Late last year, Royal Dutch Shell gave the greenlight to a massive LNG export terminal on Canada’s Pacific Coast, one of the largest investments in LNG in years. But like other fossil fuel projects in Canada, the plans have run into some trouble.
Shell’s LNG Canada project hinges on a crucial pipeline that will connect gas fields along the border of British Columbia and Alberta to the Pacific coast at Kitimat. The Coastal GasLink pipeline is to be constructed by TransCanada (or, rather TC Energy, as the company now wants to be known).
The Coastal GasLink pipeline was supposed to mark a departure from previous long distance pipelines in Canada – a project that would, from the start, adequately consult with First Nations. Prior pipeline projects – Enbridge’s Northern Gateway and Line 3; TransCanada’s Energy East; as well as Kinder Morgan’s Trans Mountain Expansion – ran into stiff resistance from various First Nations.
TransCanada hoped that Coastal GasLink would be different. But, it too is now meeting resistance. Members of the Wet’suwet’en nation threw up makeshift barricades to stop construction on their land in recent weeks. On January 7, the Royal Canadian Mounted Police broke through those barricades and arrested at least 14 people. RCMP said it was enforcing a court order, but the clash made national and international headlines.
The situation is complex because the Wet’suwet’en nation never signed a treaty with Canada, so their territory is neither ceded nor even formally acknowledged by Canada. “What I see is a long history of the Canadian government doing its best to avoid acknowledging the existence of other systems of government,” Gordon Christie, a scholar of indigenous law at the University of British Columbia, told The Guardian. Related: America’s Remarkable Dual Achievement In Energy
TransCanada inked agreements with elected officials from First Nations tribes along the route, the company maintains that it has conducted extensive consultation with First Nations. But at least five Wet’suwet’en chiefs oppose the project. “The goal has always been the same for Canada and indigenous people: it’s to remove us from our land and have access to the resources,” Jennifer Wickham, a member of one of five clans making up the Wet’suwet’en nation, told The Guardian. “That storyline has never changed.”
The protest camp sparked protests across the country. On Wednesday, a testy and fragile truce between Wet’suwet’en chiefs and the police dialed down tensions. Workers for Coastal GasLink pipeline gained access to certain areas to proceed with preparations for construction, but the police agreed not to dismantle a nearby camp.
Prime Minister Justin Trudeau has aggressively supported Shell’s LNG Canada export terminal and the associated Coastal GasLink pipeline, hailing the $40 billion project as the largest private sector investment in the country’s history. Still, at a rally in British Columbia, he faced angry crowds.
It’s unclear what happens next. The Wet’suwet’en said that their resistance “was not over” in a statement on their website. “The Wet’suwet’en Hereditary Chiefs have by absolutely no means agreed to let the Coastal GasLink pipeline tear through our traditional territories,” the statement read. “The agreement we made allows Coastal GasLink to temporarily work behind the Unist’ot’en gate. This will continue to be a waste of their time and resources as they will not be building a pipeline in our traditional territory.” Related: Haynesville Shale About To Break All-Time Gas Output Record
The pipeline company seems a bit anxious about potential delays. “It’s important to understand that construction time lines require us to gain access to the area and begin activities as soon as we safely can to keep the current construction schedule and time lines in place,” Jacquelynn Benson, a spokeswoman for Coast GasLink, told Bloomberg. “Any delays to that would affect our ability to meet those dates.”
A separate issue could create another hurdle for TransCanada. A lawsuit alleges that the pipeline falls under federal, not provincial, jurisdiction. If that turns out to be the case, the pipeline project could potentially face a lengthy delay as it would then require federal regulatory reviews.
It is way too early to suggest that Shell and TransCanada are facing the same obstacles that killed Northern Gateway, Energy East and severely wounded the Trans Mountain Expansion. But Shell’s LNG project, which is one of the largest investments in new LNG export capacity in the world in recent years, may not experience the smooth ride that company executives had expected.
By Nick Cunningham of Oilprice.com
More Top Reads From Oilprice.com:
- Oil Enters Bull Market As Shorts Are Wiped Out
- Colombia’s Oil Rebound Off To A Rough Start In 2019
- Darkening Outlook For Global Economy Threatens Crude