History moves slowly on a day-to-day basis. But look at it over a lifetime, and it’s amazing how quickly things change.
On the First Nations economic development front, events that would have astounded people 50 years ago now barely make the newspapers.
In the last few months I’ve written about two impressive new businesses in Whitehorse: the Kwanlin Dün First Nation’s real estate development at Range Point and their new wind farm on Haeckel Hill. Both promise to be very attractive long term assets for the First Nation.
Some business ideas don’t pan out, but both of these are at the heart of our economy. Indeed, it’s hard to think of surer bets than that people will want to live close to the centre of Whitehorse or that demand for electricity will keep rising.
Promising Indigenous-owned businesses are popping up across the Yukon and northern British Columbia. Let’s look at two recent examples that didn’t get much coverage (although for one of them this is partly because of the sad closure of the Fort Nelson News a few months ago).
The first one is the Fort Nelson First Nation’s Tu Deh-Kah geothermal electricity and heat project. Like us, Fort Nelson has an “island” electrical grid that is not connected to the North American system.
Have you ever taken a break from driving the Alaska Highway to soak in the Liard Hot Springs and wondered if there was more of that free heat around? Well, the answer is yes. In Muskwa, just south of Fort Nelson on the highway, there are old gas wells with sustained temperatures of 120°C. Hot brine from two kilometres down will be brought to the surface to drive electrical turbines before being reinjected.
Tu Deh-Kah estimates it will power the equivalent of 14,000 homes. According to Barkley Project Group, which is involved in the effort, the plant’s capacity will be seven to 15 megawatts.
After generating electricity, the still-hot water can then go through a heat exchanger for a district heating network.
BC Hydro currently generates power with local natural gas from Fort Nelson’s prolific wells. Replacing some of this with geothermal will cut carbon emissions and reduce exposure to fluctuating natural gas prices. Heating buildings with geothermal would also displace fossil gas.
The detailed financials are not public, but a 2019 pre-feasibility study said a typical 15 megawatt plant of this type might bring in $13 million per year in electricity sales. Unfortunately, the major buildings of Fort Nelson are seven to nine kilometres away so a heat pipeline might not make financial sense. However, Tu Deh-Kah may find closer clients or encourage the development of new businesses such as greenhouses.
With financial support from the B.C. and federal governments, the First Nation plans to build in 2024 and open in 2026. Like Range Point and Haeckel Hill, after an initial capital investment the ongoing costs for geothermal are low. Hopefully, the Fort Nelson First Nation will be cashing royalty cheques for decades to come.
Our second project is also focused on energy, but on a massive scale. Even the visionaries who wrote the economic development sections of Chapter 22 in the Yukon Umbrella Final Agreement would be surprised at the number of zeroes in the numbers.
We are talking about the Nisga’a Nation’s proposed $10 billion Ksi Lisims LNG project on Nisga’a-owned land near Prince Rupert. Most pipelines and LNG plants are powered by burning the gas that flows through them, but Ksi Lisims plans to use local hydro-electricity. This will allow it to have “one of the lowest carbon intensities of any large-scale LNG export project in the world.”
It may seem strange for a First Nation to invest in natural gas in the climate-change era. However, the logic is that natural gas is a “transition fuel” for Asian customers. With the Russian invasion of Ukraine upending global energy markets, Asian countries have faced gas shortages and rising prices for their poor consumers and developing industries. China, Vietnam, Pakistan, the Philippines and other countries are building large numbers of coal-fired power plants.
Ksi Lisims and the other projects hope to replace some of this coal use with lower-carbon Canadian gas. The US Energy Information Administration says that natural gas emits almost half less carbon dioxide per unit of power than coal. With hydro-powered pipelines and Canada’s increasingly strict regulations of methane releases from the gas industry, Canadian LNG proponents say it makes global sense for this gas to come from Canada.
A Ksi Lisims presentation says that it sets “a new higher standard for environmental performance, with 90 per cent fewer greenhouse gas emissions than a typical facility elsewhere in the world. By sourcing LNG from Ksi Lisims rather than from an existing LNG plant, 3 to 5 million tonnes of greenhouse gas can be avoided each and every year.”
Those are meaningful numbers, four to seven times the Yukon’s total emissions.
Some analysts worry that Asian demand for natural gas won’t last long enough to pay back huge LNG investments. Others point to the fact that the new coal plants being built are expected to last 20 to 30 years.
Ksi Lisims is so big that the Nisga’a Nation cannot do it alone. Other partners include private sector players such as Rockies LNG and Western LNG.
In fact, the project is so huge that planners have made some innovative moves to address local impacts and shortages of skilled workers. Instead of touting how a high percentage of the project will be built locally, Ksi Lisims points out that its giant LNG processing plant will be built on massive floating platforms overseas and towed into place. This also reduces local land disturbance. Ksi Lisims plans to deal with the social issues caused by a massive influx of outside workers by housing all the workers at a remote location.
“Community impacts can be reduced even more by housing all construction and operations workers at the facility’s remote location. This will mean less pressure on housing, traffic, health and social services in northwestern B.C.,” according to Ksi Lisims.
When Ksi Lisims signed a deal to supply Shell with two million tonnes per year of LNG two weeks ago, Nisga’a Lisims Government president Eva Clayton said “the Nisga’a people are now able to envision the opportunity and prosperity that Ksi Lisims LNG will bring to our Nation.”
The project still faces many hurdles, including environmental reviews and obtaining pipeline capacity to gas fields in northeastern B.C. and Alberta.
There is still much to do to correct historic economic injustices in the Yukon and Canada. But as we look forward into 2024, it is a good moment to reflect on the momentum shown by leaders such as the Kwanlin Dün First Nation, Fort Nelson First Nation and Nisga’a Nation.
Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.