Well, welcome back. Another episode of Drumbeats.
And last time we had Chief Crystal Smith with
us, we spoke about growing up in Kitimat Village
and a bit about Haisla Nation's history of economic
and industrial development. And we're very happy
and privileged to have Chief Crystal Smith back
with us again, Mark, and we're going to talk.
in more detail now about Cedar LNG. Yes, welcome,
Chief Crystal. Great to have you on the show
again. Thank you very much. It was wonderful
to speak with you on the previous podcast. So
let's talk about Cedar LNG. Sounds good to me.
And first off, I have to say congratulations
on what a journey. I know the journey is maybe
only just beginning. But to get to a positive
financial investment decision, it's fantastic
news. And so maybe you could tell us a little
bit about the journey and how you got to this
point. Cedar LNG has been about 10 to 12 years
in the making. It was an idea from one of our
advisors and one of our... our good friends of
the Hazel Nation, that we had seen so many different
proposals coming in and the idea popped into
his mind that why doesn't the nation own one
of the facilities and make it a reality? And
we started from there. Our advisors at the time
took that as a part of a negotiation where they
felt it was beneficial to not build more infrastructure
in the province, however, utilize and... gain
off of what was already being proposed so it
became a part of a negotiation and we were successful
in in obtaining 400 mmcf off of the coastal gas
link project which feeds lng canada so essentially
when lng canada and coastal gas link announced
their positive final investment decisions the
opportunity for cedar lng to become an actual
reality the opportunity sat with the nation to
make that happen. So over the years, we had started
the preliminary work prior to LNG Canada announcing
their FIDs so that when they were successful,
that we would essentially hit the ground running
as we knew that time was going to be of the essence
to be able to make this a reality. So we sought
partnership because as an Indigenous community,
we knew that we didn't have the necessary skill
set when it came to the technologies and essentially
the capital that it would require to have Cedar
become successful. So we sought partnerships.
We didn't necessarily have Pembina right from
the beginning as a partner. We went through the
process and everything that happened during COVID
and the economy essentially impacted Cedar, much
like any other project that was being proposed
at the time. However, we were very fortunate
to be able to work through those issues. And
in 2021, I believe it was June or July of 2021,
we were happy to announce that we had formed
a partnership with... with Pemina and from there
have worked very diligently to ensure that we
were meeting all of the project's timelines and
working through all the challenges. And we're
very, very proud. I mean, it's been one roller
coaster of an experience. I had been a large
part of LNG Canada and witnessing them getting
regular updates in terms of their project when
they were going through the process. So largely
knew what to expect in terms of some of the hurdles
that we were going to encounter and how it was
up and down. We'd have some very large wins within
the process. come up against a brick wall that
would essentially and potentially call the project.
So it was quite the experience. And we were supposed
to have announcements in December of 2023. However,
that got pushed to June. And I believe it was
June 25th or 26th, we were able to announce a
positive final investment decision here directly
in our community with our membership. My family
right beside me. And I would like to understand
a little bit more about exactly what Cedar LNG
is and how your facility fits in with what LNG
Canada is doing. And so maybe you could explain
a little bit about that. So Cedar LNG is a facility
that would be the first in Canada, if not North
America. first floating LNG facility, which means
it is built on a barge on the ship that will
be anchored to the shore on the west side of
the Douglas Channel. In terms of the economic
and the business plan and business cases for
LNG from Canada, it fits in with LNG Canada in
terms of providing the world with LNG and to
be able to offset a lot of the coal burning and
other forms of energy that aren't necessarily
as green as LNG. So how we were able to work
with our community, the mandate that we had already
received from our community in terms of supporting
LNG Canada, it fits within our community's expectations
and how they approved a commodity like LNG Canada.
And was that a fierce debate within the community?
