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Canadian Aboriginal Group Rejects $1 Billion Fee for Natural Gas Project

Ian Austin, New York Times, May 20 2015 - 16:00

OTTAWA — A small aboriginal community in British Columbia has rejected a $1 billion payment for a natural gas project, the latest setback for the Canadian energy industry’s effort to bolster exports.

A group led by the Malaysian energy company Petronas had offered the money to the Lax Kw’alaams Band, to help push through a plan to build a liquefied natural gas ship terminal near their remote community. It is part of an overall pipeline and gas drilling project that the group, Pacific NorthWest LNG, values at 36 billion Canadian dollars.

The community, which has about 3,600 members, has consistently rejected the plan over concerns that it would harm fish habitats, particularly for salmon. After six public meetings over the issue, the band council voted against the payment.

“Hopefully, the public will recognize that unanimous consensus in communities (and where unanimity is the exception) against a project where those communities are offered in excess of a billion dollars, sends an unequivocal message this is not a money issue: This is environmental and cultural,” Garry Reece, mayor of the band, said in a statement announcing the vote on Wednesday.

Canada’s strategy to increase gas exports has been running into challenges on several fronts.

Keystone XL, a pipeline that would carry Canada’s oil sands to the American gulf coast, remains stalled in Washington. Other aboriginal groups have effectively blocked an oil sands pipeline project in British Columbia, the Northern Gateway.

Now, the liquefied natural gas project may also be in limbo.

About a decade ago, the Supreme Court of Canada ruled that native groups like the Lax Kw’alaams that never signed treaties must be consulted and accommodated when projects cross their land. Last year, the court strengthened the powers of such communities although it stopped short of requiring their consent. But few industry observers believe that Pacific NorthWest or any other energy project would ignore native groups’ wishes, a step that could invite litigation and perhaps civil unrest.

While several concerns were raised over the liquefied natural gas pipeline at the public meetings, the greatest worry appeared to involve the potential disruption of water grasses, which are used as shelter from predators by juvenile salmon. Environmental studies commissioned by Pacific NorthWest and the band reached opposite conclusions about the terminal’s impact on aquatic life. The results of a review by the Canadian Environmental Assessment Agency are not expected until the fall.