Egyptian LNG terminal is model for Kitimat project: Encana

Energy

The rugged, rocky, windswept shoreline of Douglas Channel and Kitimat harbour are very different from the Nile Delta, a gigantic flat estuary, so much bigger than the Kildala or Giltoyees, warm, on the Mediterranean, a cradle of human civilization.

KBR, the main contractor for the Kitimat LNG project front end engineering, is basing its planning  for the Kitimat terminal on a project it built in Egypt, Dave Thorn, Encana Vice President of  Canadian Marketing told an investor conference call on Tuesday, Oct, 4, 2011.

Thorn told the call that plans for the Kitimat terminal are based on the “Seagas” terminal in Damietta, (also known as Dumyat) Egypt,  60 kilometres west of Port Said on the Nile Delta.

The terminal is used to export liquified natural gas from fields in Egypt to customers in Spain.

In 2000,  what was then Haliburton KBR was given the contract for front-end engineering and design (FEED)  through a joint venture in Egypt,  Damietta LNG Construction Llc.  The joint venture later got the contract to build the LNG terminal complex.

The terminal is formally called SEGAS, an acronym for the Spanish Egyptian Gas Company.

 According to the Wikipedia entry,  the output capacity of the plant is 5 million tons of LNG per year.  The complex includes the LNG liquefaction train, inlet gas reception area (metering and analysis), natural gas liquids removal and fractionation area, a docking jetty for tanker loading and transportation, LNG refrigerated storage and export facilities (tanks and booms), utilities and supporting infrastructure (power, water and roads), gas metering and treatment facilities (acid gas removal and dehydration), refrigerant condensate and LNG storage (two 150,000 m³ PC LNG storage tanks). The total investment costs of the LNG complex were around US$1.3 billion.

Unlike Kitimat, where the natural gas will come from the Horn River Basin, the natural gas in Egypt is close to the terminal, in large fields under the Nile Delta.  The plant is supplied by natural gas from the West Delta Deep Marine  Concession Area about 140 kilometres (90 mi) from the LNG complex.

About 3.2 million tons of LNG is sold to  Unión Fenosa Gas which has a receiving terminal at Sagunto, Spain.  The rest is sold on the open market by the Egyptian Natural Gas Holding Company.

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In ancient history the port was known as Tarniat, It was later overshadowed by the growth of nearby Alexandria.  From seventh to the twelfth centuries, under Muslim caliphs, Diamietta was both an important naval base and an import point for goods from as far away as China. Today, in addition to the LNG terminal, it has a major container port.

KBR, formerly Kellogg Brown and Root has been involved in construction, mostly in the energy industry, for more than a century.   For many years the company was part of the Haliburton empire, but was spun off in 2007 and is now headquartered in Houston, Texas.
The company was recently involved in a number of scandals and lawsuits, mainly tied to its role as a prime contractor for the US military in Iraq.

Related link:  SEGAS Liquefied Natural Gas Complex, Damietta

 

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China biggest customer for Kitimat LNG: Encana

Energy

564-ecanalogo75.jpgChina is probably the largest long
term customer for liquified natural gas that will be shipped through
the port of Kitimat, executives from Encana, one of the three
partners in the KM LNG project said in an investor conference call
Tuesday, Oct. 4, 2011.

India could also be big customer for
LNG shipped from the Horn River in northeastern BC through Kitimat,
Encana said.

Although Japan will be increasing its
purchases of liquified natural gas in the coming years, the immediate
situation with Japan is less certain. While the March 2011
earthquake and tsunami knocked out the Fukishima nuclear plant and
prompted Japan to scale back other nuclear plants and increase LNG
purchases, Encana says the country has still not come up with any
definite policies

559-chinalng.jpgDave Thorn, Encana vice president of
Canadian marketing, who also oversees the Encana’s role in the
Kitimat project, said that China’s overseas imports now account for
eight per cent of its purchases of natural gas. That is expected to
rise to 10 per cent in the next few years. Thorn said there is a big
gap between current LNG contracts and what Encana says is long term
demand from China. He speculated that there could be increasing
demand from China during the 20 years or so the Kitimat LNG project
is exporting LNG. ( As well as projected population and
manufacturing growth, even in a weak economy, China is now heavily
dependent on coal, but is also investing in “green” projects
which means there could eventually be a switch from coal to natural
gas).

The fact that one giant Chinese
customer, PetroChina, pulled out of a deal with Encana earlier this
year doesn’t seem to be a setback. Thorn said that there is strong
interest from at least six unnamed major customers for LNG to be
shipped through Kitimat. “The expression of interest ranged from
simply LNG supply to existing or planned regasification facilities
through to participation all along the value chain from shipping,
equity interest in the Kitimat facility as well as upstream
participation,” Thorn said.

561-kitimatlngmarket.jpgThe Kitimat project is currently
undergoing a front end engineering evaluation by KBR. There is a
similar study under way on the Pacific Trails Pipeline that could
carry the natural gas to the terminal. Both studies are expected to
be complete by the end of 2011. Encana expects the National Energy
Board to approve KM LNG’s application for an export licence in
December. Encana and its partners, Apache Corporation and EOG
Resources, expect to make a final investment decision in January
2012.

If all goes as planned the Kitimat
terminal would be shipping 700 million cubic feet of natural gas a
day to Asia when the terminal begins operations in 2015. Encana and
its partners are already optimistic, talking about plans to double
capacity to to 1.5 billion cubic feet a day in the coming years.

What’s driving much of this is the
high price of natural gas in Asia, which is pegged to the price of
oil, compared to North America where natural gas prices are
determined by the marketplace. With shale gas increasingly abundant
the price on this continent has been dropping and that has affected
the bottom lines and stock prices of Encana and other natural gas
producers. Encana is also bolstering its bottom line by tapping
“liquid-rich reserves” (oil and natural gas) that may be found
in the areas where they are currently pumping natural gas.

The Horn River Basin area in
northeastern BC was a surprise discovery by an Encana crew in 2003,
said Kevin Smith, Encana Vice President of New Ventures. The company
then began to quietly acquire assets, either by buying land or by
leasing in the region. “The Horn River resource base is enormous,
highly accessible and will certainly play a large role in North
American and even global gas supply in the years to come,” Smith
told the conference call.

