Huu-ay-aht left to announce that Steelhead hits “pause” on Kwispaa

Feb 19, 2019 | Blog, Governance | 6 comments

Steelhead LNG always tried to talk a big game.

Their big splashy announcements when they signed partnerships, attempted to build the perception they were a viable player in the oil and gas business.

This weekend they hit the pause button on their massive gas liquefaction plant at Sarita Bay (Kwispaa LNG) on the west coast of Vancouver Island. If you visit their website you wouldn’t even know though. News broke when their partner, Huu-ay-aht Nation, sent a letter to inform their membership.

It’s the same song we heard back in December 2017 when Steelhead pulled the plug on their Malahat LNG project. In both cases, their First Nation partner stood alone, explaining.

Ya got trouble my friends

I played Mayor Shinn in the Stelly’s High School production of The Music Man. So, I saw right through the empty promises of shiny instruments and music lessons.

Many people told me not to worry. Steelhead LNG is not going to happen, they said.

But, the slick salespeople roll through the reserve with big promises to supply a long-term, stable source of revenue. And, the community needs the revenue because they are a modern treaty community and must replace the meagre Indian Act funds that sustain them. First Nations communities partner with the LNG companies because they promise to provide the answer to dramatic poverty. They offer a hand up, and out.

LNG companies like agreements with First Nations because they add legitimacy to their project. If they can say they have Indigenous partners, and even give their project an Indigenous name, it is a better sell to investors. Frankly, it quietly addresses the stereotype that First Nations people are disruptive. Don’t worry, they won’t disrupt in this project. Invest away! Of course, that is a thin veil, and LNG is all about thin veils.

To an extent, it is a mutually beneficial relationship. But, as it turns out, the hand they offer is empty.

But, LNG is a problem in Sarita Bay, and the Saanich Inlet, and everywhere else in British Columbia. Because, it’s not real.

Everyone is leveraging each other for short-term gain. The gas fields are are a “play”, and the pipelines are a make-work project. The partnerships are a smokescreen, and the announcements are a communications exercise. Politicians love cutting ribbons, and oil and gas executives give politicians billion dollar ribbons to cut.

So, goodbye Steelhead LNG. Thank you for lifting up these First Nations communities as high as you could, for as long as you could. Now, they need to find real long-term, stable income, because there are real social issues their leaders have to address.

Perhaps the leadership in British Columbia will recognize this pattern before it is too late. It would be a real shame if we bought band instruments from a door-to-door salesman, only to find out after its too late that “T” rhymes with “P”, and that stands for PLAYED.

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  1. Bill Iring

    I appreciate your thoughts here but would suggest that perhaps other factors to consider in this recent announcement for a “pause” on Kwispaa projects.
    First there is telling inference in your piece that the Huu-ay-aht are pawns and “easily” duped by “slick salesmen”. I know from the original trip to Asia with Premier Clark to understand market opportunities to recent signing of engineering agreement with Hydunai Heavy Industries in Spain that the First Nations community and leadership were well aware of both the process and the risks. They are neither careless or standing around waiting for government handouts. They are as qualified as anyone to engage in “big picture” investments for their own nation.
    As you are aware these LNG projects are complicated. Steelhead is an energy development company who has to attract credible investors. And as in any large projects there are “go, no go” decision points. With the announcement of LNG project in Kitimat with the list of partners including several large international energy companies I can understand Kwispaa partners having to rethink “pause” expenditures on their project.
    It is often easy to say “I told you so”, but that does not assist the challenging nature of finding creative solutions required to attract capital investment and well paid employment to rural communities.

    • Adam Olsen

      Hello Bill… I have a long history with Steelhead, going back to the Malahat proposal. I am not suggesting at all that the Huu-ay-aht or Malahat are easily duped. I have long been critical of the vulnerability created by the modern BC Treaty process. I have also been long critical of how Steelhead operates. That is the source of my criticism as Steelhead departs the scene. I have had many meetings with them and I have know what I speak when it comes to their approach to Indigenous relations. But, I appreciate the comment.

  2. Schubart Dan

    Don’t know if you’ve ever crossed paths with Keith, but I find his perspective thoughtful and sometimes more nuanced than a lot of what circulates. He reinforces your own thoughts:

