Robin Rowland | Northwest Coast Energy News

Here’s how the Enbridge hearings will proceed

Staff of the Northern Gateway Joint Review panel explain the hearing process to residents of Kitimat at Riverlodge Recreation Centre, June 16, 2011. (Robin Rowland/Northwest Coast Energy News)

It will take more than year for the Enbridge Northern Gateway Joint Review Panel to complete hearings and taking evidence before it even begins to consider a decision whether or not to approve the controversial pipeline proposal.

Even then, the worries of the residents of northwest of British Columbia will be only one factor in the panel’s decision.

The Joint Review panel information town hall reached Kitimat on the afternoon of Thursday, June 16. One of the information sheets handed out at the town hall explained the Joint Review Panel this way:

In deciding if the Project is in the public interest, the Panel will consider whether Canadians would be better or worse off if the Project was approved. The public interest includes all Canadians and refers to a balance of economic, environmental and social considerations that change as society’s values and preferences evolve over time.

(Emphasis in original)

Here is a summary of how the process will work:

This summer, those who wish to formally participate in the hearing process must register with the panel.

For those who wish full intervenor status, the deadline to apply is July 14, 2011.

For those who wish to make oral statements in the community round of hearings, the deadline to apply is October 6, 2011.

Those formal intervenors who wish to request information from Northern Gateway have two deadlines. August 25, 2011 is the deadline for the first round, after which Northern Gateway must respond by October 6. The intervenors then can ask Northern Gateway a second set of questions, with a deadline of November 3, 2011. Northern Gateway must respond by November 24, 2011.

The deadline for intervenors to file written evidence with the panel is December 22, 2011.

Community hearings

On January 10, 2012, the Joint Panel will begin the “community hearings” phase where anyone who met the registration deadline, either as an intervenor or a community participant, can make a presentation to the panel.

These community hearings will be held across northern BC and Alberta, along the route of the pipeline and down the coast, with, sources say, a significant session slated for Kitimat.

The community hearings are expected to take several weeks.

Those who made oral comments to the panel then have until March 13, 2012 to file follow up letters.

Final hearings

The community hearings are then followed by another round of filing by the intervenors and government participants.

On June 16, 2012 the Joint Review Panel will then open the more formal “final hearings” at a location to be determined.

Around the same time, the Joint Review Panel must prepare an environmental assessment report that will be submitted to the Minister of the Environment.

Again, according to the handout material, there is a caveat in the panel’s mandate

The significance of any negative environmental and socio-economic effect is only determined after considering the actions that are proposed to prevent or reduce the effects. (Emphasis in the original)

In other words, as those who have attended Enbridge’s briefing sessions know, the company has outlined a whole series of safety measures, for example, adding navigation aides to Douglas Channel and parts of the coast.

If the environmental movement wishes to challenge the voluminous reports, likely costing millions of dollars that Enbridge has already filed as part of its application to the Joint Review Panel, the environmental concerns will have to be backed up with solid and expensive expert evidence.

Once the Minister of the Environment has the environmental assessment, the government then responds:

The government response will set out whether the Government of Canada agrees or disagrees with the conclusions and recommendations made the Panel by the panel regarding the potential environmental and socio-economic affects of the Project. The Governor-in-Council [ the federal cabinet] must approve the government response. This approved response will be made available to the public.

The decision

After it hears the government response on the environment, the panel makes its decision, whether or not the project can proceed.

The Panel will issue its Reason for Decision which will include a decision whether or not the Project is in the Canadian public interest.

If the Panel decides the Project can proceed, its Reasons for Decision will include conditions that Northern Gateway must meet before, during and after the construction of the Project.

If the Panel decides that the Project should proceed, the Panel will send its decision to the Governor in Council who can either accept or reject the decision but cannot modify it.

The Governor in Council means the federal cabinet, so the final decision will rest with Prime Minister Stephen Harper.

Is energy player Nexen Kitimat’s next “gentleman caller?”

Another big energy company is looking for a way to get its shale gas from northeastern British Columbia to the lucrative markets of East Asia.

At Monday’s Canadian Petroleum Producer’s investor conference in Calgary, Nexen announced it was looking for a joint venture partner to export the shale gas through a west coast port to Asia.

