Sarita Bay LNG Vote Came with Promise of Multimillion-Dollar Education Fund

Huu-ay-aht First Nation members were coerced into supporting a liquefied natural gas project on Sarita Bay on Vancouver Island’s west coast, an opponent of the development has charged.

On March 25 Huu-ay-aht members voted 140 to 61 in favour of moving ahead with a “co-management development arrangement” with Steelhead LNG. The Huu-ay-aht First Nation government said it is the first such agreement for an LNG plant in the province.

But Stella M. Peters, a citizen of the nation, said members were left with little choice after leaders promised $2 million for education and training and to more than double monthly grants to elders — but only if the LNG development was approved in the referendum.

“It was like an ultimatum to vote yes,” charged Peters. “It seemed to me like a sellout.”

The Bamfield resident said that the nation’s government basically told its people, “If you don’t vote yes, we’ll lower your programs and services.”

A pre-referendum statement by the nation’s executive council warned citizens that the training fund and an increase in monthly elders’ benefits from $200 to $500 “would be supported by the proposed LNG project and therefore if the project does not move forward, it is not financially viable.”

Huu-ay-aht Chief Councillor Robert Dennis declined an interview. In an emailed statement, the nation said, “citizens asked for concrete benefits from the project, and that is what Huu-ay-aht negotiated with Steelhead LNG.”

“They are not considered bribes in any way,” the statement said.

The nation is “responsible for generating wealth for its people — that is the role of Huu-ay-aht’s elected government,” it said. That’s why the government decided to explore the economic development opportunity offered by Steelhead LNG, the statement said.

Trevor Boudreau, a spokesperson for Steelhead LNG said it would be inappropriate for the company to speak for Huu-ay-aht “in terms of how they feel they would benefit from the proposed project or any programs they have established for the betterment of the their citizens.”

Steelhead LNG, a Vancouver firm, is majority owned by Calgary-based Azimuth Capital Management, which manages nearly $2 billion in energy investments.

The proposed $30-billion export facility, the largest LNG project proposed in the province, would be on 330 hectares of Huu-ay-aht land on Barkley Sound about 10 kilometres north of Bamfield and 70 kilometres southwest of Port Alberni. The facility, if built, could ship 24 million tonnes of liquefied methane annually over a 25-year period.

Methane for the LNG project would come via pipelines from the earthquake-making technology of hydraulic fracturing in shale formations under the boreal forest of northern B.C. and Alberta.

The referendum vote consisted of one question: “Do you approve the proposed Huu-ay-aht Sarita LNG Project?”

The majority of respondents voted by mail. The Huu-ay-aht nation has about 700 members, with about 150 living on reserve.

Members living in Port Alberni or Vancouver don’t understand what could be lost if the project goes ahead, said Peters.

“A good number of our off-reserve people who voted have never gone out salmon fishing or clam digging,” she said. “All they saw was the money and they didn’t consider long-term impacts.”

Peters is concerned that a large LNG project could severely damage marine wildlife and wants to see more consultation about the project’s impacts for Barkley Sound. 

The project — like Steelhead’s plan for a floating LNG plant on the Saanich Inlet north of Victoria — is still in an assessment stage. The next phases include feasibility studies and design.  

The provincial government’s troubled LNG strategy, which still has produced no tangible benefits for taxpayers, has divided many First Nations communities because the majority of pipelines and LNG terminals have been proposed on aboriginal lands.

To date, almost 30 nations have signed impact benefit agreements with the B.C. government on methane-carrying pipelines running through their lands. The Kitselas First Nation recently signed financial agreements on LNG benefits that could earn $13 million for the nation if three different projects go ahead in northwestern B.C.

Last year several interior communities formed the First Nations LNG Alliance, which supports LNG development and argues it will provide their people with revenue and jobs.

In addition, the province set up a $30-million Aboriginal Skills Training Development Fund to provide skill training for communities in 2015. The government said the Huu-ay-aht had not applied to the fund.

Other First Nations communities, such as the Haida, worry that the carbon-intensive industry represents another form of colonialism that will destroy salmon habit along the coast and unsettle Treaty 8 lands in northeastern B.C. where most of the drilling and fracking for shale gas is now taking place.

Grand Chief Stewart Phillip, president of the Union of BC Indian Chiefs, said there is a major power imbalance between First Nations and energy companies.

“Oil and gas companies are quite adept at coming into communities and preying upon the deeply rooted structural poverty of these communities,” he said.

Most LNG agreements with First Nations are conditional on projects going ahead and being profitable, Phillip said. But the B.C. government’s aspirations for LNG are “market dead” due to a global methane glut, he added.

The Huu-ay-aht government said the increase in elder benefits as a result of the positive vote reflects the fact they might not be around to see others benefits if the project goes ahead.

“Many of these elders will not be able to see benefits from the project in their lifetime,” the statement said. “Leadership felt it was therefore essential that some be given to them at this time.”

The training fund and increased benefits for elders weren’t the only incentives tied to a 65 per cent positive vote outcome.

Prior to the election, the nation’s executive council said it was “happy to report that, if citizens vote 65 per cent or more in favour of moving forward with this project,” then the nation and Steelhead LNG would put aside $7.9 million for river restoration work and set up a dedicated decommissioning fund of up to $250 million.

Hydraulic fracturing to access methane supplied needed for the LNG plants has become a major issue for First Nations in the province’s northeast.

The Fort Nelson First Nation has repeatedly noted inadequate consultation and “significant adverse impacts on land, water, air and treaty rights” from hydraulic fracturing.

In addition the Blueberry River First Nation filed a lawsuit in B.C. Supreme Court in 2015 that alleges years of mining, clear-cutting and energy drilling, including extensive fracking, have violated its treaty rights under Treaty 8.

The B.C. government’s goal of kick-starting a brand new LNG industry with subsidies and tax giveaways has floundered due to a sustained global LNG glut resulting in depressed spot prices for methane.

With LNG projects currently under construction in Australia, the U.S. and Russia, analysts don’t expect the oversupply in LNG to end for several years.

Last month Royal Dutch Shell shelved plans for its Prince Rupert project on Ridley Island.

The Huu-ay-aht First Nation has long struggled with the impacts of colonialism.

Nearly 70 years ago, it challenged Canada’s unlawful logging of the community’s reserve lands. Last year the Specific Claims Tribunal awarded the nation compensation of $13.88 million, but the federal government is contesting the size of the award.