The 20-million-gallon Lily Dam, one of the two unlicensed dams for which Progress Energy received retroactive exemption from environmental review. Photo by Ben Parfitt.
In an earlier post I had noted that Progress Energy, now known as PETRONAS Canada had been accused of building two massive unlicensed dams in violation of provincial environmental regulations. It has since been reported that that British Columbia’s Environmental Assessment Office (EAO) allowed these massive unauthorized dams to be exempt from environmental assessments. According to Ben Parfaitt in Policy Note these dams had previously been described in internal documents of the very same EAO as being ‘illegal works’. This is a disturbing precedent because there are other unlicensed dams in the gas fields of Northern BC that stand to be given the same kind of retrospective exemption. This move by the EAO is indicative of the dominance of corporate interests generally, and PETRONAS’ imperatives in particular, within the provincial administrative process.
According to the Globe and Mail, the B.C. Sierra Club, which is a conservation group, is suing the British Columbia government to get these retrospective exemptions revoked. Olivia French, the lawyer representing the B.C. Sierra Club has stated that “Progress Energy acted with a bit of disregard for B.C.’s laws — one of those typical, ‘Ask for forgiveness, not for permission’ sort of positions.” As Green Party MLA Sonia Furstenau has said that the EAO’s decision to grant Progress’s extraordinary request for retrospective exemption fuels public distrust of the relationship between government and the powerful industries it regulates.
In an earlier post I had noted how on July 13 2018, LNG Canada formally welcomed PETRONAS as their fifth Joint Venture participant and how this investment was connected with TransCanada’s Coastal GasLink pipeline that is building to transport the natural gas from Dawson Creek to the LNG Canada terminal in Kitimat. Much of the gas to be transported to market via the pipeline and terminal will , of course, come from PETRONAS owned Progress Energy’s own gas fields in the North Montney area. On November 22, 2018 Progress Energy Canada Ltd. changed its name to PETRONAS Energy Canada Ltd. (PETRONAS Canada). Mark Fitzgerald, President & CEO of PETRONAS Canada said, “The name change is a reflection of our parent company’s commitment to Canada and the strength of our business in the company’s overall portfolio.” Malaysian Crown corporation PETRONAS now not only owns one of the largest natural gas resources in the Montney basin, but is also a key player in getting Canadian LNG to market across the Pacific ocean.
While the province of British Columbia endorses extensive fracking activities in the course of its LNG industry, environmental and health & safety concerns are being acknowledged by a growing number of national governments around the world. In June 2017 the Irish parliament passed legislation that outlaws this resource extraction technique. According to EcoWatch. Ireland follows France, Germany and Bulgaria in legislating against fracking. Tony McLoughlin, who introduced the legislation as a private member’s bill is reported to have said, “If fracking was allowed to take place in Ireland and Northern Ireland it would pose significant threats to the air, water and the health and safety of individuals and communities here. Fracking must be seen as a serious public health and environmental concern for Ireland”. Either he is wrong or the province of British Columbia is is well down the wrong track!
Roads and fracking drill pads slice up the scenery in northeastern BC (2013)
In June 2018, Centre forCPA-BC Resource Policy Analyst Ben Parfitt made a presentation to British Columbia’s Scientific Hydraulic Fracturing Review Panel in the context of rising provincial LNG industry and attendant concerns about general health and safety, and specifically the well being of Indigenous Peoples and communities.
Parfitt’s presentation included the following findings:
- at least 92 dams were built in northeast BC without the companies that built them first obtaining the required licences and authorizations.
- a large number of drilled and fracked gas wells in one remote operating area in northeast BC leaked methane gas, potentially contaminating groundwater.
- increased water use at more fracking sites means more earthquakes.
- contrary to the Province’s adoption and implementation of the United Nations Declaration on the Rights of Indigenous Peoples, the fracking operations in BC have taken place without the “free, prior and informed consent” of First Nations.
Having given up its bid to lead BC LNG Terminal investments with a mega plant on Lelu island, PETRONAS seems unwilling to be left out. On the 31st of May 2018 PETRONAS owned Progress Energy announced that another PETRONAS wholly-owned entity, the North Montney LNG Limited Partnership (“NMLLP”), “has entered into a Purchase and Sales Agreement for an equity position in the LNG Canada project in Kitimat, British Columbia, Canada”. Pending regulatory approvals and associated agreements, the composition of ownership in this ‘LNG Canada’ project will be PETRONAS (through NMLLP), (25%); Shell Canada Energy, a subsidiary of Royal Dutch Shell plc (“Shell”), (40%); PetroChina Canada Ltd. (15%); Diamond LNG Canada Ltd., a subsidiary of Mitsubishi Corporation, (15%); and Kogas Canada LNG Ltd. (5%).
Before PETRONAS joined this consortium, Chris Newman of Energeticcity.ca, had reported that industry analysts consider the project to be a long shot. Yet in an even earlier article in Energeticcity.ca (also by Newman), B.C.’s Premier John Horgan, is reported to have said that the project will proceed “It has all of its permits in place, has social license from First Nations in the region, has the support of the community, and is waiting for economic conditions to turn around”.
As the BC election campaign progresses towards the May 9th polling date, there are suggestions that the governing Liberal Party is suffering of the consequences of premier Clark’s seemingly unfulfillable promises of an LNG economy for the province. The sudden change in market conditions caused major projects to withdraw and today there is only one major project, the Petronas led Pacific NorthWest LNG investment, that still might go ahead. It is clear, however, that Petronas cannot withstand the risks in the wider LNG future alone, as there are reports that it has offered a $1 billion stake in another gas project to Shell, ExxonMobil, Thailand’s PTT Exploration & Production and Japanese firms. This has no direct bearing on the BC situation but it is an indication of the sensitivity of the LNG giant to the current market conditions. Meanwhile, auguring well for BC LNG and the Provincial Liberals, the Lax Kw’alaams, Metlakatla and the Kitselas First Nation have all signed benefits agreements in the context of the Pacific NorthWest LNG project. Opposition by hereditary chiefs led by Yahan Wesley notwithstanding, first nations stakeholders have been signing on to the project, steadily shifting from the earlier refusal of offers of compensation. Of anecdotal interest is the fact that Malaysian leaders of the Pacific NorthWest LNG management team, who have thus far been behind the scenes, have started appearing in the BC media – Standing on the extreme right at the rear is Pacific NorthWest LNG chief operating officer and former Head of LNG Projects for PETRONAS, Wan Badrul Hisham.