LNG World News reported:

Nexen wants to find a partner with expertise in producing and selling liquefied natural gas, said Marvin Romanow, chief executive officer. The Calgary-based company last month opened the books on its shale-gas resources for review by interested parties.
“We looked for folks with good contacts in LNG,” Romanow said

Canadian Press reported:

Nexen Inc. (TSX:NXY) is on the hunt for a partner to help develop its vast holdings in the Horn River Basin. LNG expertise would be attractive in a partner, but Nexen is open to a variety of marketing strategies for its gas, chief executive Marvin Romanow said.
“I think you want to think about treating your market access as a portfolio, not as a single killer strategy.”

So it is likely that Nexen and its prospective partners, whether from Asia or North America, will be next in line of “gentleman callers” making their way to Kitimat to check out Douglas Channel.

To use a theatrical and old movie analogy for a moment, Kitimat, with its isolated location and the devastating closure by West Fraser of the Eurocan plant, up until this spring, the town was seeking big money corporate saviours in the same way as Tennessee Williams’ stricken, lonely Laura pined for a “gentleman caller” in The Glass Menagerie.

Now with the world wide gold rush in shale gas production aimed at the Asian market, Kitimat seems to be taking on a new movie role, the nice, plain, intelligent next-door girl that all the boys ignored until she suddenly comes in to an unexpected inheritance. Now all the boys are calling on her and so are fancy guys from out of town.

Nexen is a Calgary-based energy company, first known as Canadian Occidental Petroleum. It began with operations in the Alberta oil patch and later in the Gulf of Mexico.

In 1991, the company made a major oil discovery in Yemen and that financed later expansion into the Alberta oil sands, deep water drilling the Gulf of Mexico and exploration in northeastern British Columbia shale oil.

At the Calgary conference, Nexen said it wasn’t currently drilling any new wells in Yemen and was slowing maintenance of wells while it waits renewal of its contract with the government. Given the current unrest in Yemen, it may be a while before a new government is formed that can sign a new 50/50 contract with Nexen.

On shale gas, Nexen says on its website:

While we weren’t looking at shale gas five years ago, today we have captured significant resource potential-enough to double our current proved reserves-in the heart of one of North America’s best shale gas plays. We are improving productivity and driving down costs as we improve equipment utilization, drill longer wells and initiate more fracs per well.
Shale gas can be brought on quickly, fuels our short-term growth and complements the larger projects in our portfolio.

Webcasts from the CAPP conference

PDF of Nexen’s Powerpoint presentation. (On the Nexen investor page, lower right)

Oil Sands Project in Canada Will Go On if Pipeline Is Blocked: New York Times

New York Times
(Registration required)

Oil Sands Project in Canada Will Go On if Pipeline Is Blocked

One way or another — by rail or ship or a network of pipelines — Canada will export oil from its vast northern oil sands projects to the United States and other markets.

The oil sands have reserves of 171.3 billion barrels, according to estimates by the provincial government of Alberta.

So the regulatory battle over the proposed Keystone XL pipeline, which would link the oil sands to the Gulf Coast of the United States, may be little more than a symbolic clash of ideology, industry experts say. Even if the Obama administration rejects the Keystone plan, the pace of oil sands development in northern Alberta is unlikely to slow

PNG ratings give hint what of financial markets think of Kitimat

The outlook for Pacific Northern Gas issued by Canada’s Dominion Bond Rating Service on Friday not only gives an indication of the financial health of the company, it also gives a window into what the financial markets think of the prospects for Kitimat and the region,

DBRS gave Pacific Northern Gas “Secured Debentures and Cumulative Redeemable Preferred Share ratings… BBB (low) and Pfd-3 (low), respectively, both with Stable trends,” DBRS said a news release dated June 10, 2011.

DBRS says that like all utilities, PNG has a stable financial outlook, but “it still has a higher level of business risk when compared with other DBRS-rated utilities.”

