British Columbia

Pacific NorthWest LNG decision delayed as Ottawa asks more questions

The federal environment minister's long-awaited decision on the controversial Pacific NorthWest LNG plant near Prince Rupert, B.C. has been delayed at least three months.

3 month extension by Environment Minister Catherine McKenna sends B.C. officials to Ottawa to 'overcome delay'

An artist's rendering of the proposed Pacific NorthWest LNG plant near Prince Rupert, B.C., showing a suspension bridge past Flora Bank. (Pacific NorthWest LNG)

The federal environment minister's long-awaited decision on the controversial Pacific NorthWest LNG plant near Prince Rupert, B.C. has been delayed at least three months while environmental regulators demand answers from the company on potential impacts to fish, marine mammals and human health.

The company received a six-page letter from the Canadian Environmental Assessment Agency Friday, outlining its new questions, and the revised timeline — that the federal government will take up to 90 days to make a decision after it gets answers from Pacific NorthWest LNG, Ltd.

That news sent B.C. officials scrambling to Ottawa over the weekend trying to "overcome this delay and reach a positive final outcome," B.C. Minister of Natural Gas Development Rich Coleman said in a statement Monday.

Environment Minister Catherine McKenna was expected to make a decision this week on the $36-billion project, backed by Malaysia's Petronas, which would build a natural gas liquefaction and export facility on Lelu Island, to condense natural gas for export to Asian markets.

However, earlier this month the company sent regulators "significant new information," according to a statement from McKenna, prompting new questions.

"It is critical to get this decision right," McKenna's statement read. "Therefore I am providing the proponent an additional opportunity to clarify its mitigation plan, clarify its concerns on the current conditions, and ensure the risks posed are minimized."

Environment Minister Catherine McKenna, pictured earlier this month in the House of Commons during question period, has delayed a decision on the Pacific NorthWest LNG plant near Prince Rupert, B.C. (Fred Chartrand/Canadian Press)

'Night and day' construction

According to the CEAA letter, the company told it March 4 that it would be unfeasible to limit in-water marine construction to certain times, to limit impacts on herring spawing, salmon rearing, eulachon and marine mammal migrations — a proposed condition for approval.

Lelu Island is at the mouth of the Skeena River, described by the CEAA as "one of the largest and most diverse wild salmon watersheds in the world," and second only to the Fraser River for sockeye salmon.

The company said construction "must generally be able to proceed on a continuous basis, night and day," the CEAA letter states, raising uncertainty for the regulator about impacts on fish and marine mammals.

The letter also raises questions about human health, with round-the-clock disturbance from nighttime construction, and is requiring a "quantitative assessment" of the effects on human health from the nighttime light and noise.

Once the company submits new information, the government is giving itself 15 days to decide if their questions are answered, and then up to 90 days to make a decision on the project, according to the letter and the minister's statement.

Lelu Island, on B.C.'s North Coast, is located at the mouth of the Skeena River, which is B.C.'s second largest salmon-bearing river. (Brian Huntington)

B.C. wants to 'overcome' delay

The B.C. government has a lot riding on approval PNW LNG project, which it calls "the largest private-sector investment ever in Canadian history," promising 4,500 construction jobs and 330 operational jobs.

Premier Christy Clark won the last election in part on promises of LNG prosperity, but uncertainty exists whether any of the proposed liquefaction and export terminals will ever be built.

"I'm confident that any remaining questions can be answered completely and quickly," said Coleman's statement Monday. "They have to be."

"Jobs for British Columbians should not be held by unnecessary delays."

McKenna's statement calls the creation of a new LNG industry "a significant economic opportunity for Canadians and British Columbians," but also says development has to happen "in an environmentally sustainable manner.

"We are committed to rebuilding Canadians' trust in environmental assessments, and to do so we need to make sure assessments are thorough and credible."

Last week, hundreds of truckers, many of them from the gas sector, lined up for a rally in Fort St. John Wednesday to show their support for proposed LNG projects in B.C. (Brett Hyde/CBC)

With files from Richard Zussman