Coastal waters

The Stand at Lelu Island: B.C. First Nations vow to halt LNG project

Salmon, Indigenous communities, and taxpayers could all be collateral damage as B.C. moves forward on Petronas' liquefied natural gas deal
Brian Huntington

Wrapped in thick north coast fog, a small island in the Skeena River estuary, 15 km south of Prince Rupert, has become a lightning rod for B.C. Premier Christy Clark’s strained LNG ambitions.

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“I’m really at the boiling point already,” says Yahaan (Donnie Wesley), hereditary chief of Gitwilgyoots, one of the nine allied tribes of Lax Kw’alaams, a Tsimshian coastal nation. Standing on his traditional territory Lax U’u’la, also known as Lelu Island, Yahaan says, “I am willing to take on that drilling boat and get arrested, or whatever it is going to take to make the world know that this is going on. The salmon and seafood of the entire Skeena River are in jeopardy.”

Salmon at risk

The focus of Yahaan’s concern is the shallow Flora Bank next to Lax U’u’la, a sandy eelgrass bed that is one of the most important habitats for juvenile salmon, steelhead and shellfish in the entire Skeena River system.

Smolts leaving the river during spring migration instinctively turn north into this area for shelter, feeding, and protection from predators for weeks at a time while they adapt from fresh to salt water. Research reveals that 88 per cent of Skeena salmon, or 330 million smolts per year, rely on Flora Bank. The majority of eelgrass in the estuary is on Flora Bank, and 20 times more salmon use Flora Bank than other estuary eelgrass. Genetics show smolts from the entire watershed, the traditional territories of 10 First Nations, use Flora Bank.

Lelu Island and Flora Bank
The Globe and Mail

There is no other comparable area in the Skeena with such concentrated biological significance. There may be no comparable area in B.C.

This is of remarkable importance, especially considering the Skeena supports the second-largest wild salmon run in Canada, bringing in excess of $100 million from commercial and sport fishing every year, not to mention it is the cultural backbone of a dozen First Nations. You would think that if any area in the mouth of the Skeena River should be protected, this is it.

Unfortunately, Flora Bank is ground zero of the front-running LNG proposal in B.C.

LNG on Lax U’u’la

An international consortium led by Malaysian state-owned oil giant Petronas is proposing to build an $11-billion Pacific NorthWest LNG plant on Lax U’u’la.

Responding to community concerns over proposed dredging on Flora Bank, the Pacific NorthWest LNG design was revised in October 2014 to include less dredging, a 1.6-km suspension bridge straddling the edge north of Flora Bank, and a 1.3-km trestle on Agnew Bank to a deep-water berth. The plant would fill a supertanker per day.

Despite the new design, significant concerns remain.

A study commissioned by the Lax Kw’alaams Band revealed that Flora Bank sediments are held in place by a dynamic equilibrium of complex tidal and river currents. The report by SedTrend Analysis Ltd. concluded that the bridge supports, trestle pilings, dredging and tanker traffic could disrupt this balance, eventually destroying the salmon habitatthrough erosion or deposition.

The new bridge would be wider and longer. Previous research shows that young salmon avoid swimming under bridges in estuaries. Although the planned P acific NorthWest bridge lies directly across the northward salmon migration path, the proponent does not acknowledge this risk.

Scathing new findings released last week by the Skeena Fisheries Commission and Simon Fraser University conclude that the updated Pacific NorthWest proposal “disregards science” and “poses significant and unacceptable risks to Skeena Salmon and their fisheries.”

This oversight is not surprising. The first project map Pacific NorthWest submitted to the Canadian Environmental Assessment Agency omitted the Skeena River entirely.

Flora Bank
Brian Huntington

The Pacific NorthWest submission has now been rejected three times based on reviews by Natural Resources Canada and the Department of Fisheries and Oceans, dragging out the Canadian Environmental Assessment Agency process from the expected 365 days to over 700 and counting.

This is not the first time LNG development has been proposed for Lax U’u’la. In 1977, a proposal from Dome Petroleum to build an LNG plant there was rejected, partly due to 1973 Department of Fisheries and Oceans science that deemed development on Lelu an unacceptable risk to fish habitat.

“If you had to pick one place on the whole north coast that is more perilous to wild salmon, I'm not sure you could find one,” Skeena-Bulkley Valley MP Nathan Cullen told Northern View

Who is Petronas?

If we take Clark at her word about her vision for the “world’s cleanest and safest LNG,” the choice of Petronas as a corporate partner should raise some eyebrows.

In September, a leaked safety audit from Petronas revealed offshore oil rigs in “catastrophic” states of disrepair, routine inspections overdue by 20 years, and problems with the potential to cause human death.

The prime minister of Malaysia, Najib Razak, is currently accused of stealing $700 million and covering up $11 billion in debt. When several of his cabinet ministers, deputy premier, and attorney general publicly pressed the issue this summer, he fired them. Razak is also the president of Petronas, and the company reports only to him. Malaysia now hangs on the precipice of economic disaster as its currency responds to the scandal.

The company also has a dubious record on respecting Indigenous rights.. In Borneo, gas pipeline route details were withheld from local Indigenous populations until construction. Last year, that pipeline exploded. It had been built on unstable soil.

Lax Kw’alaams rejects $1.15 billion

In early May, Petronas made an unprecedented offer to the small community of Lax Kw’alaams of just over $1 billion for permission to build their plant on Lax U’u’la.

“This will be a real game-changer for many First Nations in terms of how they can build their future,” John Rustad, B.C. Aboriginal relations and reconciliation minister, told the Globe and Mail of the offer. That’s one view. Another is that facing the largest proponent payout to a First Nation in Canadian history and having only a week to decide is hardly consultation, let alone a way to build a future. One could argue it smacks of bribery.