The DBRS report goes on to say:

Economic conditions in PNG’s Western system remain weak, but are showing signs of improvement, albeit at a slow pace. Signs of economic improvement in the region include Rio Tinto Ltd.’s (Rio Tinto) announcement of an additional $300 million investment on preconstruction activities for the US$2.5 billion proposed modernization of its aluminum smelter in Kitimat, B.C.; the proposed Phase 2 of a new container handling facility at the Port of Prince Rupert; and continued modest growth in the oil and gas sector in the Northeast system area.

The closure of the West Fraser Kitimat [Eurocan] paper mill in 2010 resulted in some loss of customers in the region, which was offset by the increase in customers in the Northeast system service area. Despite the challenges in the Western system area, PNG has been able to maintain a stable customer base.

In the longer term, the competitiveness of natural gas as a fuel and heating source still remains a key focus for PNG, especially in the Western service area; however, residential and commercial electricity rates are expected to rise in the near term according to BC Hydro’s Service Plan. The proposed electricity price increase and current low gas price environment are expected to keep PNG’s delivered natural gas rates competitive with electricity rates in PNG’s Western system.

DBRS also liked the fact that much of the money paid by the KM LNG partners for the Pacific Trail Pipeline was supposed to go PNG shareholders:

In March 2011, PNG completed the sale of its 50% stake in Pacific Trail Pipelines Limited Partnership (PTP) for a gross consideration of $30 million. The Company has declared special dividends of approximately $22 million, which represents all of the initial payment. A final cash payment of $20 million will be paid if the purchasers make a decision to proceed with the construction of the Kitimat LNG export facility in British Columbia.

There is no guarantee that the final payment will be made.

Going forward, if the net proceeds from the second payment are retained and reinvested in the Company, this could have a longer-term positive impact on PNG’s creditworthiness. However, the extent of any credit impact will depend entirely on the amounts to be retained and how they are reinvested.

But as the Northern Sentinel reported, the BC Utilities commission wasn’t so happy with the dividend, especially when it came to the PNG “transportation charges” it levies on consumers and businesses. The Sentinel says Pacific Northern Gas agreed to pay $500,000 toward the transportation charges to avoid a court fight with the BCUC, after the commission questioned why PNG was not passing on some of the money from the sale to lower the charges.

It should be noted that $500,000 is just six per cent of the $30 million net proceeds PNG received for the sale.

In the long term, the DBRS report says: “increase[d] utilization on its Western system, [has] the potential to increase PNG’s margins and lower the average cost of transporting gas for all customers.” “Increased utilization” likely refers to the various liquified natural gas projects that may make further use of PNG facilities.

DBRS says that PNG expansion and diversification plans could eventually lower its financial market risk profile:

“through electricity and renewable energy generation. In 2010, it acquired the 9.8 MW McNair Creek “run of river” hydroelectric generation facility in British Columbia for $17 million. It also recently formed Narrows Inlet Limited Partnership with Skookum Power Corp. to undertake an investment of up to $2.5 million to advance the Narrows Inlet Project to the start of construction. The $190 million project was awarded a 30-year energy purchase agreement with British Columbia Hydro & Power Authority (BC Hydro) in spring 2010.”

As some energy executives have come to realize, but others have ignored, high PNG natural gas transportation charges are one main reason that the industry is mistrusted, if not hated, across the political spectrum from right to left in northwestern BC, a political constituency that goes far beyond the environmental activists.

At every public meeting on energy and pipeline issues, there are always questions about the PNG transportation charges, even at meetings on the Enbridge bitumen pipeline, which has little do with the natural gas charges here (although Enbridge is a major consumer natural gas supplier in eastern Canada).

At the information meeting in Kitimat earlier this summer, Thomas Tatham, managing director of BCLNG Energy Co-operative, which hopes to build the second LNG terminal near Kitimat harbour, promised that his company, using PNG lines, would absorb the transportation charges for Kitimat consumers.

Joint Review hearings on Enbridge Northern Gateway set for Kitimat in mid-January: sources

The full Joint Review Panel hearings on the Enbridge Northern Gateway pipeline are tentatively set to open in Kitimat in mid-January, 2012.

Knowledgable energy industry insider sources confirmed the likely dates and that the bulk of the hearings will take place in Kitimat to Northwest Coast Energy News Friday after a number of the participants in this week’s National Energy Board hearings on the KM LNG pipeline made inquiries locally about booking meeting rooms and hotel accommodation for several weeks in a stretch, beginning in early January, 2012.

