It should come as no surprise that Petronas expects B.C. to cave in to its demands to expedite the process of approving its Pacific NorthWest LNG terminal and natural gas pipeline, lowering taxes and weakening environmental regulations in the process.
After all, Petronas has a well-established record of getting what it wants in the other countries it operates in, such as Sudan, Myanmar, Chad and Malaysia.
This week, the B.C. government did cave to at least one Petronas’ demands — cutting the peak income tax rate for LNG facilities from seven to 3.5 per cent, thereby slashing in half the amount of revenue it’s expecting to receive from the liquefied natural industry. The government also introduced a standard for carbon pollution for B.C.’s LNG industry, which was hailed as a step in the right direction, but not enough.
In considering Petronas’ bid to develop B.C.’s natural gas resources, it is vital that we consider the company’s track record.
In 2011, I had the opportunity to witness the destruction caused by a Petronas pipeline, while working with the international NGO Global Witness. While staying with the semi-nomadic Penan people of Sarawak (Malaysian Borneo), I heard testimony of how the company had treated them in the course of constructing the pipeline.
Although I had travelled to Malaysia Borneo to document the impact industrial logging was having on these people, the ongoing clearance for the Petronas pipeline emerged as an immediate concern.
Petronas has faced fierce local opposition to its 500 km pipeline crossing Malaysian Borneo to feed its LNG terminal in Sarawak. Previously remote, semi-nomadic tribes of the Bornean jungle have now been violently thrust into an industrialized landscape that is foreign to them and hostile to their way of life. They resisted this invasion, erecting futile barriers made of sticks, and met bulldozers armed only with traditional bow and arrows. The project has been marked by secrecy, including details surrounding the location of the proposed pipeline, giving very little time for locals to voice their opposition through formal channels, or to scrutinize terms of the project.
The history of the Penan is a tragic one, marked by successive waves of industrial activity since the 1980s that has left them marginalized. Much of Sarawak has been converted to oil palm plantation, following decades of rapacious logging for valuable hardwoods for export. Increasingly they are no longer able to maintain their way of life, and this has made them all the easier to disregard in the construction of the Petronas pipeline.
I was struck by how wide a corridor had been cleared for the pipeline, and the brute force that had been employed in carving its way through the dense jungle. The clay-based Bornean soil, previously held together by the roots of majestic trees, eroded into muddy pools, and clumped heavily around my boots. I can’t help but think what Petronas’ pipeline though rugged northern B.C. will look like (Pacific Northwest LNG has contracted TransCanada to build the pipeline), or how it will affect First Nations and local communities.
A Petrona pipeline cuts through the Sarawak jungle. Credit: Stefanie Wedeken.
It could be this “low bar” way of operating in developing countries that has led the CEO of Petronas, Shamsul Abbas, to conclude that B.C. is a “high cost environment" in comparison. "The proposed fiscal package and regulatory pace in Canada threatens the global competitiveness of the PNW LNG project," Abbas wrote.
Petronas has also defied a UN embargo against Sudan, providing fuel to its military, which is known to bombs civilians in Darfur. Others have pointed out the many corruption and bribery scandals that the company has been associated with in recent times.
This all leads to the question: does the B.C. government know how to use Google? Even a cursory background check would have revealed this company has a questionable track record. Either the B.C. government didn’t do its due diligence to find out who they were dealing with or they did, and ignored it, which is worse. Given the secrecy with which these and other LNG deals have been negotiated, this could very well be the case.
British Columbians have every right to scrutinize the companies that wish to exploit our natural resources, and to uphold the environmental and social safeguards that make this province a great place to live.
Petronas has set a deadline of the end of October for the company to reach an agreement with government officials on ways to reduce the cost of the project.
Natural gas is a finite, non-renewable resource that Canadians depend upon and that, despite what British Columbia’s Environment Minister Mary Polak may say, is not a global climate change solution.
What’s the rush?
Main image: The Penan people blockade the Petronas pipeline in Sarawak. Credit: Stefanie Wedeken.