Warren Buffett’s Berkshire Hathaway has decided against investing $4-billion in a project to bring Alberta natural gas to port in Saguenay, Que., citing Canada’s “current political context.”
Énergie Saguenay revealed Thursday it lost its major potential investor in the $14-billion GNL Québec project, making it the latest Canadian energy project to encounter hurdles caused by low oil and gas prices, political opposition and resistance from Indigenous people and environmentalists.
“A major private investor who was near investing in the project decided at the last minute to not proceed,” said Stéphanie Fortin, director of public affairs for Énergie Saguenay. “The reason evoked was Canada’s current political context.”
Ms. Fortin declined to name Berkshire Hathaway, the conglomerate giant led by billionaire Mr. Buffett, as the investor who pulled out. But a Quebec government source confirmed the information first reported by La Presse on Thursday. The source was granted anonymity because they were not authorized to speak on the matter.
Ms. Fortin also declined to name specific parts of the political context that led to the decision. "All of the elements creating a certain instability, questions among investors, we’ve seen on different projects across the country,” Ms. Fortin said.
Meanwhile on Thursday, Mohawks from the Kahnawake reserve south of Montreal lifted their blockade on a Canadian Pacific Railway line. A group of Mi’qmaqs in eastern Quebec followed suit a short time later, releasing from paralysis a small regional railway in the Gaspé. The two blockades, in support of Indigenous opponents of a British Columbia natural gas pipeline, were the last of a series of protests that disrupted rail transport across Canada for a month.
Énergie Saguenay’s GNL Québec project, including a liquid natural gas facility and a 750-kilometre natural gas pipeline from an existing line in Northeastern Ontario across Northern Quebec, is heading into federal and provincial environmental review. The first Quebec hearings start March 16. The environmental reviews must be complete before final financial commitments are made in 2021, Ms. Fortin said.
The planned route of the pipeline crosses several traditional Indigenous lands. The terminal at Saguenay will load ships that will cross waters occupied by beluga and fin whale populations. On Thursday, 250 doctors signed a letter warning the Quebec government of health impacts from the gas industry.
Quebec Premier François Legault warned last week that the pipeline project must gain “social acceptability” if it is to proceed, after the Wemotaci Atikamekw Council said it hasn’t consented to the project. Prime Minister Justin Trudeau said Thursday the atmosphere has changed for energy project proponents.
“We have to do more to demonstrate the jobs we are creating, the investment we are attracting, can succeed in a world where the reality of climate change is hitting harder all the time,” Mr. Trudeau said.
Tim McMillan, president and chief executive officer of the Canadian Association of Petroleum Producers, wasn’t surprised by the news, but acknowledged his disappointment.
The move by investors follows a string of project cancellations over the past few years, he said, including the recent decision by Teck Resources Ltd. to withdraw its Frontier oil sands mine application, and various pipeline projects being nixed or delayed.
“This investor not willing to invest in Canada has been the backdrop for several major project cancellations,” he said. “It doesn’t seem to be getting better. In fact, recent events in Canada are continuing to shake confidence in the types of investments we absolutely need to be attracting.”
Pointing to federal regulatory changes and multiple rail blockades, Mr. McMillan said the problem has spread from Western Canadian energy projects to national agriculture, mining and shipping sectors.
Mr. McMillan “absolutely” thinks the GNL project’s location in Quebec will draw more attention from Ottawa. “I hope it’s a wake-up call for multiple governments to re-establish Canada as a place where the rule of law is consistent and where our regulatory system is clear and transparent,” he said.
Dale Nally, Alberta’s Associate Minister of Natural Gas, took aim at weeks of rail and port blockades, saying in an e-mail it is “undeniable” they have deterred international investors from doing business in Canada.
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Les Perreaux
Emma Graney