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What? No market for LNG?

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One thing you can say for BC Green Party leader Andrew Weaver: When he takes a position, he can sure stick to it:

  • “I’ve been saying for four years, there is no market for LNG.”

And as recently as March 27, he was still on it:

  • “The reason why we have no LNG industry here in British Columbia is that the market simply doesn’t support it,” he insisted on the Business News Network.

No market?

This is why natural-gas developers have already spent billions in BC, building and securing gas supplies, and working on pipelines?

This is why Shell and partners are looking at a $40-billion LNG Canada plant and export terminal at Kitimat?

And this is why investment in LNG is booming around the world?

We do understand and relate to Mr. Weaver’s concerns for the environment. Protection of the environment, of our land, our air, and our water, has been a priority for First Nations in BC for thousands and thousands of years.

But. . . . the Greens are an “official party” for legislature purposes, meaning they have provincial funding for office, staff, and research capability.

And Mr. Weaver’s advisers seem to have missed some of the market information that is out there.

Some recent examples:

And, of course:

So there’s “no market” for LNG?

As the BC LNG Alliance says: ‘Make no mistake, if BC doesn’t develop an LNG industry it doesn’t mean there is any less LNG in the world. It just means that other countries without our strong environmental regulations will produce and supply it and see all the benefits instead of British Columbians.’

As for Mr. Weaver’s environmental concerns, hear David Keane, CEO of the BC LNG Alliance:

“By developing a globally competitive, liquefied natural-gas (LNG) industry, B.C. can market its abundant natural gas, exporting responsibly developed natural gas to countries that need cleaner fuels to power their economies.

“We can help those countries address their energy, climate and air-quality goals, while meeting B.C.’s strict climate targets. . . . LNG from B.C. will be the cleanest in the world due to the province’s world-leading GHG emissions policies and rules.”

Maybe we’re missing something, but it sure looks to us like there’s a market for BC LNG. We hope to meet with Mr. Weaver one day to explain why, and why many First Nations are eager to see it happen.

Chief Councillor Joe Bevan of the Kitselas First Nation is just one Indigenous leader who sees a future in responsible LNG development:

“For some of chiefs who have seen three generations from one family, under social assistance, it’s time that we stopped managing poverty and start managing wealth.”

— Karen Ogen-Toews, CEO, First Nations LNG Alliance

Blog: Canada’s slow waltz on LNG

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One thing is for sure: The anticipated increase in demand from global LNG customers is fast accelerating activity among LNG suppliers.

The U.S. government, for one, is racing to approve a number of new LNG-for-export plants. Two plants are already operating. Eleven more are in the environmental review process, and at least six more are being thought about.

One planned U.S. operation is being reviewed for the Oregon coast. Another is being proposed for Alaska.

These last two possibilities are worrisome, as they would hack at one of BC’s big competitive advantages: We can offer much shorter shipping times to key Asian customers than can LNG plants on the U.S. Gulf Coast. And shippers leaving BC would not have to pay US$380,000 for a one-way, east-to-west passage through the Panama Canal.

So the U.S. under Donald Trump is sprinting.

What has Canada’s record been so far? A sluggish slow waltz.

Here’s the classic example:

Pacific NorthWest LNG filed its formal Project Description with the Canadian Environmental Assessment Agency (CEAA) in February 2013.

The CEAA then posted it publicly on its website on 19 February 2013. That action kicked off a government-and-public review process that, we were told at the time, could take two years.

Two years? In fact, the final approval came on Sept. 17, 2016, meaning it took:

  • 3 years, 7 months, 9 days (1,317 days)

In contrast, look at Cheniere Energy Inc.’s experience with the U.S. Federal Energy Regulatory Commission (FERC).

Cheniere filed the Project Description for its Sabine Pass LNG project in Louisiana on 31 January 2011 and the formal evaluation began.

On 16 April 2012, the project got the FERC order authorizing Cheniere to begin construction. The elapsed time:

  • 1 year, two months, 17 days  (442 days).

Cheniere’s first export cargo of LNG left by carrier for Brazil on February 24 last year, and well over 200 more have since gone to 25 different countries. On average, Cheniere is sending off a loaded LNG carrier every three or four days; and in one recent week dispatched six loaded ships.

