Canadian LNG Export Future Delayed, But Not Dead Yet
As the Lax Kw’alaams community rejected a $1 billion offer from Pacific NorthWest LNG as compensation for a proposed natural gas project this week, the global energy community took notice. With the native tribe turning down such an enormous sum of money, the rejection could put a chill on Canada’s energy investment prospects. Worse, it also raised the possibility that Canada would be shut out of the vast Asian markets that it needs to offload the natural gas the United States no longer wants. But the reality is more nuanced than that.
Community engagement has become far more important for oil and gas projects, and in accordance with international best practices, indigenous communities should be involved in a process of free, prior, and informed consultation. Cases in Canada, and across the Western Hemisphere, have shown that agreement between governments, private firms, and indigenous communities is possible. And when done well, everyone stands to gain.
Pacific NorthWest LNG, which is owned by Malaysian national oil company Petronas plus Sinopec, JAPEX, Indian Oil Corporation, and Petroleum Brunei, has been negotiating with the Lax Kw’alaams band council since 2011. The major point of contention is over the impact of the project on local fisheries, in particular salmon. Both sides have commissioned environmental reviews that come to different conclusions. Pacific NorthWest has offered to build a bridge it argues will protect the area, but the community is dissatisfied with the solution. The Canadian Environmental Agency’s own review is due later this year.
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