LNG Canada final investment decision 18 to 24 months away, CEO says. Has concerns about air shed, pipelines

LNG Banada
The LNG Canada site at the old Methanex plant in Kitimat, April 29, 2014. (Robin Rowland/Northwest Coast Energy News)

The final investment decision for the LNG Canada project is 18 to 24 months ahead,  Andy Calitz, CEO LNG Canada said Wednesday.

Calitz said that the project must go through a series of what are called “stage gates” before the respective corporate boards of the partners make that decision. Calitz said the project has already completed three stages, identifying the project, testing the idea, selecting what exactly the proponents are going to do. “Then there is the so-called design stage when all the design experts come in. We are hundred per cent certain we are tackling the next phase.” It is when the design phase is complete and then depending on world market conditions, that the final investment decision will be made.

Caltiz also pointed to one reason that while the LNG Canada project is moving ahead slowly,it appears to be moving faster than the rival Chevron-Apache Kitimat LNG project. That’s because the four investors in the LNG Canada project, Shell, PetroChina, Mitsubishi and KoGas (Korea Gas) are the customers, shipping their own product via the proposed TransCanada Coastal Gaslink pipeline, to the jointly owned terminal that will be built on the old Methanex site in Kitimat.

Caltiz’s comments came at a Vancouver news conference called to announce a joint venture agreement between the four partners. Under today’s agreement, Shell has increased its stake in the project to 50 per cent from 40 per cent; PetroChina will hold 20 per cent and each of Kogas and Mitsubishi Corporation holding 15 per cent. PetroChina and Shell increased their holdings by buying from the other partners.

Calitz said, “They each bring their own gas, they each put their own capacity in the pipeline to be transported by Transcanada, they together own the energy plant, then they lift the cargo in the same proportion, taking in to their own potrfolios, for every cargo that is produced, say for every 100,000 cubic metres, 15 will go Kogas 15 to Mitsubishi 20 will go Petrochina and 50 will go to Shell.”

One reason, along with the volatility and uncertainty of the liquified natural gas market that the Chevron Apache Kitmat LNG project appears to have stalled is a lack of customers. Kitimat LNG has said it is looking for equity partners similar to what was said today about the LNG Canada project.

Air shed

Asked a general question about environmental concerns, Calitz singled out local concerns about the air shed quality in the Kitimat valley and similar concerns up in Prince Rupert, saying, “We are at all times very sensitive to our environmental impact… In the case of the airshed around the LNG plant, it is being quantified, it;s being looked at cumulatively in Prince Rupert, in Kitimat. We also make sure that we work with the government about the sensitivity of air shed impact to the communities of Terrace and Kitimat. I can confirm your point it is high on our agenda. We understand the issues we all developed energy projects before and will continue to be vigilant.”

He said there were three main concerns that would affect the final investment decision: “Where does the Asian gas price go? Two will we have enough labor and what will the labor rates and labor productivity be and three between the various companies that have a lot of experience in Canada specifically TransCanada pipelines into Kitimat, and the other pipeline company going into Prince Rupert, we need to get those pipelines through the mountains.”

While it may be reading too much into one statement, it appears that LNG Canada and its partners are taking a more careful approach to pipeline construction than the Enbridge Northern Gateway project where that company was always certain its plans for crossing the rugged northwest BC mountains would yield few problems.

Russia crisis

The other major factor governing any decision on LNG plants in British Columbia is the volatile marketplace.

Reporters at the Vancouver news conference asked Caltiz about reported talks between China and Russia where Russia, now facing economic sanctions for its actions against Ukraine, would ship natural gas to China and if that would affect BC plans to export LNG to China.

“One can always draw linkages between any two subjects but I would say the linkage is between very weak and non existant,” Calitz said. “The closeest that anyone can come to a linkage is do the events in Europe and Ukraine increase the likelihood of a major pipeline between Russia and China, that’s for Russia and China to decide, but apart from that very very weak linkage.”

That state of prices remains a concern among reports that several Asian nations including the giants India and China plan to form a sort of buyers club, to drive down the high price of natural gas, which in Asia is a percentage of the price of crude oil, while in North America, market conditions have driven the price of natural gas much lower.

“There is a very active daily debate about prices paid for LNG in Asia. That debate, I am sure, will continue as long as the Henry Hub [the North America market price] is at $4 and Europe is at $8 and Asia based is somewhat from 12 to 18 dollars, depending on whether its contract or spot.

“If you ask is that of concern, then every project here will be affected by changes in price, whether the price goes up or down. will impact the final investment decision and it will impact in the way say the Pacific Northwest or the Kitimat LNG project.

“We as an energy project in British Columbia, like all other energy projects, like even from East Africa are looking at production costs and what the Asian prices are. So by 2015, what happens to that price and what happens in those negotiations will feature in the decisions of all the players.”