    Keith Hunter
    11 hrs
    Wrapping up and understanding the loose ends on projects is always a critically important step in moving forward. It is especially important to respect the need for this part of due diligence when it comes to projects like the Kwispaa LNG and Steelhead LNG pipeline (SLNG) projects.
    Today I was a recipient on an email from a Vice President of SLNG confirming they had “paused” the Kwispaa LNG project. Following receipt of that email I was called by SLNG and had a very respectful discussion as to the next steps of SLNG.
    What I was told was that last Friday, February 15, 2019 (the date of the Huu-ay-aht Chief Councillor and their Tyee Hawii letter to the citizens of their Nation) that SLNG laid off all staff. This layoff of staff was without prior notice and was effective immediately.
    I was informed this was directly related to investor decision-making to no longer provide investor funding to Kwispaa LNG and/or to the SLNG pipeline development. All staff working on both of these core components required for the Kwispaa LNG project were laid off.
    In essence Steekhead LNG has no employees working on the pipeline component. There are no employees of SLNG to work on building the relationships of First Nations and governments along the pipeline route as was reported in various media articles that quoted the CEO of SLNG as stating.
    I asked specifically about the major project reviews on the Kwispaa LNG project that had been initiated by the Canadian Environmental Assessment Agency and the BC Environmental Assessment Office.
    I was told there are no staff working for SLNG on the Kwispaa reviews and that CEAA and the EAO were aware of this. I will be following up with both CEAA and the EAO requesting the project reviews of their respective agencies be terminated due to the lack of ability of the proponent to engage with First Nations, the lack of capacity to complete the draft EIS/AIR process and the instability of SLNG to successfully complete the project reviews.
    I realize there are many people that held different views of this project. I have seen the unrest and anxiety this project created in many people. I also saw the efforts made to succeed that produced a very high standard of work done.
    I have always viewed my role in working on this project and the support I could give was in helping ensure the decision-making process was fair and inclusive and that the information people needed to make decisions upon was complete and credible.
    I personally shared many of the shared concerns and was committed to help make Free and Prior Informed Consent a reality because our next generations depend upon us to do the best we can do.
    I read somewhere once something like we will not be here in one hundred years but our decisions we make will be. I kept that simple statement in mind thinking of how this project would have forever changed the future of our grandchildren and their grandchildren.
    In my mind I compared it to the very first sawmill that started in the Alberni Valley and how now the last remnants of old growth are still being destroyed. Even the last little stand of trees remaining next to Harbour Quay is being considered to be sold by the City of Port Alberni. Somethings, once they begin, cannot be remediated. A genie cannot always be put back into the confines of a bottle.
    But at the same time there were many families supported by the forest industry just as there are in the energy sector. It is not easy to just ignore the need for an economic development need…provided the impacts are understood and can be avoided.
    Having said that, and with what we now know, SLNG is not, in my opinion, solvent or credible enough to have earned my personal confidence.
    I have seen SLNG “partner” with both Malahaht and Huu-ay-aht First Nations and in the process create deep polarization within their community regarding SLNG.
    SLNG asked two First Nations to be their dance partner and left them both standing on the dance floor alone.
    In the structure of corporations in BC, there is nothing I am aware of that would stop SLNG from finding more investment and starting their project aspirations again. The omissions in the media that they fired their project staff without notice indicates to me their intention to still appear as a viable pipeline developer with the Kwispaa LNG project ready to simply unpause.
    Often it is what wasn’t said that speaks the loudest.
    I cannot begin to predict what SLNG may do in the future if they can attract sufficient investor money. I can say that if and when the time comes to deal with their project again that the loss of their social capitol and necessary trust building has very likely reached a point of not being able to be repaired.
    Given their track record of walking off and leaving their First Nations dance partners, employees and environmental assessment agencies all standing alone on the dance floor it would be impossible for me to advise anyone to accept an agreement as having substance.
    Thank you again to all of you that I had the honour and pleasure of working with on this very important matter for all of the next generations of life, seen and unseen, born and unborn.
    All my relations

    • Adam Olsen

      I communicate with him on Messenger. Thank you for sharing this. I meant to do it earlier but got caught up elsewhere.

  3. Bill Irving

    I appreciate this conversation because of the many influencing economic factors at play in rural communities.
    Over the years in the Alberni region alone, at regional government level, I have participated in proposals including aluminum smelters, link mill, Jack Nicklaus golf courses, LNG plants and container port to name a few.
    In each case “developers” pushed possibility, engaged with communities and departed when risk factors (depressed market or increased costs) dissuaded potential investors. Reflecting on the nature or scope of your original article I would suggest there are two factors that, for me, have been more consistent struggles for communities than developers whose upfront stated purpose is the bottom line.
    First is that senior governments have held up these economic opportunities as carrots. As more traditional forestry and fishing economies with related stable unionized jobs diminished in rural communities the senior governments “encouraged” communities to invest in attracting new industries. Regional economic development funds, whether native or non-native communities, were invested with the encouragement of senior governments because aluminum smelters or LNG plants were supported by senior governments. Many hours and dollars were spent pursuing the economic goals pitched by senior governments.
    Second point I have found consistent throughout these projects is the desire and purpose of rural communities to attract projects that help stabilize and rebuild a fundamental of healthy communities – that is local, stable , well paid jobs.
    I would suggest “developers” and their role in economic development are only a part of issue under discussion. My sense is that senior governments have either abrogated or confused the process of economic renewal, spouted optimistically transition economies, lacked the will to invest long term in rural economies and rather than partner with rural communities to build stable economies “suggested” that communities partner with developers.
    Unfortunately as I re-read your article I think the overarching struggle for stable employment in rural -native and non-native communities – is lost in the focus of “developers” profile.
    Senior governments are just as culpable as any developer when it comes to raising expectations and then “moving on”. They need to focus on “real” opportunities and help communities build stable economies rather than this continued baiting them with “opportunities”.

    • Adam Olsen

      You are absolutely and I have been calling the provincial government’s hyperbole on LNG from the very beginning. The empty promises, used as an election ploy to fill seats in Victoria is a distraction from the real work of creating a stable, sustainable rural/urban economy and resilient communities across British Columbia. We may disagree on the intentions of a specific company, but you are correct in criticizing the provincial government.

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