B.C. government signs LNG benefits agreement with First Nations
by Gordon Hoekstra, Vancouver Sun, Feb 15, 2017
The B.C. Liberal government signed benefits agreements Wednesday worth hundreds of millions of dollars with the Lax Kw’aalams and Metlakatla First Nations in exchange for their support of LNG projects in their traditional territories of the province’s north coast.
It’s a critical measure, in particular, for the $12-billion Pacific Northwest LNG project, one of the remaining hopes for Christy Clark’s government — which heavily touted a new natural gas export industry to Asia beginning in 2012 that has not materialized.
The agreements were signed with Lax Kwa’aalams elected officials, but the community is divided over Pacific Northwest LNG, which is owned by a consortium led by Malaysian state-controlled Petronas. Among those opposed are some hereditary chiefs.
The umbrella agreement announced Wednesday could encompass four or more other LNG proposals in early development in the two First Nations’ traditional territory, including the ExxonMobile-led WCC LNG project just north of Prince Rupert.
Pacific Northwest LNG also announced they had signed agreements with the two First Nations, although no details were released.
LNG projects in B.C. have been hampered by reduced global demand, competition from new entrants such as the U.S., and the need for energy companies to reduce capital spending after oil prices plummeted in 2015.
Mega-projects in northwest B.C. headed by energy giants Shell and Chevron have been shelved. A smaller project near Squamish, owned by Indonesian billionaire Sukanto Tanoto, is still in the mix.
Pacific Northwest LNG chief project officer Wan Badrul Hisham, who attended the announcement in Victoria, called the benefits agreements a “significant” milestone, but did not say whether the project would go ahead. The company has said a decision could be made this year.
The B.C. government’s benefits agreement with Pacific Northwest LNG will provide $98 million in one-time payments at various stages of LNG development, some linked to Pacific Northwest LNG. There are also ongoing annual payments, including for gas production tied to individual LNG projects, that would provide additional millions of dollars over several decades. More than 1,900 hectares of Crown land transfers are also on the table.
A similar benefits agreement with the Metlakatla will provide $46 million in cash, ongoing annual payments and Crown land.
The B.C. government did not release a value for the Crown land.
Lax Kw’aalams mayor John Helin, who spoke at the announcement, called the agreement historic.
“For the first time in my lifetime, in my history, we are really a part of what is happening in our traditional territory, as far as looking after the environment and getting benefits that I think we deserve as the people from that territory,” said Helin.
The premier said the benefits agreements that pave the way for LNG projects will create a better future for the First Nations.
There was no mention of whether there would be a vote or referendum by the First Nations community members on the agreements.
An earlier benefits package of $1.15 billion was rejected by the Lax Kw’aalams in community votes in 2015 — and subsequently by the council of the day — over concerns that the project on Lelu Island near Prince Rupert would harm sensitive salmon rearing habitat.
Meanwhile, opponents continue to maintain a camp on Lelu Island to prevent construction of the project, and a federal court action was launched, including by some hereditary chiefs, over the decision to approve the project. Justin Trudeau’s federal Liberal government has given the project the OK, as has the B.C. government following environmental assessments.
Former Lax Kw’aalams mayor Garry Reece, who was ousted by Helin in the previous election, said Wednesday he was doubtful that Helin and the current council would hold a vote on the benefits package.
There have been reports that Petronas is considering moving the location of its ship berth off Lelu Island to another location, to address concerns that the berth would harm Flora bank, home to eel grass beds that form an important salmon-rearing habitat.
But Lax Kw’aalams member Christine Smith Martin said it would still be a problem for opponents if the terminal that will liquefy the gas is built on Lelu Island. She also said she has little trust in the environmental monitoring promised for the project.