In a prepared statement, Calitz said,”“While we are in the early evaluation process and a decision to build the project is still a while away, this agreement reinforces our commitment to developing an LNG facility in British Columbia and allows us to proceed with the next steps in our project assessment, We will need to continue to work closely with the provincial and federal government to ensure that the project is economically viable, as well as working closely with First Nations, the local communities, and regulatory agencies, and move forward on a number of commercial agreements and contracts. We remain cautiously enthusiastic about the potential opportunity in B.C. and look forward to exploring it further.”

Premier Christy Clark, who made a brief appearance at the news conference before leaving to a prepare for another sales trip to Asia, was more optimistic, saying: “The private sector doesn’t make billion dollar investment decisions if they don’t think there isn’t going to be a return on it. It’s not for me … to determine what the market looks like, it’s the private sector that does that and I think the answer to them is you would not see those major companies taking the next step signing a joint venture agreement today if they didn’t think there was a market for BC gas.

“The other advantage that BC has that we will never sacrifice is our reputation as a dependable, reliable, honourable trading partner. When people do business in British Columbia on natural gas, they know we won’t play politics with them.They know we will keep our promises about where the tax levels will be and how they’re going to be treated as trading partners. That is a tremendous advantage for us in an unstable world.”

 

Temporary foreign workers

Asked by a reporter about LNG projects using temporary foreign workers, Clark replied. “The thing about temporary foreign workers is that temporary workers should come for temporary jobs, And in the process of building these huge facilities and pipelines with peaks in construction that we will not be able to meet within British Columbia or even Canada. There’s no question about that.
“Our view is very much British Columbians first, and the way to do that is to make sure people have all the skills training that they need to take advantage of those jobs, second reach out to the rest of the country and then third work with the unions and other organizations when needed to support temporary foreign workers coming in.

“We’ve had remarkable consensus with the trade unions, recognizing the need for some temporary foreign workers at some point in the construction of these projects. That’s why we’ve gone about planning it so carefully because we want to make sure when we will need workers in what skill set in what month and what years. We’re really breaking it down so we can be sure we have exhausted British Colunbia’s potential to fill those jobs before we start to look across the country or around the world.”

LNG Canada signing
LNG Canada joint venture agreement signing cermony in Vancouver, April 30, 2014, left to right, Jorge Santos Silva, Executive Vice President Shell Upstream Americas Commercial, Bi Jingshuang, Director – Legal Department of China National Oil and Gas Exploration and Development Corporation (CNODC), representing PetroChina, Andy Calitz, CEO, LNG Canada, Hiroki Haba, Vice President, Natural Gas Business Division, Mitsubishi and Jongkook Lim, Vice President, LNG Business Department, Korea Gas. Standing wathc are Christy Clark, Premier of British Columbia and Rich Coleman, Minister of Natural Gas Development. (LNG Canada)

Projects on the go

The news release listed the many LNG projects under way from the four partners.

Shell currently has ten LNG projects in operation with approximately 26.1 million tonnes per annum (mtpa) operational LNG capacity, in nine countries, and two projects
with an additional 7.5 mtpa under construction. Shell is also one of the largest LNG vessel operators in the world, with interests in around a quarter of the LNG vessels in operation.

Phoenix Energy Holdings Limited (an affiliate of Petro-China Investment (Hong Kong) Limited) (“PetroChina”) is China’s largest oil and gas producer and supplier, as well as
one of the world’s major oilfield service providers and a contractor in engineering construction. PetroChina officially launched three LNG projects in June 2004, two of
which started operations in the first half of 2011.

Kogas Canada LNG is the world’s largest LNG importer. As the nation’s sole LNG provider, KOGAS currently operates three LNG terminals and a nationwide pipeline network, supplying natural gas fromaround the world to power generation plants, gas-utility companies and city gas companies throughout the country.

Since pioneering the first LNG import to Japan from Alaska in 1969, Mistubishi handles 40 per cent of Japan’s LNG imports and has successfully built a portfolio of LNG export investments across Australia, Indonesia, Malaysia, Brunei, Oman, Russia and North America.

With the joint venture agreement, the group has incorporated a new federal corporation, LNG Canada Development Inc. The project’s corporate offices will continue to be located in Vancouver and Calgary, with the project office based in Kitimat.

Although pegged as a “major milestone” in the development of LNG Canada, the Kitimat social media rumour mill was correct in speculation Tuesday that the news conference concerned a corporate name change and sale of assets.   The event was probably more a kickoff for Christy Clark’s upcoming tour of Asia.

 

BC releases special report on LNG jobs and training

BC LNG reportThe BC Ministry of Jobs, Tourism and Skills Training today released a special report on the job prospects for the LNG industry and the policies needed on training, job mobility and use of temporary foreign workers.

A news release says:

Premier Christy Clark today accepted all recommendations in ‘The Premier’s Liquefied Natural Gas Working Group: Final Report’ as a road map to making sure British Columbia has the skilled labour force it needs to seize the opportunity of liquefied natural gas.

