Robin Rowland | Northwest Coast Energy News

NEB approves KM LNG export licence

Energy

The National Energy Board has approved KM LNG’s (also known as Kitimat LNG) application for an natural gas export licence.

A NEB news release says:

The National Energy Board (NEB or the Board) today approved an application by KM LNG Operating General Partnership (KM LNG) for a licence to export liquefied natural gas (LNG) from Kitimat, British Columbia to markets in the Asia Pacific region.

The export licence authorizes KM LNG to export 200 million tonnes of LNG (equivalent to approximately 265 million 10³m³ or 9,360 Bcf of natural gas) over a 20 year period. The maximum annual quantity allowed for export will be 10 million tonnes of LNG (equivalent to approximately 13 million 10³m³ or 468 Bcf of natural gas).

The supply of gas will be sourced from producers located in the Western Canada Sedimentary Basin. Once the natural gas has reached Kitimat by way of the Pacific Trail Pipeline, the gas would then be liquefied at a terminal to be built in Bish Cove, near the Port of Kitimat.

The construction and operation of the pipeline and the terminal will require provincial regulatory decisions.

This is the first application for an LNG export licence that the Board has considered since the de-regulation of the natural gas market in 1985.

In approving the application, the Board satisfied itself that the quantity of gas to be exported does not exceed the amount required to meet foreseeable Canadian demand. The exported LNG will not only open new markets for Canadian gas production, but the Board believes that ongoing development of shale gas resources will ultimately further increase the availability of natural gas for Canadians.

Prior to approving the licence, the Board considered environmental and related socio-economic effects of KM LNG’s application. These effects included matters related to marine shipping, and the proposed LNG terminal and Pacific Trail Pipeline.

The Board also acknowledges the potential economic benefits associated with KM LNG’s project. These benefits include employment opportunities due to the development of the LNG terminal and the Pacific Trail pipeline.

Kitimat mayor Joanne Monaghan said, “I am glad they got it, because now the project can move forward.”

KM LNG is owned by Apache Canada Ltd. (40 per cent), EOG Resources Canada Inc. (20 per cent) and Encana Corp. (20 pre cent). The Front End Engineering for the LNG terminal at Bish Cove is now underway. The companies say a final investment decision will be made in early 2012.

A news release from Apache said:

“The Kitimat LNG project represents a remarkable opportunity to open up Asia-Pacific markets to Canadian natural gas and we’re leading the way in being able to deliver a long-term, stable and secure supply to the region,” said Janine McArdle, Kitimat LNG President. “This export licence approval is another major milestone for Kitimat LNG as we move forward and market our LNG supply. LNG customers can have even more confidence in a new source of supply.”

“Today marks a historic day for Canada’s natural gas industry and this is fantastic news for our project and the communities where we operate. Kitimat LNG will bring revenues and jobs and the associated benefits to Canada,” said Tim Wall, Apache Canada President. “The Kitimat LNG partners are very pleased with the NEB’s approval of our export licence and we’d like to thank them for their support and confidence in the project.”

Text of NEB Decision on KM LNG(pdf)

EPA finds submerged oil, orders Enbridge to file new Michigan clean up plan by Oct. 20

Environment

A map issued by the US Environmental Protection Agency showing pockets of submerged oil found in the Kalamazoo River during summer 2011 cleanup operations (EPA) Click on map for larger version.

The United States Environmental Protection Agency has ordered Enbridge to “to take additional steps to clean up the July 2010 oil spill that damaged over 35 miles of the Kalamazoo River system.”

The
directive requires Enbridge to submit plans by Oct. 20, 2011 “for
cleanup and monitoring work expected to last through 2012”. EPA news release. Failure to comply could result in civil penalties.

The local newspaper the Battle Creek Courier quotes an EPA official as saying agency has learned a lot in the 14 months since the Enbridge pipeline burst, contaminating five acres of land, part of Talmadge Creek and 35 miles of the Kalamazoo River. The order was based on what the EPA has learned in the past few months.

