Ottawa asks for extra time for environmental assessment of Pacific NorthWest LNG

Malaysia’s state-owned Petronas has hit yet another hurdle on the road to developing its Pacific NorthWest LNG project in British Columbia, Canada. The Canadian Environmental Assessment Agency (CEAA) requested three extra months to review the project, reports Reuters. The Canadian government in Ottawa said it remains committed to reaching a final decision on the project this year.

The CEAA was original set to deliver its environmental assessment report by March 22, but the agency said it needed more data from the project’s backers after they handed over a series of documents and observations March 4.

Pacific NorthWest LNG has faced a number of obstacles as the project waits for approval ranging from environmental concerns to worries that the plant’s placement could impact a critical salmon habitat. The Petronas project has been in the regulatory process for nearly three years waiting for a permit to build the LNG facilities.

The request for more time to review the project’s impacts could indicate that the new Trudeau government may seek more stringent environmental regulations before letting the project move forward, potentially making the project uneconomical, and forcing Petronas to write off billions invested in the project already. Trudeau’s Liberal government came to power in November promising to address environmental concerns.

Pacific NorthWest LNG


Pembina Institute, an environmental think tank, believes that the Pacific NorthWest LNG could account for 75%-87% of emission allowed under British Columbia’s 2050 environmental targets, making it the province’s largest source of carbon pollution if upstream emissions are factored in with the plant.

A decision on Pacific NorthWest LNG could set the tone for how Trudeau’s government balances environmental concerns against the needs of the oil and gas industry, which has been suffering from the protracted decline in oil prices.

Canadian producers looking for outlets into the international market

Historically, the U.S. has been the primary purchaser of Canadian hydrocarbons, but with the shale revolution, the U.S. has become increasingly energy independent.

“We are losing our market in the U.S. for our gas,” Dave Tulk of Calgary-based Gas Processing Management Inc. told CBC. “The ability of our gas to compete with the gas coming out of the shale plays … it’s a real concern.”

The construction of LNG plants like Pacific NorthWest LNG would give Canadian producers a much needed outlet into global markets.

“We, as Western Canada, need LNG to go off our west coast,” said Tulk. “That creates a huge number of opportunities for us in terms of sustaining and growing our gas industry, sustaining and growing our LNG and petrochemical industries. Getting LNG is a critical strategic project that needs to happen for Canada.”

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