During the June NEB hearings in
Kitimat, witnesses described the Horn River formation as special but
were reluctant to go into detail. Smith said the shale in the Horn River
is “all the attributes for high productivity,” including large
reserves and “overpressured system” which helps extraction. “It
keeps getting better and better.”

As well as going west to Asia, natural
gas from Encana’s Horn River assets will go east to Alberta to fuel
bitumen sands production which Smith said will require an additional
1.3 billion cubic feet a day by 2020, This is likely to be
controversial with the environmental groups and bitumen sands
opponents who have always taken issue with the idea that clean
natural gas would be burned to help get crude of the dirtier bitumen
sands.

563-lnghub.jpgEncana says it has developed a “hub”
system in the Horn River where a central well site can use horizontal
drilling to tap areas where once many wells would have been needed.

“Fracking” or fracturing shale gas
requires large amounts of water. As was pointed out in the June
hearings in Kitimat, Encana has tapped an ancient, underground alt
water reservoir called Debolt which allows it to reuse the water from
the formation and minimizing use of local fresh water.

British Columbia is helping the shale
gas industry with favourable royalties in the northeast including
royalty credits for building infrastructure in the region.

Encana, however, is under pressure
from inflation. It faces rising costs from steel, labour and all
kinds of services. While it supplies the bitumen sands with natural
gas, it is also in competition with the Fort MacMurray area for
supplies and labour.

Related links

Dow Jones (via Fox) Encana Eyes Asia As Key Market For B.C. Natural Gas

CP (via Canadian Business) Encana says costs of labour, steel, services rising in energy sector

Gitxaala First Nation settles with KM LNG

Energy

The Gitxaala First Nation has settled its dispute with the KM LNG (also known as Kitimat LNG) over it’s application before the National Energy Board for an export licence.

A letter from Robert Janes, representing the Gitxaala, was filed with the  NEB on Sept. 29, saying they were withdrawing their intervention and their motion for further hearings.

In original filings, the Gitxaala First Nation objected to a lack of consultation between the Crown and the First Nation as well as expressing concerns about the in adequacy of the Transport Canada TERMPOL process which is looking at the environmental and socio-economic effects of tanker traffic on the west coast. (TERMPOL is also part of the Enbridge Northern Gateway application).

One of the concerns of the Gitxaala that came in out in the June hearings in Kitimat was the effects of tanker wake on the coast.    Janes’ cross-examination of the KM LNG witnesses was one of the liveliest part of the Kitimat hearings.

No details of the settlement were released.

Related link: NEB adjourns KM LNG hearings as partnership talks to coastal First Nation

Encana conference call to update Kitimat, Horn River developments

Energy

Encana, one of the three partners in the KM LNG (Kitimat LNG project) will hold a conference call for executives and a simultaneous webcast, Tuesday, Oct. 4 at 9 a.m. MT,  8 a.m. PT to update on its Horn River shale gas development and also Encana’s view of the Kitimat project. Encana’s partners are Apache Corp. and EOG.

A news release from Encana says

Encana Corporation (TSX, NYSE: ECA) will hold a conference call and
webcast for the investment community highlighting its Horn River
resource play on Tuesday, October 4, 2011 at 9:00 a.m. MT (11:00 a.m.
ET). The presentation will be hosted by members of Encana’s senior
management team and will include information detailing the company’s
strategy, resource play hub development model and operations in the Horn
River play, as well information on the Kitimat LNG project.
A live webcast of the conference call will also be available via Encana’s website, www.encana.com, under Investors/Presentations & events, or directly at the following

URL:

Webcast link:
http://w.on24.com/r.htm?e=361512&s=1&k=56F984CEC6C224CE4C59E3D7FE8C9CB8

The Calgary Herald is speculating that Encana may be either selling some assets or announce that it has found development partners. For those in the know in the Alberta oil patch the sudden announcement has people in Calgary wondering what the announcement will be.

The Herald also quotes one analyst as wondering what is holding up the Kitimat LNG project.

Phil Skolnick of Canaccord Genuity said he’s hoping for “some clarity” on where the company is at in the joint venture process, as well as what’s preventing Kitimat LNG from moving full-steam ahead.

“What are the essential bottlenecks?” Skolnick wondered

Editor’s note: 
With all the activity around town it’s certainly a surprise to hear the Kitimat project isn’t going “full steam ahead.” As far as Northwest Energy News is concerned if there were bottlenecks on the project at this end, the ever vigilant Kitimat rumour mill which has been churning another possible LNG project for more than a week now, would certainly have heard about it. Perhaps it is simply all the  unusually stormy weather we’ve been having all summer has slowed things down.

Accuracy is the best neutrality. It’s all about the bitumen.

Editorial

Memo to my media friends and colleagues:

Last Tuesday, Sept. 20, 2011, the District of Kitimat sponsored an “educational forum” here at Mount Elizabeth Theatre on the controversial Northern Gateway pipeline project which, if approved, would carry bitumen from Alberta  to the port of Kitimat and on to Asia.
.
There was an hour of presentations  covering all sides the debate, followed by a question and answer period.

551-ngatepanel-thumb-500x230-550.jpgThe Enbridge educational forum in Kitimat, Sept. 20, 2011.  Left to right, Ellis Ross, Chief Counsellor, Haisla First Nation,  Mike Bernier, mayor of Dawson Creek, Greg Brown, environmental consultant and John Carruthers, President Enbridge Northern Gateway  Pipelines. (Robin Rowland/ Northwest Coast Energy News)

Throughout those two hours, the word used to describe the substance that could come to Kitimat through that pipeline was the word “bitumen.”   Panelists Ellis Ross, Chief Councillor of the Haisla First Nation,  John Carruthers, president of Enbridge Northern Gateway Pipelines talked about “bitumen,” so did environmental consultant Greg Brown, they all spoke about “bitumen.”  The questions from the audience were about “bitumen.”