The Joint Review website says: “The Panel will start meeting with participants on 10 January 2012 at locations to be determined.” During last winter’s National Energy Board pre-briefing on this week’s LNG hearings, NEB staff said the location to be determined was always chosen to provide the best opportunity for those involved to speak before the board. While there were fears in Kitimat that the LNG hearings would be held Alberta, those fears proved to be unfounded.

The Joint Review panel is now traveling across BC offering information sessions to the public.
Updated schedule here. It is highly likely that hearings, like the information sessions, will be held in as many locales as possible, but those will likely be mostly about local issues, with the bulk of the concerns before the Joint Review Panel hearings in Kitimat.

A NEB source cautioned that dates are always tentative due to other hearings, staff commitments (some of the KM LNG NEB staff are also assigned to the Northern Gateway hearings) and, as sometimes happens, the lawyers agreeing on postponements.

According to the official website:

The Joint Review Panel for the Enbridge Northern Gateway Project is an independent body, mandated by the Minister of the Environment and the National Energy Board. The Panel will assess the environmental effects of the proposed project and review the application under both the Canadian Environmental Assessment Act and the National Energy Board Act.

The Joint Review panel has much wider powers to hear issues than the NEB did this week in the KM LNG hearings, where the only issue on the table was the partnership’s application for a natural gas export licence.

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

The National Energy Board adjourned the KM LNG hearings early on Friday pending negotiations between the energy partnership and the Gitxaala, a small coastal First Nation, based in Kitkatla on the northern BC coast.

NEB panel chair Lynn Mercier ruled that the board would not decide on KM LNG’s request for an export licence before Sept. 15, 2011. The panel could reconvene earlier if there is agreement between KM LNG and the Gitxaala.

The Gitxaala, like all coastal First Nations and many other BC coast residents, are worried about increased tanker traffic, whether natural gas or oil, along the BC coast. That worry lead to heated exchanges Wednesday between Robert Janes who represents the Gitxaala and Gordon Nettleton who is lead counsel for KM LNG.

On Thursday, testimony showed that KM LNG has been more successful than Enbridge in reaching agreement with First Nations along the pipeline route. KM LNG has reached agreements with the Haisla, on whose traditional territory the Bish Cove LNG terminal will be built and 14 other inland First Nations, with an agreement with a fifteenth under negotiation.

It appears that KM LNG failed, as late as Tuesday, when the hearings began, to realize the concerns of First Nations along the coast. Corridor talk Thursday indicated that the some sort of deal was being discussed. The NEB hearings were scheduled to begin at 9 am and go all day Friday. Instead the opening was delayed until just after 10:30 when Mercier announced the panel’s decision.

KM LNG hearings continue in Kitimat

The National Energy Board hearings on KM LNG’s application for an liquified natural gas export licence continued in Kitimat Thursday. Most of the day was taken up with lawyers questioning the panel of supply experts about various aspects of shale gas extraction, mostly in northeastern British Columbia’s Horn River formation.

The ghost of Enbridge haunts the second day of Kitimat LNG hearings

Lawyer Robert Janes, representing the Gitxaala First Nation, cross-examines consultant Roland Priddle at the second day of the KM LNG hearings before a National Energy Board panel in Kitimat, June 8, 2011. (Robin Rowland/Northwest Coast Energy News)

The ghost of the Enbridge Northern Gateway proposal is always behind the scenes in the stuffy meeting room at the Riverlodge Community Centre as the National Energy Board considers KM LNG’s application for a liquified natural gas export licence through the port of Kitimat.

Officially, in the view of the board and the lawyers in the room, the Enbridge proposal is neither, legally nor practically, part of the proceedings.

The two hearings are quite different. The KM LNG is, in the view of the National Energy Board, nothing more an application for an export licence. The Joint Review is considering the Northern Gateway “facility.” That is much wider.

Today, one of the key issues about the Northern Gateway proposal came to the forefront: the question of responsibility for tankers, whether those tankers carry bitumen or cryogenic cooled natural gas.

