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Buffett Fund Backs Out of Quebec LNG Project as Hearings Begin, Community Opposition Mounts

U.S. investment legend Warren Buffett’s Berkshire Hathaway industrial conglomerate has decided not to sink C$4 billion into Canada’s next controversial fossil pipeline, the GNL Québec pipeline and liquefied natural gas terminal in the Saguenay region, just as environmental hearings and grassroot opposition to the project begin gearing up.

“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 company behind the C$14-billion project. “The reason evoked was Canada’s current political context.”

While she declined to be more specific, Fortin attributed the decision to “all of the elements creating a certain instability, questions among investors, we’ve seen on different projects across the country.”

While Fortin declined to name Berkshire Hathaway as the disappearing investor, “a Quebec government source confirmed the information first reported by La Presse on Thursday,” CBC says.

Fortin said the project will have to clear environmental reviews before financial commitments are finalized in 2021. “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,” the Globe says. “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,” Trudeau stated.

Yet “the planned route of the pipeline crosses several traditional Indigenous lands,” the Globe notes. “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.”

Saguenay Deputy Mayor Michel Potvin said the announcement was a real setback for the project. “It’s concerning when we talk about an investor putting in $4 billion of $9 billion. It’s clear that Mr. Buffett has good reasons. We’re seeing the rail crisis—that’s surely one of the reasons.”

He added that “it takes the acceptance of Indigenous people,” and “in our minds, here in Saguenay, we thought we had it. We thought it was accepted by the people. What we’re seeing is that, actually, nothing is certain.”

With environmental hearings on the LNG terminal set to begin March 16, a coalition of Quebec organizations is asking the province’s Bureau d’audiences publiques sur l’environnement (BAPE) to widen the scope of the review. “In an open letter, 42 environmental and community groups say the BAPE should study the proposed Saguenay facility alongside plans to build a 780-kilometre pipeline, which would feed the facility natural gas from Western Canada,” CBC reports. “They also want additional hearings held in Quebec City and Montreal, so local concerns aren’t drowned out in the process.”

They’re also questioning the BAPE panel’s impartiality, after it emerged that one of the two commissioners, Denis Bergeron, spent 16 years as a consultant to the chemical industry

“We fear that if there are public hearings only in Saguenay, people from all across Quebec will go there, and then it will be less equitable for people in Saguenay,” said Nature Québec Director Alice-Anne Simard. “We know that many people all across Quebec want to take part in this process because this is such an important project for the future of this whole province.”

Already, the pipeline and LNG terminal have “divided many in the region, and the province as a whole,” CBC says. “Premier François Legault has been vocal in his support of the project, claiming it will help reduce emissions globally by facilitating exports of liquefied natural gas, which produces fewer emissions than coal.” Environmental groups “argue the project will actually increase greenhouse gas emissions. And their concerns don’t end there.”

“There are, in addition, concerns about local environmental and social impacts of the project along the pipeline route, on endangered species such as caribou, as well as impacts on the Saguenay River and the Gulf of Saint Lawrence, where ships would transport the gas liquefied by the plant,” said Équiterre Caroline Brouillette. “Rather than reduce emissions from coal, it is likely to slow down the transition to renewables.”

Canadian Association of Petroleum Producers CEO Tim McMillan said he was disappointed but not surprised to see Berkshire Hathaway step away from the project. “This investor not willing to invest in Canada has been the backdrop for several major project cancellations,” he told the Globe and  Mail. “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.”