Of course, after a couple of years of hearings,briefings and educational forums on the Northern Gateway pipeline project, with more to come (especially when the Joint Review Panel’s formal hearings begin here in January) the people of Kitimat are used to the word “bitumen.” Everyone from grade school kids to seniors know the right words to use, especially since Kitimat is also the site of proposed liquified natural gas projects (which introduced a whole new set of terminology.) 

When we talk about (and sometimes debate) the Northern Gateway project on the cross trainers and treadmills at the Riverlodge gym, the word used is “bitumen.”

While the Kitimat meeting was underway the rest of the continent, and especially the media  was focused on another pipeline project, the proposed Keystone XL project that would carry bitumen from Alberta down to Texas to be refined there.

So it was no real surprise when Open File Ottawa ran a short item by freelancer Trevor Pritchard on the debate over media use of the words “oils sands” vs the words “tar sands.”
  

Type in “Alberta tar sands” into Google, and you get 852,000 results. Perform a search for “Alberta oil sands” instead, and you end up with 334,000 results–not even half that. And if you change “Alberta” to “Alberta’s,” the gap widens even further.
So why do most media outlets tend to default to the phrase “oil sands”? Is “tar sands” pejorative? Or do both terms carry their own bias?

Pritchard pointed back to an article in the Tyee posted after the Calgary Herald attacked the late NDP leader Jack Layton for using the term tar sands.

Tyee quoted the Calgary Herald editorial (no longer visible on the web)this way:

Interestingly, the Calgary Herald didn’t so much take issue with the statements themselves, as it did with his vocabulary.
“It’s not what Layton said,” read an editorial from early April. “It’s the loaded and inaccurate language he used repeatedly, referring to the oil sands as ‘dirty’ and ‘tar sands’ — a word that’s part of the propaganda lexicon for radical environmentalists.”

Nearly two weeks later, the Herald was still ruminating about Layton’s and Obama’s language choices.
“Tar sands is inaccurate and pejorative,” wrote columnist Paula Arab.

In today’s polarized world, you might expect the Calgary Herald, in the centre of the Alberta oil patch, to be in favour of the term “oil sands” 

However, most of the mainstream media seem to have bought into the idea that if the sandy hydrocarbons found in northern Alberta are called “tar sands” (it certainly looks and smells and feels like tar) it is pejorative, while “oil sands” are neutral. As comments on both the Tyee and Open File stories show, those who tend toward the environmental point of view consider the term “oil sands” energy industry spin.

Open File asked the Canadian Press for their take on the subject, since the CP  Stylebook (like its equivalent from the AP in the United States) is considered the usage Bible not only for the Canadian media for most non-academic writing in the Canada.

Senior Editor  James McCarten responded:

Canadian Press style calls for the use of the term “oilsands” (all one word), as it is both the official term used by the petroleum industry and the least susceptible to misinterpretation or misunderstanding. It is also in keeping with accepted style for terms like “oilpatch” and “oilfield” — consistency is a critical element of any effective writing style.
It’s also important to choose the most neutral term available.

“Tarsands,” while at one time the industry’s chosen term, has been appropriated in recent years by opponents of the oil industry and has taken on political connotations, so we choose to avoid it.

To which commenter Raay Makers responded:

So let me get this straight: CP deems the term preferred by the petroleum industry “neutral,” while the term “appropriated” by opponents of the oil industry isn’t. They obviously have misconceptions of the meaning of the term neutral.

An hour after I read the Open File story,  I turned to CBC TV News and watched Margot McDiarmid’s item on the Keystone debate.  In her first reference to the Keystone pipeline, McDiarmid used the term “oil sands bitumen”  to describe what would go through the Keystone to Texas.  Relatively accurate. But then at the end of her item she said “oil” would be flowing through the Northern Gateway Pipeline to Kitimat.

Even though I worked in radio or TV for three decades and know the necessity to keep things as simple as possible  in a short item, I was appalled.  To describe the bitumen that is going  through those pipelines simply as “oil” is misleading and inaccurate.

If you’ve sat through briefings, attended hearings and read the documents, it is clear that bitumen behaves differently in a pipeline from conventional oil, whether it is crude oil or refined oil.

That difference is at the heart of the debate over both pipelines. It appears that no one outside  of the local media here in Kitimat and media along the Northern Gateway route seems to understand that difference, not even at the centre of the current debate about the Keystone XL in Nebraska.

So I checked. What term is the media using to describe what will flow through the Keystone and Northern Gateway pipelines?  The media is all over the place, calling it oil, crude oil, crude, tar sands oil, oil sands crude, oil sands bitumen.

I first checked the CBC.ca site:
 
 Max Paris in the written story tied to McDiarmid’s item uses “oil sands bitumen,”  the CBC interactive uses “oil sands crude.”

Today’s New York Times uses the term “oil pipeline” to describe the Keystone project.

In a Nebraska local paper, the Omaha World Herald, reporter Paul Hammel describes it as “a crude-oil pipeline”

In another local paper, the  Lincoln Nebraska, Journal Star   reporter Art Hovey uses “oil.”

An Associated Press story today, (at least as it appears on the Forbes site) is totally inconsistent, with the web friendly summary speaks about Keystone XL carrying “tar sands oil,” but the main body of the story calls it “oil.”

Reuters uses the term “oil” in this story 

An editorial  from Bloomberg uses “oil” in the lead

On first look, it might seem wrong to allow TransCanada Corp. to build the 1,700-mile Keystone XL pipeline to carry oil from Alberta, Canada, to the U.S. Gulf Coast. 

It goes on to eloquently describe the situation in Alberta’s sandy hydrocarbons

What’s more, a new conduit would seem to only encourage the further development of the Athabascan oil sands in Alberta. This is a dirty business, to be sure: Vast tracts of spruce and fir are cleared to make way for open-pit mines, from which deposits of sticky black sand are shoveled out and then rinsed to yield viscous tar. For deeper deposits, steam is shot hundreds of feet into the earth to melt the tar enough that it can be pumped to the surface. Then there are the emissions associated with mining Canadian oil sands: It produces two and a half times as much carbon dioxide and other heat-trapping gases as oil drilling in, say, Saudi Arabia or west Texas.

