The Ksi Lisims facility near the Nass estuary, backed by the Nisg̱a’a Nation, would produce nearly as much liquefied natural gas per year as the LNG Canada plant.

LNG Canada is the biggest name in British Columbia’s liquefied natural gas game. It’s also the project closest to completion. But it’s not the only large LNG export plan in the works in the province.

The Nisg̱a’a Nation, north of Kitimat, B.C., is leading an effort to construct an LNG facility called Ksi Lisims, pronounced s’lisims, which means “from the Nass River” in the Nisg̱a’a language.

Ksi Lisims would be a floating LNG plant near the Nass estuary at the north end of Pearse Island, close to the Alaska border. It would be capable of producing up to 12 million tonnes of LNG annually, nearly matching LNG Canada’s initial 14-million-tonne production capacity. Like LNG Canada, it would be supplied by fracked gas from B.C.’s northeast.

While the LNG Canada plant in Kitimat is set to begin testing its equipment soon, the B.C. Environmental Assessment Office is still evaluating the Ksi Lisims LNG production and export facility.

The Ksi Lisims project poses significant challenges for B.C.’s climate change goals, energy supply and commitment to upholding Indigenous Rights and reconciliation. Ksi Lisims is backed by the Nisg̱a’a Nation but other nearby First Nations communities worry about its impacts on their rights and traditions.

Documents previously obtained by The Narwhal indicate the B.C. government hopes to provide electricity for Ksi Lisims with a new taxpayer-funded transmission line. And while Ksi Lisims proponents say electrification will significantly lower emissions, it’s unclear if the province, facing widespread drought and reduced hydro capacity, will have enough electricity to meet escalating demand from the LNG sector.

Here’s what you need to know about the Ksi Lisims project.

What would Ksi Lisims LNG mean for local First Nations?

For the Nisg̱a’a, Ksi Lisims is an economic development opportunity that will benefit both the nation and the world.

“The Nisg̱a’a Nation has long tried to establish an economic base in the Nass Valley … in a way that agrees with our principles and our values, as we live in harmony with our lands and we move forward to building that economic base,” Nisg̱a’a Nation president Eva Clayton told attendees at the BC Natural Resources Forum in Prince George in January.

“LNG will be a transformational opportunity for us to build our economy.”

Yet the project faces stiff opposition from some of the six other First Nations participating in the environmental assessment process. The Lax Kw’alaams Band says the LNG facility would negatively affect its traditional territory and has flagged concerns about the project’s potential impact on B.C.’s ability to meet its climate targets.

In February, Gitanyow — a community of the Gitxsan people — wrote to Ksi Lisims LNG corporate leadership, outlining concerns about the project’s impacts, including on local salmon populations. The community says it is willing to take the project to court if necessary.

“Every nation has that right to pursue their economic development,” Tara Marsden, Wilp sustainability director for Gitanyow Hereditary Chiefs, told The Narwhal. “But when you have linear projects, especially in B.C., you cross so many different territories and you really need the support and the consent of all those nations to live up to the United Nations Declaration on the Rights of Indigenous Peoples.”

The Nass estuary, close to where the Ksi Lisims facility would be built, is “a very thriving, biodiverse area,” Marsden said. The estuary is home to salmon, oolichan and many other fish, as well as shellfish and mammal species important to local First Nations. Marsden said wildlife habitat will be impacted by construction of the LNG facility.

In a project summary submitted as part of its application for an environmental certificate, Ksi Lisims LNG acknowledges the project’s potential impacts on freshwater and marine ecosystems, including increased sediment in streams affected by construction and higher risk of injury and death for marine fish, mammals and sea turtles due to shipping.

However, Ksi Lisims is not expected to measurably change overall populations of fish, invertebrate, marine mammal or sea turtle populations, according to the summary.

The ongoing environmental assessment process aims to address concerns about proposed projects, including from First Nations with differing views.

“Resolving disputes between any segments of society is complicated,” B.C. Environment Minister George Heyman told The Narwhal. “Resolving differences between First Nations over the impacts of a project is just as complicated.”

“I know the environmental assessment office takes that challenge very, very seriously and it is a difficult challenge,” Heyman said. “Like anything in society, not everybody agrees.”

It’s not just First Nations that question whether Ksi Lisims is worth pursuing. During a public comment period on Ksi Lisims, the B.C. Environmental Assessment Office received more than 500 written submissions, including one from the City of Terrace saying big resource development projects don’t always deliver the economic benefits they promise. Although LNG Canada has attracted many people to Kitimat, much of its impact on Terrace has been negative, according to the city’s submission.

“Citizens have seen their municipal services erode,” the city said. “The influx of workers required for this type of development has seen housing in Terrace reach an all-time high in prices and a vacancy rate of less than one per cent.”

Even though the B.C. government has not yet officially approved the project, Ksi Lisims inked its first sale and purchase agreement in February when Shell Canada agreed to buy two million tonnes of LNG per year from the plant starting in 2028.

