Kitimat | Northwest Coast Energy News

Chevron, the partner with Apache in the KM LNG (also known as Kitimat LNG) project at Bish Cove, said Sunday that the company will hold an open house in Kitimat on the controversial Clio Bay reclamation project.

Chevron says there will be a public open house at Riverlodge Tuesday, October 8 from 4 pm to 8 pm.

In an e-mail to politicians and local groups, including Douglas Channel Watch, Marc Douglas, a senior advisor for Chevron, based in Calgary, invited local stakeholders for a series of one hour meetings the same day at the KM LNG offices in City Centre.

Chevron Canada invites you to a meeting to discuss the Clio Bay Marine Life Restoration Project.
This proposed project would see Chevron excavate marine clay from the Kitimat LNG construction site at Bish Cove and work closely with the Federal Department of Fisheries and Oceans to deposit this natural material in specific locations in Clio Bay. The clay will cap-off decaying wood debris left by historic log booming operations that has accumulated on the bottom of Clio Bay, damaging the Bay’s natural ecosystem. A key goal of the project is to restore natural marine life populations in Clio Bay. Come and share your thoughts and ideas with us and learn more about this innovative restoration project.

There has been growing controversy over the Clio Bay project in recent weeks. Members of the Haisla Nation and residents of Kitimat were initially told that due to the large number of sunken logs at Clio Bay, that the area was deprived of oxygen, with limited sealife and that capping the logs with clay from Bish Cove would restore the ecosystem. However, beginning with a discussion at District of Kitimat Council on September 3, more people have been challenging the idea that Clio Bay needs restoration, with fishers posting photographs of recent catches on Facebook pages.

On Sept.3, Councillor Phil Germuth told Council: “Those logs have actually created a woody reef, where like any other reef, an ecosystem is being sustained. So to say that those logs are suffocating the life out of Clio Bay doesn’t seem to have a lot of merit.”

At the time, Chevron told the media that they had consulted with the Department of Fisheries and Oceans and concluded that carefully placed clay would improve the ecosystem.

Special report: Clio Bay cleanup: Controversial, complicated and costly

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Gil Island “critical habitat” as humpbacks double at the mouth of Douglas Channel. New study says tanker traffic could threaten key spots

Humpback whale at Bish Cove — A humpback whale, seen here by its small dorsal fin, swims past the Chevron Apache KM LNG site at Bish Cove on Douglas Channel, August 21, 2013. (Robin Rowland/Northwest Coast Energy News)

Updated with comments from Gitga’at First Nation, Nathan Cullen and Shell Canada.

Gil Island is a “critical habitat” for the world’s humpback whales, whose numbers are increasing in Douglas Channel, Wright Sound, Estevan Sound and Camano Sound and nearby waters, according to a study released Wednesday, September 11, 2013. The study also goes on to warn that potential tanker traffic through the “geographic bottleneck” on Douglas Channel to and from Kitimat could threaten that crucial “pit stop” for the humpback whales.

The study, “Abundance and Survival of Pacific Humpback Whales in a Proposed Critical Habitat Area,” by Erin Ashe, of the University of St. Andrews, in Scotland, Janie Wray of Oceans Initiative on Pearse Island, Christopher Picard of the North Coast Caetacian Society in Hartley Bay and Rob Williams of the Gitga’at Nation Lands and Marine Resources Deptartment, is published in the jourrnal PLOS One.

The research team estimated the abundance of Pacific humpback whales by using photo-identification surveillance of adult humpbacks. They found that the number of humpback whales in this region increased each year, and doubled from 2004 to 2011, resulting in a total of 137 identifiable whales in 2011. The survey was conducted year-round. Abundance was estimated only during the summer months of July to September, when the migrating whale population is largest.

The survey focused on summer feeding regions in the northwestern BC coastal fjords that serve as a “pit stop” for whales between migrations. Migrating whales travel to the BC coast from calving grounds as far away as Mexico, Hawaii or Japan. After several months without feeding, the humpbacks arrive in BC, and, the study says, show “strong site fidelity to local feeding grounds” around the entrance to Douglas Channel.

The authors estimated that “survivorship,” the average probability of an adult whale surviving from one year to the next on the northwest coast of British Columbia is among the highest reported anywhere for the species. During “this critical refueling stage in these waters, the whales are more vulnerable to environmental stressors, such as those potentially created by increasing tourism and industrial development in the region.”

The study also says that study area has also been identified as candidate critical habitat for northern resident killer whales and notes the region “has been recolonized by fin whales in recent years.” (With details on the fin whales to come in future studies)

The study estimates there were once about 15,000 humpback whales in the North Pacific when whalers began hunting the animals. That number was down to 1,400 when whale hunting was stopped in Canada in 1966. “It is therefore good news that the segment of the population using our study area is growing and adult survival is near the limit that one would expect for this species. That said, although the population is recovering, there is no evidence that it has yet fully recovered to pre-exploitation levels in BC and we do not wish to become complacent.” the study says.

It goes on to say:

Humpback whales may be facing increasing threats in at least one of their proposed critical habitats in BC. Numerous port facility expansions and new terminal proposals, including numerous crude oil and liquefied natural gas (LNG) export proposals, could substantially increase deep-sea shipping traffic through BC’s north and central coast waters. Such developments could exacerbate oil spill, acoustic disturbance, and ship strike risks to humpbacks. In particular, the Gil Island proposed critical habitat area where our work was conducted, spatially corresponds with all shipping routes leading to Kitimat, BC port facilities that are currently being considered by regulatory agencies for high-volume crude oil and LNG tanker traffic and other increased shipping activities.