Bloomberg as you might expect from a business site, goes on to give the argument for building Keystone XL in terms of jobs and the economy (and in a much more measured way than the strident columnists in the Postmedia chain here)

Bloomberg concludes

Keep in mind, the U.S. is crisscrossed by thousands of miles of pipelines carrying crude oil, liquid petroleum and natural gas. One of these is the Keystone 1 pipeline, which already carries crude from the oil sands. Yes, these pipes sometimes leak — spectacularly last year when almost 850,000 gallons of oil spilled from a ruptured pipe in Michigan. Far more often, when leaks occur, they are small and self-contained.
After the public hearings, the U.S. should give TransCanada the green light — and then make sure the company manages pipeline design and construction with care.

Get the picture. As far as I can tell, no one, no one in the major news media is accurately describing what will flow through the Keystone XL and Northern Gateway pipelines. Again the accurate descriptions come from  the local media in northwestern BC who have attended years of local briefings and hearings. 

Oil comes from oil sands, right? Here is where the use of the term “oilsands’ leads to misleading coverage.  It is where senior editors at CP and other senior editors at other news organizations are wrong.  Saying oil or crude will flow through these specific pipelines does lead to  misinterpretation and misunderstanding and it comes directly from the ill advised use of the words “oil sands.”

Say “oil” and, although it is a generic term, most people think of the substance you put in an engine, ranging from the thick, black gooey stuff that goes into a two stroke boat engine, through the lighter oil that goes into your car or the even lighter oil used by model makers. “Petroleum” would probably be a better generic term.

553-giantcrude.jpgSay crude and  most people would think of  James Dean covered in the crude from the gusher in Giant or similar movie scenes. Or for those old enough to remember, they think of the opening of the Beverly Hillbillies when the “bubbling crude” comes out of the ground at Jed Camplett’s farm.

So what is going through the pipelines?  While Enbridge uses the term “oil” in its promotional brochure on Nothern Gateway (pdf file), in the briefings here Enbridge officials always talk of “bitumen.” They know that the people living in Kitimat, again whether supporter or opponent, have done their home work. Everyone here  knows it won’t be “oil” in the pipeline.  But it seems that the public relations branches of  Enbridge and TransCanada  still believe they can spin the media into reporting the pipelines will just be carrying oil.

So what is going to be in the Northern Gateway and Keystone XL pipelines? Read the documents filed with the Joint Review Panel and you find out it is “diluted bitumen”  (The bitumen from those sandy hydrocarbons in Alberta has to be diluted or it won’t flow through the pipeline.)

Documents filed with the Joint Review Panel by Stantec, an environmental consulting company based in Fredericton, New Brunswick,  hired by Enbridge, and frequently retained by the energy industry  uses this definition:

diluted bitumen A hydrocarbon consisting of bitumen diluted with condensate in order to reduce viscosity, rendering it suitable to be transported via a pipeline.  In addition to condensate, other subjects can be used as a dilutant (naptha and synthetic oil)

So what is condensate?

Again as defined by industry consultant Stantec condensate is:

condensate:  A low density mixture of hydrocarbon liquids that are present in raw natural gas produced from many natural gas fields or which condense out of raw gas if the temperature is reduced below the hydrocarbon dew point temperature of the raw gas.

(Another angle the media has ignored about the Northern Gateway project. While it carries diluted bitumen west from Alberta, there is a twin pipeline that carries the condensate east to Alberta.)

What to call the pipelines and the product?

So let’s talk about Northern Gateway and Keystone XL first.   These pipelines are different from the other pipelines that Bloomberg and other media say crisscross North America.

These pipelines will be carrying diluted bitumen, not oil, not crude.

When the public think of oil they think of a lubricant that enhances flow, not a gritty substance that has to be diluted before it can move. Diluted bitumen is a mixture of sand and soil and crude hydrocarbons, with various petrochemicals added to so that that mixture can actually get through the pipelines.

The use of diluted bitumen is raising all kinds of questions.   There were questions at last week’s forum on the effect of the friction from the sand on the stability of the pipelines.  There were questions at the forum about the corrosive nature of the condensate added to the bitumen on the stability of the pipelines.

These questions do not arise when it comes to conventional pipelines which have been built for the past century.

While there have been major oil spills for decades on land and sea, there has never been a major spill  of bitumen in either a pristine watershed or the ocean.  There has never been a major spill involving this mixture of  bitumen and condensate.  

Unfortunately, the ultimate answer to the question of how dangerous such as spill could be, will only be found out if there is disaster.

554-enbridgekitimatriver.jpgA photo map of the Enbridge Northern Gateway Pipeline (in yellow) showing its route close to the Kitimat River, site of the town’s water supply. (Enbridge. Filed with the Joint Review Panel)

The Northern Gateway Pipeline follows the route of the Kitimat River. One of the most frequent questions is what happens to the town’s water supply if the pipeline breaks.

There are thousands of pages on the Joint Review Panel website that show that Enbridge and their consultants have done all kinds of tests, modelling and contingency planning to support their stand the pipelines  and the tankers are as safe as possible. There are documents from environmental groups and others that take the opposite position.

So to maintain its already shaky credibility the media must be accurate.  Accuracy is the best form of neutrality.

So here are my style/copy suggestions:

The media should call what is going into the Northern Gateway and Keystone XL pipelines  “diluted bitumen” on first reference and “bitumen”  on subsequent references.

It is NOT accurate to call it “oil.” It is not really accurate to call it “crude.”

It is  crude oil mixed with sand and the condensate chemicals.  To call what will go through the Northern Gateway and Keystone XL pipeline simply as oil  or crude is leading to gross  misinterpretation and  complete  misunderstanding.

The media should continue to use oil when they are referring to conventional oil flowing through a conventional pipeline.

The public isn’t stupid.  If you ask a Grade Three student in Kitimat about bitumen and condensate you’ll get a pretty good answer. If the media has to produce sidebars,  graphics, interactives, explainer items,  to explain what bitumen is, the sooner the better, so that those taking part in the debate and those reporting it know what they’re talking about.