In each of three community votes members rose from their chairs to unanimously reject the offer.

Flora bank and PNW LNG site
Greg Horne

“Not a single person stood up in favour of it,” said Yahaan. A responding statement from the Lax Kw’alaams Band said that Flora Banks is off-limits to development.

The company’s bluntness shocked Yahaan most.

“We asked them, ‘Why are you building in the Skeena estuary? Why not in some little cove where it’s not going to harm anything?’ He didn’t care. He said, ‘It’s the cheapest location to put an LNG plant. There is road access, open ocean access, and there is hydro.’ My jaw dropped.”

Red carpet for Petronas

On June 11, Petronas announced a conditional Final Investment Decision in the project. Following an attempt to buy First Nations consent, Petronas simply acted as if consent was irrelevant, as did the B.C. government, which on July 13 held a rare summer session of the legislature to approve the Petronas project.

Designed as attractive amid a depressed global gas market, the LNG Projects Agreements Act locked in an LNG tax rate of 3.5 per cent, half of what was originally desired by Clark, with no taxes until after capital cost recovery, a process that could take some time — Australia’s Gorgon LNG plant has run $17 billion over budget and a year overdue, making some critics worry it will never return profits. Further, should any future government change this agreement within 25 years, Petronas would be entitled to collect damages. Former Liberal politician Martyn Brown trashed the plan as “environmentally reckless, fiscally foolhardy, and socially irresponsible.”

B.C. has also allowed foreign workers to build LNG plants. Petronas will use 40 per cent foreign workers to build its $11 billion plant, and $8 billion of this will be spent overseas.

It is hard to imagine a better deal for Petronas. For Clark, it’s a desperate attempt to keep a flagging election promise.

Perhaps most disturbing is the fact that of the 20 LNG proposals in B.C., this is the only one with both a conditional Final Investment Decision and legislative approval. Construction of the Pacific NorthWest LNG project on Lelu Island is poised to begin first.

Tsimshian Reoccupy Lax U’u’la

On Aug. 25, Yahaan and Tsimshian supporters moved onto Lax U’u’la to stop the rejected Petronas proposal in its tracks. The camp has received overwhelming regional support. Chiefs from the nine allied tribes of Lax Kw’alaams and the elected Lax Kw’alaams Band representatives have announced united support for Yahaan.

Drilling boats have been turned away, and Lax U’u’la caretakers have caught surveyors pulling up eelgrass. The Prince Rupert Port Authority, a federal body still without provincial or local oversight, gave permission to Petronas to conduct geotechnical work as part of the Canadian Environmental Assessment process, the final regulatory hurdle facing Pacific NorthWest LNG.

Sockeye smolt and eelgrass
Brian Huntington

On Sept. 16, the Lax Kw’alaams Band announced intentions to file litigation to prove title to Lax U’u’la. Following in the wake of the Tsilhqot’in decision, this court action could trump the Petronas proposal.

In response, Michael Culbert, president of Pacific NorthWest LNG, illustrated the company’s erroneous belief that the issue is about money when he told the Globe and Mail, “There’s a question as to who the landlord might be. When that answer is clear, we will then take our agreement that we have and pay the landlord appropriately.”

Madii Lii

One of the House Groups of the Gitxsan Nation (Luutkudziiwus) is fighting the Prince Rupert Gas Transmission pipeline that would supply fracked gas from northeast B.C. to the plant on Lax U’u’la. Thirty-two kilometres of the pipeline is proposed for their Madii Lii territory.

Fifteen months ago, they closed their territory to Prince Rupert Gas Transmission contractors and built a cabin at the only road access, and they have been turning away pipeline contractors ever since.

On Oct. 14, they announced intentions to launch a B.C. Supreme Court challenge on the basis of inadequate consultation.

Lax U’u’la camp
Ken Rabnett

“We were not consulted on the pipeline project, nor was adequate data collected on cumulative impacts to our territory. We were given no acceptable means, funds, or time to assess it,” says Richard Wright, spokesperson for Madii Lii.

If successful, the judicial review could cancel the Environmental Assessment Certificate and B.C. Oil and Gas Commission project permit.

To cover legal costs, Luutkudziiwus are fundraising money in alliance with the charity RAVEN Trust.

The Petronas mega-project

The Pacific NorthWest LNG plant would be supplied from fracking operations in the Montney basin in northeast B.C. owned by Petronas, via two pipelines Petronas has contracted TransCanada to build — the 300-km North Montney Mainline pipeline feeding the 900-km Prince Rupert Gas Transmission pipeline.

The total investment is CAD $40 billion, by far the biggest industrial project in B.C. history, equal in cost to the Enbridge Northern Gateway (CAD $7.9 billion), Site C dam (CAD $8.3 billion), Keystone XL (CAD $10 billion), and Energy East (CAD $12 billion) combined.

The Harper government balked in 2012 when Petronas proposed to buy Calgary-based fracking company Progress Energy, on the grounds that it is not in Canada’s “net interest” to have a single foreign company frack, pipe, liquefy and ship gas to Asia. In the end, the purchase was allowed.

Whether Petronas will respond to mounting community pressure to move its terminal away from Flora Banks is unknown at this point.

What is clear is that the cutting edge of Christy Clark’s dream of clean, safe, and economically prosperous LNG is a plan that is a threat to Canada’s second-largest wild salmon run, at the hands of a company with an abysmal safety and corruption record, governed by a rock-bottom tax and foreign worker regime, blocked on the ground and in court by two First Nations. This isn’t a great start to the LNG dream in B.C. It sounds more like a nightmare.

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