The monitoring program showed that “a relatively large fraction of BC’s humpback whales rely on the waters around Gil Island, given the small size of the study area.”

Humpback whale in Douglas Channel — The tail fins of a humpback whale are seen in Douglas Channel near Bish Cove, as a fishing boat speeds toward Kitimat harbour in a rain storm on Aug. 21, 2013. (Robin Rowland/Northwest Coast Energy News)

The study warns:

This high reliance on relatively small fractions of available habitat has important implications for conservation and management. It lends support to the proposal to designate the current study area as part of the population’s critical habitat…

This also suggests that area-based management for cetaceans can effectively target small areas if these areas are chosen carefully. The corollary to this, though, is that a tendency for animals to be concentrated or aggregated in small areas lends them vulnerable to catastrophic events like oil spills and ship strikes. Critical habitats like the Gil Island waters are therefore a mixed blessing when high densities of whales are found in geographic bottlenecks that also funnel and concentrate shipping traffic. Anthropogenic threats to this must be evaluated not only in terms of the proportion of available habitat that this area represents, but also in terms of its critical importance to large numbers of whales for critical life-history processes. The risk and ecological consequences of an oil spill in this region would increase substantially if proposals were approved to ship large volumes of oil and LNG traffic through the Gil Island waters. Studies in Pacific waters similar to our study area suggest that oil spills can have severe and chronic impacts to cetacean populations and it is uncertain whether affected populations can recover from such perturbations.

One reason for the study is that while the humpback is considered an endangered species in the United States, in Canada it is listed as “threatened” under Canada’s Species at Risk Act and the increasing numbers could mean that the humpback is downgraded to “special concern.”

The study was based on what is called “community based science,” a cost-effective partnership between scientists, the Gitga’at Nation and other First Nations, NGOs and the Department of Fisheries and Oceans.

As part of its Pacific humpback whale recovery strategy, DFO has proposed four areas as candidate critical habitat. One criterion for designating critical habitats within northern BC coast feeding grounds is that inlets are used for specialized ‘‘bubble-net’’ feeding behaviour (where the humpbacks create a fishing net of bubbles to catch their prey).

At the start of the study, the team had noted that “mainland inlets have been somewhat under-represented in habitat studies” and so they began working on the photo-identification of the humpbacks, using two research groups, the North Coast Cetacean Society and the Gitga’at Lands and Marine Resources Department. Surveys were conducted as weather permitted throughout the year from April to November (with occasional trips in February, March and December), from 2004 to 2011.

The aim of the study was to “collect as many high-quality photographs of individually recognizable humpback whales as possible within the study area [referred to in the study as ‘Gil Island waters’’] from Estevan Sound in the west to Ursula Channel in the east. One 27 foot and one 18 foot boat were used to conduct the surveys. A total of 374 photo- identification surveys conducted over 47 months resulted in a catalogue of 177 high-quality, unique identifications of individual humpback whales.

Information also came from “an informal sightings network including local fishermen and tourism operators who reported humpback and killer whale sightings over VHF radio;” hydrophones monitored for vocalizing humpback whales; and visual monitoring from the land-based Cetacealab facility on the south end of Gil Island.

When a humpback was sighted, they were identified by the fingerprint like tail flukes and the numbers cataloged.

The study was funded by grants to Cetacealab and Gitga’at First Nation from Julie Walters and Sam Rose, and from Fisheries and Oceans Canada (Cetacean Research Program, Species at Risk Program). There was also support from King Pacific Lodge.
–

Updates

In a news release, the Gitga’at First Nation said:

“The importance of our territorial waters for humpback and other species of whales, should give pause to those who would propose tanker routes through the Douglas Channel,” said Arnold Clifton, Chief Councillor of the Gitga’at First Nation. “The increase in whales in our territory coincides with low shipping traffic, however current proposals would increase shipping traffic to unprecedented levels. We remain resolute in our determination to protect whales and the natural heritage of our territory from tankers and other developments that would put them at risk.”
“Our study shows that while still vulnerable, humpback whales are recovering, and this area plays an important role in supporting their numbers,” said lead author, Erin Ashe, a PhD candidate at the University of St. Andrews and a co-founder of Oceans Initiative. “Identifying and protecting critical habitat is one of the most effective ways to support endangered species recovery.”
The waters around Gil Island are especially rich habitat for humpback whales, due to high abundance of their preferred foods, such as krill and herring and due to the remote nature of the coastal fjords. Humpbacks, which rely on acoustic communication, are sensitive to noise pollution from ship traffic.
“It is Cetacea Lab’s contention that all levels of government must collaborate with the Gitga’at First Nation and others in protecting humpback whales from the risk of increased tanker traffic,” said Janie Wray, whale researcher with Cetacea Lab. “This study represents the best available scientific information about the importance of this area to humpback whales. Over the course of our study, we have observed the population more than double, with mothers returning year after year with their calves, introducing the next generation of juvenile whales to the nutrient-rich feeding grounds of Douglas Channel to Caamano Sound.”