(And now we learn that BC’s public-sector pension plan has invested millions of dollars in Cheniere.)

Did Canada’s plodding process play a part in the cancellation of Petronas’s Pacific NorthWest LNG project? And thus the loss to the Lax Kw’alaams Band and the Metlakatla First Nation of multi-million-dollar benefits?

Nobody in the BC LNG industry is quite saying that, but Petronas-owned Progress Energy Ltd. did say this: “Delays and long regulatory timelines can ultimately have an impact on whether projects go ahead or not.”

Calgary energy consultant Dave Tulk is even more firm: He says that applying the same slow regulatory process to any further Canadian LNG proposals would be “the definition of insanity.”

We now have encouraging news on the BC government’s new “framework” for LNG development. But we don’t yet know what the federal government will build into its new regulatory process, or what BC will do as it revises its environmental assessment procedures.

A speedier approach is obviously needed, although time must be allowed for full First Nations engagement and meaningful participation as envisaged by government ministers and the United Nations Declaration on the Rights of Indigenous Peoples.

BC’s energy minister, Michelle Mungall, said this week she hopes LNG Canada‘s project at Kitimat will make a positive Final Investment Decision later this year.

LNG Canada, meanwhile, said it is working on documentation needed for that decision by its joint-venture participants, And Shell, one of those participants, said LNG Canada will name its prime contractor in April.

But, right now, LNG Canada is seeking speedy answers from Ottawa on new import duties on Asian steel products. This last item would add massive costs to prefabricated components for LNG plants that the industry says will have to come from Asia.

Could our government please (as it were) hit the gas?

— Erwin Tom, councillor, Wet’suwet’en First Nation, and a director of the First Nations LNG Allianc

Blog: UNDRIP, and ‘the last word’

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It’s all so simple to the person who, discussing LNG development, posted this comment on our Facebook page: “The indigenous have the last word what happens to the land.”

Do we? If so, what does ”last word” mean? Whose last word? And how is that last word determined, decided, expressed, and put into practice?

We take it that the person who posted the comment has their own, simple definition of “free, prior and informed consent” and “free and informed consent”, the concepts and/or principles that appear in the United Nations Declaration on the Rights of Indigenous Peoples, UNDRIP.

Somehow, the principles of UNDRIP are going to be integrated into Canadian law. In the words of Indigenous Affairs Minister Carolyn Bennett in 2016: “We intend nothing less than to adopt and implement the declaration in accordance with the Canadian Constitution.”

Indigenous MP Romeo Saganash’s Bill C-262 seeks to “ensure that the laws of Canada are in harmony with the United Nations Declaration on the Rights of Indigenous Peoples. “ It has been given second reading in Parliament and referred to the House Standing Committee on Indigenous and Northern Affairs.

We don’t know yet what the outcome of all this will look like in practice and in legislation. And we have more unknowns when it comes to Ottawa’s new promise to recognize Indigenous rights in the Constitution, through federal legislation that is to become law by the end of the year.

These promises have led to endless speculation as to just what Ottawa will do, and how, and to interpretations as far apart as (i) “First Nations will always have a veto over resource development” and (ii) “First Nations have to be consulted and accommodated, but they do not have a veto.”

We’ll leave all that, and ‘the last word’, to the passage of law and time.

What we at the First Nations LNG Alliance see in UNDRIP is not a legalistic, adversarial, winner-take-all, battlefield of rights, but an opportunity to implement in Canada the concept and long-overdue practice of “collaborative consent.”

This is explored in an article that appeared just a few weeks ago on the online magazine Policy Options Politiques. It’s well worth a read, beginning with this introduction:

In recent years, governments at all levels in Canada have stated their commitments to reconciliation and building nation-to-nation approaches with Indigenous peoples. Both the federal government and, more recently, the British Columbia government, have committed to implementing UNDRIP and the Truth and Reconciliation Commission of Canada’s Calls to Action, which reiterate the need to secure consent and ensure Indigenous peoples are full partners in Confederation.

