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McKenna delays decision on Pacific NorthWest LNG project

Photo: Lax U’u’la (Lelu Island)

Federal environment minister Catherine McKenna was to decide whether or not to grant approval to the proposed Pacific NorthWest liquefied natural gas (LNG) terminal by the regulatory deadline of March 22. She has now reportedly referred the matter to cabinet which means the decision could be indefinitely delayed or come within weeks.

Bloomberg reports, “Environment and Climate Change Minister Catherine McKenna will refer a verdict to Prime Minister Justin Trudeau’s cabinet rather than approving the $36-billion project with conditions, said to two officials who spoke on condition of anonymity because the decision isn’t yet public. The government’s review period ends March 22 but the cabinet has no deadline for its deliberations. The Pacific NorthWest LNG decision is among the first tests of the Trudeau government’s handling of energy and climate issues.”

On Feb. 18, in what appears to be a similar move, McKenna also delayed a decision – past the government’s own March 1 deadline – on a plan to bury 200,000 cubic metres of low- and intermediate-level radioactive waste near the shores of Lake Huron. A Government of Canada media release gave no details on a timeline for that decision either, only that the minister would contact the panel that had been reviewing the application for the nuclear waste dump “at a future date”.

The Bloomberg article continues, “Trudeau faces political pressure from the government of British Columbia, Canada’s westernmost province. Premier Christy Clark is in favour of LNG development and backs the Pacific NorthWest proposal. One provincial government official, speaking on condition of anonymity, said the government expects McKenna to refer the case to cabinet and to then receive a decision within a few weeks.” At Clark’s request, Trudeau has reportedly already extended a Harper-era tax cut for corporations intended to spur LNG development.

Earlier this month, the Financial Post reported that Petronas had “threatened to walk away if it doesn’t get federal approval by March 31, according to a source close to the project. …’They have given Trudeau to March 31 to either approve it as it stands now or they are going to leave’, the source told the Financial Post. …The big worry is that the cabinet, which has final say, will keep stalling instead of handing down a decision while the project continues to burn cash, the source said.”

But today’s news report notes, “The Pacific NorthWest LNG partners … are prepared to wait for Canada’s ruling to make a final investment decision and the expectation is that the government will act quickly, said Michael Culbert, president of both the project and Petronas’s Canadian subsidiary, gas producer Progress Energy Canada Ltd. ‘We are encouraging a timely decision but have not given the government any kind of ultimatum’, Culbert said by phone Tuesday.”

The Pacific NorthWest LNG export facility would be located on Lax U’u’la (Lelu Island) near Prince Rupert on Lax Kw’alaams First Nation territory in British Columbia. The project is being led by Petronas, with minority shareholders including Sinopec, the Indian Oil Corporation, and PetroleumBrunei. It would receive natural gas fracked in northeastern BC via TransCanada’s Prince Rupert Gas Transmission Project pipeline. Its upstream carbon dioxide emissions would be about 6.5 to 8.7 million tonnes a year and it would require a massive amount of freshwater to operate.

Petronas now says TransCanada’s pipeline construction is on hold as they await the federal decision on the project.

The Council of Canadians submitted to the Canadian Environmental Assessment Agency its letter of opposition to the Pacific NorthWest LNG project on March 11. We have also repeatedly supported opposition from the Lax Kw’alaams First Nation to the building of this terminal on their territory.