Thursday, July 24, 2014
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B.C. First Nations eyeing LNG cash windfall

Environmental concerns must be addressed before they will give access to land, official says

By Gordon Hoekstra, Vancouver Sun

VANCOUVER — Northern B.C. First Nations are developing a strategy they hope will net them hundreds of millions of dollars if they support liquefied natural gas projects and pipelines.

If projects do go ahead, with investment decisions in late 2014 or 2015, First Nations say there’s a potential to ink deals for as much as $600 million for each pipeline project.

First Nations also want to share in revenues from a so-called provincial prosperity fund, expected to reach $100 billion in the next three decades.

But dozens of First Nations stretching from northeastern B.C., where the gas will be drilled, to the northwest coast, where the plants will be built, want their environmental concerns addressed.

That has to happen before they will provide consent on numerous proposals in their vast traditional territories in the province.

“Our first benchmark is the environment. We are not opposed to industry, but we really don’t like it when industry doesn’t do things as well as they possibly can,” says Coastal First Nations executive director Art Sterritt.

While Sterritt says industry appears to be listening to First Nations, it’s imperative that both industry and government drive down greenhouse gas and other emissions from their proposed plants.

Sterritt said Coastal First Nations also have concerns over hydraulic fracturing, more commonly called fracking, used to extract gas in northeastern B.C.

“Some of our people don’t want to even talk about a share of the revenue until we’ve satisfied ourselves that fracking and water use is not doing harm to the First Nations (in northeastern B.C.),” he said.

Sterritt, like other First Nations leaders, has been attending a series of summits in northern B.C. to discuss a collective strategy.

Meetings have been held in Metlakatla, Prince George, Fort St. John and Fort Nelson. The Coastal First Nations took its entire board to examine fracking practices and concerns at the Fort Nelson meeting.

David Luggi, a negotiator for the Carrier Sekani Tribal Council in north-central B.C., said First Nations are more open to natural gas pipelines than oil pipelines because in a worst-case scenario the gas will evaporate if a pipe bursts. Many First Nations in Northern B.C. have vehemently opposed Enbridge’s $6.5-billion Northern Gateway pipeline over concerns a spill will irreparably harm important salmon-bearing waterways or the marine environment.

But government-to-government negotiations must take place to hammer out revenue-sharing terms, said Luggi.

“We’re not going to conclude anything with the companies until we see what the province is offering,” he said.

Last week, two First Nations signed the first revenue-sharing agreement with the province over the proposed Aurora LNG development on their traditional territories near Prince Rupert. The deal with the Metlakatla and Lax Kw’alaams nations could be worth $15 million.

First Nations appear to be taking a pragmatic approach to LNG negotiations with government and industry.

They have noted that it is likely only one or two projects will be built, and possibly none depending on the tax and regulatory costs in B.C., and on market prices.

In a discussion paper for use in the summits, First Nations conclude working together will give the greatest chance to reach their goals, and that it may make sense to negotiate collectively on energy corridors.

Dave Porter, CEO of the B.C. First Nations Energy and Mining Council, said building First Nations literacy on energy issues is critical.

It’s also important for trust to be built with the federal government, which has a role to play in issues such as tanker safety, fisheries and training, he said.

While both the provincial and federal government have been making the right signals, Porter said First Nations are still waiting for Ottawa’s response to recommendations from special envoy Douglas Eyford, who was appointed by Prime Minister Stephen Harper.

Eyford bluntly concluded there had been no constructive dialogue between First Nations and the federal government on pipelines.

He suggested creating a Crown-First Nations-corporate “tripartite energy working group” as a forum for open dialogue on energy projects.

Not all First Nations are willing to examine LNG development.

There is at least one First Nation in north-central B.C. — the Unist’ot’en — that opposes natural gas pipelines and oil pipelines.

However as early as 2009, 15 First Nations inked a deal to take an up to 30-per-cent stake in the natural gas Pacific Trails Pipeline. When another company bought out the pipeline rights, it netted them a $200-million prospective settlement.

While there are more than a dozen projects proposals in B.C. from global energy giants such as Shell, Petronas, Chevron, BG Group and ExxonMobil, no companies have announced a final investment decision.

Companies have also pushed back recently at the level of a new LNG tax proposed by the B.C. government on the income from plants.

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