The report, produced by representatives of government, LNG proponents, organized labour, and the Haisla Nation, maps out 15 recommendations on planning, skills training, marketing and developing best practices within the LNG sector to attract a mobile workforce.

“To bring home the opportunity presented by LNG, we have to work together — government, industry, First Nations and labour,” said Premier Clark. “Everyone here today is working toward the same goal – making sure British Columbians benefit from this generational opportunity.”

Premier Clark called together the working group after her first meeting with representatives of organized labour in September 2013. At that historic meeting it was agreed that all parties would to work together to map out how they could work together to solve some of the complex challenges associated with the LNG opportunity.

“I want to thank the Premier for setting up the working group. I also want to thank the representatives of the Haisla Nation, industry, labour and government as it has been quite a process to come to agreement on the recommendations,” said Jim Sinclair, president of the BC Federation of Labour. “We were able to get beyond our differences by keeping our focus on what B.C. workers need to take advantage of the potential that lies in LNG. Now we have to ensure that the 15 recommendations are implemented. This investment in the workers of British Columbia will lead to good jobs. As we know, good jobs build a better B.C.”

The report includes one recommendation on developing a working group moving forward, four recommendations on skills training planning and implementation, two recommendations on marketing and promotions, three recommendations on apprenticeship trades and mentoring, two recommendations on a mobile workforce, one recommendation on timelines and two recommendations on the use of workers from other jurisdictions. The recommendations will be reflected in the 10-year skills training plan that will be released soon.

“Premier Clark recognized early the need for LNG workforce development in collaboration with industry, labour, and government,” said David Keane, vice president, policy and corporate affairs for BG Canada’s Prince Rupert LNG project. “Skills training is critical to ensure citizens of the province might realize the full economic benefits of LNG.”

From the report…..

Top 10 Construction-
Related Jobs with the
Greatest Demand

1.Steamfitters &
pipefitters
2.Construction traders
helpers & labourers
(including riggers)
3.Welders
4.Concrete finishers
5.Heavy equipment
operators
6.Carpenters
7.Truck drivers
8.Purchasing agents &
officers
9.Gas fitters
10.Crane operators

Read the full report

LNG_Final_Report

 

Clio Bay reclamation postponed as new contractor takes over at KM LNG

Marine clay sign Robin Rowland photo
Sign explaining marine clay at the Chevron/ KMLNG Open House, in Kitimat, March 13, 2014. (Robin Rowland/Northwest Coast Energy News)

Studies on the Clio Bay reclamation project have been postponed until the fall while the new prime contractor takes over the Kitimat LNG project.

A spokesperson for Chevron said at the Kitimat LNG open house on Wednesday now that Irving , Texas-based Fluor Corp, in partnership with a joint-venture partner, Japan’s JGC Corp. has won the engineering, procurement and construction contract for the KM LNG project, it will take some time for the new company to be briefed on the Clio Bay project and then begin working with Stantec the environmental contractor on the project. That means that the reclamation project itself will now not likely proceed until spring of 2015.

In community meetings last fall, Chevron had said it expected the preliminary studies to be completed in January or February.

KM LNG, a partnership between Chevron and Apache Corp, took over the Riverlodge Recreation Centre for three days from February 2 to 4, to brief employees and contractors on the transition from KBR Inc., the original prime contractor which lost the bidding for the second stage of the contract to Flour.

KM LNG organized the open house mainly to show what is happening at the old Eurocan site, which is being converted to a work camp for the project.

The Clio Bay project, however, had a prominent place among the panels on display at Riverlodge. In the panels, Chevron says that up to 40 per cent of the Clio Bay bottom is covered with wood debris, at some points, as much as 10 metres deep, meaning a degraded habitat for dungeness crab and eel grass.

As was announced in the fall, Chevron, in partnership with the Haisla Nation, plan to take marine clay from Bish Cove and use it to cover the wood debris to create a new sea bottom. One panel said: “The new layer of marine clay is expected to be colonized by eel grass and by species such as worms, crustaceans, small fish and other sea life that will encourage a more plentiful, healthy ecosystem replacing the degraded ecosystem created by the decomposing wood debris that now covers the ocean floor.”

Chevron sees the project as an example that others could follow. Another panel notes: “Project proponents around the world are moving away from the old practice of dredging and disposing of marine clay. The Clio Bay restoration project would see marine clay used wisely to deliver benefits to the environment, community and culture.”

Work continues on the remediation of the old Eurocan mill site. Chevron and Apache are, in effect, spending millions of dollars to clean up the mess left behind when West Fraser abandoned the mill.

The company has to demolish the old mill and remediate contaminated areas. One of the big challenges is dealing with the old landfill site, which Chevron says has to be brought up to 21st century environmental standards. That includes adding an impermeable lining to the landfill and upgrading the leachate treatment systems.