It was a very long process. We took the engagement
piece very strategically within our community
by educating our members just as our elected
leaders and our staff were being educated around
the impacts and what to expect from an LNG plant.
being operational in our territory. We had spent
many hours with experts in our local facility
but one important aspect that we took on was
we have 2 ,000 Haisla members and they all don't
reside within our community. So to ensure that
we were getting the full support of our membership,
we would do community engagement sessions here
locally, and then we would travel to hubs of
where they would reside. So we would take the
experts and all the information, and we would
travel to Vancouver to be able to give the same
information and the same education to our members,
regardless of where they resided. Lots of interesting
aspects of the development, and I'm sure part
of the message and engagement with the community
was around risks, environmental risks, financial
risks, as well as rewards. So I'm interested
in how that process and how did you sell this
as successfully as you did to the community?
In terms of the impacts, I think around the education
of Cedar LNG was essentially introducing the
new technology that was being introduced. So
a large part of these engagement sessions happened
even before we had partners so that we could
help educate our members and give them background
information many years ago. on the newly formed
board. And a part of our first decision -making
was around the technologies and the discussion
around having our Haisla values and the protection
and importance of the environment felt throughout
every decision that was being made by Cedar LNG
and our future partners. So the first decisions
that we made had large in part to do with the
technology that we had chosen a floating facility
as opposed to one that would be on land. We also
decided that we were going to have an air -cooled
system versus a water -cooled, which would then
minimize the impacts on our Douglas Channel.
And we went with electric drives versus gas -driven,
which ultimately impacts the air quality here
in our territory. those decisions would not be
impacted by any type of discussion around returns
that the nation would potentially see in the
future. We felt it was important that this project
was held to a higher standard and higher expectation
given that it would be nation -owned and potentially
the first of its kind in the world. So we felt
that it was important that we held ourselves
up to a much higher expectation level so that
we could be proud to stand in front of our community
and to talk and introduce more information about
Cedar LNG. I think from that and relaying that
information to our members, I believe gained
the trust and the foundation that we had, given
that we were going to be inserting our Haisla
values throughout the entire process. When it
came to choosing our partners, it was important
that they acknowledge that We weren't going to
be changing any aspect of the project given any
discussion around revenue, potential revenues
and the economic benefit. And when we chose Pemina
as the partner, our values were extremely in
alignment when it came to those discussions.
With their expertise, we were able to further
minimize impacts on the site and with the technologies
that their expertise was able to bring to our
partnership. So we've been working very diligently
and closely and introducing them to our community
and being able to express how those values were
in alignment and the work that they were bringing
to the partnership tremendously added value.
And I would say solidified that stability within
not only our community, but within the province
and within Canada. So every aspect of the project
as we moved it forward, one of the main hurdles
that our team encountered was around our equity
raise and that portion. A large, all of our equity
is being brought to the table through the First
Nations finance. Through their process, they
required a community referendum. which required
us to do a very focused strategic engagement
session. And we did that through a process where
we had community sessions here in community.
We held that one online as well so that if you
couldn't make any of the other sessions that...
you were able to attend virtually and ask all
questions. Those sessions were very well attended
by our membership. Amazing, amazing questions
and the feedback and the thoughts that our members
came with were absolutely tremendous. It was
the most strategic and thorough. engagement session
that I've seen yet in all of my 11 years so far
here with the nation. And the feedback was a
positive blessing from our community for us to
take on the equity and to be able to have our
portion of the finance to see they're successful
with a 97 % vote from our membership. So I think
one of the... You know, interesting things is
you were a community and nation ready to engage
with investors and other partners. And you spent
a lot of time, as you mentioned, looking at the
technology, talking about your values. Who are
you working with through that process? Because
that really laid the groundwork for the successful,
I guess, launch of Cedar LNG. So would you mean
like who assisted us through that? purely a nation
initiative. We had been through a lot of community
engagement sessions and our experience with LNG
Canada. So we had that responsibility for our
leadership and also a few of our staff members
that our prime focus and a lot of our time and
a lot of our effort, we gained the knowledge
through our staff to be able to have these conversations
with our membership. And then as Pemina was brought
on, we would then introduce them to our community
and have a couple of sessions where they would
come in and provide the other technical pieces
of changing of the design of the facilities on
land and how we were working towards minimizing
even further. So they would come and provide
that expertise through the engagement sessions.
