Natasha Bulowski
Local Journalism Initiative Reporter
Canada’s National Observer
Months after promising that respect for Indigenous rights is fundamental to his major projects agenda, Prime Minister Mark Carney announced the Ksi Lisims LNG project — which would require a new gas pipeline snaking through First Nations territory — will head to the Major Projects Office for possible fast-tracking.
In Carney’s telling, Ksi Lisims is one piece of a trio of interlocking major projects: a floating liquefaction plant off the northwest coast of British Columbia, the estimated 900-kilometre Prince Rupert Gas Transmission (PRGT) pipeline to move gas from northern BC to the coast, and a new transmission line to power the export terminal with electricity.
“LNG is an essential fuel for the energy transition,” he said. “We’re home to the world’s fourth largest reserves of natural gas, and we have the potential to supply up to 100 million tonnes annually of new LNG exports to Asia. But that will require major investment across a wide range of infrastructure.”
Carney said referring Ksi Lisims to the Major Projects Office does not mean the project is approved, but it does mean the federal government will be working hard to put the conditions in place for it to move forward. That includes offering tax breaks for new LNG production, streamlining environmental assessments, and potentially offering impacted First Nations equity ownership through Ottawa’s Indigenous Loan Guarantee program.
Using federal resources to advance LNG projects will put Carney’s government on a collision course with some First Nations, several of which have already filed court challenges against the Ksi Lisims and PRGT projects.
Indigenous leaders, climate advocates and financial experts immediately condemned the decision.
Referring Ksi Lisims to the Major Projects Office is a “blatant act of aggression,” Tara Marsden, Gitanyow Wilp sustainability director, said in an interview with Canada’s National Observer. “I don’t think it should be seen as anything other than that.”
Expect court challenges
Neither the Ksi Lisims LNG export terminal nor the PRGT pipeline have received consent from all affected First Nations, despite consent being a requirement under British Columbia’s Declaration on the Rights of Indigenous Peoples Act (DRIPA).
In October, both the Lax Kw’alaams Band and Metlakatla First Nation separately challenged Ksi Lisims in federal court. Gitxsan Hereditary Chief Charles Wright filed a request for judicial review to revoke the PRGT’s environmental certificate in September. (It was dismissed, but an appeal is outstanding.)
When British Columbia granted its environmental certificate to Ksi Lisims in September, it noted that no consent has been obtained from the Lax Kw’alaams Band, Metlakatla First Nation, Kitsumkalum Band of the Tsimshian Nation, Gitxalaa Nation, and Gitanyow. The Council of the Haida Nation also opposes increased LNG tanker traffic through its vulnerable ocean territory.
The legal battles against both Ksi Lisims and PRGT will continue despite the referral to the Major Projects Office, Imalka Nilmagolda, a Vancouver-based staff lawyer with Ecojustice, told Canada’s National Observer in a phone interview. She said we’ll have to wait and see how the active legal challenges play out. For example, Lax Kw’alaams Band and Metlakatla First Nation have separate, ongoing judicial reviews in federal court to try to overturn the decision to grant an environmental certificate to Ksi Lisims.
“If the judicial reviews are successful … the decision gets punted back to the minister to remake that decision,” she said, adding that it’s unclear how that will work if a project is already in the fast-tracking pipeline.
The level of opposition to PRGT bears similarities to Coastal GasLink, which saw blockades and staunch opposition from Wet’suwet’en hereditary chiefs and other groups, she said.
But what effect the legal challenges will have on the fast-tracking — and vice versa — is not clear. There has never been fast-tracking legislation like this before, so in a legal sense this is “uncharted territory,” Nilmagolda said.
In this new regulatory environment, how First Nations perspectives and laws are going to be incorporated remains a “live issue,” Nilmagolda said.
‘This is a climate bomb’
Carney called LNG “an essential fuel for the energy transition,” and boasted that it will be “one of the world’s cleanest LNG operations,” with emissions 94 per cent below the global average. By eventually powering Ksi Lisims with electricity delivered on a new transmission line, Carney said the project could be “net-zero” by 2030.