Tar sands/Oil sands

It is clear that the Canadian  media managers who decided in the mid 2000s that the term “oil sands” was more neutral than “tar sands” blundered.

Yes the environmentalists do use “tar sands” and for some it can be pejorative.  But if you have ever seen the stuff it certainly is tar. 

Just as Enbridge uses “oil” in its brochure  on Northern Gateway but says the real thing “bitumen” in meetings, “oil sands” is the preferred energy industry spin term. The use of the term “oil sands” reduces media credibility.

Using “oil sands”  likely amplifies the general belief that the “corporate media” is in the pocket of big business and thus reduces the credibility  of the shrinking numbers of  hardworking reporters left working in the field.

387-Jointreviewbriefing_June_16_2011.jpgHere crowd sourcing and social media help. There are postings both on Open File and Tyee saying the terms “bitumen sands” or “bitumen-bearing sands” are proper neutral terms. I have used the term “sandy hydrocarbons” in this article, I came across it in a briefing document some while ago and it stuck in my mind (though I can’t remember where I saw it).

It is up to public editors, ombudspersons and style book editors to make the call here for their organizations.   I believe that if the media starts using “bitumen sands” as a technically accurate and neutral term for what is found in northern Alberta, the readers and viewers will  quickly accept it.

Staff of the Joint Review Panel brief residents of
Kitimat on the process, June 16, 2011.
(Robin Rowland/Northwest Coast Energy News
)


The big picture. Why isn’t the environment in the style books?

There is a bigger problem that I discovered when I was looking into this issue.  I checked the Canadian Press Stylebook to see what the editors said about the environment and found nothing. Absolutely nothing.  There are chapters on business news, entertainment, sports, even travel, but nothing on environmental coverage.

A very quick check with copy editor friends seems to have come up with same result across the media. Media stylebooks don’t consider the environment important enough to have a full chapter. (I may have missed some of course, the check was very quick) yet environmental stories are in the news every day.

The Associated Press was founded in 1848, in part so the New York newspapers could cooperate in getting the latest business news from Europe, first from ships and then from the transAtlantic cable.  So business news has been essential to the media  for at least a century and a half.  This, I believe, has created this historical, and probably   unintentional, institutional bias that favours word usage preferred by business.  If  media style books had  environment chapters then the question of  oil sands/tar sands would  have been considered more thoroughly and the “neutrality” of “oil sands” questioned. 

Who knows what other environmental issues have been considered only superficially because stylebooks don’t have a chapter on the environment?

Reporters in the field  are often left angry and frustrated by rulings from public editors and ombudspersons who may, despite their efforts, err on the side of  “neutrality” rather than “accuracy” especially in this era of extreme polarization.

Media managers often take the path of least resistance, especially if they are being inundated with complaining e-mails and letters. 

A stylebook chapter on the environment should stress accuracy over neutrality. Thus it serves the public.

A rigorous chapter in a media style book on the environment (and also on science which is also lacking) would give guidance to reporters in the field, editors at the desk  and allow managers to tell the complainers with agendas just how the issue has been examined.

This site has always used bitumen to describe what will be in the Northern Gateway Pipeline. From now on it will use bitumen sands in copy, and will use tar sands and oil sands in direct quotes as appropriate. I hope the rest of the media will follow.

Disclosure: I worked for CBC.ca from 1996 until I took early retirement in 2010. I have also freelanced for both Canadian Press and OpenFile.

 Glossary of terms used in Stantec environmental report (PDF excerpt from original file)

We’re not afraid of Kitimat, Oregon rivals say, as papers filed for LNG export terminal permit

Energy

The Jordan Cove Energy Project, often cited by energy industry experts as Kitimat’s chief west coast rival as a liquified natural gas export project,  sent a $50 filing fee to the United States Treasury on Friday,  thus notifying the US Federal Energy Regulatory Commission that the company  is seeking to export liquified natural gas from its planned $3.5 billion terminal at Coos Bay, Oregon.

Although testimony at June’s National Energy Board hearings cited Coos Bay as a rival that could take LNG business away from Kitimat, the view from Oregon appears to be just the opposite.

545-jordancove.jpgJordan Cove project manager Robert Braddock told the industry newsletter, Platt’s Gas, that he is “not afraid of competition from the north, where Kitimat LNG is planning an export terminal in British Columbia. ‘We actually presume that Kitimat would be built,” Braddock said. “We assume that we would be built number two and we think there is plenty of room for two such facilities on the West Coast.’

Braddock also told Platt’s that Oregon is not a rival for BC or Alberta gas nor competition for LNG terminals in Louisiana and Maryland. “The principal difference is we have access to a different range of resources from both Canadian gas and US gas. But equally important is we would have certainly much closer access to the Asian markets,” he said.

The Oregonian newspaper reported that prospective customers in Asia for the Coos Bay project may be waiting to see what happens in Kitimat before signing on with Jordan Cove. Braddock told the Oregonian that the  company “is still testing the waters with potential customers, and won’t go ahead with the expensive and byzantine permitting process without firm commitments from terminal users.”

The pro forma initial application filed Friday informs the  US Department of Energy that company wants to export up natural gas to countries  that have a free trade agreements with the United States.  Similar to the National Energy Board hearings on KM LNG, the Federal Energy Regulatory Commission must now hold hearings on the export licence application.

In another similarity, a few years ago, the Kitimat  plans called for an LNG project to import gas. Jordan Cove received  approval in 2009 to build a terminal to import LNG and to build a 370 kilometre (280 mile) pipeline that would carry the gas to Malin, Oregon, on the California border.  

If the US Department of Energy approves the new application, the terminal would become an export, not an import, facility.

In another parallel with Kitimat, like the Enbridge Northern Gateway Project bitumen export proposal, the Coos Bay project has prompted stiff opposition for years. The Oregonian reports “landowners and environmentalists in the region mounted a fierce campaign to block three proposals to build LNG import terminals in Oregon, including the one in Coos Bay,” in the belief that the terminals and associated pipelines would harm forests, farms and salmon habitat.  The newspaper also says that local business groups and unions have supported the import projects, which would bring jobs and tax revenue.

