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LNG decision shows Trudeau open to resource development: Stakeholders

Russell Hixson
LNG decision shows Trudeau open to resource development: Stakeholders

Several industry leaders are praising the Trudeau government’s conditional approval of the proposed Pacific NorthWest (PNW) LNG project in northern B.C., which would be led by Malaysian state oil firm Petronas, while others are saying it isn’t a done deal just yet.

"We have a reputation as being a difficult place to get things done. This decision signals that while it may take a while to get approval, we can get it right," said Independent Contractors and Businesses Association (ICBA) president Philip Hochstein. "With this decision, the federal government removed the final regulatory barrier to proceeding with the largest capital investment proposal in British Columbia’s history, and the door is now open to what will hopefully be a final decision to proceed on the part of project proponents in the months ahead."

Hochstein added that the federal government has shown that it can balance the economy and the environment.

"This is tremendously good news for our province — among other benefits, the federal decision cites an estimated 4,500 construction jobs and an additional 630 jobs once the project is operational," he said. "Even more importantly, the decision renews confidence in Canada’s determination to responsibly develop energy and other natural resources, while also achieving the highest environmental standards."

Hochstein praised Premier Christy Clark and the provincial government for their "laser focus on getting the public policy and regulatory framework right."

Kevin Hanna, director of the Centre for Environmental Assessment Research at the University of B.C.’s Okanagan campus, noted that while the conditional decision was in favour of the project, it is far from a done deal.

"(Petronas) made it very clear that they are not sure they want to go ahead," he said. "I am not sure I would bet on it anytime soon."

Hanna explained since the last election the landscape has changed. There are many more players at the LNG table coming to market and the Asian price differential has vanished. With a lot of product now floating around, prospects to build PNW LNG in the short or medium term don’t look promising. But in a decade or more, things may change.

"If we see an increasing transition away from coal and crude oil toward cleaner energy sources like hydro maybe there will be a growing emphasis on natural gas," he said.

One thing Hanna said to watch for is court challenges to the project. He said although they are unlikely there is still a possibility.

The BC Building Trades congratulated the federal government on completion of the review process.

"The environmental review process was broken under the Harper Conservative government. We welcome the introduction of a fair and balanced process for accessing major projects," said Tom Sigurdson, executive director of the BC Building Trades.

"While the assessment was rigorous, and the conditions set a high bar for the PNW LNG project to achieve on consultations and environmental concerns, we see the continued momentum as a positive step. That said, it is also only a step along the path to construction. We recognize there are a number of hurdles yet to cross. But at this time we are eager to see the outcome of the internal review process Petronas is conducting and hopeful that it will lead to the full promise of jobs for B.C. and Canadian workers."

The PNW LNG project is valued at $36 billion. It involves the construction of two trains plus an LNG liquefaction plant located south of Prince Rupert to export 19.68 million tonnes of LNG a year.

"The BC Building Trades has been working with the Premier’s Working Group on LNG since September 2013," added Sigurdson.

"We have spent years building relationships with communities and First Nations in the area. We have the skilled workforce. We have the training providers. We’re ready to build this project."

Manley McLachlan, president of the British Columbia Construction Association (BCCA), was also supportive of the government decision, saying it shows Trudeau’s government intends to support responsible resource development.

"I think from a political perspective this demonstrates the government is leaning in but are being responsible in terms of the environmental assessments and requirements," McLachlan said.

However, he added the approval turns up the heat on the looming labour crisis which the Industry Training Authority anticipates could generate up to a million job openings in the province by 2022.

"If there are no LNG plants in the next 10 years there is still a problem," he explained. "The availability of skilled workers is an issue that will be with us for a significant number of years. If the shareholders of Pacific NorthWest LNG decided that they will move forward it just adds another layer of urgency to develop the workforce."

McLachlan said with billions of dollars worth of site prep work winding down, Northern B.C.’s industry is slowing dramatically. But in Victoria and Vancouver, as well as in the south, cranes are up and projects and booming.

He also noted a recent survey by the BCCA shows in some parts of B.C. more than 50 per cent of construction companies have hired workers from Alberta, signaling a migration of labour from the hard-hit oilsands.

Petronas released a statement saying it is pleased with the conditional approval.

"On behalf of the partners of the proposed project, Petronas would like to thank the Government of Canada, the Canadian Environment Assessment Agency, area First Nations, local residents and all other relevant stakeholders for their constructive participation in the process of reaching this approval," it reads.

Petronas and its partners added they will study the conditions imposed by the Canadian authorities and conduct a total review of the proposed project prior to deciding on the next steps forward.

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