Wednesday was a hot summer day, the meeting room at Riverlodge even hotter, with no air conditioning, just a few lazy ceiling fans. In the opening moments of the hearings, one of the lawyers joked about not wearing his tie, reminiscent the opening courtroom scene in the play and movie, Inherit the Wind, based on the Scopes Monkey Trial, where Clarence Darrow (played by Spencer Tracy as Henry Drummond) confronted William Jennings Bryan (played by Frederic March as Matthew Brady)

The subject of Wednesday’s proceedings was, on the surface, dull and purely economic, charts and graphs, “Export Assessment,” guaranteed to make most of the people in the warm room to nod off.

The main witness on the panel of export experts was Roland Priddle, an Ottawa-based “consultant in energy economics.”

The initial questions were routine, about imports and exports of natural gas in Canada. The experts said the use of shale natural gas is expected to increase from two per cent of the Canadian market to 34 per cent over the next 25 years. The panel estimated that there are more than 40 shale gas “plays” are under development or planned in Canada.

For the public, the NEB hearings are a bit opaque. Unlike a public inquiry or a court hearing, the direct testimony has already occurred, in the documents the companies, consultants and experts have filed. The lawyers then ask questions on those filings.

Robert Janes, of the Janes Freedman Kyle law firm, specializing in aboriginal law cases, based in Vancouver and Victoria, represents the Gitxaala, a small coastal First Nation, based in Kitkatla on the northern BC coast.

Janes began his cross-examination of Priddle, asking about the supply chain and later at what geographic point the natural gas was officially “exported.”

Priddle hesitated for a moment, said he was unsure about natural gas, then replied that years before, when he had worked for the oil industry that the “title” to the oil changed at the “joint flange” where the pipe connected with the manifold on the oil tanker.

Priddle’s apparently innocuous statement made the few Kitimat residents left at the hearing sit up and pay attention.

The previous September, if there was a moment when you could actually see in a room at Riverlodge that a community’s attitude toward Enbridge changed, it was on Sept. 22, 2010, when the Enbridge outreach group told the audience that the company had no legal responsibility for the bitumen it would pipe from Alberta once it was loaded on the tankers.

Under further questioning from Janes, Priddle said that the fact that title to the oil changed at the “flange connection” had been traditional in the oil industry for decades.

Janes then furthered his cross-examination by asking Priddle and also other members of the export panel, about where “export” actually occurred, at the “flange connection” or at the 12-mile international ocean limit.

That question set the stage for an almost day long clash between Janes and Gordon Nettleton, of Osler, Hoskin & Harcourt‘s Calgary office, representing KM LNG. Nettleton bears a superficial resemblance to Frederic March’s Matthew Brady and while the next hours were not really the epic struggle between Darrow and Bryan, it was two good lawyers sparring over the somewhat restrictive rules of evidence that govern National Energy Board hearings, while the real question was the future of the western coast of Canada.

Nettleton tried to keep Janes’ questions narrow, just to the material in Priddle’s written submission to the NEB. Nettleton told NEB panel chair, Lynn Mercier, that Janes should ask about the “capital intensity of the LNG chain” and not “how cryogenic shipping relates to shipping and export points.”

Janes responded that “If you look at the report, Priddle talks about the chain in general aspects, all parts of the chain including government approvals.” Janes then told the NEB panel that “cross-examination can bring out knowledge of the witness as whole.” Perhaps that is true in court or at a public inquiry, but not necessarily before the National Energy Board.

Nettleton replied that Janes should have asked those questions either of Monday’s policy panel, a rather dull affair, where there few questions from any of the lawyers at the hearing or at later panel on “terminal approvals” scheduled for Thursday or Friday. Nettleton told Mercier he didn’t want Janes to have a “blank cheque” to cross-examine based on one sentence in Priddle’s report.

The problem is that the NEB practice of using narrowly focused “expert” panels, while perhaps routine in the towers of the Alberta oil patch, doesn’t always coincide with the controversies over tankers on the BC coast, especially in the case of KM LNG where the NEB hearing for the export licence is what policy calls a “market-based procedure,” focusing solely on the facts and figures of the economy of natural gas.