Cleaning up the mess left by Eurocan will take about five years, according to one of the panels at the Open House. Chevron says that job will improve the environment, where they plan to build a work camp both in the short term and in the long term as work continues.

 

Second floating LNG terminal eyed for Kitimat at Douglas Channel log sort

PNG Pipeline Looping Project map (PNG)
PNG Pipeline Looping Project map (PNG)

A second floating liquified natural gas terminal may be planned for Kitimat, Northwest Coast Energy News has learned.

According to multiple sources in Kitimat, Altagas, the parent company of Pacific Northern Gas plans the terminal at the old log sort site on Douglas Channel, where the barge carrying the liquifaction equipment would likely be moored next door to the already planned BC LNG/Douglas Channel Partners LNG project which would be served by gas delivered by the PNG pipeline system.

Pacific Northern Gas has filed an application with the BC Environmental Assessment Office to construct and operate an approximately 525 kilometre, 610 millimetre (24 inch) diameter natural gas pipeline from the natural gas hub at Summit Lake, near Prince George, to Kitimat that would loop or twin the existing PNG existing natural gas pipeline.

The application to the BCEAO says: “The proposed Project would supply natural gas to proposed liquefied natural gas (LNG) export facilities as well as the Proponent’s existing customers. The proposed Project would include the replacement of four existing compressor stations and would have an initial capacity of 600 million standard cubic feet per day.”

PNG Open House
PNG Pipeline Looping Project Open House at Tamitik. Nov. 26, 2013. (Robin Rowland/Northwest Coast Energy News)

On Tuesday, November 26, Pacific Northern Gas held a sparsely attended open house at Tamitik Arena as part of the BCEAO public comment procedure.

A 38 day public comment period on the application information requirements started on November 25 and will end on January 2, 2014.

At the open house,  PNG officials explained that “looping” means that there would be a second or twin pipeline that would mostly be on a parallel route to the existing pipeline. Since both pipelines would begin at the Summit Lake terminal and end at the Kitimat terminal that is where the term “looping” comes in.

The PNG officials said that the pipeline was initially designed to service the first floating LNG terminal at the old log sort site on Douglas Channel south of Kitimat, but north of the KM LNG site at Bish Cove.

It would be operated by  BC LNG Energy Cooperative, through Douglas Channel Energy Partnership, a partnership with the Haisla Nation and LNG Partners, the energy investors mainly from Texas,

Unlike the bigger project Kitimat LNG or KM LNG, a partnership between Chevron and Apache (and according to reports possibly Sinopec) or the Shell-led partnership LNG Canada, the BC LNG project would allow smaller companies to provide LNG to Asian customers.

At the open house, the PNG officials said the two pipelines could also service “another Kitimat floating LNG project” but declined to give details for confidentiality reasons. The same officials also said the proponent of that project was also looking at Prince Rupert as a possible site for the second floating terminal.

Kitimat sources have confirmed that AltaGas has told them that the company is also considering Prince Rupert as a site for a floating LNG terminal.

However, the current documentation and maps filed with the BCEAO show the PNG looping pipeline terminating at Kitimat, not Prince Rupert.

PNG pipeline map
Detail of the PNG Pipeline Looping proposal. The existing pipeline is shown at the dashed line, the new pipeline is shown in purple. (PNG)

According to the maps filed with the BCEAO and made available at the open house, the new pipeline would not be twinned completely along the existing route across the mountains west of Smithers to Terrace, but would head north at Telkwa parallel to Highway 16 before making its own way through the mountains, crossing the existing pipeline at the Zymoetz River east of Terrace and then taking a westerly route toward Lakelese Lake before joining the existing pipeline corridor along Highway 37.
AltaGas took over Pacific Northern Gas in the fall of 2011.

The Texas-based arm of Douglas Channel Energy partnership, LNG Partners,  is currently in financial difficulty. Reports say that the Texas investors in the company are having difficulty repaying a $22.5 million loan from China’s ENN Group.

The problems currently faced by the Texas group have no affect, at this point, on the Haisla Nation investment in the BC LNG Energy Cooperative. There is already speculation in Kitimat that if the LNG Partners get into further financial difficulty, AltaGas may step in and take over. The would raise the question whether or not there would still be two floating LNG terminals on Douglas Channel, or just the one, as originally planned, but under new ownership.

In it’s project proposal PNG says

The Project will generate approximately 1800-2400 direct person years of employment during construction. Additionally, tax benefits will be generated for Kitimat and the regional districts crossed by the pipeline. PNG anticipates the project will also result in a significant reduction in natural gas transportation rates for its existing customers.

Natural gas transportation costs are a major issue in the northwest, for those costs appear to keep going up while the price of natural gas in North America is generally going down. Natural gas transportation costs in Kitimat spiked after the closure of the Methanex plant and have continued to be quite high, which is just one of the increasing burdens for residents of Kitimat on fixed or low incomes, who are not benefiting as others from the current boom town economy.