“As we get near the end of the active submerged oil recovery, we’ll have to have systems in place long-term to do long-term maintenance,” Ralph Dollhopf, the EPA’s on-scene coordinator told the paper. “So we’ve taken all of these elements and packaged them into a set of expectations — specific tasks that Enbridge has to perform through 2012.”

Most of the remaining oil is submerged at the bottom of the Kalamazoo River or on about 200 riverbank sites that haven’t had work done yet, Dollhopf told the paper.

The EPA also is asking Enbridge to install “passive collection devices” in areas where oil commonly accumulates in the river, Dollhopf said. Oil remaining in the river tends to mass at natural deposit points — most commonly near dammed areas.

The EPA says the work will continue to the end of 2012 and even into 2013 if necessary to remove as much remaining oil as it can without harming the environment.

Some parts of the river may be reopened to the public in 2012.

An Enbridge spokesman, Jason Manshum said in an email to the Michigan paper “Enbridge has committed since the outset of this incident to restore the area as close as possible to its pre-existing condition, and to the satisfaction of the U.S. EPA, Michigan DEQ and the local community. We remain fully committed to that goal.”

The EPA situation report says that after a year of extensive cleanup work in the Kalamazoo River system. the EPA identified pockets of submerged oil in three areas covering approximately 200 acres that require cleanup…

To date, more than 766,000 gallons of oil have been recovered and 113,000 cubic yards of contaminated soil and debris have been sent to EPA-approved disposal facilities. Enbridge will be required to repay the government for all response costs.

Work during the summer of 2011 was focused on:

Revisiting shoreline areas cleaned up in 2010 where winter weather and spring floods exposed previously unseen oil or spill impacts.
Excavating oil contaminated soil and weathered tarry oil from the overbank areas.
Recovering pockets of submerged oil in the sediment. EPA has identified three major submerged oil areas including the delta leading into Morrow Lake.

Michigan cleanup by the numbers

766,288 gallons of oil recovered
6 million gallons of oil/water collected and disposed
144,942 cubic yards soil/debris disposed
783 personnel on site
$33.9 million costs to date

Source EPA, Sept. 16, 2011

Kitimat LNG on the agenda at Houston conference

Energy

The Kitimat LNG projects have been added to a conference on LNG exports in Houston, Texas on December 1.

Zeus Events, the commercial organizer of the conference tweeted this morning “Kitimat #LNG Export project added to N. American LNG Exports conference.”

The conference agenda describes the presentation this way:

Kitimat LNG Export Project Update
Kitimat LNG Project, Speaker TBA

Apache is developing the most advanced LNG export project in North America at Kitimat, British Columbia. Construction is expected to begin in early 2012, with operations to start in 2015. The representative has been asked to describe the project and provide an update, discussing what it will mean for British Columbia gas producers.

The conference website describes it as:

Proposals to liquefy and export North American gas as LNG have grown more numerous and controversial since our 2010 conference. At last count, ten liquefaction and export projects have been proposed on both coasts of North America. Analysts warn, however, that the United States is preparing to export its clean, abundant natural gas to countries like China, where it will be used for transportation fuel, while the U.S. will continue to import high-cost crude for its transportation.

This year’s conference will expand on our 2010 meeting to address political issues such as FERC’s willingness to approve export plant construction permits as well as examine new proposals. Costs, political hurdles and regulatory issues will be discussed.

The Oregon projects, seen by analysts at the June National Energy Board hearings as Kitimat’s chief rival are also on the agenda at the conference.

US, European companies looking at LNG powered ships

Energy Environment Shipping

As one ship is grounded off New Zealand, causing an environmental “catastrophe” and a second is grounded off Nova Scotia, a shipping company in New Orleans has announced that it will commission two vessels powered by a duel fuel system that includes liquified natural gas.

