Competing in the global LNG market: Evolving Canada's opportunity into reality
The Canadian LNG industry is comprised of global players who all take their obligations to work cooperatively with Canadian First Nations communities very seriously. These developers bring positive global experiences to the table in doing just that in many other jurisdictions, and in many cases they have long-standing operations in Canada and mutually beneficial relationships already in place with many of the impacted First Nations communities. There has already been preliminary support for the proposed Kitimat facility and two north coast First Nations have already signed revenue-sharing agreements with the BC government related to the development of a proposed export terminal on their traditional territories near Prince Rupert, BC.
Still, this issue — gaining First Nations support — may be the most complex for energy companies to address. Technical and cost challenges such as LNG facility design can certainly impact project economics, but those issues are in many ways more manageable than gaining acceptance and support from communities that are determined to preserve their heritage and traditional territories and where there isn’t a shared consensus across all of the various First Nations communities.
Project proponents must continue to engage in extensive consultation efforts, and new models of cooperation and sharing will have to emerge. Training and education programs, real and lasting job opportunities, support for social programs, community investment and finding a way to share the other economic benefits are all critical tasks. And, to the extent that First Nations take up equity positions or participate in other creative gain-sharing structures as part of projects, attention will have to be given to make those structures transparent, well-understood and viable.
Though getting the deal-terms agreed to will require significant effort, additional challenges lie in implementation once the signing ceremony takes place. Aboriginal content provisions, funding models, effective training programs, and the reconciliation of competing interests, both within certain communities and across territories where boundaries are in dispute, will require the development of specialized skills and a culture of collaboration and patience.
Both the BC and Federal governments have a role to play. But simply granting regulatory approval will not be enough to move projects forward. Many anticipate the potential of ongoing legal challenges. That’s why all levels of government are proactively identifying creative solutions to address these issues.
Each of these obstacles requires careful consideration and thoughtful resolution. They are complex and time consuming — which increases risks and costs — and ultimately impact the competitiveness of the BC LNG opportunity. But notwithstanding the challenges, there is a positive way forward. Many First Nations communities recognize and want a part of the opportunity in BC’s LNG development plans. Ultimately, respect, trust and cooperation can be achieved by maintaining a collaborative mindset.