goals,” Eva Clayton, the elected president of the Nisga’a, said in a statement.