B.C.’s latest LNG approval sends mixed messages about commitments to climate and Indigenous Rights

In Smithers, B.C., Sundays are shift-change days.

The grocery store parking lots fill with work trucks bearing bumper stickers that proclaim love for Canadian pipelines. The highway becomes a stream of pickups, their orange safety flags — that tower above the trucks on the worksite for visibility — tucked down for travel. Outside a local hotel, vehicles assigned to a controversial RCMP unit tasked with policing opposition to industrial projects make up a majority of the trucks and SUVs flanking the building. 

They’re all here because of the Coastal GasLink pipeline being built to connect underground shale gas formations in the province’s northeast with marine shipping routes on the Pacific coast, about 120 kilometres from Smithers as the crow flies. Until recently, there was only one liquefaction and export facility preparing to receive the gas — now there are two.

In mid-March, B.C.’s NDP government approved Cedar LNG, a partnership between the Haisla Nation and Pembina Pipeline Corporation. Pending final investment decision, the liquefaction and export terminal would be built over the tidal waters of Douglas Channel across from the Haisla village of Kitamaat, just a few kilometres from LNG Canada. Cedar LNG would export three million tonnes of liquefied natural gas (LNG) annually, about 30 per cent of what its larger neighbour plans to ship when it starts operations in 2026. Like LNG Canada, it would receive its supply from Coastal GasLink.

Premier David Eby and Haisla elected chief councillor Crystal Smith announced the decision at a press conference on March 14, with Eby calling it “an unprecedented opportunity for both Haisla Nation and the region.”

“Today’s announcement marks a historic milestone for Cedar LNG and the Haisla Nation’s journey towards economic self-determination,” Smith said in a statement. “Together with our partner, Pembina Pipeline, we are setting a new standard for responsible and sustainable energy development that protects the environment and our traditional way of life.”

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Hot on the heels of the announcement, the province said it is developing new regulations for the oil and gas sector, including an emissions cap and a requirement that all new projects have a “credible plan” to reach net zero by 2030. For example, Ksi Lisims, a proposed liquefaction facility on Nisga’a territory, now needs to include an emissions reduction plan as part of its environmental assessment.

But the rule doesn’t apply to the newly approved project. Instead, the Haisla Nation is signing a memorandum of understanding with the province to explore opportunities for emissions reductions beyond its approved plan.

“Already proposed to be one of the lowest-emitting facilities in the world, we will be working in partnership to further reduce the project’s emissions,” Eby said. 

Critics and climate activists decry B.C.’s approval of another gas export terminal, while supporters applaud the decision as an act of reconciliation. Meanwhile, energy analysts cautiously approved the province’s plan to implement new policies and regulations but question how effective they will be at curbing emissions from already approved projects.

Here’s what we know so far.

Approval of Cedar LNG comes as UN secretary-general calls for climate action ‘everywhere, all at once’ 

Cedar LNG’s approval was announced less than a week before the Intergovernmental Panel on Climate Change published its latest report, which warns the decisions governments make this decade “will have impacts now and for thousands of years.”

United Nations Secretary-General António Guterres didn’t mince words in a video message released with the report, noting, “the rate of temperature rise in the last half century is the highest in 2,000 years.” He called the document a “survival guide for humanity.” A key point in that guide, he said, is governments should not approve or fund new oil and gas projects and stop expanding existing fossil fuel reserves.

“In short, our world needs climate action on all fronts — everything, everywhere, all at once,” Guterres said.

If built, Cedar LNG would receive 400 million cubic feet of gas daily, fed from the contentious Coastal GasLink pipeline. According to documents filed with the B.C. environmental assessment office, the plant would emit around 8.6 megatonnes of equivalent carbon pollution over its 40-year lifespan. Upstream, the project would add an additional 39 megatonnes, about the same amount of emissions produced by putting 8.4 million cars on the road for a year or driving around the planet 12 million times.   

The provincial approval is subject to 16 conditions, including developing an emissions reduction plan that aligns with B.C.’s climate goals. The plant will power its turbines with electricity supplied by BC Hydro, which minimizes — but doesn’t eliminate — emissions produced during the energy-intensive liquefaction process. 

“Powered by renewable electricity and with plans to achieve near-zero emissions by 2030, Cedar LNG showcases what responsible resource development can look like as we transition to a clean-energy future,” Minister of Energy, Mines and Low Carbon Innovation Josie Osborne said in a statement.

According to an industry analysis, liquefaction accounts for less than one-third of emissions produced by the gas sector. The rest is added to the atmosphere during extraction, pipeline transport, shipping, regasification and combustion. And that’s only the emissions we track — invisible methane leaks at every step of the process are a problem industry operators and regulators grapple with worldwide.  

George Heyman, B.C. minister of environment and climate change strategy, said the new energy framework and emissions cap played a prominent role in the project decision, which took 118 days, more than 60 days past the legislated deadline.

He described Cedar LNG as a relatively small and well-designed project “in terms of doing everything it can to minimize environmental and carbon impact — which is not to say it doesn’t have any” and noted the broader scope of emissions were considered in the approval.