Turning this commitment into reality is perhaps the greatest challenge of the coming decade. It may well define Canada in a global context, and will certainly have significant implications for governance and land and resource development decision-making across the country.

Policy Options goes on to say this:

Researchers who have studied the declaration at length have remarked that implementing UNDRIP implies building consent through long-term, ongoing collaborative governance relationships. . . . This relational approach to free, prior and informed consent moves beyond the adversarial debates around veto and focuses instead on processes for Indigenous peoples to be full and equal governing partners in decisions affecting their lands.

And that’s what we hope to see: full and equal partnerships based on mutual respect, mutual understanding, and recognition of Indigenous rights and title.

It’s a world in which “the last word” is a fully shared and mutual word.

As Policy Options puts it:

Collaborative consent is like cooperative federalism but it goes further, in that it embraces the critical role of Indigenous nations as full partners in building Canada’s future. It requires all governments (Crown and Indigenous) to continuously build new, shared spaces, structures and institutions as part of an evolving relationship.

That’s a world that may seem strange to those trained to think in precise, categorical, legalistic and adversarial terms.

But as Policy Options writes:

The intention of seeking collaborative consent . . . would be to build real partnerships and new forms of governance, ones that would do away with courts as a way to resolve disputes or mediate a fraying relationship, which is cumbersome and often ineffective.

Let’s go for it.

Chief Councillor Robert J. Dennis Sr., Huu-ay-aht First Nations

BC LNG: the time is coming

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We shake our collective Alliance heads when we get zealous comments such as these posted on our social media channels:

“LNG is dead, dead, dead.” “LNG is a thing of the past.” “Do you not understand that LNG is gone and we must move on renewables?”

A thing of the past? This is not what we are hearing from expert forecasters—or from energy companies whose investors are betting big billions that LNG is definitely a fuel of the future.

We and they may see it as the “transition” fuel that takes over from coal and some oil as the world moves—slowly, over some decades—into the realm of renewables. But LNG is far from dead, dead, dead.

Indeed, if you’ve heard of a so-called glut in world LNG supply, listen to the CEO of Royal Dutch Shell: “The LNG glut — conspicuously absent isn’t it?”

And a leader of the US LNG company Tellurian added last week: “We need all the LNG we can get.”

Hear, too, the International Energy Agency: “LNG ushers in a new global gas order.” It now sees world gas and LNG demand rising by 74% by 2040.

And we see almost daily such stories as these:

  • LNG is the world’s fastest-growing traded commodity
  • India plans massive natural gas expansion, LNG imports to soar
  • Asia’s rapacious thirst for liquefied natural gas is sucking supplies from surprising places.

It all adds up, most agree, to a big worldwide window of opportunity beginning to open as early as 2022, and perhaps earlier. (One Canadian analyst even sees the window opening in 2020.)

  • Some 38 countries now are LNG importers, and demand for the chilled gas has already grown to 260 million tonnes per year. That’s expected to very soon to reach 280 million tonnes per year.

“Every year, two or three more countries are added to that list,” notes Andy Calitz, CEO of LNG Canada in Kitimat.

He says Canadian projects need to be built before even more competing projects are announced, in Oregon or Alaska, the US Gulf Coast and gas-rich places such as Qatar and Mozambique.

Given that it can take four years to build a big plant like his, we would therefore hope to see at least one Final Investment Decision (FID) for BC in 2018.

For along with it will come jobs and opportunity for First Nations and others.

Tragically, the cancellation of the Petronas (Pacific NorthWest LNG) project was a huge blow to those First Nations who had counted on a go-ahead for the project to boost their economies.

(The BC government valued the Lax Kw’alaams Band’s deal, for one, at $98.5 million, including millions in payouts the day a go-ahead Final Investment Decision was made. The agreement with the Metlakatla First Nation was valued at $46 million, with $5 million cash upfront.)

Now we have to underline the optimism of Calitz, who holds out hope for LNG Canada’s FID in the fall of 2018, and says: “I actually believe that B.C. will have an LNG industry.”