The Nisg̱a’a Nation did not respond to a request for comment.

How will fracked gas be shipped to the Ksi Lisims facility?

The Ksi Lisims LNG project achieved another milestone in March, when the Nisg̱a’a Nation and Western LNG announced a deal to buy TC Energy’s proposed Prince Rupert gas pipeline project. TC Energy is the same company building the Coastal GasLink pipeline to supply LNG Canada.

Originally approved in 2014, the Prince Rupert gas pipeline project was intended to supply the proposed Pacific NorthWest LNG facility on Lelu Island, near Prince Rupert. That project was cancelled in 2017, leaving the transmission line in limbo. Then, in 2019, TC Energy obtained a five-year extension to its environmental certificate. The extension came with a slew of conditions the company must meet before Nov. 25, including completing a cumulative effects study for the project in consultation with First Nations.

Once the sale of the planned pipeline is finalized, the Nisg̱a’a Nation and Western LNG will assume responsibility for the permit condition obligations, according to an email the BC Energy Regulator sent to The Narwhal in response to questions. That includes ensuring the pipeline project qualifies as substantially started by Nov. 25. The environmental assessment office will make that determination by examining how much work has been done on the project, with a focus on land-based physical activities that affect the environment, according to an email from the environment ministry.

Failure to meet the conditions will send the project back to the drawing board, leaving Ksi Lisims without a supply of natural gas.

If the project proceeds, the pipeline would stretch from the Montney gas fields in northeast B.C. and Alberta to the Ksi Lisims facility — including through Gitanyow territory.

The Gitanyow agreed to the pipeline project in principle in 2014, but Marsden said much has changed in the past decade.

“In terms of climate change, the advance of the [United Nations] Declaration on the Rights of Indigenous Peoples, the advance of Gitanyow policies and laws that we’ve developed around water, around protected areas — there is so much change,” she said. “At the time, the project was not what it could be today. It was still a big risk, but in a 2014 context it was not the extreme risk that we view it as today.”

Construction of the Coastal GasLink pipeline — a project fined for breaking multiple environmental laws — and enforcement actions against Indigenous land defenders by the RCMP’s Critical Response Unit (formerly known as the Community-Industry Response Group, or C-IRG) has also changed the way the Gitanyow community thinks about the Ksi Lisims pipeline, Marsden added.

She said TC Energy wants to “refresh” the 2014 agreement it signed with the Gitanyow.

Marsden said she’s baffled the pipeline project and Ksi Lisims LNG are treated as separate projects in the environmental assessment process, even though they are closely intertwined. She said the splintered process — in which the impacts of building supply pipelines are not factored into environmental assessments for LNG facilities — allows proponents to leave out potential downsides of their projects while emphasizing far-reaching benefits.

“They don’t apply the same splitting principle to the benefits,” Marsden said, noting Ksi Lisims emphasizes its LNG will offer cleaner fuel to Asian markets. “They want to talk about the benefits of replacing coal in Asia, that’s their bottom line … so they want to look at something way beyond the scope of anything the B.C. government can control. But they don’t want to look at the impacts associated with the project that are right here in B.C.”

The LNG industry claims liquefied natural gas will displace coal power overseas. Critics say boosting fossil fuel supply could delay urgently needed transitions to renewable energy.

Wait, how many LNG projects are in the works in B.C.?

In addition to Ksi Lisims and LNG Canada, four LNG projects are at various stages of development in B.C.

In March 2023, Premier David Eby announced the approval of Cedar LNG, a joint venture between the Haisla First Nation and Pembina Pipeline Corporation that will produce and ship LNG from a floating terminal in the Douglas Channel near Kitimat. Cedar LNG, which aims to produce about three million tonnes of LNG per year, will be supplied by the Coastal GasLink pipeline — the same pipeline feeding LNG Canada’s nearby plant.

In Squamish, Woodfibre LNG — owned by Enbridge and Indonesian billionaire Sukanto Tanoto — was to begin construction this spring, but experienced a recent setback when the company’s plan to house workers on a massive ship anchored in Howe Sound was rejected by Squamish council. The Woodfibre facility is expected to produce about two million tonnes of LNG per year.

And FortisBC wants to expand its Tilbury LNG production plant in Delta, boosting capacity from 250,000 tonnes to 3.4 million tonnes per year, potentially making it the third-largest LNG plant in the province. The planned expansion is separate from FortisBC’s marine jetty project, which recently received an environmental certificate. LNG produced by FortisBC’s existing plant will be transferred through the jetty to fuel ships and will also be sent to offshore export markets.

The latest LNG project proposed in the province is Summit Lake PG LNG, which would be located at an industrial site about 30 kilometres north of Prince George. The facility would produce about 2.7 million tonnes of LNG per year for shipment by rail to Prince Rupert for export. Summit Lake is backed by JX LNG Canada, an Alberta-based subsidiary of the Chinese company Changchun Jixing New Energy Ltd. The project, which is undergoing an environmental assessment, is open for public comment.