I think it's really interesting that this was
a Haisla Nation -led initiative from concept
and then right through. This was not a case of
Pembina or any other company coming to you and
saying, we want to build this facility, will
you support us? You set the parameters and the
specifications based on your community engagement,
and those conditions had to be satisfied by any
partner coming in. I'm interested in what the
structure looks like with Pembina. It's close
to 50 -50, I know. But can you tell us a little
bit about how CDAR -LNG is structured as a partnership
and how you expect it to be governed going forward?
So your statements in terms of how we were able
to bring... this to industry and have them be
a part of the work that we were completing here
in our territory. We knew that going in that
we wanted to maintain majority ownership. In
regards to the Indigenous participation, I think
too far off than not, a lot of communities would
see a reverse in terms of actively participating
where they would have you know, a stake within
major projects and then find some way along as
the project progresses, a lot of dilution in
the sense of that ownership piece when projects
progress for whatever circumstance, whatever
reason it has happened. However, we knew that
it was important and it was a key factor in us
maintaining majority ownership. So in the proposals,
part of the decisions and the makeup of Cedar,
that was, if not the most important key piece.
We did not want to get lost in being an Indigenous
community, very small in the sense of having
any partner come in and being able to kind of
dwindle our stake in the project away. Again,
as a foundation of having our values driven into
Cedar, it was important for us to have that majority
ownership, thus having representation in a decision
-making body. So our governance structure is
actually a 50 -50 as well. The way we're able
to make the success of it is the decisions for
the project. have to be unanimous. We are appointed
as from our elected leadership to sit on the
board of Cedar LNG. We do have a responsibility.
to be bringing decisions back to the entire elected
leadership, as does Pembina in terms of their
responsibility to the Pembina board. So we have
it within our governance structures to be able
to bring the necessary information back to our
collective leadership and then come together
with decisions that are essentially a part of
the mandate from their board and our council.
And you've established a new economic development
corporation, I see, just this year. Is that how
you hold the interest in the partnership through
that development corporation? It would be, so
we have established it's Iaqua Development Corp,
which means in our language, working together.
So they are newly formed as of April 1st. It's
a flow and it's a working relationship between
Haisla Nation Council and Iaqua Development.
So in partnership between our two entities, we
have each have responsibility. within that structure.
A lot of the ECDEV files, which would entail
the CEDAR entities, have moved to YACWA. However,
maintaining the rights and title has remained
with Haisa Nation Council and our elected leadership.
So there's a process that we have implemented,
but it's very much in partnership as well. And
I'm curious also, you've gone for an equity participation,
a majority equity. Participation, that comes
with risks as well as rewards. How have you de
-risked this project for your community? You
mentioned that First Nations Financial Authority
has provided financing. I assume that's some
form of debt and that's debt for the community.
How have you de -risked the financial arrangements?
And de -risking the financial aspect when it
comes to the nation was definitely a process
that we undertook in working closely with. other
levels of government. We're fortunate to have
the established relationships with the province
of BC leadership as well as the federal government.
So the announcement of the loan guarantee program
from the feds was absolutely important in terms
of the work that we were completing. And the
same with the province of BC. being able to take
what they've seen in terms of the importance
of Indigenous participation and putting it to
action is definitely one that was important,
is important to the Haisla Nation. So in terms
of de -risking, working with other levels of
government to be able to ensure that our nation
was protected through this process while contributing
to the economics of not only the province, but
of Canada was of huge value and importance to
not only our elected leadership, but more so
of our membership. What are the key learnings
you think for other investors and potential partners
looking to work with Indigenous nations across
the country? You know, they're coming into the
market. They've heard all kinds of things. This
is obviously a great success story. What advice
would you be giving them about how to approach
these opportunities? I think when I did, and
I've mentioned it in every aspect, you know,
I'm very fortunate to hold this title through
the success that our nation has seen. But without
our membership, there is no way that I would
have, our nation would have the ability to see
the success. without the backing of them and
their mandate is absolutely crucial and vital
to any type of economic initiative that any community
is undertaking. I think a large part of the sensationalism
that unfortunately the world has seen is due
to that portion of the puzzle missing within
certain communities. And that's not always the
case. We have communities such as ours that that
support industrial development because they've
seen what the potential is. So I think getting
the backing of not just the leadership that's
sitting in front of you, but more importantly,
getting the backing of the membership that make
up that community that it's impacting is a vital
key piece in the success that we've been able
to see here. And when you're going through your
list of potential partners and working through
it, RFP process or some other process, did you
find that some investors really didn't get what
you were trying to achieve? Most definitely.