Harvey Gulf International Marine of New Orleans, Louisiana and Trinity Offshore of Gulfport, Mississippi said Friday it will build two offshore 92 metre (302 foot) supply vessels, with a price tag of $55 million each with an option for a third. These vessels will service the oil and gas rigs in the Gulf of Mexico.

New Orleans City Business report

The vessels will also have environmental features to meet US ENVIRO+ Green Passport Certification by the American Bureau of Shipping.

The ship’s propulsion system will be built by a Finnish company called Wärtsilä, which specializes in natural gas power plants on land and integrated marine engine systems, as well as designing ships, including large ferries.

Wärtsilä

In a news release, John Hatley, a vice president of Wärtsilä North America remarked that “We are witnessing a transformation of the marine industry as it charts a course towards a new era for natural gas. It’s exciting for Wärtsilä to be a trusted partner in this launch with industry leader Harvey Gulf, whose natural gas supply vessel investment actions of today signal a coming paradigm shift. This is aimed at capturing operational savings while simultaneously reducing emissions.”

The company website says it supplies power systems for LNG carriers as well as container vessels, bulk carriers, drilling rigs and ships, offshore research vessels, floating production units, cruise ships and yachts.

The duel fuel system combines conventional marine fuel systems, gasoline, light fuel, heavy fuel or biofuel with liguified natural gas.

European shipping companies are adopting the duel fuel technology to meet emission standards that come into effect 2013.

Wärtsilä

The website says

This dual-fuel capability means that when running in gas mode, the environmental impact is minimized since nitrogen oxides (NOx) are reduced by some 85 per cent compared to diesel operation, sulphur oxide (SOx) emissions are completely eliminated as gas contains no sulphur, and emissions of CO2 are also lowered. Natural gas has no residuals, and thus the production of particulates is practically non-existent.

The shipping industry finds the operational savings that gas offers to be very compelling. Similarly, the significant environmental benefits that LNG fuel provides are of increasing importance. With fossil fuel prices, and especially the cost of low sulphur marine fuel, likely to continue to escalate, gas is an obvious economic alternative.

Two-stroke engine

On September 23, Wärtsilä, announced that it is now working on a two-stroke liquified natural gas engine. The website says:

Wärtsilä… has successfully tested its new low-speed gas engine technology in trials conducted at the company’s facilities in Trieste, Italy….
Wärtsilä successfully demonstrated that the engine performance fully complies with the upcoming IMO Tier III nitrogen oxide (NOx) limits, thereby setting a new benchmark for low-speed engines running on gas.

The new RTX5 2-stroke test engine is part of Wärtsilä’s 2-stroke dual-fuel gas engine technology development programme. This is an important part of the company’s strategy to lower emissions, increase efficiency and to develop its low-speed engine portfolio to include dual-fuel gas engines alongside its medium-speed dual-fuel engines.
“The decision to initiate this project was announced in February 2011, just seven months ago. The fact that we have already conducted a successful test shows that our gas engine technology is at the forefront of meeting the future needs of shipping, a future that stipulates more stringent environmental regulation….

The tests with the RTX5 engine will continue during the autumn and winter of this year, and into 2012. More details about the engine technology and its performance will be announced upon completion of the programme.

Want to catch that fish? Check its personality profile

Environment Fishery

A study at Queen’s University in Kingston seems to indicate that fish not only have individual personalities, but that personality could determine where the fish may be caught.

According to a news release from Queen’s:

Anglers fishing near rocky outcrops or in areas of water with submerged vegetation may be more likely to catch timid fish, while those fishing in open water may be more likely to reel in bolder fish, according to new research conducted at Queen’s University Biological Station.

“Boldness–the tendency of an individual to take risks–is one personality trait of considerable interest to behavioural biologists,” explains lead author Alexander Wilson, a visiting biologist from Carleton University. “Ours is the first study to have characterized a relationship between capture technique and individual boldness in a wild population of fish.”

The researchers studied bluegill sunfish caught either by angling or beach seining (a long net that is dragged through water to encircle fish).