Another problem facing PNG is that the new pipeline will cross the traditional territory of the Wet’suwet’en First Nation, where one house, the Unist’ot’en oppose both the Northern Gateway and Pacific Trails Pipeline and have set up a blockade camp on access roads.

The PNG filing with the BCEAO promises consultation with both the Wet’suwet’en Council, and the Office of the Wet’suwet’en, which represents the hereditary chiefs and matriarchs, as well as other First Nations along the proposed route.

 

PNG Open houses for the project are scheduled for:

Vanderhoof
Friendship Centre Hall
Thursday, November 28, 2013

Terrace
Best Western Inn
Monday, December 2, 2013

Smithers
Hudson Bay Lodge
Tuesday, December 3, 2013

Burns Lake
Chamber of Commerce
Wednesday, December 4, 2013

Summit Lake
Community Hall
Thursday, December 5, 2013

 

Sinopec in talks to buy into Kitimat LNG Wall Street Journal says

sinopeclogoThe Wall Street Journal is quoting sources that Sinopec, China’s largest  petroleum refining company, “is in early talks with U.S.-based oil-and-gas producer Apache to buy a minority stake in a liquefied natural gas project on Canada’s Pacific coast.”  And since Apache is a partner with Chevron in KM LNG, that means the project commonly known as Kitimat LNG.

Wall Street Journal story (subscription required)

Costs rising

Sinopec is looking at several of the at least 13 LNG projects in the northwest BC region. The reports say that Sinopec management has not yet signed off any investment and say that any Sinopec investment would go toward the rising costs of the KM LNG project’s costs, which Apache now estimate will be about $15 billion US.

“Apache is moving forward with the project, and we’re looking for partners,” says an Apache spokesman, according to the reports. It appears that Apache is once again recalculating the cost of the Kitimat project.

Sinopec, the China Petroleum and Chemical Corporation is the world’s fifth largest company by revenue.   It has a $4.65 billion stake in the bitumen sands giant Syncrude and owns the Canadian energy company Sinopec Daylight Energy Ltd through Sinopec Canada.

It was a Sinopec pipeline that exploded in Qindao in Eastern China, killing 55 people on Friday, as well as spilling oil into the nearby sea.

 

One of the Kitimat LNG projects plans to self-generate power for liquefaction plant

At least one of the two large liquified natural gas projects in Kitimat is, at least at this point, planning to self-generate the power required using a gas-fired, steam-driven electrical generation system.

A job ad posted this weekend by the headhunting firm Fircroft is seeking a Lead Project Engineer, Power Plant for “Our client, a major international owner/operating company, requires expertise for their LNG mega-project in Western Canada.”

The job, which requires 20 years and more experience, would be located in Calgary for eighteen months, then move to Kitimat for the remainder of a four year contract paying from $1650 to $1850 per day.

By Fircroft describing the job as a “mega-project” means that the client is either Shell’s LNG Canada project or the Chevron and Apache KM LNG project, since the much smaller BC LNG project could not be described as a “mega-project.”

As well as the standard qualifications for a senior engineer, the job posting lists:

• Power Plant design, operation and construction experience required.
• Boiler design, construction, operation, and commissioning experience required.
• Heat Recovery Steam Generation (HRSG) design, processes, construction, operation, and commissioning experience required.
• Integrates inherent safety in design and operability in concept selection and development for gas resource opportunities.

Providing the power for the Kitimat and other northwestern LNG projects is becoming controversial. The power is needed to cool the natural gas so it can be loaded onto tankers for shipment to customers.

The BC government recently announced a $650,000 study of the cumulative effect on air quality for the planned industrial expansion in the Kitimat area, including the Rio Tinto Alcan Kitimat modernization project, which would increase the amount of sulphur dioxide emissions, combined with as many as three LNG projects and the associated increase in tanker traffic, as well as the possible and even more controversial Enbridge Northern Gateway project.

At the time of the BC announcement, the Globe and Mail reported:

If natural gas is used either for direct-drive or combined-cycle electricity generation to produce the energy required for the proposed Shell LNG facility at Kitimat, approximately 300 million cubic feet of natural gas would be burned. The proposed Chevron Apache LNG facility could burn approximately 140 million cubic feet of natural gas.

The other alternative for powering the LNG plants is to use hydro-electricity, and BC Hydro at the moment doesn’t have the capacity to supply the LNG projects with power. One possibility is the controversial Site C dam project in the Peace River basin, which is also under review by the BC government. 

Although the job is restricted to Canadian citizens or permanent residents, it is clear that the engineer will have to also answer to the project’s overseas partners since one requirement is to conduct:  “Overseas VIP workshops, including Value Engineering, Process Simplification, Process Optimization and Design to Capacity.”