I remember those meetings very vividly and we
went down to Vancouver. Our leadership had been
down in Vancouver for a week looking through
proposals and not one came back that was similar,
that was the same. There was some key pieces
that you that you looked at that were in alignment
with our values. But I remember one specifically
that had come into the boardroom in Vancouver
and had essentially pushed the economic aspect
and was telling us if you do not change the technology,
the revenues project would not be successful
and telling us that, you know, the bottom. line
was more important than our environment, essentially,
in this project. And I think we had allotted
at least three hours for the conversations to
occur. And within a half hour, I had seen that
conversation and that opinion was not going to
change. And I had seen and felt the tension.
rising within the room and had said, you know,
there's no point in continuing this conversation
if that opinion and that mindset and that approach
isn't going to change. And I said, I think we
can cut this meeting short. Thank you for coming
and thank you for responding. And they had left
the room. And I think to much of our team's surprise
having it cut short. It was interesting, again,
to be sitting as an Indigenous community, being
able to choose our partner based on what we felt
was important. I think it was quite the experience
to have a multi -million dollar investor walk
out of the room. I'm sure in any project like
that, Indigenous or not. to be able to have the
leadership say, listen, we just don't think you're
aligned with our values and why waste the time?
I'm sure they're reflecting on that today. Rob.
How about the bigger vision, Chief Crystal? Have
you started to see some impacts, positive or
otherwise, in your community already? I know
you're some time away from first exports, but...
Are you already seeing some positive impacts?
And what is the bigger vision? Again, we're very
fortunate to have gone through LNG Canada's process
of construction. The industry has been in our
territory for well over 12 years now. And to
be able to see and witness the impact that it's
having on the ground has been absolutely the
highlight of me being a part of our leadership.
A huge focus of mine is changing. the lives of
our people and the quality of their lives. And
to be able to see that come to fruition has definitely
won that. Gives me inspiration to get out of
bed and to accomplish the things that we've done.
It keeps me going in the most difficult times.
I find it absolutely amazing to see. And it's
through, you know, posts on social media. It's
through talking to our members in the grocery
store of hearing what they're experiencing because
of the opportunity they've been provided. You
know, getting messages saying I was successful
in getting a mortgage. Thank you for you and
the rest of council for providing this opportunity.
Those are meaningful, absolutely meaningful.
And being able to see our people, you know, explore
the world for the first time in traveling abroad
and doing and being independent. You know, more
importantly, I'm seeing. an uptake in our culture
and revitalization of our language. And I explained
in the earlier podcast that I have an identical
twin sister and she's our language and culture
teacher in our local community school. And to
hear her send voice recordings of her speaking
fluently in Haisla is absolutely one that I can,
an emotional impact that I often find. hard to
put into words. It's absolutely tremendous to
see her and hear her singing a lullaby in Haisla
to our grandsons. So I am definitely seeing the
impacts. it was a need for why we, why we supported
these projects. So most definitely. And I think
when it comes to Cedar, that is yet to be remained
to be seen. We are, are currently starting the
works on, on site. So I'm, I'm anticipating that
we're going to see an uptake in, in employment
opportunities on site. So definitely looking
forward to, to seeing that. I think, you know,
it's, One important piece is the success of other
Indigenous communities. I think being able to
accomplish something like CEDAR for our nation,
I think has set the foundation in terms of displaying
to not only Canadians, but to the world that
Indigenous communities can be a large part of
the success in our economies. We're no longer
a barrier. In fact, we are a solution. to be
able to have the success that our country has
seen so far. So when you have Indigenous communities
be a large part of your projects and proposals,
it will be successful. For other communities
looking to Haisla, other Indigenous nations and
peoples, and consider moving forward with their
own projects, you spoke before about the importance
of getting everybody on site. Is there some other
aspects of that that you'd really like to...