— Dan George, Chief of the Ts’il Kaz Koh First Nation (Burns Lake Band), and chair of the First Nations LNG Alliance

The road to energy literacy

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It’s easy to define energy literacy as “an understanding of the nature and role of energy in the world and daily lives.”

But that definition, from a government education program, then adds a tough twist. It says this understanding must be “accompanied by the ability to apply this understanding to answer questions and solve problems.”

Talk about the ideal world. . . .

In this ideal world, an energy-literate person:

  • Can think in terms of energy systems;
  • Knows how much energy they use, and what for;
  • Knows where the energy comes from, and how it reaches them;
  • Can communicate about energy and energy use in meaningful ways;
  • Is able to make informed energy-use decisions based on an understanding of impacts and consequences; and
  • Can assess the credibility of information about energy.

That last one is surely tough to do in this era of social media and short attention spans. How do we know what is reliable and credible information, when we are bombarded with fake news, political propaganda, well-funded social-media campaigns to discredit energy development, and a myriad communications from energy companies?

Add to that the complication of understanding the rights and title and needs and priorities of First Nations. And the right of First Nations to be fully engaged in (and potentially true partners in) LNG developments that respect and protect the environment. Those things, too, are an essential part of energy literacy in Canada.

Thinking of energy literacy, I got a chuckle out of a column by Bill Whitelaw, energy analyst and CEO of JuneWarren-Nickle’s Energy Group (JWN) in Calgary.

His headline: “Canada’s politicians aren’t energy literate, and it’s crippling the country.”

Bill wondered if politicians should have to take an energy version of the old S.A.T. test so unloved by students.

“What if Canada’s aspiring provincial and federal politicians had to engage with a similar process vis à vis energy knowledge ‘testing’ before being permitted to let their names stand for office? Call it the E.A.T. — Energy Assessment Test.”

I did not chuckle when Bill Whitelaw added this: “Let’s face reality: most politicians currently came to office well-intentioned but ill-equipped to deal with the complexities of energy matters: economic, technical, regulatory, political and so on. What they are equipped with, on all points on the political spectrum, is a particular ideological perspective on energy that is their default position on what they think they know.”

That’s what we at the First Nations LNG Alliance see every day. We see it from environmentalists, eco-activists, and from some politicians and would-be plliticians. And, sadly, sometimes from business people who should know better. Worse, we far too often see “a particular ideological perspective” that demonstrates abysmal lack of understanding about First Nations and Indigenous people, and Indigenous rights and title.

Now, how do we move towards this ideal world of energy literacy? Clearly, communication is the key. That is, of course, a serious challenge in this age of failing newspapers and steadily growing social media channels. Last time we looked, by the way, there were well over 250 social-media channels around the world.

Our Alliance is on just two of the leaders: Facebook and Twitter. And on those we will work harder to explain how and why First Nations can and do support responsible LNG development.

Resource companies, and government, and we First Nations, and you, can also help increase energy literacy.

Let us take every opportunity to “communicate about energy and energy use in meaningful ways.” And let us in that way help people to make those “informed energy-use decisions based on an understanding of impacts and consequences.”

And maybe we could add, too, some energy literacy being taught in our schools and colleges.

— Karen Ogen-Toews, CEO, First Nations LNG Alliance

 

LNG, CO2, methane and emissions

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Environmental NGOs continue to oppose LNG using all tactics available.  Their latest issue is suggesting that BC won’t meet its emission targets if it allows LNG plants to proceed.

The plants will be big greenhouse-gas emitters, opponents say, and that’s on top of GHGs emitted by natural-gas wells and processes.

“You can’t have LNG and meet the targets,” insists BC Green Party leader Andrew Weaver. He repeated his threat to bring down the NDP government over the issue. “This is that sword I would die on.”

But Canadian sustainability consultant Rob Seeley counters: “When we export LNG to Asia, of course there will be some local emissions here in British Columbia to produce and transport the LNG. But, of course, the greenhouse challenge is not a local issue, it’s a global issue.

“So one large LNG facility in British Columbia, exporting its LNG for power, if it were displacing coal, it would be reducing the globe’s emissions by as much as 60 million tonnes of CO2. In everyday terms, that’s about eight million cars we’d be taking off the road.”