Project documents indicate connecting the export terminal to the grid could take until 2032, and achieving the “best-in-class emissions performance,” is essential to its grid hook up. Without that transmission line, the export terminal will be powered by gas.
But Carney’s “net zero” claim was immediately shot down by critics.
“The net zero promise is BS,” said Richard Brooks, climate finance director with advocacy group Stand.earth. Even if the plant could be electrified, the gas it exports will be burned somewhere which could generate 33 million tonnes of greenhouse gas emissions — roughly four million homes worth of carbon emissions, he said.
“That’s a huge carbon footprint. That’s why this is a climate bomb.”
Carney’s framing that LNG is an essential transition fuel rests on a belief that countries will swap LNG for coal as part of their energy transitions. But in recent years, universities and think tanks have said the argument doesn’t hold up.
Last year, Cornell University professor Robert Howarth found that LNG’s carbon footprint could be worse than coal when processing and transportation of the gas is considered. Howarth’s research was focused on the United States, so it isn’t directly comparable to a potentially electrified LNG terminal, but the findings paint a troubling picture.
While it’s true that burning gas creates fewer carbon dioxide emissions than coal, burning gas and its associated methane emissions can “more than offset this difference,” he wrote. From methane leaks in the fracking process (which would be applicable to Canadian LNG), to methane leaks from LNG tankers (also applicable to Canada), the global warming potential from LNG has been dramatically underestimated — and according to Howarth’s analysis, does not lend itself to any claims of being “net zero” or reducing emissions overseas.
This week, the Canadian Climate Institute warned that boosting Canadian LNG will increase domestic emissions and has “ambiguous implications for global emissions.”
Last year, the International Institute for Sustainable Development said Canada should avoid issuing project approvals and export licences to new LNG projects because LNG exports may “crowd out” investment in renewable energy in other countries — completely undermining any bridge fuel argument its proponents claim.
Feds help set stage for investment decisions
The economics of LNG also came under fire following the announcement. As previously reported by Canada’s National Observer, global LNG markets are barrelling toward a supply glut by 2030 as new export terminals, like Ksi Lisims, are forecasted to come online.
“How does that make any sense to bring more supply into a market that is already overcapacity?” said Brooks. Ksi Lisims has signed some purchase agreements for its gas, but the vast majority of its output does not yet have customers locked in.
“If you were dealing with pure market dynamics here, this kind of project wouldn’t proceed,” Brooks said. “It’s because of the intervention of the government that it has the chance to actually move forward.”
Ksi Lisims — a partnership between Nisga’a Nation, Rockies LNG (a consortium of 11 major oil and gas companies), and the Texas-based Western LNG (financed by US private equity firms Blackstone and Apollo Global Management) — is awaiting a final investment decision and is expected to cost an estimated $10 billion. Blackstone CEO Stephen Schwarzman was a major donor to US President Donald Trump, and Apollo’s founder Leon Black, who resigned in 2021, is under investigation over allegations he paid $170 million to Jeffrey Epstein.
“These are not neutral investors,” said Elizabeth May, leader of the Green Party in a statement. “They are central figures in the political and financial machinery surrounding the current US administration. Canadians should be alarmed that instead of scrutinizing this project, the Carney government has chosen to fast-track it.”
PRGT’s price tag is sitting somewhere between $10 billion and $12 billion — more than double the original $5 billion cost estimate — and is owned by Nisga’a Nation and Western LNG.
Except for a few permits and pending judicial challenges, Ksi Lisims and PRGT are far along, so Carney’s move to refer the projects to the MPO appears aimed at coordinating the financial components of these projects to nudge investors toward a final investment decision, Nilmagolda said.
Two months ago when Carney named LNG Canada Phase 2 to the Major Projects Office for consideration, TD said in an analyst note that project’s inclusion was “superficial support.” The bank said it would have liked to have seen the Ksi Lisims LNG and related Prince Rupert Gas Transmission Pipeline projects included to indicate federal support for the LNG sector.
“If this is the kind of industry that’s nation-building, I really question what the vision is of this government, and if it’s bank-driven,” said Marsden. “People living in Toronto have a very different idea of impacts when it’s not affecting them.