An environmental lawyer, Susan Jane Brown, a staff attorney at the Western Environmental
Law Center, told Platt’s Gas she is still digesting the news, but that said the export
plan will likely rankle her clients, environmental organizations and
landowners. “It would be one thing to
import a good that would be used domestically. But exporting a
domestic product that they have long advocated that we need
domestically, it is a bait and switch,” she told Platt’s.

A powerful local politician, Senator Ron Wyden, an Oregon Democrat  is skeptical of the idea of exporting LNG from the US and told the Oregonian: “I think it’s premature to conclude that the United States now has so much natural gas that it can afford to export it overseas…I think there ought to be a time-out on approving LNG exports until there is a better understanding of how much natural gas there is, whether it can be safely extracted, and what the impact on the U.S. economy would be from LNG exports.”

Sen. Wyden’s opposition is in stark contract with the various consultants and economists who testified at the Kitimat hearings in June which envisioned a totally integrated North American natural gas marketplace with pipes snaking all over the continent delivering the cheapest and most convenient gas to the nearest market.  Wyden’s remarks may be an indication that American politics could put the break on the ideal free market visions of the experts that were expressed before the NEB.

548-ruby logo.jpgSimilar to plans to take shale gas from the Horn River Formation in northeastern BC, Jordan Cove would tap into the Ruby Pipleline,  a  1,000 kilometre (680-mile), 42-inch diameter that would carry shale gas from the Rockies to a hub in Wyoming and then to Malin, Oregon to connect with the Jordan Cove pipeline there.

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How Kitimat harbour will look if both Northern Gateway and KM LNG go ahead

530-EnbridgeLNG1.jpg

Detail of a map filed by Enbridge Northern Gateway with the Joint Review Panel showing the foot print of the proposed bitumen terminal and the LNG terminal.  The proposed BC LNG terminal would add a third terminal at North Cove (green text on this map)

A recent filing by the Enbridge Northern Gateway project with the Joint Review Panel shows just what Kitimat harbour and the service area will look like if the liquified natural gas projects go ahead and so does the Northern Gateway.

Three maps show areas where the two pipelines follow the same routes and where they diverge beginning just east of the service centre.  (Larger versions of maps pop up if you click your mouse)

532-EnbridgeLNG4-thumb-500x268-531.jpgIn this map, the Enbridge pipeline is yellow with a black outline, the LNG pipeline is red. Where there are yellow and red alternating squares, that means the two pipelines will follow the same route. Solid orange lines are paved roads,broken orange lines are unpaved roads and the green lines are power lines.

535-EnbridgeLNG3-thumb-500x265-534.jpgJust before the pipelines reach the service centre, they diverge, the yellow Enbridge pipeline following the road route around the periphery of the service centre, while the gas pipeline at first follows the route of the Pacific Trails Pipeline and then snakes off at the hydro substation.  The two pipelines then run parallel just off Haisla Boulevard across from the Rio Tinto Alcan plant. The green line beside the two pipelines marks a hydro line that would be build to power the facilities.

538-EnbridgeLNG2-thumb-500x265-537.jpgThe final map shows the Enbridge pipeline coming into the bitumen/condensate terminal with its large footprint, while the natural gas pipeline continues, crosses Bish Creek and then enters the Bish Cove KM LNG terminal.  If the BC LNG terminal is built at North Cove, just west of the proposed Enbridge Northern Gateway facility, a branch pipeline would go from the main gas pipeline down to that facility. (There were indications at the June NEB hearings that negotiations were under way on “sharing” gas “molecules” between the two groups).

541-EnbridgeLNG5-thumb-500x447-540.jpgFootprint of the Enbridge Northern Gateway plant.

Enbridge photo maps showing Northern Gateway and LNG routes in pdf format

Harper appears to endorse Northern Gateway in TV interview

Energy Politics

In an interview with Bloomberg News, Prime Minister Stephen Harper strongly endorsed the bitumen pipeline from Alberta to Texas, the controversial Keystone XL project and then went on to apparently push for the Enbridge Northern Gateway project by saying “there is all the more reason why Canada should look at trade diversification and particularly diversification of energy exports.”

In the interview with the business news service Harper said U.S. approval of TransCanada Corp.’s proposed $7 billion Keystone XL pipeline is a

 “no-brainer” because it will create jobs and add to America’s secure energy reserves.

“The need for energy in the U.S. is enormous, the alternatives for the U.S. are not good, on every level,”

Harper said he’s “confident” the pipeline will be built.

Keystone would link Canada’s oil sands to U.S. refineries on the Gulf of Mexico coast. The 2,673-kilometer pipeline would begin in Hardisty, Alberta, and cross Saskatchewan, Montana, South Dakota and Nebraska.

The alternatives for the United States are not good. And, you know, on every level, not just economic (but) political, social, even environmental, the case is very strong for this…”The fact that there are these kinds of pressures to, you know, to potentially take decisions which would, in my judgment . . . to avoid a decision would be a complete no-brainer.”

Shawn McCarty of The Globe and Mail interprets Harper’s statement this way:

the federal government has broadly endorsed the oil industry’s efforts to build new pipelines to the West Coast to open up new markets in Asia.

The National Energy Board is reviewing plans for a natural gas pipeline to Kitimat, B.C., and a plant to liquefy the gas so it can be exported via tanker.

The NEB and Canadian Environmental Assessment Agency are holding a joint review of Enbridge Inc.’s more controversial Northern Gateway oil pipeline to the coast. The Gateway project is opposed by environmental groups and first nations, whose traditional lands would be affected.

Harper has now added his voice to cabinet ministers Joe Oliver and James Moore in pushing for the Northern Gateway Pipeline, which once again raises the question, why have the Joint Review Panel since it appears the decision to go ahead has already been made?