Somewhat stymied by the narrowness of the hearings, Janes proceeded to ask questions about how the natural gas market had changed over the past few years. Again Nettleton objected to some of Janes’ questions that were beyond the scope of Priddle’s original written report.

Janes was trying to establish that the northeastern British Columbia shale gas deposits would eventually be developed whether or not the Kitimat LNG terminal was given NEB approval.

Priddle replied by giving Janes a lecture in economics, saying that while the advantages or disadvantages for First Nations were beyond his expertise, as an economist he felt that if Janes that had an interest in the welfare of his First Nations clients and their social development, it also should extend to other First Nations groups in both British Columbia and Alberta. “As an economist,” Priddle said, “I tend to follow the ‘present value princple,’ he said, explaining that it is best if a person gets a job now, “the person who is not employed in 2012 and 2013 but will get some employment in the future… that native looses the five years” and “so there is much less economic value” for that individual person.

“What is the benefit taking the project now, taking the development now?” Janes asked. “If we do this rigorously, what are the costs imposted on the aboriginal person? I suggest that proper economic analysis requires both sides of the equation.”

Priddle avoided that question, saying to Janes. “you are moving away from my evidence.”

With that, Janes had finished his questioning and the hearings broke for lunch.

Most of the afternoon was concerned with questions over the future of an integrated North American natural gas market and how, in the future, Canadian natural gas might be exported not just to the United States but through the US to Asia, while at the same time American natural gas could be imported into Canada to service some markets.

As the day closed, in the heat of the afternoon, and as many were anxiously looking at their watches as the clock neared the time for the puck drop for the fourth game of the Stanley Cup finals between the Vancouver Canucks and the Boston Bruins in Boston, Mercier called on Nettleton to ask any redirect questions to Priddle and the rest of the panel.

Nettleton seized on the scenario that it was possible that Alberta natural gas could be exported to Asia through a port on the US west coast.

“If KM was not allowed to proceed, and the potential outlet was in the United States, how do see that as advantageous to [BC] First Nations?” Nettleton asked Priddle.”Objection!” Janes was on his feet to protest: during the cross-examination, Priddle had indicated that the advantages and disadvantages had moved beyond the evidence in his written submissions.

“What’s good for the goose, is good for the gander,” Janes told Nettleton. “This is completely out of bounds,” because Janes had not been able to examine Priddle on the question, it was not proper rexamination, it was outside of the evidence.

“I have asked if Mr Priddle to comment,I have not asked for an opinion whether there would be costs or benefits for First Nations that would be affected by Kitimat LNG,” Nettleton said.

“That is the question I am objecting to,” Janes replied.

After some more arguments, Mercier concluded that a comment and an opinion were pretty much the same thing and the hearing adjourned. The participants fled to watch the Bruins trounce the Canucks 4-0 and the stage was sit for more clashes on Thursday as the more substantial expert panels face the lawyers.

Australia, Canada rivals in “new frontier” of liquified natural gas

Canada and Australia are rivals in the “new frontier” of liquified natural gas export sales to Asia, a panel of energy marketing executives told the National Energy Board Tuesday at hearings into the KM LNG in Kitimat.

The “marketing panel” testifying before the board included Kenny Patterson, Vice President LNG Marketing and Shipping for Apache Energy, Sean Bolks, Apache Director of Corporate Risk Management, Jamie Bowman, Vice President of Marketing for EOG and David Thorn,Vice President, Canadian marketing for Encana and two consultants.

Patterson told the NEB at more than one point during his testimony that Canada was the “new frontier” for liquified natural gas, and so was attracting a good deal of interest from countries across East Asia who need more natural gas supplies.

Patterson and the other executives on the panel refused to be specific on who the customers actually are, despite cross-examination from NEB counsel Parvez Khan and additional questions from the NEB presiding member Lynn Mercier.

Patterson said Apache couldn’t go into individual buyers, so Khan asked: “How many different buyers n a general sense?” to which Patterson replied that in Asia, the KM LNG partners, which include Apache, EOG and Encana, were general discussions with seven to eight major Asian LNG companies as well as other smaller players.

That answer came despite the fact that earlier in the day in Kuala Lumpur at the Asia Oil and Gas Conference, Mate’ Parentich, general manager of LNG marketing at Apache, said the company would soon conclude talks on the sale of 85 percent of liquefied natural gas from the Kitimat terminal.

