It’s not often these days that Canada’s resource industries receive good news. But a recent positive assessment from federal scientists found that the proposed $11.4 billion Pacific NorthWest LNG terminal in British Columbia poses a low risk to the environment. A positive assessment on the proposed liquefied natural gas (LNG) terminal could be an important step towards the project being built and B.C. beginning to export LNG.

According to the report in the Globe and Mail, Fisheries and Oceans Canada submitted a letter to the Canadian Environmental Assessment Agency (CEAA) last week stating that “[t]he effects of the marine structure on fish and fish habitat have been categorized as having a low potential of resulting in significant adverse effects.”

The report goes on to say that:

“Fisheries and Oceans Canada… outlines recommendations to reduce the risk of damaging Flora Bank. Those include monitoring eelgrass beds to ensure the area remains stable and revising construction methods for the bridge and pier because porpoises are sensitive to underwater noise… The federal scientists conclude that Pacific NorthWest’s plans to protect Flora Bank are reasonable, as long as the venture’s backers introduce a long-term monitoring program, implement measures to mitigate harm to fish habitat and adhere to a series of other recommendations to protect the Skeena River estuary… Natural Resources Canada agreed with DFO, in a letter last week to the CEAA, that the consortium’s scientific studies into Flora Bank’s sediment patterns have been rigorous, adding that it “has confidence in the proponent’s conclusions.”

Despite having a natural advantage and significant potential to export LNG to the Asia-Pacific region, B.C.’s LNG industry has been slow to get up and moving, all while competing jurisdictions continue to make entries into large Asian markets.

This is unfortunate because there is a lot of prosperity at stake for B.C. A recent Fraser Institute study found that B.C.’s LNG industry has the potential to supply 11 to 20 per cent of the Asia-Pacific LNG market by 2020. The study went on to find the cost of delay imposed upon LNG investments in B.C., defined as export revenues forgone, is substantial at C$22.5 billion per year in 2020, rising to C$24.8 billion per year in 2025. The export revenues lost in 2020 would be equal to 9.5 per cent of B.C. GDP in 2014. Even if assumed sales are cut in half, B.C. still stands to lose export revenues comparable to five per cent of 2014 GDP.

While the recognition of the proposed LNG terminal’s low environmental risk is a positive step towards receiving regulatory approval, the small victory for LNG exports from B.C. may be short-lived. Some groups are claiming that the findings of the federal scientists contradict findings by the Lax Kw’alaams First Nation, whose members rejected a billion dollar deal from Pacific NorthWest LNG over environmental concerns surrounding the proposed terminal.

These groups are already indicating a court challenge will be pursued should the project receive approval from the CEAA.