Related Link Vancouver Sun U.S. approval of Keystone a ‘no-brainer’: Harper

Christy Clark flies to Kitimat, spins on LNG, flies out again

Energy Environment Politics
529-6166894394_e7958e02d3.jpgBC Premier Christy Clark meets with the leaders of the Haisla First Nation at Kitamaat Village, Monday, Sept. 19, 2011.  (BC government hand out )

BC Premier Christy Clark made a flying visit to Kitimat Monday, Sept. 19, 2011, dropping into Kitamaat Village to meet with the leaders of the Haisla First Nation and, as part of the flying, boarded a helicopter to take a look at the  KM LNG at under construction at Bish Cove, before flying out again.

It was all part of the premier’s campaign style job strategy which sees Clark touring the province this week and unveiling a complete jobs package on  Thursday.

The proposed liquified natural gas terminals at Kitimat are not as controversial in this region as the proposed Enbridge Northern Gateway pipeline.  There is general support for the LNG projects, allowing for  safety concerns about LNG tankers and environmental problems from the construction of the pipeline.

Clark’s visit to the Kitimat region is controversial here because from all appearances, there was little or no substance.   If the visit had in been the early decades of the last century, when politicians traveled by train rather than helicopter, it would have been a “whistle stop,” nothing more.

A BC premier visiting the traditional territory of the Haisla First Nation should, of course,  make a courtesy call on the leadership in the village, although it appears the visit was  short, routine  rather than a truly substantial meeting.

As for the rest of the Kitimat region was concerned,  the premier’s short in and out photo op was not aimed at helping the people of Kitimat but appeared to be more spinning her jobs strategy throughout the rest of the province which is less familiar with the history of  development in Kitimat.   

No one in the local media, the Northern Sentinel, Kitimat Daily nor Northwest Coast Energy News were given any information about timing of the premier’s visit, perhaps because local reporters might ask tougher questions than the BC legislature  pool traveling with Clark. The Northern Sentinel only found out about the time of  the meeting after  one of the numerous calls made by local media was actually returned in time for their reporter to be in the village for the premier’s visit.

As of Sunday, no meeting between the premier and Kitimat Mayor Joanne Monaghan was scheduled.  At the last minute, after some political arm twisting, the premier did have a brief  ten to fifteen minute   meeting with Monaghan and Municipal Manager Ron Poole at the village on Monday.  (It should be noted that members of Kitimat council will meet with Clark at the up coming convention of the Union of BC Municipalities).

At 14:55 Monday, Sept. 19, Clark (or her PR team) tweeted.

We’re taking steps to get #kitimat’s liquefied natural gas plant running by 2015. A strong LNG industry means local jobs. #bcpoli

The message was quickly retweeted by Clark supporters. That tweet raised eyebrows, since the process for the KM LNG is already well under way, with construction apparently on schedule for the 2015 date when the first natural gas will flow into a tanker.  The licence for KM LNG is in the hands of  the federal National Energy Board. 

What the tweet meant became clearer once the premier’s office issued a news release  

Christy Clark’s “more aggressive approach to the development of the natural gas sector” includes traditional small c conservative elements:

Cutting red tape: accelerate the lengthy permitting processes and improve the decision making required to bring large-scale production facilities from a concept to a reality, and that these commitments will be a greater priority for B.C. on a go forward basis.

Skills training: working with industry partners for some time on the future skills required to support a new LNG industry. The goal is to ensure the post-secondary system is able to deliver the targeted training necessary to grow the oil and gas industry, including LNG.

Attracting investment:  by working with industry stakeholders and First Nations to remove the barriers and secure the investment required to establish up to three LNG plants by 2020. As of today, the Province is aware of a handful of LNG proposals.

The only practical element in Clark’s announcement was help for the Haisla First Nation in dealing with multiple developments: (as related in the news release)

The Province’s assistance is timely,” said Haisla Nation Chief Councillor Ellis Ross. “Our own training capacity is limited by resources and capabilities, and these have been exhausted given the projects now underway on our territory and the demands they place on our people for skills and training. Our economic future has never looked better, and this assistance will help us deliver on this promise to our community.”

Michael Smyth of The Province (along with a number of Tweeters) noted that most of Clark’s announcement was recycled.

Those same economic storms have buffeted the government, too, and Clark doesn’t have a lot of money to spend on direct job creation — not if she keeps her promise to balance the budget in 2013.

So, expect many re-announcements of old projects. The proposed Kitimat liquefied natural gas plant Clark trumpeted Monday, for example, was approved three years ago.
She’s also expected to cheerlead the Northwest Transmission Line project this week, another one that’s been in development for years.

Without a lot of money to throw around, Clark will talk about getting government out of the way of private-sector job creation. Deregulation and cutting red tape is less expensive than direct stimulus spending to create jobs.

The environmentalists won’t be happy when she starts fast-tracking permits for mining and other resource extraction, but losing “green” votes is the least of her worries.

Veteran journalist Norm Farrell in his blog “Let’s play political football with Kitimat” gives a list of how often a Kitimat LNG project has been announced going back to an Associated Press report from 1981

The Rim Gas Project, which includes Petro-Canada of Calgary, Westcoast Transmission of Vancouver and Mitsui and Co. Ltd. of Japan, wants to deliver and sell liquefied natural gas to Japan from a plant it will build at Bish Cove, six miles from Kitimat.

And Kitimat Tweeter  YWGSourpuss posted:

Kitimat has kinda sorta might been getting an LNG Plant since I was a teenager. Meanwhile, Methanex and Eurocan were culled, dust blows…

and then

I see media wonks waffling about LNG/Kitimat/need for cheap energy. Remember Kemano Completion? Ask Rio Tinto re: hole in the mountain.

On the Opposition side of the question, Vancouver Sun columnist Vaughn Palmer looked at an apparent split in the opposition NDP over the LNG issue Wednesday, noting that the environment critic NDP environment critic Rob Fleming is concerned about the controversial fracking process used to retrieve natural gas from shale:

When you look at where the gas would come from, we’re talking about major shale-gas deposits. There are big concerns there, from an environmental perspective, around water usage and whether it’s sustainable, and water contamination when it’s injected underground to bring the gas to the surface – the fracking process – and a lot of greenhouse gases produced.