Merran Smith, executive director of Clean Energy Canada and co-chair of the NDP government’s new Climate Solutions and Clean Growth Advisory Council, says it is possible to allow some LNG development while meeting the targets to reduce emissions.

And consultants told the BC government’s Climate Action Secretariat in 2014: “Our analysis shows that ‘clean’ natural gas from BC could result in significantly reduced global GHG emissions.”

Developer LNG Canada at Kitimat makes these points on LNG, CO2, and emissions:

  • “LNG Canada will have the best CO2 intensity of any large LNG export facility in the world.
  • “Further, policy makers that established the original greenhouse gas framework were not envisioning a province in which no new development would take place. Instead, each new development would need to be judged on its own merits considering the broader benefits to society as well as measures to minimize the CO2 footprint.
  • “In LNG Canada’s case, the broader benefits both to Indigenous, community and the provincial economy outweigh the incremental CO2 emissions.
  • “Further, these CO2 emissions can be reduced or offset working collaboratively with government and other sectors in the economy.
  • “And finally, it is important to note the most important commitment to addressing global climate change is the federal government commitment in Paris COP.  It is under this framework that provinces and industry must work together to ensure we live up to our commitment to keeping the climate to 2 C.”

Indeed, through a combination of energy-efficient natural-gas turbines and renewable electricity from BC Hydro, LNG Canada’s project will emit less than half the greenhouse gas emissions of the average LNG facility currently in operation.

“The LNG from our project alone could reduce global CO2 emissions by 60 to 90 million tonnes per year, which is more than the total annual emissions of British Columbia and roughly 10 percent of Canada’s total annual emissions.”

(More on this from LNG Canada.)

As for “fugitive emissions” of methane from BC’s natural-gas wells, the industry is working hard to address and reduce overall emissions in natural gas production. Let’s face it, any leakage of gas means the company loses some valuable product, and the profit from it.

Looking for evidence of methane emissions in BC’s natural-gas extraction industry, researchers for the Suzuki Foundation were surprised at how tight the new wave of field equipment really is, reports the Resource Works Society.

Indeed, the society adds: “Thanks to the Suzuki Foundation’s work, we have fresh verification that companies are working hard to meet federal and provincial environmental standards, and succeeding.”

And in a separate story, Resource Works busts some myths about fugitive emissions.

Meanwhile, the industry-supported BC Oil and Gas Research and Innovation Society is funding two UBC research projects: One on the potential for drones to detect and monitor fugitive gas; and one on statistical analysis on occurrence and potential causes of gas migration from wells.

All of which points to the industry’s understanding that it has a responsibility to (as National Chief Perry Bellegarde puts it) hit the “sweet spot” of balance between the economy and the environment.

Help from eco-activists? Be wary

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The fact that we exist as an Alliance hangs on this: There are many First Nations who support responsible LNG development, and the benefits to our nations and communities that flow from it.

We’d been wondering when national media would catch on to the tactics of some anti-development and eco-activist groups who have recruited First Nations people as supporters.

Columnist Claudia Cattaneo of Financial Post certainly did this in a story headlined ‘Eco-colonialism’: Rift grows between Indigenous leaders and green activists.

A brief extract:

“The campaigns consistently portray a united Indigenous anti-development front and allies of the green movement, but some Indigenous leaders are becoming alarmed that they could be permanently frozen out of the mainstream economy if resource projects don’t go ahead.

“They said in interviews they’ve had enough of activists invading their lands, misleading them about their agendas, recruiting token members to front their causes, sowing mistrust and conflict, and using hard-line tactics against those who don’t agree.

“‘The best way to describe it is eco-colonialism,’ said Ken Brown, a former chief of the Klahoose First Nation in southwestern B.C. ‘You are seeing a very pervasive awakening among these First Nations leaders about what is going on in the environmental community.’”

We’ll leave it to you to read it all, but as supporters of responsible LNG development we were also struck by this paragraph:

‘There was also the demise of Pacific NorthWest LNG and Aurora LNG, as well as the continuing challenges faced by the Trans Mountain pipeline expansion and other proposed LNG projects. These cancellations and obstacles are celebrated by activists, but also wiped out jobs and revenue for First Nations.”

