Pieridae Pitches for $925M Federal Subsidy for Goldboro LNG, Threatens Legal Action to Silence Critics
A fossil company angling for a C$925-million federal “grant, repayable contribution, or loan guarantee” for the controversial Goldboro liquefied natural gas (LNG) terminal in Nova Scotia is threatening legal action against five signatories to an open letter urging Prime Minister Justin Trudeau, Premier Iain Rankin, and other elected officials to reject the plan.
Thomas Ciz, general counsel for Alberta-based Pieridae Energy, informed the five signatories in a March 19 letter that they are “in receipt of Confidential Information, including a power-point [sic] presentation,” and that their use of the material was “unauthorized”, the Halifax Examiner reports.
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The letter accuses signatories Ken Summers of NOFRAC, Michael Sawyer of the Citizens Oil and Gas Council, Pascal Bergeron of Environnement Vert Plus, Jim Emberger of the New Brunswick Anti-Shale Gas Alliance, and German climate consultant Andy Gheorghiu of disclosing the information to “other persons (including news publications) for the express purpose of damaging Pieridae’s commercial prospects of developing and constructing the Goldboro LNG Facility.” The PowerPoint included a pitch for funding equal to about 7.5% the company’s estimated project cost.
The open letter says Goldboro would be Nova Scotia’s biggest source of greenhouse gases, adding that Rankin’s successor as provincial environment minister “made the understated observation that meeting the province’s reduction targets with the entry of such a large new emitter would be ‘challenging’.”
In the presentation, Pieridae pitches jobs and trade, reconciliation, and net zero greenhouse gas emissions as the main selling points of a project it describes as “shovel worthy” and “shovel ready”. It says the $13-billion project would be Atlantic Canada’s first LNG terminal, create 87,000 full-time equivalent jobs and $28.4 billion in economic activity during construction, and serve as a boon to Indigenous reconciliation and to Canada’s commitments under the 2015 Paris agreement.
But “due to COVID and the inability to raise funds in the current state of energy markets in Canada and the U.S., government financial support is critical to moving the project forward,” the presentation states. “Government support is a question of timing—it would act as a bridge to more certain and stable markets” as well as an “open season” period this spring to secure pipeline access.
The slide deck cites a “comprehensive energy economy modeling framework” that shows Goldboro meeting a net-zero emissions threshold for “portions of the supply chain considered to be within the control of Pieridae Energy”. It pledges natural gas produced “with an emissions intensity in line with net-zero”, reduced emissions at the terminal, purchase of any emissions offsets it needs to get to zero, possible carbon capture initiatives in Alberta, and production of electricity from waste heat at the Nova Scotia site.
It also indicates support from Membertou First Nation Chief Terence Paul and Paqtnkek Mi’kmaw Nation Chief PJ Prosper, who’s also regional chief of the Assembly of First Nations, for the 5,000-bed work camp for the project. It says Pieridae has selected Calgary-based Black Diamond Group and the Mi’kmaq Nation “to exclusively negotiate the contract to build a $720-million work force lodge and amenities” for the project.
Last October, CBC reported that Black Diamond would do the construction at the site. The Mi’kmaq would get to “provide catering and cleaning services”
But the PowerPoint said all of that was contingent on speedy subsidies.
“To maintain Pieridae’s commitments to both [German utility giant] Uniper and the federal German Government, a final investment decision (FID) must be reached by June 2021 and we must begin pre-site construction in late Q1 or early Q2 2021,” Pieridae stated. “To secure this timeline, we are requesting a Government of Canada grant, repayable contribution or loan guarantee of CAD$925 million,” to be paid in segments over the course of the project.
A deeper dive into Goldboro’s nearly decade-long history shows severe obstacles to that timeline, apparently significant financial difficulties facing the company, and important questions about the project’s consultation or lack thereof with Nova Scotia First Nations, particularly concerning the man camp.
The Examiner first reported on the subsidy demand earlier this month, revealing that Pieridae had hired Maple Leaf Strategies lobbyist Luka Stevanovic to help it set up meetings with multiple federal officials and Members of Parliament. In a previous, long-form exposé in October, the paper found the nearly decade-long effort to get Goldboro built was on shaky ground, with its original engineering firm stepping away from the project and its financial guarantees from Uniper and the German government apparently less firm that the company appeared to believe.