Asked for specifics by Bloomberg News, a Houston based Apache spokesman Bill Mintz then said that no binding contracts had yet been signed for the Kitimat project.

Bloomberg later moved a corrected and updated version of the story, including the statement that no contracts have yet been signed.

Khan asked about one Memorandum of Understanding signed with KM LNG. Again the panel refused to be specific. Bowman said the MOU had been signed with the previous partnership in KM LNG and while the MOU had not yet expired, it was subject to further negotiations.

Khan and Mercier were both aware that any agreements with potential buyers were “subject to regulatory approval,” which, of course, is the National Energy Board’s role, but again they were unable to drag any specifics out of the executives on the marketing panel.

The panel members told the NEB members that Korea and Taiwan are already well established LNG markets and China was beginning to be more aggressive as an LNG buyer. Japan, which was devastated by the earthquake in March and lost of a lot nuclear powered electrical generation capacity is now scrambling to catch up with its Asian neighbors. The executives told the NEB panel that both Indonesia and Malaysia will also become more important buyers for LNG in the Canadian market as their domestic demand grows.

Noting that Patterson is based in Perth, Australia, Mercier asked the executives about the recent announcement by Shell that it would build a floating LNG platform off Australia.

Panel members replied that the Asian markets want long term, secure sources of supply, with multi-billion dollar contracts for between 10 and 20 years. As stable, market-driven countries with ample supplies of natural gas, both Canada and Australia could fulfill those needs, panel members said. Companies operating in both countries would require those multi-billion, multi-year contracts to justify the investment in natural gas extraction and transportation.

Jamie Bowman, Vice President of Marketing for EOG listens as fellow panel members testify before the NEB. (Robin Rowland/Northwest Coast Energy News)

Kitimat fishers, hunters ask NEB for special conditions on KM LNG export licence

The Kitimat Rod and Gun Club Tuesday asked the National Energy Board to place special conditions on the Kitimat LNG project so as, in the words of Rod and Gun representative Mike Langegger, to preserve “the fish and wildlife values of the northwest,” from the “cumulative effects” of industry encroaching on the wilderness.

The board panel,which is considering the project’s application for a natural gas export licence, allowed Langegger to testify early in the proceedings, now expected to run at least until Thursday, because he has other commitments.

In response to a specific question from Lynn Mercier, presiding member of the board panel, Langegger asked that the NEB require the KM LNG partners, energy giants Apache, Encana and EOG, establish a joint committee with Kitimat residents, both First Nations and non-First Nations, to preserve the values of the wilderness around the liguified natural gas terminal.

He also asked that the energy companies create special funding “dedicated to fish, wildlife, and the environment…to maintain the fishing, hunting [and] recreational activities used by residents not just for now but for generations to come.”

The liquified natural gas terminal is proposed for Bish Cove, down Douglas Channel from Kitimat, an area that is currently still largely wilderness.

Langegger noted that crucial salmon breeding rivers flow into Bish Cove from the surrounding mountains. Bish Cove is also known as a habitat for deer and bears, both black bears and grizzlies.

He also asked that Kitimat residents continue to have access, as they do now, to the bush surrounding the proposed terminal “with no gates, no lockoffs.” Langegger complained to the board that Rio Tinto Alcan has, in recent years, restricted access to the Kitimat River estuary, near the aluminum plant, while once Kitimat residents had easy entry to the estuary.

Langegger said that Rod and Gun members and other Kitimat residents fear the cumulative effects of the destruction of the wilderness, and specifically that some of the past practices of the forest industry, which he said had a “huge detrimental effect,” could be compounded by the Kitimat LNG plant and other projects.

While not referring directly to the proposal, Langegger was bringing in the Enbridge Northern Gateway project, which is being considered in a separate National Energy Board proceeding.

Lanegger told the NEB panel that he hoped that “the new generation of industries coming [would] accept those values” of fishing, hunting and recreation.

Mike Langegger of the Kitimat Rod and Gun

club checks his notes while testifying before the NEB. (Robin Rowland/Northwest Coast Energy News)