Political support for LNG gaining traction in Canada, Indigenous leader says

The intensifying U.S. trade war has forced a long-overdue shift in political attitudes in Canada toward support for the development of liquefied natural gas, says an Indigenous leader whose First Nation co-owns an LNG project in British Columbia.

Cedar LNG will be an important part of Canada’s Indo-Pacific strategy that seeks to boost shipments to Asia while striving to reduce economic reliance on exports to the United States, said Crystal Smith, elected chief councillor of the Haisla Nation in northern B.C.

The Haisla own 50.1 per cent of Cedar, while Calgary-based Pembina Pipeline Corp. holds 49.9 per cent. Cedar, which started construction in Kitimat, B.C., last year on the Haisla’s traditional territory, aims to begin shipping LNG to Asian markets by late 2028.

U.S. President Donald Trump has considered imposing a wide range of new tariffs, including 10-per-cent levies on Canadian natural gas. Canada, the world’s fifth-largest natural gas producer, exported 45 per cent of its gas supplies last year to U.S. markets.

“It has taken Trump’s threats of new tariffs for Canada to actually realize that it has the ability to be one of the largest LNG-producing countries in this world,” Ms. Smith said in an interview as she toured Cedar’s site along Douglas Channel.

“Indigenous participation and natural resource development – I think the political narrative has changed in the outlook for these types of projects.”

For example, Prime Minister Mark Carney has said he wants to make Canada an energy superpower globally, aiming to boost conventional energy production while also spurring the transition to renewables. B.C. Premier David Eby has praised Cedar, citing it as a prime example of economic reconciliation.

Shell PLC-led LNG Canada will become this country’s first export terminal for the fuel when it starts shipments by mid-2025 from Kitimat to Asia. LNG Canada is mulling a Phase 2 expansion.

But Canada has lagged far behind the United States in developing LNG export terminals. The first such facility in the lower 48 states began operating in 2016 and another seven U.S. sites have opened since then.

Besides LNG Canada and Cedar, Woodfibre LNG near Squamish, B.C., is also under construction and hopes to begin exports to Asia by late 2027.

“We need to expand those markets overseas and not be so dependent on the U.S.,” said Mike Eddy, Cedar’s director of external affairs.

LNG Canada’s $18-billion terminal will have an initial export capacity of 14 million tonnes a year, compared with annual capacities of 3.3 million tonnes at Cedar and 2.1 million tonnes at Woodfibre.

Pembina chief executive officer Scott Burrows said last week during a conference call with industry analysts that strong demand for LNG could mean an eventual expansion of Cedar.

Calgary-based ARC Resources Ltd. has made a 20-year commitment to be a major supplier of natural gas for Cedar.

Two prospects are Ksi Lisims LNG, an early-stage proposal backed by the Nisga’a Nation in northern B.C., and FortisBC’s plans to expand its Tilbury Island domestic plant in Delta, near Vancouver, with the goal to diversify operations with exports to Asia.

The Cedar project will require US$3.4-billion in capital spending and US$600-million in other expenses, including interest paid through financing arrangements during construction, as well as transaction costs.

A floating production unit is being built in South Korea for Cedar, which is constructing various other infrastructure in Kitimat. The Haisla-led project will use electricity from BC Hydro for powering electric motors that drive compressors for the liquefaction process.

Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives, said in an interview that as LNG gathers momentum in B.C., the province’s climate goals are being undermined.

“There are going to be additional impacts from fracking, processing and pipeline transport,” said Mr. Lee, who wrote a 22-page report that is critical of B.C.’s fledgling LNG industry.

He said Mr. Eby’s NDP government has good intentions for climate action, but supporting LNG will make things worse. “The B.C. government is weakening its climate regulations to court new LNG development,” Mr. Lee said in his report.

Ms. Smith and other Haisla leaders have strongly supported LNG Canada and the contentious Coastal GasLink project, the 670-kilometre pipeline across northern B.C. that will transport natural gas to Kitimat.

However, the Skeena Watershed Conservation Coalition, the Gitanyow Nation and allies have warned about the climate impacts of fossil fuels such as LNG. The coalition’s allies include the Wilderness Committee, David Suzuki Foundation, Dogwood, Stand.earth, Sierra Club and Northwest Institute.