In his biweekly conference call with Northwest BC reporters, Skeena Bulkley Valley MP Nathan Cullen said: “I don’t get a sense from the way that the federal government has designed this [referring to Enbridge Northern Gateway] project, that on the marine side, any of these things are important to Mr. Harper. When you start to place down the most important values and certainly for British Columbians and Canadians, protecting a humpback feeding ground would seem like an important value in the Great Bear Rainforest, you start to see where the limits and the restrictions are on any idea of moving oil super tankers through such a narrow place. It’s just another bit of evidence, a bit of science that says this is difficult, if not impossible, and Enbridge’s project has made so many of those arguments more and more clear as we start to bring science to the table.

“It’s so frustrating for people that evidence, our opinions and our values just don’t seem to matter to the federal government. They already said yes to this thing years ago and damn the science, damn anything that comes their way. That’s not going to work, not going to work for us and not going to work for the humpback whales.”

A spokesperson for Shell’s LNG Canada project, noting that the company officials had not yet read the study, said, “It’s early days for the proposed project and the start of a thorough regulatory process. We welcome contributions and thoughts on important matters. We will look at this study. As with any project in Canada we work with local First Nations and local communities to minimize the impact of our activities.”

Neither Enbridge Northern Gateway nor Apache, a partner in the KM LNG project, responded to a request for comment.

Why BC should watch the Australian election: LNG and natural gas are suddenly a top issue

Could the future of northwestern British Columbia’s hoped for natural gas boom depend on the outcome of this weekend’s Australian general election?

While the mainstream media in North America has mostly been following the personal feud between Prime Minister Kevin Rudd and Opposition Leader Tony Abbott or speculating whether or not Wikileaks founder Julian Assange’s party will make a ripple or a splish, a natural gas crisis has rocketed high on to the Australian election agenda.

I’ll be the first to admit that I know very little about Aussie politics, but I couldn’t ignore all the LNG and natural gas Australian election related stories that suddenly started showing up in my alerts.

LNG train “on ice”

This morning came the alert that Chevron has put the development of another train at its giant Gorgon LNG facility “on ice” (as a pun enabled headline writer in the Western Australian put it)

Chevron and its partners in the Gorgon LNG project on Barrow Island are expected to postpone work on detailed design and engineering of a fourth processing line at the mega project until at least next year as they battle to contain the soaring cost of the foundation development.
As reported by WestBusiness at the weekend, Chevron’s latest internal cost review is understood to have placed a final cost on Gorgon’s three-train venture of up to $US59 billion ($65.6 billion), or 13 per cent above the last confirmed budget revision of $US52 billion.
Chevron is refusing to discuss the status of the cost review and is understood to have told its Gorgon team to “value engineer” in the hope of substantially reducing the latest overrun on a project that was originally supposed to cost $US37 billion to complete.

Raw logs all over again

For a resident of northwestern BC, one thought comes to mind from the media reports on the LNG situation in the Australian election, it’s raw logs all over again.

It appears from those media reports that while Australia has huge reserves of shale-based natural gas, the way the country has structured its LNG boom, major industries and consumers are becoming alarmed that domestic natural gas prices for both will soon skyrocket. There are calls for whatever party wins the election to pass legislation that would create “domestic gas reservation” so that Australians won’t see the gas exported while they pay higher prices for what’s left over.

Most of the shale gas reserves are in Western Australia, while the population—and industry– are concentrated far away on the east coast.

That is leading to another controversy, demands that eastern Australia develop its coal gas reserves, which, of course, brings to mind Shell’s decision to forgo development of coal gas deposits in the Sacred Headwaters and the ongoing fight by the Tahltan First Nation to stop Fortune Minerals’ open pit coal mine in the Sacred Headwaters at Klappan.

Then there’s another vexing issue that northwestern BC is facing and soon have to deal with. In the election, some Australian politicians and unions are calling for curbs on the use for temporary (and not so temporary) foreign workers.

Another factor is the growing cost of natural gas extraction and LNG export, which has, in the midst of the election campaign, pitted Chevron against Australian unions, with Chevron executives (as they did in other contexts before the election call) pointing to Canada—that means Kitimat, folks — as the cheaper alternative.

Rising prices

The Australian has reported that a poll, commissioned by the nation’s manufacturers, so it is somewhat suspect, that:

Manufacturers will today claim that most Australians want a policy of domestic gas reservation and that this would sway voter intentions, a move set to renew the acrimonious debate over rising gas prices.
Manufacturing Australia will release a survey it commissioned where 35 per cent of people said it was “quite likely” and 13 per cent “extremely likely” that it would sway their decision at the election if a party made a policy pledge on the issue.Those uncertain stood at 21 per cent.

In one Australian riding, a local candidate wants one per cent of Australia’s gas be reserved just for the State of Queensland.

Bob Katter flew through Gladstone as fast as the wind whistled through Spinnaker Park on Monday, where he told local media he wanted to reserve a domestic gas supply for Australia and scrap the 457 visas that bring foreign workers into the country….

Mr Katter said mineral processing was under enormous pressure in Australia with copper processing wiped out in northern Queensland and to counter that, the Katter Australia Party would reserve 1% of the gas supply for Queensland.
“Because of the escalating skyrocketing cost of coal, gas and electricity in the past eight years, one per cent of the gas will be reserved for the benefit of the people in Queensland if not Australia,” he said.

“That gas will be used to produce electricity at prices our retirees can afford, and young families can afford, and most importantly that our mineral processing plants have prices for processing they can afford.”