What about carbon pollution from LNG?

Under B.C.’s regulatory regime, LNG plants can emit up to 0.16 tonnes of carbon dioxide equivalent for each tonne of LNG produced. LNG Canada will come in just under that threshold at 0.15 tonnes of carbon emissions for every tonne of LNG, assuming proposed mitigation measures, such as a fugitive emissions survey program, are in place.

Ksi Lisims plans to have a much lower emission profile by relying on electricity to power its operations (something LNG Canada is hoping to do as well). If fully electrified, Ksi Lisims would produce 0.018 tonnes of carbon emissions for every tonne of LNG.

How and when the project will get access to hydro power remains unclear. BC Hydro is advancing a $3-billion transmission line that would transport power across northwest B.C. but questions remain about whether the province has enough power to supply projects like Ksi Lisims, who will pay for the line and whether it will be able to sidestep an environmental assessment.

Rising demand and persistent drought are putting pressure on B.C.’s power grid, increasing the province’s reliance on imported power.

In the interim, Ksi Lisims plans to rely on temporary power barges fuelled by natural gas, pushing its emission intensity up to 0.156 tonnes of carbon emissions for every tonne of LNG produced, just under B.C.’s threshold.

Is there a market for so much LNG from B.C.?

If all LNG projects proposed in B.C. become operational, they would collectively produce more than 40 million tonnes of LNG per year, according to Natural Resources Canada. That includes Phase 2 of LNG Canada, which has been approved by the B.C. government. LNG Canada, a consortium of some of the world’s most profitable oil and gas corporations, including Shell, has hinted Phase 2 will proceed but has not yet announced a final investment decision.

Much like the substance itself, natural gas markets can be volatile. Prices spiked in the wake of Russia’s invasion of Ukraine in 2022 but have dropped due to softening demand, according to a report from the Institute for Energy Economics and Financial Analysis, a U.S.-based nonprofit focused on the energy transition.

Proponents say B.C.’s LNG sector is subject to strict environmental and emissions requirements, making it attractive for countries like Japan and South Korea that aim to reduce their own emissions.

“The messaging that I get from the international world is that they need our LNG,” Clayton, president of the Nisg̱a’a Nation, said at the January resource forum. “We have a responsibility as Canadians to help the world get off the coal.”

But nuclear power and renewable energy sources like wind and solar are increasingly displacing LNG as countries look to green their power grids. South Korea’s LNG imports dropped by five per cent last year, according to the institute’s report, while Japan has reduced LNG imports by 20 per cent since 2018. In Europe, where demand for gas power is expected to remain strong due to Russia’s continuing aggression in Ukraine, gas consumption has dropped by 20 per cent over the past two years.

“Lackluster demand growth and a massive wave of new export capacity are poised to send global liquefied natural gas markets into oversupply within two years,” the institute’s report noted.

What’s the next step for Ksi Lisims LNG?

The environmental assessment office is unlikely to complete its review of the Ksi Lisims project before B.C.’s October election, in which the impacts of climate change and the future of resource development are likely to be prominent issues.

Following the end of a public comment period in December 2023, the assessment office requested additional information from the Nisg̱a’a Nation and its partners to address concerns identified during the public engagement period. Concerns included the facility’s carbon emissions, power requirements and potential environmental and wildlife impacts.

The proponents have up to one year to submit a revised application.

The BC NDP government is broadly supportive of LNG development but has also committed to reducing carbon emissions — including developing an emissions cap for the oil and gas sector and requiring all new LNG projects to have a credible plan to be net zero by 2030.

“In the case of natural gas and LNG, we’ve been very clear,” Heyman said. “We’re serious about our Clean BC plan, we’re serious about meeting our climate targets, we’re serious about the oil and gas sector reducing its emissions.”

Two of the province’s three opposition parties are pledging to make the LNG sector a major player in B.C.’s economy.

BC United (formerly the BC Liberals) frames the BC NDP’s Clean BC plan as a costly job killer and party leader Kevin Falcon has pledged to scrap the plan if his party forms government. Falcon has also said a BC United government would “go all in on B.C. LNG” to help displace coal power in Asia.

The province’s Conservatives, which have been polling far ahead of BC United in recent months, are also promising to “dramatically expand B.C.’s natural gas production and LNG export facilities” for the same reasons.

Only the BC Green Party opposes LNG development. Green MLA Adam Olsen, a member of the Tsartlip First Nation, has criticized the idea that LNG projects can represent reconciliation in action.

“I am deeply concerned that the BC NDP is pitching climate change-inducing fossil fuel projects as economic reconciliation with Indigenous people,” Olsen said in the wake of the Cedar LNG decision.

“I’m not surprised to see that industry bringing their billions of capital to partner with Indigenous people but true economic reconciliation must include the provincial government doing more to proactively increase access for Indigenous nations in clean energy production.”

Read the original article by Shannon Waters on The Narwhal.