“In my view it is far more important to have a broad-reaching, sector-wide set of clear rules and regulations that demonstrate how we are going to steadily reduce emissions in the sector, rather than to hang successive failure or credibility on the approval or failure to approve one or another project,” he told The Narwhal in an interview.

If all goes as planned, Cedar LNG would power up its turbines in 2027 and continue operating until 2067, close to two decades after the date 196 countries promised to get emissions down to zero in the Paris Agreement signed in 2015. In 2021, Canada enacted legislation that holds the federal government accountable to that commitment. That means pollution associated with the project, however small, will have to be offset in some way.

As a recent Guardian investigation revealed, more than 90 per cent of emissions offsets purchased by companies like Disney, Shell and Gucci were “worthless.” Put another way, no greenhouse gases were prevented from entering the atmosphere but corporations used the offsets to market their products as environmentally friendly.

Karena Shaw, a political ecologist and associate professor of environmental studies at the University of Victoria, worries the sector won’t be held accountable. 

“What message is this decision sending out to the fossil fuel industry?” she said in an interview. “If we let industry get away with a ‘credible plan’ to be net zero, we’re going to lose. A credible plan to get to net zero could be just purchasing the cheapest offsets that are out there.”

Other methods of decreasing emissions produced by the gas sector include carbon capture and storage, but the recent International Panel on Climate Change report noted this would be the most costly and least effective way to tackle the problem. 

‘They now know what the rules are’: emissions cap could quash B.C. oil and gas investment

Cedar LNG went through a joint provincial-federal environmental assessment process and the federal government gave its stamp of approval one day after B.C. approved the project. But it’s unknown how the new emissions cap and other regulations like stricter methane rules will affect industry investment in the sector.

“There are a number of projects that have not yet made final investment decisions,” Heyman noted. “They now know what the rules are and can make a determination if they’re able to meet them.”

Werner Antweiler, an energy economist and associate professor at the University of British Columbia, told The Narwhal investors will be paying attention to “local regulatory uncertainty and the global long-term outlook in the LNG market.”

He said Indigenous Rights and environmental mandates are the two main drivers of uncertainty in B.C. 

“The long overdue recognition of Indigenous interest through the [United Nations Declaration on the Rights of Indigenous Peoples] requirement on Free, Prior and Informed Consent requires businesses to adapt,” he wrote in an email. “Most of the proposed LNG projects in B.C. have come to naught. Given the choice to build in B.C. or somewhere else, most natural gas firms will likely look somewhere else first.”

Adam Olsen (SȾHENEP), a Green party representative and member of Tsartlip First Nation (WJOȽEȽP), said a “very optimistic person” would view the province’s new energy framework as a regulatory means to make B.C. oil and gas development uneconomical.

“What might come out at the other end of that emissions cap process is simply an unsustainable fossil fuel industry in this province,” he told The Narwhal in an interview. 

He said others would argue the government used the framework and the memorandum of understanding — both of which lack details — as a smokescreen for green-lighting another fossil fuel project.  

“With so little detail on that energy action framework, it’s near impossible to actually determine what’s going to happen.”

Heyman said the details will be released over the next few months, along with timelines on when changes will be implemented.

Getting a solid return on exporting B.C. gas to buyers across the Pacific has always been somewhat iffy, Shaw said. 

“For years, there’s always been this sort of back and forth around the viability of the sector in British Columbia,” she said. “It’s going to be the first to go when the market gets pinched.”

In early February, Calgary-based TC Energy announced a revised cost estimate for the Coastal GasLink pipeline of $14.5 billion, more than double its original estimate. That price, the pipeline operator said, could rise by another $1.2 billion if construction isn’t completed this year. 

Antweiler said the International Energy Agency’s analysis of global gas demand forecasts either minimal growth or significant decreases, noting “investors will be reasonably cautious given these scenarios.”

“This said, energy security can still lead to regional expansions as reliability of supply can play an important role, or if a carbon border adjustment mechanism as introduced in the [European Union] requires buyers to shift from high-carbon-emission to low-carbon-emission sources.”

Shaw said companies are holding out for now, likely waiting to see what happens as the province develops its regulations and hoping governments will make investment easier. B.C. contributed more than $5.4 billion in financial incentives to LNG Canada and committed to spend more than $700 million of taxpayer dollars to secure support from First Nations for the pipeline and the sector at large. 

“If they get enough subsidies and support from the government, they can make something out of it,” she said.

That financial backing is something Ellis Ross, Skeena MLA with the B.C. Liberals and a member of Haisla Nation, would like to see. 

“I sincerely hope Cedar LNG is granted similar tax breaks to those received by LNG Canada,” he said in a statement.

Cedar LNG is Canada’s first Indigenous-led LNG project

The Haisla nation is no stranger to industrial development on its territories. Canada-based mining company Rio Tinto Alcan has operated its aluminum smelter in Kitimat for about 70 years and, like everywhere else in B.C., the coastal community has seen the impacts of decades of commercial logging.  

While the nation has financial agreements with LNG Canada and Coastal GasLink, economic benefits have largely been a byproduct of projects brought forward by outside parties. In contrast, Cedar LNG is being hailed as Canada’s first Indigenous-led liquefied natural gas project. With majority ownership, the Haisla Nation is calling the shots.

