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Government of Canada approves $11B Pacific NorthWest LNG Project

The Federal Cabinet of the Government of Canada approved the $11-billion Pacific NorthWest LNG Project following completion of a federal environmental assessment. Pacific NorthWest LNG is a proposed natural gas liquefaction and export facility on Lelu Island within the District of Port Edward on land administered by the Prince Rupert Port Authority (PRPA). The facility would liquefy and export natural gas produced by Progress Energy Canada Ltd. in northeast British Columbia.

Both Pacific NorthWest LNG and Progress Energy are majority-owned by PETRONAS. Sinopec, JAPEX, Indian Oil Corporation and PetroleumBRUNEI are minority shareholders in the Pacific NorthWest LNG project.

The project represents one of Canada’s largest resource development projects with a total capital investment of up to $36 billion when accounting for upstream natural gas development.

The project is subject to over 190 legally binding conditions that will lessen the environmental impacts of the project. For example, Pacific NorthWest LNG Ltd. will be required to comply with mitigation measures that will minimize adverse effects on fish, fish habitat, marine mammals, wetlands, migratory birds, and human health.

The project will be subject to a compliance and enforcement regime, which includes establishing environmental monitoring committees comprising Indigenous peoples, and federal and provincial representatives, for the first time. Technical experts will monitor the project and will have the authority to stop project activities that do not comply with the conditions.

The decision also imposes a maximum cap on annual project greenhouse gas emissions—a maximum of 4.3 Mt of CO2e per year, 900,000 tonnes less than what had initially been proposed by the proponent. In addition, upstream emissions will be reduced by the government’s commitment to regulate methane emissions from the oil and gas sector, and by British Columbia’s plan for electrification of upstream extraction of natural gas.

First Ministers agreed in the Vancouver Declaration to implement policies to meet Canada’s 2030 target. As a result, emissions from all projects, including this one, must fit within Canada’s plan to meet that target, which First Ministers will discuss this Fall. British Columbia’s commitment that it will increase its carbon price in line with the Pan Canadian Framework to be announced later this Fall reflects this principle.

Scientific experts from Natural Resources Canada, Transport Canada, Fisheries and Oceans Canada, Environment and Climate Change Canada and Health Canada provided scientific and technical advice throughout the assessment. Indigenous peoples brought forward traditional knowledge including observations about marine conditions that prompted additional study. The review period was extended so that federal scientists could thoroughly assess the proponent’s information, require supplementary studies and review additional external research. As a result of this review, mitigation measures and monitoring requirements were put in place. Scientists found no significant effects on fish with the legally-binding mitigation and monitoring conditions.

The Canadian Environmental Assessment Agency conducted extensive consultations throughout the environmental assessment and also provided four formal opportunities for public comments and input. More than 34,000 comments were received from individuals and groups on the draft environmental assessment report. Concerns raised by the public included effects on fish and fish habitat, the volume of greenhouse gas emissions and impacts on Indigenous rights and title. Support for the project focused on the project’s economic impact and job creation. Some communities expressed concern about the impact of increased marine shipping.


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