The fish caught angling were more timid than fish captured in the wild using a seine net. However, when a group of fish captured by seine net was then released in a large outdoor pool and angled for, it was the bold individuals who were most often caught in the open.

Wilson says the researchers caught more fish in the areas with refuge–a habitat that appeals more to timid fish. On the other hand, beach seining or angling in open water are both capture techniques that are more likely to target bolder, risk-taking fish.

This research was recently published in the Canadian Journal of Fisheries and Aquatic Science.

Kitimat, B.C.: Ground zero in the race to fuel Asia: Globe and Mail

Energy Environment

The Globe and Mail Report on Business has a major report on Kitimat, LNG and pipelines

Kitimat, B.C.: Ground zero in the race to fuel Asia

A green light for the Kitimat LNG project could see the rapid establishment of a regional export hub, one that major global energy players are keen to join. By the end of this decade, three billion cubic feet a day of gas could flow through Kitimat – equal to all of B.C.’s current production and close to 20 per cent of Canada’s current output.

Editorial: Lawyers have a lot to be thankful for this weekend

Editorial

As lawyers from Vancouver Island to Calgary and on to Ottawa sit down for Thanksgiving dinner on Monday, they will be counting their blessings and adding up their billable hours thanks to the surprise announcement by Enbridge that the company is getting into the west coast LNG rush.

On Thursday, Enbridge CEO Pat Daniel told Reuters that Enbridge is interested in joining one of the two proposed Canadian LNG projects to ship natural gas to Asia. Reuters reported that “‘Enbridge plans to build a natural gas pipeline along the route of the proposed Gateway oil line, which would transport natural gas from Horn River and other natural gas fields to the coast by 2016,’ Daniel said.”

Thursday was also the deadline for public to register for the Joint Review Panel to make oral statements about the Northern Gateway bitumen pipeline.

Now everything has apparently changed.

That brings to mind the quote from Abraham Lincoln who told an audience in the 1864 presidential campaign, “An old Dutch farmer… remarked to a companion once that it was not best to swap horses when crossing streams.”

That has now been generally shortened to “Don’t change horses in midstream.”

Which is sort of ironic, since Enbridge just bought what the energy industry calls a “midstream” natural gas plant in northeastern British Columbia as part of its plans to get into the LNG “play.”

So what happens now, that it appears that one way or another the LNG and Northern Gateway pipeline projects could be combined?

How does this affect the Joint Review Panel on the bitumen pipeline and the hearings that begin in January?

Is is fair that registration for public comment participation is closed now that suddenly the pipeline situation is changing almost daily?

The National Energy
Board hearings on an export licence on the KM LNG project have concluded. If Enbridge buys into the KM LNG project and Kitimat LNG is now connected, one way or another, with the
Northern Gateway, how does that affect the pending National Energy Board decision?

As the hearings here in Kitimat showed, National Energy Board hearings are often mystifying to the public and the rules of procedure narrower than the kind you would find in a full public inquiry.

Environmental activists are determined to stop the bitumen pipeline. First Nations are saying they haven’t been consulted properly on the bitumen pipeline. There are whole new questions arising: if there is a twinned natural gas and bitumen pipeline along the Northern Gateway route, how does that change the environmental and safety studies by government, Enbridge and the environmental groups?

In the lawyers’ homes on Monday as the lawyers say “pass the turkey,” they will be contemplating two words: “Court challenge.”

Bitumen or no bitumen? That is the question in the pipeline

Energy

On Thursday, Enbridge CEO Patrick Daniel told Reuters that the company “would prefer to supply natural gas to the Kitimat liquefied natural gas plant in British Columbia over any other export project in western Canada.”

That immediately raised a question in the northwest is Enbridge thinking of replacing the Northern Gateway bitumen pipeline with a natural gas pipeline? Or is it planning two pipelines?

So far Enbridge has not responded to a request from Northwest Coast Energy news for clarification.

