A long-delayed and controversial liquefied natural gas (LNG) pipeline and export terminal in northern British Columbia is now officially back on track and promoted as a new opportunity for Indigenous economic development.
However, a report released last week warns that the risks 鈥� to land, community and even investors 鈥� are far greater than the promised benefits.
The Prince Rupert Gas Transmission (PRGT) pipeline and Ksi Lisims LNG terminal are poised to export up to 12 million tonnes of LNG annually, much of it destined for Asian markets. The pipeline鈥檚 route cuts through Gitxsan and Tsimshian territories, but many hereditary leaders and community members remain opposed.
Janna Wale, who is a Gitxsan community member and co-author of the new Yellowhead Institute report said the dominant narrative portraying LNG projects as straightforward economic opportunities overlooks significant realities.
鈥淭here鈥檚 been one kind of narrative presented 鈥� economic growth is good and LNG equals opportunity. But there are trade-offs and checks and balances. It鈥檚 important to include those in the conversation,鈥� Wale said.
Financial risks
Financial risk stands out as a core issue for Indigenous communities being drawn into the project as equity investors, joint venture partners or through procurement contracts.
Hayden King, executive director of the Yellowhead Institute, said these communities also bear the greatest risks if things go wrong. Few long-term shipper contracts have been signed, forcing the project to depend on the volatile spot LNG market, where global competition is fierce and prices are unpredictable.
The report highlights that Japan and South Korea 鈥� key prospective markets for BC LNG exports 鈥� are already experiencing surpluses.
鈥淕iven the glut in the LNG market, where is this going to be sold, to which market and how is it going to get there? Those answers are not yet clear and so that presents a risk to those in it, and then those that are impacted by it,鈥� King said.
Emily Lowan, who co-authored the financial risk analysis for the report, said typically, 80 per cent of a project鈥檚 funding comes from loans and 20 per cent from direct investment. With this setup, sharing the equity portion equally between two parties (Western LNG and the Nisga鈥檃 Nation) means each party must directly invest 10 per cent.
鈥淓quity owners are paid after lenders, which means they are financially vulnerable if a project defaults or does not result in projected returns,鈥� Lowan said.
While Ottawa鈥檚 $10 billion Indigenous Loan Guarantee Program is seen as proof that the government wants Indigenous communities to have a real share in these projects will offer some financial cushion, Lowan said the program does not cover lost revenue if profits fall short or shield nations if a commercial partner collapses.
Lowan said at the time the report was written, no loan guarantee programs protected the full corporate debt exposure.
With project costs for the PRGT soaring and on track to reach $30 billion as outlined in the report, a hypothetical $3 billion equity stake for the Nisga鈥檃 Nation would absorb nearly 30 per cent of Canada鈥檚 Indigenous loan guarantee fund.
If costs overrun 鈥� as seen in previous megaprojects 鈥� lenders may demand more equity or refuse additional financing, potentially triggering defaults, she said.
Environmental and social concerns
The report highlights how the floating LNG terminals and associated infrastructure will threaten marine ecosystems through dredging that destroys coral reefs and oyster beds, underwater noise pollution and shipping operations that produce significant greenhouse gas emissions.
鈥淚t really is a watershed of impacts. When you start to impact one part of that system, the rest of the ecosystem will be impacted as well. These cascading effects are especially concerning as climate change stresses these environments,鈥� Wale said.
The pipeline crosses two of British Columbia's largest salmon-producing river systems, requiring clear-cutting through major waterways and drilling beneath critical spawning habitats.
Wale warned the pipeline will bisect important salmon runs, huckleberry patches and moose habitat critical to Indigenous food security and cultural practices.
Despite this, the pipeline鈥檚 approval relies on a permit granted in 2014. In June, British Columbia鈥檚 Environmental Assessment Office ruled construction was 鈥渟ubstantially started,鈥� allowing developers to move forward without a new review. This permit bypasses contemporary environmental standards, even as climate impacts worsen 鈥� raising concerns among conflicting Indigenous voices.
Socially, resource hub towns such as Terrace are expected to face higher housing and food costs and overwhelmed health services.
鈥淭here will be 1,200 people in a man camp just a kilometre away 鈥� our health care system here is hanging on by its threads, and we're going to be bringing in over 1,000 workers into a tiny community,鈥� said Gina Mowatt, a Gitxsan member.
The influx of transient workers in 鈥渕an-camps鈥� also raises worries about increased risks of sexual violence toward Indigenous women, a pattern linked to such developments.
Beyond these risks, the report details uncertainty linked to BC鈥檚 shifting LNG policy. The 2024 commitment to 鈥渘et-zero ready鈥� LNG projects by 2030 still allows ongoing fossil gas use if electricity isn鈥檛 yet available, meaning emissions will persist and put additional strain on local environments.
Rifts between Indigenous nations
While the Nisga鈥檃 Nation has actively invested in and supported the project, many hereditary leaders and community members of the Gitxsan and Tsimshian nations oppose it, asserting they never gave free, prior and informed consent.
King warned that this dynamic revives a colonial 鈥渄ivide and develop鈥� tactic that pits Indigenous Nations against one another.
鈥淭here are plenty of opportunities for First Nations to negotiate with BC or Ontario or Canada, but fewer opportunities for nations to negotiate and undertake this type of diplomacy amongst themselves and I think that鈥檚 by design,鈥� he said. 鈥淚 don't think Canada wants nations to be working together. I think they want them to be divided.鈥�
He said the governments and corporations cultivate division by labeling communities that support resource development as 鈥渢he good Indians鈥� while portraying resisting groups as 鈥渢he bad Indians.鈥�
This 鈥渃leavage that鈥檚 created and cast,鈥� King said, mainly benefits external actors and undermines Indigenous governance, long-standing diplomatic relations and collective power.
He said the approval process itself risks deepening these divisions by advancing consultation and consent with only select Indigenous groups, while excluding others is further fracturing Indigenous unity.
Mowatt frames the conflict as a struggle between Indigenous communities and external actors, rather than a dispute within Indigenous nations.
鈥淸Instead] the war is against PRGT; the war is against these massive international corporations that are coming into our territory, every intention to destroy our lives here,鈥� Mowatt said.
As the project moves forward amid fractured consent and complex risks, the social and environmental stakes continue to weigh on the communities whose lives and lands intersect with the pipeline鈥檚 path.
鈥淲e need the whole picture 鈥� it鈥檚 about the legacy left for future generations, and who actually gets to decide what that legacy will be,鈥� Wale said.