Coal gas

Another story in The Australian quotes James Baulderstone of the Australian energy company Santos:

THE NSW gas industry has warned of higher gas prices, job cuts and a significant risk to the state’s energy security if the coal-seam gas sector is not developed.
James Baulderstone, vice-president of eastern Australia at Santos, said without indigenous gas of its own, NSW had no ability to control its energy supply security.
“NSW faces prospective gas shortages as long-term contracts underpinning the state’s gas supply expire over the next two to three years, the very time in which the commencement of LNG exports from Queensland will see annual gas demand in eastern Australia triple,” he said.
“Looming natural gas shortages in NSW could be avoided by the timely and balanced development of the state’s already discovered reserves of natural gas.”

The Australian Liberal Party (which like BC’s is actually conservative) supports coal gas projects. But it also wants to force energy companies to develop gas reserves they have leased.

Chevron and the unions

Also embroiling the election is the growing dispute between Chevron and the Australian unions.
As the Australian Financial Review reported, Chevron is claiming that high costs are slowing the LNG projects and blaming the government of Prime Minister Kevin Rudd.

The federal government has rejected claims from Chevron that Australia’s high-cost economy is threatening the nation’s biggest energy project, Gorgon, even as the Maritime Union of Australia demands a 26 per cent pay rise and more than 100 other benefits for its members, including Qantas Club memberships and iTunes store credits.

As Chevron’s $52 billion Gorgon project became embroiled in the election campaign, trade union officials accused Chevron of seeking to dodge responsibility for poor labour productivity and high costs.

The union’s demands for employees working for 19 offshore oil and gas contractors around Australia include a 26 per cent raise over four years, no foreign labour without consultation, union control of hiring and four weeks holiday for every four weeks work.

(Note there are accusations of biased reporting during this election, especially from the media owned by Rupert Murdoch. I could find no independent confirmation of union demands for airline memberships and iTunes credits)

The Australian Labour minister, Gary Gray, who is from Western Australia, and according to reports, in a tough re-election fight, is blaming Chevron and the other energy companies for “failing to control the costs of their staff and contractors.”

“We do need our companies to get better in managing their productivity issues,” he said.

Prime Minister Kevin Rudd said he had studied China’s latest five-year economic plan and concluded Australia’s industrial relations system wasn’t hurting the industry.

Boom or bust?

The Australian Financial Review quotes Chevron Australia managing director Roy Krzywosinski as saying Australia has a two-year window to get policy settings right and fix industrial relations and productivity or risk losing out on billions of further investment in liquefied natural gas projects.

It goes on to make a reference to Shell and operations in Canada—again that’s Kitimat folks.

after the unprecedented rush of LNG investment in the past four years, Australia has become the most costly place worldwide for new plants, while new competition is emerging in North America and east Africa.

Shell, which has slowed its $20 billion-plus Arrow LNG project in Queensland, said construction costs in Australia are now up to 30 per cent higher than in the US and Canada.

Mr Krzywosinski said LNG projects are “long-term projects that transcend governments” and Chevron would work with all sides of politics to get policy settings right.

This Australian blogger warns:

The investment surge in LNG – often favourably compared with the Apollo moon program in its magnitude – is in some ways a bubble. Firms have rushed in, extrapolated an endless supply/demand imbalance for their product, ignored global competition, over-paid for assets and developed with little thought to what others were doing, grossly inflating input costs in the process.

The blogger goes on to say

This fallout is typical of the “built it and they will come” attitude that seized energy and mining executives in the final stages of the “commodity super cycle” boom. A similar story, with different dynamics, is playing out in coal and next year in iron ore.
The unions are largely not to blame for the cost blowouts even if they are a party to them. They are, after all, unions. What does capital think will happen if it hands them such a card to play?

Sound familiar?
Australia a mirror of the BC election?

Again it appears from this far off shore, that the Australian election is somewhat mirroring the recent BC provincial election and not only because of the issue of LNG. The Labour PM Kevin Rudd returned to power after three years on the back benches, coming back after the party dumped PM Julia Gillard.

Like BC, the Australian Liberal Party is really conservative. The Liberal Leader Tony Abbott, wants to abolish Australia’s carbon tax but Abbott is also threatening to fine companies that don’t lower prices if (or when) the carbon tax is abolished.

The polls show that the Liberal Party is leading, but that Kevin Rudd is more popular than Tony Abbott. Rudd is running an attack campaign against Abbott, warning of the consequences of an (conservative) Liberal victory. Sounds a bit like Christy Clark.

Given the split in the polls, with the leader of one party more popular than the leader of the party that is leading the polls, this video of the editors of The Australian which accompanies this story shows their senior editors are awfully confident, perhaps over confident, about the polls. I know given what happened in BC, Alberta and even Israel, I’d be a lot more skeptical.

We’ll know the outcome of the Australian election by this time next week. As for LNG, given the volatility of the market, who knows?

(Editor’s Note: Tony Abbott and the Australian Liberal Party won a landslide victory in the weekend vote)

(Note some of the Australian media sites appear to be metered and allow only one viewing)

Apache sells some of its gas and oil assets, confirms commitment to Kitimat project

Apache Corporation said Thursday it will sell oil and gas producing properties in the Nevis, North Grant Lands and South Grant Lands areas of western Alberta, to Ember Resources Inc., a private Canadian company, for CAN$220 million, as part of the company’s “portfolio rebalancing,” Apache said in a news release.

