Island Tides: Malahat LNG

On August 20, 2015, Steelhead LNG and Malahat First Nation announced a 25-year lease agreement for Malahat’s newly purchased Bamberton lands on the Saanich Inlet, and a partnership agreement to explore the potential of installing a floating gas liquefaction plant at the site of the former cement plant.

In October 2015 the National Energy Board (NEB) approved a six million tonne (per year) export license for the proposed Malahat LNG project. Since then the partnership has hired consulting companies to collect background data of the site and surrounding area and to draft technical design details for the infrastructure.

Williams, an energy infrastructure company from Oklahoma, is partnering with Steelhead LNG to explore constructing a 130km pipeline called the Island Gas Connector, which will run from Sumas, WA to Cherry Point, WA at which point the pipeline will run along the ocean floor through Southern Gulf Island and the Salish Sea to Bamberton. The project is similar to the Georgia Straight Crossing (GSX) that was approved by the Canadian Government in 2003.

Steelhead LNG and Williams are currently preparing their gas plant and pipeline Project Descriptions, and will require approvals from the B.C. Environmental Assessment Office, Canadian Environmental Assessment Agency, NEB and the U.S. Federal Energy Regulatory Commission.

This proposal makes no sense for so many reasons. The general feeling around the Saanich Inlet is that the project is so absurd that “it will never happen.” But make no mistake; the proponents are serious. Despite significant challenges they continue to move the project forward and intend on applying to the regulators later this year.

Despite the provincial governments desperate attempts to label LNG “clean” there are high environmental and social costs to the gas industry from extraction to consumption.

In British Columbia gas is fracked in the northeast of the province and piped to tidewater. Fracking is an energy intensive industry and escaped methane from extraction and piping pose a serious risk to our climate action targets. Fracking scars the landscape, leaving behind toxic tailings ponds, it threatens groundwater and is proven to cause earthquakes.

All aspects of gas liquefaction plants are damaging to the local environment. Steelhead LNG has many questions to answer in the design of the Malahat LNG proposal. Will they burn gas to power their project? Will they use chemically treated ocean water at a rate of thousands of litres of per hour to cool the gas to liquefy it? Will they discharge that heated, treated water back into the Inlet? How much excess gas will they flare? How will the gas plant and pipeline disrupt the Goldstream salmon run and other important fisheries and recreation activities? What will be the impact of increased shipping in the Saanich Inlet and the Salish Sea? What security measures will have to be put in place and how will that limit access to the Inlet?

The Malahat LNG project would come at significant social costs to the communities around the Saanich Inlet. The hopes that the Inlet could recover from the years of industrial use by the Bamberton cement plant would be dashed by another heavy industrial operation there. Inviting the health and safety risks into the region is irresponsible.

The Saanich Inlet in the heart of WSANEC territory and while Steelhead has partnered with Malahat First Nation; the company has damaged their relationship with the other WSANEC First Nations. Pauquachin, Tsartlip, Tsawout, Tseycum and Malahat First Nations are all descendants of the signatories of the Douglas Treaties. All the communities except Malahat have all expressed strong opposition to the project and even some Malahat members have publicly expressed their concerns about the proposal. Yet the First Nations’ concerns have been ignored.

In addition to the environmental and social impacts this project faces formidable economic challenges. With the depressed oil and gas markets it currently costs more to produce LNG in B.C. than we can sell it for. And with the glut in the market, with countries like the United States, Australia and Qatar already exceeding the world demand, our nascent LNG industry, led by our government, is less than an afterthought in the global market.

Steelhead LNG is selling itself on a promise that the project will create 400 short-term and 200 long-term jobs. They say, it will indirectly support many more throughout the region. They also state that the project could generate tens or hundreds of millions or billions of economic benefit. But who will see that benefit, and at what cost?

What will be the impact on the value of local real estate? How will introducing heavy industrial activities impact the 21,000 tourism and service related jobs in the region? How will it affect the tourism industry? How will the industrialization of the Saanich Inlet affect the choices of potential visitors?

There are more than 20 projects proposed in BC and in spite of the political promises that LNG plants would be operational by now, none are have even received a “final investment decision.” The B.C. LNG industry is struggling to get off the ground despite the provincial government’s concessions such as relaxing the regulatory environment and reducing royalties and taxes.

It seems absurd that in spite of what appears to be so many insurmountable obstacles, Steelhead LNG still pushes ahead. Perhaps it is because the B.C. government continues to push their hyperbolic 2013 election promise to get  B.C. methane to foreign markets at any environmental, social and economic cost. Who would have thought we would be facing an LNG proposal in the Saanich Inlet and Southern Gulf Islands?

It is easy to fall into the trap of thinking the whole thing is so absurd that it will go away on its own. It won’t. This heavy industrial proposal is inappropriate for the Saanich inlet and as Prime Minister Justin Trudeau said, “even though [it is] governments that grant permits, ultimately it is only communities that grant permission.” Our communities must make our voices heard through organization and coordination. Make your voice be heard.

The Saanich Inlet Network is a community group tracking this project closely and working to increase community awareness of the proposal. Learn more about the Saanich Inlet Network and join the mailing list to tell us what you think and to stay informed at


Adam Olsen

Stellys Cross Road, Brentwood Bay, BC, V8M 1J7