This afternoon, Jeff Lewis writing on Alberta Oil’s website in Another suitor sidles up to Kitimat LNG says:

No word yet on whether Tim Wall, the CEO of Apache Canada Ltd., is keen to take on another partner for the massive development. (The Reuters report has Enbridge building a natural gas line in conjunction with its proposed Northern Gateway line, which is to be twinned with a pipe for importing bitumen-thinning condensate from the coast; there’s no mention of sending natural gas west on the Gateway website).

But the question still remains. The Reuters report actually isn’t that clear on whether it will be a bitumen pipeline twinned with a natural gas pipeline or a natural gas pipeline substituted for the bitumen pipeline.

Here is what Reuters said.

Enbridge plans to build a natural gas pipeline along the route of the proposed Gateway oil line, which would transport natural gas from Horn River and other natural gas fields to the coast by 2016, Daniel said.

There is already speculation and rumour in Kitimat about the Enbridge announcement. Environmental activists have long feared that there would be a twinning of the two projects, while many people sitting on the fence were willing to accept liquified natural gas but not bitumen.

If there is any truth to the rumours circulating in Kitimat, there may be more corporate announcements after the Thanksgiving holiday weekend that will make the situation a little clearer.

Enbridge plans natural gas pipeline along Northern Gateway route

Enbridge CEO Pat Daniel has told Reuters in New York that the company would prefer to supply natural gas through Kitimat to Asia “over any other export project” and that Enbridge plans to build a natural gas pipeline along the route of the
proposed Northern Gateway bitumen pipeline.

Pat Daniel was interviewed by Reuters reporter Edward McAllister. In a story with a New York place line the agency reports:

Pipeline operator Enbridge Inc
would prefer to supply natural gas to the Kitimat liquefied natural gas
plant in British Columbia over any other export project in western
Canada, the company’s chief executive told Reuters on Thursday.

Enbridge is interested in joining one of two proposed Canadian LNG
projects to ship natural gas to Asia, it said this week, as ample North
American supply pushes gas prices far below global levels.

But the location of Kitimat has attracted Enbridge more than Royal Dutch Shell’s potential project in Prince Rupert, also in British Columbia, company head Patrick Daniel said in an interview.

“Kitimat is the preferred project. Pipelining into Kitimat is
relatively straight forward compared to Prince Rupert, which is the
other proposed port,” Daniel said, though talks continue with both
projects…..

Enbridge plans to build a natural gas pipeline along the route of the
proposed Gateway oil line, which would transport natural gas from Horn
River and other natural gas fields to the coast by 2016, Daniel said.

As Joint Review deadline looms, more complaints about lack of information for the public

Energy Environment

Environmental groups are saying that the Northern Gateway Joint Review Panel and Enbridge haven’t given the public enough notice that the Thursday is the deadline for registration to participate in the hearings, which begin in January.

In Smithers, Pat Moss, with the Friends of the Wild Salmon says neither the
National Energy Board, or Enbridge had done much to let people know they
need to register this far in advance.

In Kitimat, Douglas Channel Watch distributed a leaflet door to door warning about the pending deadline.

Those who wish to make oral statements have until October 6 to apply to make an oral presentation to the Joint Review Panel. Applications can be made on the JRP website:

While the hearings are scheduled to begin on January 10, 2012, locations are still uncertain. The JRP website says

Have you made a decision on specific hearing locations?
No. Based on the comments received, the Panel intends to conduct oral hearings in locations close to the pipeline and marine components of the project. The list of oral hearing locations will be announced at a later date.

Moss says this lack of firm dates and locations for those hearings is likely a hindrance to some people who wish to participate, since they cannot know this far in advance where they will be when the hearings come to their area, “We’re very concerned that there
will be a lot of people who will only realize that the hearings are
being held much later, after the National Energy Board announces the
locations and dates for the hearings, and by then it’s long after the
deadline,” Moss says.

The environmental groups say the Joint Review Panel should have had a more aggressive campaign in newspapers, online and in the broadcast media to make people in northern BC aware of the looming deadline.