At the same time, Apache CEO Rodney Eichler said, “We also remain focused on advancing the Kitimat LNG project to monetize large unconventional resources in the Liard and Horn River basins in northern British Columbia.”

“Going forward, Apache is focused on growing our liquids production from a deep inventory of crude oil- and liquids-rich opportunities that generate attractive rates of return on our extensive remaining acreage in Canada’s Western Sedimentary Basin,” Eichler said.

“This transaction is one element of a comprehensive review of Apache’s portfolio to determine which assets make the most sense for Apache to own given our growth and return objectives and which assets are better owned by others,” Eichler said. “The Nevis, North Grant Lands and South Grant Lands assets fit in the latter category.”

Apache is selling 621,000 gross acres (530,000 net acres) and more than 2,700 wells that had average net production during the second quarter of 2013 of 67 million cubic feet of gas and 237 barrels of liquid hydrocarbons per day from late Cretaceous sands and coal seams. Apache says “it will retain 100 per cent working interest in horizons below the Cretaceous, such as potential Duvernay and Nisku, in Nevis and North Grant Lands.”

Apache previously announced plans to divest $4 billion in assets by the end of 2013. The company intends to use proceeds from the asset divestitures to reduce debt and enhance financial flexibility and to repurchase Apache common shares under a 30-million-share repurchase program authorized by the Board of Directors earlier this year.

In July, Apache announced an agreement to sell its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC(Fieldwood), an affiliate of Riverstone Holdings, for cash proceeds of $3.75 billion. In addition, Fieldwood will assume all asset retirement obligations for these properties, which, as of June 30, 2013, Apache estimated at a discounted value of approximately $1.5 billion.

Seaspan keeping an eye open for opportunities in Kitimat, CEO says

Seaspan ULC, the large BC-based marine transportation and shipbuilding company is keeping its on eye on future opportunities in Kitimat and along Douglas Channel, chief executive officer Jonathan Whitworth said Tuesday.

Jonathan Whitworth, CEO of Seaspan ULC, at the RCM SAR 63 boathouse. (Robin Rowland)

Whitworth was in Kitimat to meet members of the Royal Canadian Marine Search and Rescue Unit 63, which operates from the Nechako Dock.

He also met with members of the Haisla Nation while he was in town.

Kitimat SAR 63 is one of six stations which will receive $8,500 a year for three years, to help cover operating expenses, from the Dennis and Phyllis Washington Foundation, based in Missoula, MT. Seaspan is part of the Washington group of companies, that has holdings on the west coast of Canada and the United States, owned principally by Dennis Washington.

At the moment, Whitworth said, Seaspan operates the HaiSea in partnership with the Haisla Nation. “It’s a boat that you will see up and down the Channel, she does a lot of work for RTA as well as some of the others, mainly from the construction and the up and coming constrution from the new projects. We take a lot of time and effor to make sure our equipment looks good as well as operates well. That’s the kind of pride our crew puts in the vessels and the company supports.” he said. Seaspan barges are also used for the construction projects currently under way in Kitimat.

Whitworth said that while Douglas Channel is not yet “packed on the water,” shipping will likely increase in the coming years. “There are two big dominoes to fall, the first one is any of these big projects being talked about that are going to increase shipping in the Douglas Channel, be
it Chevron or Shell or the BC LNG project. They need to get approval first, that hasn’t happened yet. We understand it may be within the next six to twelve months before we hear some announcements. When that goes ahead, we can start looking at building new boats, be it escort tugs, or docking vessels, or additional vessels… That will help up us to know the time for when we need to deliver new boats for the Douglas Channel.”

Seaspan has always had a close relationship with the Canadian Coast Guard, Whitworth said and that relationship is even closer now that the Seaspan’s Vancouver Shipyards, was chosen by the federal government for the National Shipbuilding Procurement Strategy for non combat vessels. In February, the federal government announced (pdf) a series of preliminary contracts valued at a total of $15.7 million for the joint support ships, the CCGS John G. Diefenbaker polar icebreaker and the offshore fisheries science vessels.

The Washington Foundation is giving a multi-year donation of $1.1 million to three British Columbia marine and port community charitable organizations. Partnering with Sail and Life Training Society (SALTS), Vancouver Maritime Museum (VMM) and Royal Canadian Marine Search & Rescue (RCM-SAR).

Royal Canadian Marine Search and Rescue received $300,000 over three years. “Half of it $150,000 when to Royal Canadian Marine Search and Rescue Sooke training facility on Vancouver Island, that benefits all of the different stations in BC, they all get a chance to go train and at that training centre,” Whitworth said. “The remaining funds, the $150,000 was spread between six stations that are closely associated with Seaspan, so two in Vancouver harbour, North Vancouver, West Vancouver, two on the Fraser River, one at Delta and one at Richmond, one at Victoria and one right here in Douglas Channel in Kitimat.” The $8,500 covers approximately 35 per cent of the operating costs for Kitimat’s SAR 63 station every year for three years.

A July 25 news release from the foundation (pdf) says:

The Dennis and Phyllis Washington Foundation’s charitable donations are the organization’s first direct donation of their kind in Canada. Since its inception, the Washington Foundation has donated more than $144 million in the United States to hundreds of organizations that focus on education, health and human services, arts and culture, and community service.