“Today is about changing the course of history for my nation, and Indigenous Peoples everywhere in history, where Indigenous people were left on the sidelines of economic development in their territories,” Smith said at the announcement.

Ross, with the B.C. Liberals, celebrated the project approval.

“I am extremely gratified that an initiative we worked on behalf of the Haisla people finally got the respect it deserves from the provincial government,” he said in a statement following the announcement.

Premier Eby said approving Cedar LNG doesn’t mean sacrificing the environment.  

“We think that the dichotomy — the idea that you can only have economic development by abandoning environmental principles, or that by holding the environmental principles you have to give up on jobs and opportunities — is a false idea,” he said. “The future in British Columbia around major projects or projects involving land or resources need to be done in partnership with First Nations.”

But critics say there’s another false dichotomy embedded in the government’s actions. If economic reconciliation is only achieved through the development of fossil fuel infrastructure, other economic opportunities for Indigenous communities are obscured or displaced. The narrative also ignores the root cause of economic inequity: colonization.

“The historical context of these issues is critically important to understanding the mechanisms by which colonization, genocide, land dispossession and forced assimilation policies translate into the conditions of poverty that the Indigenous people experience today in B.C.,” a 2022 First Nations Leadership Council report on economic disparity noted.

“Indigenous revenue should not be fettered by a single project,” Olsen said. “It should be viewed as ‘How do we participate? How do Indigenous nations participate and benefit from their lands and territories without having to approve devastating climate-change-inducing projects?’ ”

The greenhouse gases emitted by projects like Cedar LNG have some Indigenous leaders speaking out against increased activity in the fossil fuel sector.  

“I am deeply worried about the warming planet and resulting climate emergency that are being driven globally by major industrial resource extraction,” Grand Chief Stewart Phillip, president of the Union of British Columbia Indian Chiefs, said in a statement. “The expansion of the LNG industry and associated fracking that was greenlit … is frightening when we think about how this will impact the lands and waters in this province and across the world.”

While Haisla and other nations in B.C. have historically shown support of projects like Cedar LNG and the Coastal GasLink pipeline, not all Indigenous leaders are behind the industry. Notably, Wet’suwet’en Hereditary Chiefs oppose the Coastal GasLink project, which is being built on their territory without consent — a central tenet of the United Nations Declaration on the Rights of Indigenous Peoples, which was passed into law in B.C. in 2019.   

“While they’re saying on one hand this is economic reconciliation for the Haisla, the pipeline is being dragged across other territories,” Olsen said. “There’s huge amounts of challenges — $36 million is being spent on the RCMP protection of that pipeline against other Indigenous people.”

Premier Eby didn’t directly respond to a question about controversy and backlash over Coastal GasLink.

“We are going to have challenges along the way,” he told reporters.

Olsen said it’s important to note he’s not speaking against the Haisla by criticizing the framing of the decision. Rather, he would like to see more options provided to Indigenous communities and for all governments — Indigenous and non-Indigenous — to speak openly.

“It shouldn’t be a zero-sum game for the Haisla,” he said. “It shouldn’t be that if the government doesn’t approve this, there’s no economic development for them. We should be able to have an honest conversation about the fact that fossil fuels are increasing the climate emergency that we’re facing right now and increasing the hostility of the climate and this planet we live on.”

‘This is part of everywhere’

As temperatures continue to rise globally, ecosystems become increasingly uninhabitable for species. Extreme weather events — such as droughts, wildfires, heat domes and atmospheric rivers — can take out entire populations of fish or wildlife.

But the climate isn’t the only culprit. 

In B.C., the decline of keystone species like salmon has a long list of causes, including decades of industrial activity. Clearcut logging, hydroelectric facilities, mining, agriculture and other human impacts have wreaked havoc on species and natural systems. In the northeast, where gas for Cedar LNG and other facilities is extracted, cumulative impacts were centre stage in a landmark 2021 court ruling, which found the province guilty of infringing on Blueberry River First Nations’ Treaty Rights by permitting and encouraging widespread development. 

“As we’ve seen from the Blueberry River case, there are limits to how much those landscapes can take,” Shaw said. 

Earlier this year, the province signed an agreement with Blueberry River First Nations, outlining a plan for how gas extraction on the territory will be managed moving forward. At the time, Premier Eby said the fossil fuel industry could continue digging as much gas out of the ground as companies could get their hands on, they just had to have a smaller footprint on the surface.

“The agreement is not a cap on production, it is a cap on land disturbance,” Eby said in January.

Now, with the emissions cap and energy framework further constraining the sector, it’s unclear how companies like energy company ARC Resources, which inked a deal with the Haisla Nation and Pembina Pipeline Corporation to provide 50 per cent of Cedar LNG’s supply, will get the gas out of the ground.

Meanwhile, construction continues on Coastal GasLink. 

“There are immediate, proximate impacts around extraction and around the pipeline itself, but then there’s the broader contribution to climate change,” Shaw said. “There’s always the question of why this project, when do you start saying no. This is what the gut punch is for me. We’re trying to say no everywhere — and this is part of everywhere.”