emphasize for learnings for them as well? I think
one of the key highlights of CEDAR as well in
regards to some of the first decisions that we
made, we also made the decision that we would
actively involve Indigenous communities that
surround our nation to be able to share in the
opportunities that our people have seen so far.
I often talked about with our leadership and
with our membership around the economies that
existed between our communities prior to contact,
that we've all coexisted in our territories in
terms of what we could culturally provide one
another. And to be able to have the opportunity
in the modern day context through major projects,
it's an important factor, but it's also one that
gives me huge pride to be able to have and say
that. We've been very inclusive and have done
our own reconciliation work with our neighboring
nations and being able to provide that opportunity
as well. So I think in terms of keeping your
people along for the journey of your economic
development, I think it's important to keep in
mind Indigenous communities that surround you
and keep them in mind for this journey as well
to be able to have them a part. of your success
is, is a huge, is a huge win. Great. Well, thank
you very much for that, Chief Crystal. I think
any, any of us and Rob, you know, both you and
I live in the UK and, you know, those are the
words that anybody in any community wants to
hear, that their leadership is concerned for
them and for their neighbours. That's what makes
a great place to live and, you know, provides
prosperity. for all. So Rob, any final thoughts?
Well, I just want to thank Chief Crystal Smith
for spending some time with us today, but also
for what she's doing, the inspiration that she
is for Indigenous people, non -Indigenous people.
It's fantastic. You're showing what is possible
when things are done properly, and you've shown
how to get the community. And I think that it's
an inspiration to investors as well, because
it's proof that it is possible to do big projects
with Indigenous communities if you go about it
the right way. So I'll say on behalf of all of
us, nyawa ngoa. Thank you very much. Thank you.
Cedar LNG is the first for an Indigenous community,
Canada and the world. Here are the key takeaways.
So I think the key thing from point of view from
investors, asset managers, and large enterprises
over here in the city of London listening to
Chief Crystal was the story that the indigenous
peoples in Canada are not willing to be partners
in development is incorrect. Of course, what
they want to have is their... recognition of
their values and that they have a stake at the
table. And I think one of the interesting things
is they now control access to many of the key
infrastructure and natural resources in Canada,
but they're willing partners. And if you approach
them as a willing and equal partner, I think
you can be very successful with your investment
and know that it's a long -term play you're in,
which is great. That's what you're looking for.
Investing in an asset that provides a consistent
return over time. And with Cedar LNG, you can
see Pembina is very lucky to have partnered with
the Haisla Nation because they're in that for
the long haul together. And I think that's going
to be a very successful project for all the factors
those two partners can't control. Yeah, it was
really interesting hearing about the story of
how Cedar LNG came about. And it is evidence
that not all Indigenous communities are against
development. To understand that this was a Haisla
-led project from the outset, from the concept
right through, was good to hear. Also lessons
about how to go about engaging. You heard Chief
talk about... Lots of engagement in the territory,
outside the territory. They spent a lot of time
making sure that their members understood exactly
what was being proposed, the risks as well as
the rewards. So a real inspiration and a lesson
in how to get projects done and get them done
in an environmentally friendly way with massive
local community support. Yes, absolutely. So
everyone, our podcast is on YouTube, Spotify,
Amazon Music. Please subscribe and follow us.
And we're having an upcoming newsletter to highlight
future podcasts, talk about some of these issues
in more detail with some further background information.
Absolutely, Mark. Look forward to it.