Mike Halligan, Executive Director of the Washington Foundation, says today’s announcementis the start of an exciting inaugural collaboration with Canadian charitable organizations in British Columbia.

RCM SAR 63 — Members of RCM SAR Unit 63, on board “Snowflake Responder” with Seaspan CEO Jonathan Whitworth. (Robin Rowland)

Kitimat’s SAR 63 operates along Douglas Channel and down the Inside Passage as far as Butedale. Training takes place every Wednesday evening at the SAR 63 boathouse at the Nechako Dock. The unit will be recruiting new members in September. Anyone interested can contact training officer Duncan Peacock.

Kitimat in “horse race” with Australian LNG project Chevron says

Gorgon project in Australia — The Gorgon LNG project in Western Australia. Chevron says Gorgon Project work continues to progress with the installation of the second of three amine absorbers, two condensate stabilization modules and a recycled gas compression module. (Chevron Australia)

Kitimat LNG is in a “horse race” with an LNG project in Western Australia–and at this point, according to the Australian media–Kitimat is winning, even though the Australian Gorgon project is much further ahead while the Kitimat LNG project at Bish Cove hasn’t really started.

The Australian reports come from the same conference call Chevron held with financial analysts last week, when the company said the final investment decision for Kitimat LNG has been postponed to 2014.

The Brisbane Times is quoting Chevron as saying that expansion of the Gorgon “will be in direct competition with exports from North America, which have a cost advantage.”

Chevron has a 47.3 per cent stake in Gorgon. Shell which is developing its own project at Kitimat, LNG Canada, has a 25 per cent stake in Gorgon. ExxonMobil holds 25 per cent.

”In the case of Gorgon train four … we are happy to see both of them move forward,” Chevron vice-chairman George Kirkland told analysts late last week, referring to the competition with Kitimat. ”[There is] a bit of a horse race between them at this point.”

Shipping gas to north Asia from Canada is cheaper than exports from Australia, he said, although the challenge is to find markets for the gas. ”The development cost at Kitimat … may end up being less than in the case of Gorgon,” he said, which ”has the benefit of [being a] brownfield development on the plant side”.

”We’re going to offer volumes … and interest in the plant as a combination,” Mr Kirkland said of the Kitimat marketing plans. ”We think that’s a big advantage.

”Our goal is to maintain our … first-mover advantage … We have had some initial discussions with Asian buyers.”

The Gorgon project in the northwestern area of Western Australia. (Chevron Australia)

According to Wikipedia, the Gorgon area of Western Australia is the site for a number of liquified natural gas projects. The projects are off shore and close to the export terminals, much different from British Columbia where the gas fields are in the Peace River district in the northeast of the province.

Wikipedia says

The Gorgon field is centered about 130 kilometres (81 mi) off the north-west coast of Western Australia, where the water depth is approximately 200 metres (660 ft). Other fields in the group lie to the north, such as Jansz-Io, which covers an area of 2,000 square kilometres (770 sq mi), in a water depth of 1,300 metres (4,300 ft).

Chevron says

It is one of the world’s largest natural gas projects and the largest single resource development in Australia’s history.
The Gorgon Project is developing the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 130 and 220 kilometres off the northwest coast of Western Australia.
It includes the construction of a 15.6 million tonne per annum (MTPA) liquefied natural gas (LNG) plant on Barrow Island and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.
Gorgon LNG will be off loaded via a 2.1 kilometre long loading jetty for transport to international markets. The domestic gas will be piped to the Western Australian mainland.
The Gorgon joint venture is investing approximately $2 billion in the design and construction of the world’s largest commercial-scale CO2 injection facility to reduce the project’s overall greenhouse gas emissions by between 3.4 and 4.1 million tonnes per year. The Australian Government has committed $60 million to the Gorgon Carbon Dioxide Injection Project as part of the Low Emissions Technology Demonstration Fund.

Gorgon project wharf — A view of construction on the 2.1-km (1.3-mile ) LNG wharf with 24 caissons in place. (Chevron Australia)

In May, Reuters reported that the $52 billion Gorgon liquefied natural gas (LNG) development was 60 per cent complete. At the time, Reuters said Chevron planned to start engineering and design work for an expansion by the end of the year.

Parts of the Gorgon project are in an environmentally sensitive area, Barrow Island, which has been a nature reserve in Australia since 1910.

Wikipedia says

Barrow Island’s ecology. The island is a Class A nature reserve, and home to theflatback turtle (classified as a vulnerable species) and numerous other animals not found on the Australian mainland. Other concerns are related to the adequacy of quarantine procedures on Barrow Island to protect against the introduction of non-endemic species, and risks associated with geological sequestration of CO2.It was reported in November 2011 that native animals on Barrow Island had been accidentally killed daily with a known total of 1550 since construction began.

Chevron says

The Gorgon Project is being undertaken in accordance with strict environmental standards to preserve the island’s ecology.
Central to the Gorgon Project’s commitment to protect the conservation values of Barrow Island is the Quarantine Management System (QMS), which directs
the Project’s quarantine operations. The QMS is the largest non-government quarantine initiative in the world and was considered to be “likely world’s best practice” by the Western Australian Environmental Protection Authority. The Project’s gas processing facilities are being constructed within a 300 hectare ground disturbance limit, which represents 1.3 percent of Barrow Island’s uncleared land area.

