R.I.P. LNG: The Long and Short of it

The pros and cons of several billion dollars’ worth of proposed liquefied natural gas development going to waste
Braden Klassen, Photo Editor

After years of deliberations, research, campaigning, and arguments over the benefits and detriments of installing a new $36 billion liquefied natural gas facility in the vicinity of Lelu Island near Port Edward, the Pacific Northwest LNG project has officially been cancelled.

After being given the green light to proceed with building the coastal facility almost a year ago, Petronas, the Malaysian government-owned oil and gas corporation, has pulled away from the deal, citing the slowing down of global LNG market conditions as the reason. On July 25, the company website pacificnorthwestlng.com displayed a statement that “Pacific NorthWest LNG is disappointed to announce that its proposed LNG project will not be proceeding following an extensive review of the project by our partners.”

Even before PNW was conditionally approved by the federal government in September 2016, the project became mired in controversy and legal challenges, and criticisms of it were multifaceted.

For all of the economic benefits that having a new state-of-the-art LNG export operation would reap, many were still opposed to the construction of the facility. Claims were made that the provincial government neglected to adequately consult with the local First Nations. and the Gitxsan Nation appealed to the Federal court to review the approval, saying that Pacific Northwest infringed on their fishing rights that are protected under the Canadian Constitution.

Climate change activists were convinced that the millions of tonnes of carbon emissions annually produced by PNW would throw B.C. far behind its 2050 emissions reduction target.

Some economic analysts said that the impetus toward capitalizing on LNG market demand was based on inflated prices around 2013 and 2014, and that the long-term financial goals of the project were unsustainable. In fact, the hype around the project was so huge that its cancellation will likely have a rippling negative effect on B.C.’s fossil fuel economy.

When large collaborative ventures like PNW fall through, it sends a very distinct warning to possible global investors that B.C.—at least for the time being—is not the most ideal place to establish new fossil fuel projects. The economic effects of this kind of speculation are much more complicated to quantify in dollar amounts than more straightforward subjects like job numbers. They could continue to daunt sectors of the province’s commerce into the future.

Then again, the same thing has been said about the future costs that climate change will eventually incur, such as damaged infrastructure and lost productivity from increasingly intense fires and storms.

Years of effort went into planning for its construction, time-consuming economic negotiations had to take place in order for it to become a viable option for the provincial government to pursue, and yes, the potential creation of hundreds of skilled jobs for local British Columbians has now disappeared. All of this is time and money that seemingly could have been spent more wisely by the government.

Undoubtedly, the death of the Pacific Northwest facility project is a loss for B.C., though the gravity of that loss really depends on each person’s own perspective, their level of involvement in the LNG industry, and whether they prioritize the short-term economic outcome over the long-term environmental benefits.