There’s a lesson in all this for First Nations people.

Of course, not all First Nations leaders, peoples, or communities support resource development, and they absolutely have every right to oppose it.

But if you’re approached by an outside eco-group offering “support”, what’s their real agenda?

It’s almost certainly not to get your Nation a better deal and more benefits from the developer. Be aware, and wary. Know what you’re getting into.

We posted Cattaneo’s story on our Facebook page, where it drew a pertinent comment from BC consultant Dave Kennedy. He said that publicly opposing a development in hopes of getting more benefits from a developer is an unfortunate strategic error.

“I have seen this tack taken more than a few times and it is rarely successful. There are a couple of reasons for this: Once a party is publicly opposed to a project it is unlikely that the proponent will want to advance negotiations as it signals to others that a real or virtual blockade is a productive tactic causing the proponent to face more public opposition. This makes investors and regulators more than a little uncomfortable and defeating the ‘blockade’ becomes the focus of the leaders around the boardroom table, rather than a focus on a better project or improved benefits. Secondly, the First Nation does not now have a way to move forward without publicly abandoning its opposition to the project. Having said that the project is no good how can the Nation’s leadership change its public position when it will soon become clear that the major thing that changed was the size of the benefit package?”

More on all this on our Facebook page, and in this article from Dave Kennedy.

Karen Ogen-Toews, CEO, First Nations LNG Alliance

Our blog is . . . a First Nations lens

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Love that we don’t have to start our new blogspace with a dictionary definition, especially one such as this:

“A blog is a regularly updated website or web page, typically one run by an individual or small group, that is written in an informal or conversational style.”

Well, OK, our blog may turn out to be all of the above, but let’s keep it simple: It’s a webpage where we can discuss LNG and related resource issues of the day—through a First Nations lens.

That helps to ensure that First Nations views, needs and priorities are out there. And every time we write a blog, we’ll use social media to invite the public to read and absorb it. Most importantly, we want First Nations people exposed to a variety of views about the LNG industry.

There have been some recent messages that they need to hear. For example:

  • Ellis Ross, former chief councillor of the Haisla Nation (and now BC Liberal MLA for Skeena): “If the government really wants reconciliation for First Nations . . . you have to get behind economic development and actually support industries that help First Nations get out of poverty. They don’t want your handouts. They don’t want handouts. They want to support themselves. And, yes, this means supporting fish farms, forest and range agreements, LNG.”
  • Calvin Helin of the Lax Kw’alaams Band, on eco-activists who claim to support First Nations objections to resource developments: “These environmentalists are happy to make a park in somebody else’s backyard. Well, screw that. You are talking about people where there is 90 per cent unemployment.”
  • Joe Bevan, chief councillor of the Kitselas Nation: “A resource-based economy is a big reality of living and working in the north. Resource economies bring well-paying jobs, stability for many families and prosperity to our communities. But, ensuring that the right voices are heard is crucial when trying to engage with industry or government to get resource projects underway.”
  • And such headlines as “B.C. is now the worst destination in Canada for oil and gas investors — and among the worst in the world: survey.”

That last was a column in Financial Post. Among the things it listed as deterrents to natural-gas development in BC were ‘disputed land claims and protected areas.’

If that’s some kind of short-hand for “First Nations objections”, let’s be clear: First Nations, like any other society or community, encompass different views about economic development. Some welcome responsible resource development; some want the resources left in the ground.

We feel our First Nations LNG Alliance is in the common-sensible middle of the road:

  • We believe in responsible LNG development that can offer Indigenous people and communities jobs, incomes, training, education, security, and (as Ellis Ross and others put it) a pathway out of poverty, alcohol, and worse.
  • But First Nations communities in BC and Canada were stewards of the environment long before there was a Canada or a BC, and we continue to have that responsibility. So LNG and natural-gas development must respect the environment and First Nations rights.

Please join and support our cause for engagement and dialogue. And keep your eyes on our social media channels (Facebook and Twitter) for notice of our next blog.

Karen Ogen-Toews, CEO, First Nations LNG Alliance