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

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

Log booming at Clio Bay
Log booming operations at Clio Bay, August 21, 2013. (Robin Rowland/Northwest Coast Energy News)

Chevron, the company operating the KM LNG project at Bish Cove and the Haisla Nation have proposed that marine clay from the Bish Cove construction site be used to cap more than 10,000 sunken and rotting logs in Clio Bay. Haisla Chief Counsellor Ellis Ross says he hopes that using clay to cover the logs will help remediate the environmentally degrading sections of the Bay. The proposal has brought heated controversy over the plan, both among residents of Kitimat and some members of the Haisla Nation, who say that Clio Bay is full of life and that the capping will cause irreparable damage.

An investigation by Northwest Coast Energy News shows that capping thousands of sunken logs is a lot more complicated and possibly costly than anyone has considered. It is also clear that many of the comments both supporting and opposing the Clio Bay project are based on guesses rather than the extensive scientific literature available on the subject.

Northwest Coast Energy News findings include:

  • In 1997, the Department of Fisheries and Oceans surveyed sunken log sites in Douglas Channel. The results, published in 2000, identified 52 sites just on Douglas Channel and the Gardner Canal that had various levels of enviromental degradation due to sunken logs. Clio Bay was not the list. The DFO scientists recomended followup studies that never happened.
  • Scientific studies show that degradation from sunken logs can vary greatly, even within one body of water, due to depth, currents, number of logs, and other factors. So one part of a bay can be vibrant and another part environmentally degraded due to low levels of dissolved oxygen and decaying organic material.
  • If  KM LNG wasn’t paying for the remediation of Clio Bay, it could be very expensive. Capping sunken logs at a cove near Ketchikan, Alaska, that is the same size and shape as Clio Bay cost the US and Alaska governments and the companies involved $2,563,506 in 2000 US dollars. The total cost of the cleanup of the site which was also contaminated with pulp mill effluent was $3,964,000. The estimated cost of capping the logs in the Alaska project was $110 per cubic yard.
  • The Alaska project shows that a remediation project means while most of the logs in a bay or cove can be capped, in some parts of a water body, depending on currents, contamination and planned future use, the logs have to be removed and the area dredged.
  • Agencies such as the State of Alaska, the US Environmental Protection Agency and the US Army Corps of Engineers all recommend using “clean sand” for capping operations. Although “clay balls” have been used for capping in some cases, the US officials contacted say they had no record of large amounts of marine clay ever being used for capping. They also noted that every log capping project they were aware of happened in sites that had other forms of contamination such as pulp mill effluent.
  • Chevron only recently retained the environmental consulting firm Stantec to study Clio Bay. The Department of Fisheries and Oceans has told District of Kitimat Council it recently completed mapping of the seafloor at Clio Bay. The Alaska project was preceded by five years of monitoring and studies before capping and cleanup began.
  • A letter from Fisheries and Oceans to the District of Kitimat says that Clio Bay has been mapped and the department is planning to monitor any capping operations. However, it appears from the Department of Fisheries and Oceans website that the department has no current policies on remediation since the Conservative government passed two omnibus which weakened the country’s environmental laws. According to the website, new remediation policies are now being drafted. That means that although DFO will be monitoring the Clio Bay operation, it is uncertain what standards DFO will be using to supervise whatever happens in Clio Bay.

Northwest Coast Energy News is continuing its investigation of the sunken logs problem.  Expect more stories in the days to come.

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Clio Bay: Haisla desire to clean up bay led to proposal to cap Clio with marine clay, Ross says

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

Clio Bay
Clio Bay, looking toward Douglas Channel, September 14, 2013. (Robin Rowland/Northwest Coast Energy News)

 

Haisla First Nation Chief Counsellor Ellis Ross says the Haisla made the proposal to the KM LNG project, a partnership of Chevron and Apache, to use the marine clay to cover the thousands of logs at the bottom of Clio Bay after years frustration with the Department of Fisheries and Oceans and the BC provincial government, which for decades ignored requests for help in restoring almost fifty sunken log sites in Haisla traditional territory.

The problem is that remediation of the hundreds of sites on Canada’s  west coast most containing tens of thousands of sunken logs has been so low on DFO’s priority list that even before the omnibus bills that gutted environmental protection in Canada, remediation of sunken log sites by DFO could be called no priority.

Now that the KM LNG has to depose of a total of about 3.5 million cubic metres of marine clay and possibly other materials from the Bish Cove site, suddenly log remediation went to high priority at DFO.

The controversy is rooted in the fact that although the leaders of the Haisla and the executives at Chevron knew about the idea of capping Clio Bay, people in the region, both many residents of Kitimat and some members of the Haisla were surprised when the project was announced in the latest KM LNG newsletter distributed to homes in the valley.