Gorgon Project Overview Chevron document pdf

Gorgon-Progress Update August 2, 2013 pdf

Chevron postpones Kitimat LNG decision to 2014, seeks new equity partners, Dow Jones reports

The Dow Jones wire is reporting that Chevron has postponed a final investment decision on the Kitimat LNG project until 2014, “putting a deadline on a project that has already seen delays.”

Competitors are trying to sell natural gas to Asian customers using the cheaper Henry Hub North American market benchmark rather than higher Japanese bench mark which is based on the price of oil.

The Dow Jones report says Chevron, which is partnered with Apache, is still having problems finding customers in Asia. It quotes George Kirkland, head of Chevron’s upstream business, as saying that the company is offering customers equity stakes in the Kitimat project. Kirkland told a conference call that equity should be more attractive to buyers.

Kirkland said the company won’t approve the project until it has lined up customers for at least 60 per cent of Kitimat’s total 5 million metric tons a year of export capacity, although Kirkland expects that to happen in 2014.

“We’ve have had some discussions with Asian buyers,” Mr. Kirkland said during a call with investors. He declined to name the companies with which Chevron was negotiating. “It’s more likely to be a 2014 (decision), not late 2013,” he said.

U.S. natural gas prices were $3.37 per million British thermal units Friday, down from $13.69 in July 2008.
Chevron to Make Final Kitimat LNG Decision in 2014

Coast Guard plans to pump oil from sunken WWII transport in Grenville Channel

The Canadian Coast Guard says it will undertake “a significant environmental response operation” because more oil is leaking from the sunken Second World War United States Army Transport vessel, the Brigadier General M.G. Zalinski.

The Coast Guard says that an operation known as “hot tapping” will be used to remove the oil from the Zalinski. Hot tapping was used recently to remove fuel from the sunken cruise liner Costa Concordia off Italy and the container ship Rena which broke up off New Zealand.

The Coast Guard says:

Hot tapping is a well-known and frequently used method of removing oil from the tanks of stricken vessels. Holes are carefully drilled into the side of the vessel to access fuel-tanks and then hot steam is pumped into the tanks. The steam increases the temperature of the oil and enables it to flow more easily. The oil is then pumped to the surface for safe disposal.

The procedure can be done with holes of very small sizes up to very large diameters. Hot tapping is used in both marine and land-based scenarios.

The red sections in the image above represent the fuel tanks of the Zalinski; the possible locations for hot tapping of the vessel. The yellow sections represent the cargo holds. (Canadian Coast Guard)

The Canadian Coast Guard says it “has engaged the Gitga’at First Nation and the Province of British Columbia to participate in the operation and maintain a presence at the wreck site” and will keep the Gitga’at First Nation informed of what is going on:

The Coast Guard recognizes that given their proximity to the Zalinski site and their interest in the oil recovery operation, the Gitga’at need to be informed on the progress of the operation and that they have important local knowledge and skill that will be beneficial to the operation.

The Coast Guard says that environmental monitoring in January and March of 2013, discovered “further upwelling” of oil and added new patches to the sunken vessel.

The Coast Guard says: “Although the patches from 2012 and 2013 remain in place, early patches have begun to leak and the Canadian Coast Guard has determined that the structural integrity of the vessel is deteriorating.”

The USAT Brigadier General M.G. Zalinski was built in 1919 and served as a United States Army Transport vessel during the Second World War. It ran aground during a storm and sank in 1946 in the Grenville Channel about 100 kilometres south of Prince Rupert.

According to a Coast Guard News release, the wreck was “undetected” until the fall of 2003 in 34 metres of water near an underwater cliff about 20 metres from shore.

In September 2003, the United States Coast Guard Cutter Maple reported pollution in the Grenville Channel to the Canadian Coast Guard.

The CCGS Tanu investigated the source of the pollution and collected oil samples, but, the news release says, the vessel remained elusive and undetected.

A month later, more oil pollution was spotted so the Canadian Coast Guard used a remotely operated underwater vehicle which located the Zalinski.

New pollution was reported in the channel in October 2003 by a commercial airline pilot and at this time the Coast Guard suspected that the source of the upwelling of oil was an old wreck.
In 2003 and 2004, the Canadian Coast Guard contracted divers to patch the vessel to prevent the leak of oil.

The Coast Guard says it regularly monitored the site with the help of Transport Canada’s National Aerial Surveillance Program. Local First Nations Groups also monitored the wreck site.
More oil was spotted in April 2012, and at that time, contract divers patched the Zalinski with an epoxy that hardens underwater.

The Coast Guard says new dive footage has shown that metal rivets that hold the hull’s plates are corroding and that the hull is buckling.

as the state of the vessel deteriorates, the Coast Guard has determined that to prevent any harm to the environment, a significant operation should be undertaken to remove the oil from the vessel. The Canadian Coast Guard will be the on-scene commander for the duration of the operation, directing the recovery and the removal of marine pollutants from the vessel and actively monitoring the operation.

The Canadian Coast Guard has also engaged the province of British Columbia and local First Nations groups to solicit their feedback on the operation. On July 26, 2013, Public Works and Government Services Canada posted two requests for proposal seeking a third-party to conduct the oil removal operation and oil spill response services to assist in the case that any oil leaks from the vessel as the operation progresses.

