Canadian Regulator Sees Petronas Project Harming Environment

  • Regulator cites high carbon emissions, porpoise habitat damage
  • Proposal must meet conditions if given approval to proceed

The Canadian regulator reviewing a natural gas export project on the nation’s Pacific Coast said the C$36 billion ($26 billion) development led by Petroliam Nasional Bhd. would probably cause “significant adverse environmental effects.”

The Canadian Environmental Assessment Agency released on Wednesday the draft of a report that’ll be reviewed by the government before it makes a decision on the liquefied natural gas proposal. The agency raised concerns about greenhouse gas emissions and the destruction of harbor porpoise habitat, even with mitigation measures, and said the development probably wouldn’t significantly harm the environment in other ways. It added 20 pages of conditions for the project to move ahead, should the federal government give its approval.

Canada’s environment minister will have the final say on whether the Pacific NorthWest LNG project led by Petronas, as the Malaysian company is known, can proceed. The proposal is coming under new policies announced by Prime Minister Justin Trudeau’s Liberal government last month, including more consultation and an assessment of the carbon emissions tied to the facility and gas-field drilling. Trudeau has promised to overhaul resource project reviews to overcome environmental opposition.

“It is likely the Canadian federal government will approve the project subject to achievable conditions," David Austin, associate counsel at Clark Wilson LLP in Vancouver, said in an e-mail. "But considerably more effort is going to have to be put into reducing greenhouse gas emissions from the pipelines and natural gas fields that would supply it.”

The proposal, also backed by Indian Oil Corp., Japan Petroleum Exploration Co., China Petroleum & Chemical Corp. and Brunei National Petroleum Co., was cleared by the report for not being likely to cause significant harm to marine fish and fish habitat. Environmental opponents to the project and an aboriginal community with traditional lands at the shipping terminal site, the Lax Kw’alaams Band, had raised concerns about the potential for the development to destroy important salmon rearing habitat.

The regulator was most focused on carbon emissions.

Harbor Porpoise

After considering the implementation of best achievable technology and management practices and compliance with provincial law, the regulator said the project would result in 5.28 million metric tons of carbon a year, “a marked increase” at both provincial and national levels. Emissions tied to gas drilling would also be “high in magnitude, continuous, irreversible and global in extent” at 6.5 million to 8.7 million tons a year.

Harbor porpoise frequenting waters near the project, which are sensitive to underwater noise, would be negatively affected particularly during construction, the agency found.

Pacific NorthWest LNG said it’s reviewing the report and conditions. “Pacific NorthWest LNG would like to thank the government of Canada, First Nations and community members for their constructive and rigorous approach with respect to the federal environmental assessment,” Spencer Sproule, a spokesman, said Wednesday in an e-mail.

The project, among almost two dozen proposed for Canada’s Pacific Coast, would export 12 million metric tons a year of LNG. Last June, the venture said it would proceed pending outstanding approvals. Royal Dutch Shell Plc and Exxon Mobil Corp. are among other proponents for Canadian LNG projects, which are competing with supplies coming online from Australia and the U.S.

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