Chevron statement

In a statement sent to Northwest Coast Energy News Chevron spokesperson Gillian Robinson Ridell said:

The Clio Bay Restoration Project  proposed by Chevron, is planned to get underway sometime in early 2014. The proposal is fully supported by the Federal Department of Fisheries and Oceans and the Haisla First Nation Council.  The project has been put forward as the best option for removal of the marine clay that is being excavated from the Kitimat LNG site at Bish Cove. Chevron hired Stantec, an independent engineering and environmental consulting firm with extensive experience in many major habitat restoration projects that involve public safety and environmental conservation.  The Haisla, along with Stantec’s local marine biologists, identified Clio Bay as a site that has undergone significant environmental degradation over years of accumulation of underwater  wood debris caused by historic log-booming operations. The proposal put forward by the marine biologists was that restoration of the marine ecosystem in the Bay could be achieved  if marine clay from Chevron’s facility site, was used to cover the woody debris at the bottom of the Bay. The process outlined by the project proposal is designed to restore the Clio Bay seafloor to its original soft substrate that could sustain a recovery of biological diversity.

Kitimat worried

Non-aboriginal residents of Kitimat are increasingly worried about being cut off from both Douglas Channel and the terrestrial back country by industrial development. These fears have been heightened by reports that say that Clio Bay could be closed to the public for “safety reasons” for as much as 16 months during the restoration project.

The fact that Clio is known both as a safe anchorage during bad weather and an easy to get to location for day trips from Kitimat has made those worries even more critical.

There is also a strong feeling in Kitimat that the residents were kept out of the loop when it came to the Clio Bay proposal.

In a letter to the District of Kitimat, DFO said:

Clio Bay has been used as a log handling site for decades which has resulted in areas of degraded habitat from accumulations of woody debris materials on the sea floor. The project intends to cap impacted areas with inert materials and restore soft substrate seafloor. The remediation of the seafloor is predicted to enhance natural biodiversity and improve the productivity of the local fishery for Dungeness crab. The project area does support a variety of life that will be impact and therefore the project will require authorization from Fisheries and Oceans Canada for the Harmful Alteration, Disruption or Destruction (HADD) of fish and fish habitat.

The letter avoids the controversy over the use of marine clay but saying “inert material” will be used. That can only increase the worries from residents who say that not only clay but sand, gravel and other overburden from Bish Cove and the upgrade of the Forest Service Road may be used in Clio Bay. (The use of “inert material” also gives DFO an out if it turns out the department concludes the usual practice of using sand is better. That, of course, leaves the question of what to do with the clay).

Although Ellis Ross has said he wants to see large numbers of halibut and cod return to Clio Bay, the DFO letter only mentions the Dungeness Crab.

DFO website cites pending changes after the passage of the omnibus bills.
DFO website cites pending changes after the passage of the omnibus bills.

Try to search “remediation” on the DFO site and the viewer is redirected to a page that cites the omnibus bills passed by the Conservative government and says

On June 29, 2012, the Fisheries Act was amended. Policy and regulations are now being developed to support the new fisheries protection provisions of the Act (which are not yet in force). The existing guidance and policies continue to apply. For more information, see Changes to the Fisheries Act.

On April 2nd, 2013 the Habitat Management Program’s name was changed to the Fisheries Protection Program.

So, despite what communications officers for DFO and the Harper government may say, there was no policy then and there is no policy now on remediation of log sites. Given Harper’s attitude that LNG and possibly bitumen export must proceed quickly with no environmental barriers, it is likely that environmental remediation will continue to be no priority—unless remediation becomes a problem that the energy giants have to solve and pay for.

Alaska studies

On the other hand, the State of Alaska and the United States Environmental Protection Agency spent a decade at a site near Ketchikan studying the environmental problems related to sunken logs at transfer sites

Those studies led Alaska to issue guidelines in 2002 with recommended practices for rehabilitating ocean log dump sites and for the studies that should precede any remediation project.

The Alaska studies also show that in Pacific northwest coast areas, the ecological effects of decades of log dumping, either accidental or deliberate, vary greatly depending on the topography of the region, the topography of the seabed, flow of rivers and currents as well as industrial uses along the shoreline.

The Alaska policy is based on studies and a remediation project at Ward Cove, which in many ways resembles Clio Bay, not far from Kitimat, near Ketchikan.

The Alaska policy follows guidelines from both the US Environmental Protection Agency and the US Army Corps of Engineers that recommend using thin layers of “clean sand” as the best practice method for capping contaminated sites. (The Army Corps of Engineers guidelines say that “clay balls” can be used to cap contaminated sites under some conditions. Both a spokesperson for the Corps of Engineers and officials at the Alaska Department of Environmental Conservation told Northwest Coast Energy News that they have no records or research on using marine clay on a large scale to cap a site.)

The EPA actually chose Sechelt, BC, based Construction Aggregates to provide the fine sand for the Ward Cove remediation project. The sand was loaded onto 10,000 tonne deck barges, hauled up the coast to Ward Cove, offloaded and stockpiled then transferred to derrick barges and carefully deposited on the sea bottom using modified clam shell buckets.

