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BC’s OK of Huge Dam Could Impact LNG Projects

The Canadian government has confirmed that large-scale industrial development still tops the national agenda by authorizing construction of a hotly contested 1,100 MW dam project on the Peace River in northern British Columbia (BC).

After a seven-year regulatory process, federal Environment Minister Leona Aglukkak awarded approval to BC Hydro’s C$7.9 billion (US$6.9 billion) Site C proposal, over protests by aboriginal and green groups.

The decision to allow dam construction is liable to spill over into the regulatory arena for liquefied natural gas (LNG) export terminals proposed on BC’s northern Pacific Coast and inland for supporting shale supply drilling and pipelines.

Site C is just a seven-kilometer (four-mile) stroll southwest of the BC gas- and oilfield operations capital, Fort St. John. The native population in the region is high and has to date largely co-operated with “upstream” exploration and development activity in preparation for LNG exports proposed by 17 terminal projects.

On the negative side, the Site C approval promptly fueled environmental and especially aboriginal resistance against LNG development.

Peace River region native community leaders, supported by the BC Union of Indian Chiefs and the national Assembly of First Nations, served notice that dam construction will lower aboriginal tolerance of LNG schemes.

Native leaders said they have told BC Premier Christy Clark that the province cannot disrupt aboriginal communities and their claimed traditional lands with both dam and LNG development.

But on the positive side, the dam project is expected to generate improvements to regional infrastructure such as roads, bridges and worker accommodations that will also improve conditions for gas supply activity.

In addition, although the Site C proposal predates the LNG projects and formal economic forecasts for the dam make no direct link between the two sectors, recent projections suggest a connection will develop.

Even without counting LNG export facilities, BC power consumption is projected to grow by 40% over the next 20 years. With Canada’s gentlest climate by far, BC is a perpetual magnet for national migration as well as international immigration.

“An emerging LNG sector,” with high demand for refrigeration power to chill gas into its internationally traded liquid form, “could further increase the demand for electricity,” says a recent BC Hydro list of Site C benefits. The power company also claims 80% support for the Site C project, provided approval conditions are satisfied, in province-wide polls.

Within hours BC Environment Minister Mary Polak and Lands Minister Steve Thomson granted provincial permits. BC Hydro set a target of January, 2015, for launching construction by starting site clearing. The project’s owner is a wholly owned subsidiary of the BC government, structured as a Crown corporation reporting to the provincial energy ministry.

The decisions followed a lukewarm final report on a marathon of studies and hearings since 2007 by a joint review panel found which found that the hydroelectric dam’s 93-square-kilometer (37-square-mile) reservoir and associated facilities would destroy farms, harm natural landscapes and wildlife, and disrupt territory claimed by native communities.

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