“A Letter of Interest (LOI) has been issued by the German Government,” the press office at the German Ministry of Economics and Energy confirmed to the Examiner in June. However, “this LOI is legally not binding and shall only express that the project can be considered as eligible under the assumption that certain criteria are met.”
The agency added that a final, binding decision “requires the prior assessment of the economic, technical, and legal aspects in detail and the compliance with internationally accepted environmental, social, and human rights standards,” which would only begin “once a formal application has been filed.”
That decision sequence appeared to collide with Pieridae’s tight deadline for a federal subsidy decision. “To consider Pieridae’s desperate need for initial funding as a bridge, one would have to assume that there is funding in place at the other end of the bridge,” the five campaigners said in their letter to Trudeau, Rankin, and others. “For eight long years, Pieridae has built its pitch around the availability of US$4.5 billion in loan guarantees from the German government. Until recently the company has claimed they ‘have’ the loan guarantees, only gradually backtracking on that claim when challenged over the last two years.”
The German government’s reference to international standards also echoed with the Examiner’s report that the project would process fracked gas from Alberta—notwithstanding the pledge in the Pieridae PowerPoint that the plant “can comply with a net-zero emission future”. The five-page open letter lays out detailed concerns about the company’s financial condition, the substantial new pipeline construction and twinning the project would have to secure, and ambiguity around Pieridae’s engagement with local First Nations.
In addition to the Mi’kmaqs’ supplier role with Black Diamond, the campaigners’ letter says 13 Nova Scotia bands would receive a 51% ownership stake in the man camp. But while Pieridae directed Black Diamond to conduct “meaningful engagement” with the communities, “we are not aware, and have not been able to find, any statement about an agreement from any Mi’kmaq First Nations organization or official,” the letter states.
“While we do not claim to speak for the Mi’kmaq people, our contacts with them indicate that many Indigenous rights holders in communities did not hear about this agreement prior to the October Pieridae and Black Diamond press releases,” it adds. “No Band Council and no Chief is known to have said publicly that they signed on to this man camp project. Some Chiefs have said privately that their Band has not signed on. In the early days following the media reports, individual Band Councillors said they knew nothing about this arrangement. This would seem to indicate that no substantive consultation took place.”
That’s a particular concern, the five signatories said, given the “strong links between isolated man camps and violence against women” established by that National Inquiry into Missing and Murdered Indigenous Women and Girls.
In his letter to the five signatories, Ciz cited a non-disclosure agreement signed by the governments of Canada, Nova Scotia, and Alberta and claimed the document “imposes on the recipients of any Confidential Information of Pieridae an obligation to treat that information as confidential”. In a reply circulated yesterday by German campaign organization Urgewald, Gheorghiu said he wasn’t aware of the NDA, nor of being in contact with anyone who’d known about the agreement—apart from Ciz himself.
Moreover, “I was not—nor am I—aware of the fact that the people in Canada are not allowed to reach out to their elected officials to raise awareness about environmental/global warming impacts and financial risks related to fossil fuel projects that are eight years in the planning phase and that rely, in particular, on public funding (loans or loan guarantees),” he added.
Bergeron said the dollar value of Pieridae’s subsidy demand was the only information the company had declared confidential—after CEO Alfred Sorensen disclosed a request for about $1 billion during an April 16, 2020 investor call.
“I can’t hide my surprise at the very existence of a confidentiality agreement to negotiate $1 billion in financial assistance (and judging by the financial health of the company, a donation!) to a decadent gas company,” he wrote. “Pieridae’s cease and desist letter is obviously the prelude to a Strategic Lawsuit Against Public Participation, also known as a SLAPP suit.” But “the potential payment by any federal entity of $925 million (sorry, the company requires me to say $1 billion) for continued extraction and expansion of fossil methane export capacity is an absolutely public issue.”
“By sending the legal threat to its critics, Pieridae has demonstrated that it seeks to undermine democratic consideration of its Goldboro proposal, and doubly so since it is seeking public money for that proposal,” writes Examiner editor and publisher Tim Bousquet. “It is a bad corporate citizen.”
On that basis, “Rankin should rethink his support for the Pieridae project, and he should introduce anti-SLAPP legislation to prevent such abuses from happening in the future.”