Palmer reports that the NDP house leader John Horgan has indicated  that he and Opposition leader Adrian Dix support LNG exports.

 In Horgan’s estimation, it could be piped to the coast, liquefied and shipped out with minimal risk. “Liquid natural gas doesn’t stick to things. It blows up, or it vents. So the environmental consequence of a catastrophe with an LNG tanker is relatively insignificant,” he told me during an interview on Voice of B.C. on Shaw TV.

“So the risk to our coastline from LNG is insignificant; the benefit to British Columbians is quite significant. And it’s our resource, so we’ll get the royalties for extracting it, we’ll get value added by getting it to an LNG facility, and then we’ll get a better price for it in Asia.

Palmer is concerned about Fleming’s caution not to rush things, stating that

For “you can’t rush these things” is precisely the opposite of what industry analysts are saying about LNG development. The window on the Asian market is closing, and if B.C. doesn’t get moving, the opportunity will be gone. Again.

One wonders where Palmer gets his evidence that window of opportunity for the Asian markets is closing?  With the Fukishima meltdown, the market window for LNG is actually expanding, not just in Japan but across East Asia.  What some in the energy industry are warning about is Canadian gas being exported through the United States, warnings that were prominent at the NEB hearings in Kitimat last June and is largely industry spin trying to hurry the approval process along.

The controversy over fracking will continue, with the energy industry claiming it is safe and the environmental activists saying it is not. What is apparent about fracking as Pro Pubilica have pointed out in their continuing investigation of the issue, is that use of the process on a wide scale is new and there aren’t enough adequate studies of the process. Inadequate study could mean consequences down the road, we don’t know, so there should be some caution.

The blasting continues at the KM LNG site at Bish Cove as the shoreline rocks are levelled to close to sea level.  Meanwhile the political spin pitches just as much hot air and debris into the atmosphere.
 

Related Links

Vancouver Sun Clark leaves out Island on jobs tour

Northern View: B.C. Jobs Plan’ keys on trade with Asia

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Harper’s decision to defund coast management group may blow back on Enbridge, lawyer says

Energy Environment Link

The West Coast Environmental Law blog says the decision by Prime Minister Stephen Harper to take funding away from the Pacific North Coast Integrated Management Area plan may actually blow back on Enbridge, delaying the Northern Gateway pipeline project for years.

 The cancellation of the funding is  perceived as part of the Conservative government’s aim of pushing the
Northern Gateway pipeline through no matter what the cost.   (Two cabinet ministers, Joe Oliver and James Moore are publicly endorsing the Northern Gateway, despite the fact the Joint Review Hearings don’t even begin until January 2012. It is unlikely either minister would make an endorsement like that without Harper’s approval.)

In the blog post, Why Harper’s shot at PNCIMA also hit Enbridge in the foot, lawyer Andrew Gage argues that Harper’s move,  apparently motivated by fears that the PNCIMA process could block the pipeline, fears created by Vancouver blogger Vivian Crause and her allies among PostMedia’s right wing columnists, will actually delay the pipeline for years because it negates the legal obligation to consult First Nations and thus will likely throw the entire process into the courts for years.

Litigation by any of the Coastal First Nation against the Enbridge Pipeline could pose a serious problem for Enbridge and its Northern Gateway Project.  Because of First Nations title and rights that are protected by Canada’s constitution, the federal government has a duty to “act honourably” and to consult and accommodate First Nations who have a “credible but unproven claim” of rights that may be adversely affected by a government decision (such as approving the Enbridge Northern Gateway Pipeline project and related tanker traffic.)

As a result,  anything that the federal government does in relation to consultations with the Coastal First Nations about tanker traffic and the Enbridge Pipeline that might be considered “dishonourable” creates legal uncertainty and problems for Enbridge.  So was the decision to withdraw from the current PNCIMA funding arrangement “dishonourable?”

Gage notes that the federal government is required by the Oceans Act, passed under the Liberals in 1997, to set up integrated management plans for all coastal areas of Canada, not just the northwest, a process that began in 2005.

Gage also points out that Enbrige has, in the past, participated in the process:

A wide range of stakeholders, including one seat for the conservation sector, provide input and consensus based advice on an Integrated Oceans Advisory Committee, but do not determine the outcomes of the PNCIMA process. Enbridge has itself participated on the Integrated Oceans Advisory Committee, along with representatives of the fish farming, commercial fishing, renewable energy, recreational fishing and tourism industries, and even sponsored an early workshop in the PNCIMA process.

In short, PNCIMA is created by the federal government, managed jointly by the federal and provincial governments and First Nations, but with efforts being made to involve a wide range of stakeholders. Because the PNCIMA is co-chaired by a federal government staff-member, and requires sign-off from the government, it was unlikely to have resulted in a complete ban on oil tanker traffic, although it might have placed restrictions on marine travel, or otherwise provided protection for the coast from shipping impacts.

However, progress was slow, in part due to the limits of federal funding available for the process.

He goes onto to say that the Harper government itself agreed to the now controversial foundation funding in 2010. That was before the attacks from Crause and the PostMedia’s business columnists reached a crescendo in recent weeks. But now there is no longer any mechanism that can be perceived as neutral that consult with First Nations and other northwest coast stake holders.

To flip-flop now, slightly more than a year before the process was supposed to wrap up, leaves the PNCIMA process without the funding that the government has acknowledged is required for a thorough planning process. It is also a slap in the face for the Coastal First Nations, the BC government, environmental organizations and industry stakeholders who have worked on this process for years.

Prime Minister Harper’s government may have believed that it was helping Enbridge and its Northern Gateway Pipelines by withdrawing from this funding agreement. But the resulting uncertainty, and the appearance that the federal government has acted less than honourably towards the Coastal First Nations, may well cause Enbridge huge legal head-aches in the future.

Editor’s note: As I said in this post, there appears to be a double standard, since what the Harper government, PostMedia’s columnists and Krause apparently are saying that it is only acceptable if billionaire capitalists spend their money on a conservative or pro-energy industry agenda, but it is not acceptable if a billionaire capitalist decides to spend his money to protect the environment.

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