Map of Grenville Channel — Wreck sites for M.G. Zalinksi and *Queen of the North* (Canadian Coast Guard)

It is expected that the operation will begin in September 2013 and will conclude in December 2013. The Coast Guard says because the Grenville Channel is so narrow, some restrictions on vessel traffic in the Inland Passage will be needed.

The Grenville Channel is a narrow fjord-like waterway with significant tidal fluctuations and currents up to three knots. The shoreline is rocky and steep with little shoreline vegetation.
The Grenville Channel sees commercial fishing vessels, ferries, cruise ships, and pleasure craft transiting its waters on a regular basis, with increased frequency in the summer months. These waters, naturally shielded from stronger offshore winds and weather conditions, are the preferred route of many cruise ships.

The more mild sailing conditions and the stunning natural beauty of the area make the Grenville channel one of the scenic highlights of many marine travellers on Canada’s West Coast.

Joe Oliver makes flying visit, meets Haisla, snubs Kitimat (almost)

Natural Resources Minister Joe Oliver (centre) meets District of Kitimat Councillors, left to right, Rob Goffinet, Mary Murphy, Mayor Joanne Monaghan and Councillor Corrine Scott. (District of Kitimat) — Natural Resources Minister Joe Oliver (centre) meets District of Kitimat Councillors, left to right, Rob Goffinet, Mary Murphy, Mayor Joanne Monaghan and Corinne Scott. (District of Kitimat)

Natural Resources Minister Joe Oliver made a brief visit to the Kitimat area on Tuesday July 23, 2013, meeting Haisla Chief Counsellor Ellis Ross. In the original planning for the visit, Oliver was not scheduled to meet with District of Kitimat Council or other members of the community, snubbing Kitimat in only his second visit to the region since he was appointed minister after the 2011 federal election.

A half hour meeting with available members of the District of Kitimat Council was squeezed in only after intense lobbying from Mayor Joanne Monaghan.

The Natural Resources department public relations staff also chose to ignore (or exclude) local media, with the exception of the Northern Sentinel. Northwest Coast Energy News, Kitimat Daily, CFTK and CRFN were not informed and did not accompany Oliver on his hour long tour of Douglas Channel.

After the meeting, Natural Resources Canada issued a news release saying that he had concluded “a successful visit to Kitimat,” hosted by the Haisla:

Minister Oliver discussed opportunities to increase First Nations’ participation in resource development and received a tour of the Douglas Channel hosted by Chief Councilor Ellis Ross.

“I am privileged to have been invited by the Haisla Nation to gain their perspective, listen to their concerns and discuss our plans for Responsible Resource Development and our initiatives to strengthen environmental protection,” said Minister Oliver. “Resource development presents a tremendous opportunity for First Nations groups like the Haisla. Our government has also been clear that development will only proceed if it is safe for the environment…”

“Responsible resource development has the potential to create significant new opportunities for Aboriginal peoples across Canada,” said Minister Oliver. “The Government will make every effort to ensure that…

Aboriginal peoples in Canada have the opportunity to share the benefits of energy resource development in the years ahead, while ensuring that projects are developed in a manner that has the highest regard for safety and the environment.”

“The safe and responsible diversification of our energy markets is a priority for the Government of Canada,” said Minister Oliver. “Our energy industry must remain competitive to ensure communities across Canada continue to benefit from our natural resource wealth.”

The Northern Sentinel reported that Oliver mainly concentrated on liquified natural gas development and tried to avoid questions about the Enbridge Northern Gateway project. Oliver repeated the federal government’s position on safety outlining the programs announced last march to expand pipeline expansion and increase penalties for safety violations.

On LNG, Oliver told the Sentinel, “These are decisions made by the private sector, it’s not us telling us don’t do this project…they’re going to figure that out themselves,” he said.

On the Enbridge Northern Gateway Pipelines Project, Oliver told the Sentinel, “We have a very strong interest in seeing the markets diversify, and that includes moving oil to Asia,” he said. “However, we’re not going to stomp over the regulatory process. It’s subject to regulatory review, the joint review panel will be coming to its conclusion this December. We’re waiting for what they have to say…I know people have a view of what our opinion is but we don’t offer an opinion before we hear from the regulator.”

He added that once the review is done, “At that point we’ll know more because they will have a done a comprehensive, scientific audit.”

Councillor Mary Murphy told Northwest Coast Energy News that she was told by a Haisla friend early Tuesday morning that Oliver was coming to visit Kitamaat Village and immediately informed Mayor Joanne Monaghan.

Monaghan said, “I called his office in Ottawa and said I wanted a meeting as well seeing he was here. After an all day back and forth until three o’clock he said he would come at four for half an hour.”

Councillor Corinne Scott said. “As none of us were aware of the Minister being in Kitimat, we scrambled to have Mary, Rob, the Mayor and I available to meet with him, along with [DOK Chief Admnistrative Officer] Ron [Poole] and [Economic Development Officer] Rose Klukas.”

Councillors Mario Feldhoff, Phil Germuth and Edward Empinado were unable to attend because they working at the time and could not get away with such short notice. Sources tell Northwest Coast Energy News that even pro-development members of the local business community were not informed about Oliver’s visit.

Murphy described the meeting “as very beneficial to us.” A couple of other sources, familiar with accounts of the meeting, however, both told Northwest Coast Energy News there was barely enough time after formalities to ask questions of the minister before he dashed out the door for the airport.

Oliver last visited the region in March, to make an announcement in Terrace. At that time he did not visit Kitimat.