Cedar LNG lauded, but zero-carbon targets, ‘equal playing field’ concern experts

Approval of Cedar LNG sets a progressive precedent, but B.C.’s net-zero carbon targets could restrict Indigenous-led prospects and the same regulatory framework should be applied equally to all proponents, say experts.

“The approval of this project (Cedar LNG) is a step in the right direction, however, B.C.’s new energy framework and emissions cap could be a concern for future projects,” said John Desjarlais, executive director of Indigenous Resource Network.

“We want more Indigenous-owned and Indigenous-propelled projects to address the world’s energy crisis,” Desjarlais said. 

Last month, the B.C. government granted an environmental assessment certificate to the Cedar LNG project, a proposed floating LNG export facility in Kitimat, which will be the terminus of the 670-kilometre Coastal Gaslink LNG pipeline originating near Dawson Creek. 

Owned by the Haisla Nation and Pembina Pipeline Corporation, Cedar LNG is the largest First Nations majority-owned infrastructure project in Canada and the only First Nation-owned LNG export facility in the country.

“This project will be powered by renewable electricity by connecting to BC Hydro’s grid, making it one of the lowest emitting facilities of its kind in the entire world,” said Premier David Eby at the Mar. 14 press conference announcing the environmental assessment certificate approval. 

Cedar LNG ‘a model’ for future projects

“It’s a model for how LNG projects, and any project, can and should be developed in British Columbia,” the premier said.

Both Eby and Haisla chief councillor Crystal Smith hailed the project as historic. 

“With Cedar LNG, and in collaboration with governments, industry and other nations, we are demonstrating how we can responsibly advance LNG development in our province while protecting the environment,” said Smith. 

Cedar LNG will help “lift indigenous communities out of poverty” and “build our indigenous rights in the process,” she said, adding, the project supports economic reconciliation, respects Indigenous culture and traditions, shares opportunities with other Indigenous communities and helps builds a net-zero economy.

“The approval of this project sets a major precedent,” said Desjarlais. “Cedar LNG is a first of its kind and we hope that this builds confidence in future projects in valuing Indigenous participation and encouraging investment and partnership with Indigenous communities.”

Cedar LNG will cost an estimated $2.4 billion to build and is projected to export between 3 million and 4 million tonnes of LNG every year.

In order to pass the EAC’s requirements, Cedar LNG must have a plan to generate near net-zero carbon emissions by 2030, which includes power generation through electricity rather than natural gas. For Cedar LNG and any other new LNG facilities to meet B.C.’s ambitious climate action targets, a massive build-up of the hydroelectricity infrastructure is required.

“The project will be among the lowest emitting and most environmentally conscious LNG facilities in the world,” said Environment Minister George Heyman. 

Another requirement for Cedar LNG’s approval was a greenhouse gas (GHG) reduction plan. All conditions placed on Cedar LNG by the EAC process are legally binding. 

In addition to requiring a plan for zero emissions, the B.C. government introduced a new “energy action framework” that includes a list of further requirements for approval, including a regulatory emissions cap and fast tracking investment in clean energy and technology. 

Cedar LNG sets precedent but no guarantees

Approval of Cedar LNG sets some precedent for similar projects, but provides no guarantees they will all get the green light in the future, said Sharon Singh, partner and co-head of Aboriginal law practice at Bennett Jones in Vancouver.

“What it does is reinforces the current environmental assessment act and the policies and processes that have gone on to form the new act,” said Singh, “What I mean is that when you look at the decision, it’s carefully weighed.”

Singh said the Cedar LNG decision reinforces the importance of balancing economic reconciliation for First Nation-led projects, alongside the B.C. government’s plan to protect environmental factors like air quality and combat climate change, in addition to meeting the provisions of the environmental assessment certificate.

“The factors that lead to a decision remain the same, and it’s a balancing act ensuring when we assess those factors – social, economic and cultural – to ensure that they are meeting the objectives of the act,” said Singh. 

Isaac Thomas is a partner at Cassels Law in Vancouver and chair of its Aboriginal law group. He said the approval process of Cedar LNG was a good step for LNG developments and agrees that it provides some precedent for future Indigenous-led projects. 

“I don’t know if I would call it certainty of process, but I think it certainly helps considerably in the process in terms of having Indigenous-led projects or Indigenous partnerships and projects, but certainly positive from a project perspective,” said Thomas. 

Thomas said that whether an LNG project is First Nations-led or not, it should always meet the same legal requirements as laid out in the EAC and the energy action framework.

“In many ways, it shouldn’t be making a difference from a purely regulatory perspective,” said Thomas. “Having said that, it’s obviously very positive to see First Nations or Indigenous-led projects that have significant, and/or, material Indigenous investment in them.” 

Desjarlais from the Indigenous Resources Network said the path to supplying the world with clean energy from B.C. will run through the lands of Indigenous nations, and consequently they must be involved. 

While Desjarlais considers the B.C. government’s approach to approving LNG projects to be a progressive one, he said there is concern that its requirements regarding sustainability could jeopardize projects, such the proposed Nisga’a Nation’s Ksi Lisims LNG project on Pearse Island. Last week, the Nisga’a Nation submitted its proposal for Ksi Lisims for review under the EAC. 

“We want the government to take a balanced approach encouraging investment in resource development and ensuring our communities are properly consulted and benefited,” said Desjarlais. 

Regulatory framework should be ‘equal playing field’

As for non–First Nation led LNG projects, Thomas said the same framework for approval should apply to them as well. 

“If projects are competing for regulatory space, they should do so on an equal playing field,” said Thomas. “I think it’s fair to say that those with a large Indigenous component, certainly from one perspective, could be seen as being more positive, but that can’t be at the expense of the rest of the regulatory framework.” 

One non-First Nation led project is Canada LNG, also located in Kitimat, which was approved in 2015. Once-completed, LNG Canada will serve as another terminal for natural gas exports. 

“LNG Canada strongly encourages Indigenous participation and leadership in LNG projects,” said LNG Canada CEO Jason Klein. 

Klein believes the Cedar LNG project demonstrates economic reconciliation in action and represents an excellent opportunity for the Haisla Nation and its neighbours to advance their interests. 

“We view the Haisla Nation-led Cedar LNG project taking receipt of its Environmental Assessment Certificate as a positive development, and we wish Cedar LNG continued success as a final investment decision is considered.”