The EPA says

Nearly 25,000 tons of sand were placed at the Ward Cove site to cap about 27 acres of contaminated sediments and 3 other acres. In addition, about 3 acres of contaminated sediments were dredged in front of the main dock facility and 1 acre was dredged near the northeast corner of the cove. An additional 50 acres of contaminated sediments have been left to recover naturally.

A report by Integral Consulting, one of the firms involved at the project estimated that 17,800 cubic metres of sand were used at Ward Cove.

In contrast, to 17,800 cubic metres of sand used at Ward Cove, the Bish Cove project must dispose of about 1.2 million cubic metres of marine clay at sea (with another 1.2 million cubic metres slated for deposit in old quarries near Bees Creek).

Studies at Ward Cove began as far back as 1975. In 1990 Alaska placed Ward Cove on a list of “water-quality limited sites.” The studies intensified in 1995 after the main polluter of Ward Cove, the Ketchikan Paper Company, agreed in a consent degree on a remediation plan with the Environmental Protection Agency in 1995. After almost five years of intensive studies of the cove, the sand-capping and other remediation operations were conducted from November 2000 to March 2001. A major post-remediation study was carried out at Ward Cove in 2004 and again in 2009. The next one is slated for 2015.

Deaf ears at DFO

“We need to put pressure on the province or Canada to cleanup these sites. We’ve been trying to do this for the last 30 years. We got nowhere,” Ellis Ross says. “Before when we talked [to DFO] about getting those logs and cables cleaned up, it fell on deaf ears. They had no policy and no authority to hold these companies accountable. So we’re stuck, we’re stuck between a rock and hard place. How do we fix it?”

Ross says there has been one small pilot project using marine clay for capping which the Haisla’s advisers and Chevron believe can be scaled up for Clio Bay.

Douglas Channel studies

The one area around Kitimat that has been studied on a regular basis is Minette Bay. The first study occurred in 1951, before Alcan built the smelter and was used as a benchmark in future studies. In 1995 and 1996, DFO studied Minette Bay and came to the conclusion that because the water there was so stagnant, log dumping there had not contributed to low levels of dissolved oxygen although it said that it could not rule out “other deleterious effects on water quality and  habitat`from log dumping.”

That DFO report also says that there were complaints about log dumping at Minette Bay as far back as 1975, which would tend to confirm what Ross says, that the Haisla have been complaining about environmentally degrading practices for about 30 years.

Ross told Northwest Coast Energy News that if the Clio Bay remediation project is successful, the next place for remediation should be Minette Bay.

A year after the Minette Bay study, DFO did a preliminary study of log transfer sites in Douglas Channel, with an aerial survey in March 1997 and on water studies in 1998. The DFO survey identified 52 locations with sunken logs on Douglas Channel as “potential study sites.” That list does not include Clio Bay. On water studies were done at the Dala River dump site at the head of the inlet on Kildala Arm, Weewanie Hotsprings, at the southwest corner of the cove, the Ochwe Bay log dump where the Paril River estuary opens into the Gardner Canal and the Collins Bay log dump also on the Gardner Canal.

In the introduction to its report, published in 2000, the DFO authors noted “the cumulative effect of several hundred sites located on BC coast is currently unknown.”

DFO list of sunken log sites on Douglas Channel   (pdf)

Since there appears to have been no significant follow-up, that cumulative effect is still “unknown.”

In 2000 and 2001, Chris Picard, then with the University of Victoria, now Science Director for the Gitga’at First Nation did a comparison survey of Clio Bay and Eagle Bay under special funding for a “Coasts Under Stress” project funded by the federal government. Picard’s study found that Eagle Bay, where there had been no log dumping was in much better shape than Clio Bay. For example, Picard’s study says that “Dungeness crabs were observed five times more often in the unimpacted Clio Bay.”

Although low oxygen levels have been cited as a reason for capping Clio Bay, Picard’s study says that “near surface” oxygen levels “did not reliably distinguish Clio and Eagle Bay sediments.” While Clio Bay did show consistent low oxygen levels, Eagle Bay showed “considerable interseasonal variation” which is consistent with the much more intensive and ongoing studies of oxygen levels at Wards Cove.

Chevron’s surprise

It appears that Chevron was taken by surprise by the controversy over the Clio Bay restoration. Multiple sources at the District of the Kitimat have told Northwest Coast Energy News that in meetings with Chevron, the company officials seemed to be scrambling to find out more about Clio Bay.

This is borne out by the fact, in its communications with Northwest Coast Energy News, Chevron says its consulting firm, Stantec has cited just two studies, Chris Picard’s survey of Clio Bay and a 1991 overview of log-booming practices on the US and Canadian Pacfic coasts. So far, Chevron has not cited the more up-to-date and detailed studies of Ward Cove that were conducted from 1995 to 2005.

Chevron says that Stantec marine biologists are now conducting extensive field work using divers and Remote Operated Vehicle surveys to “observe and record all flora and fauna in the bay and its levels of abundance. Stantec’s observations echoed the previous studies which determined that the massive amount of wood has harmed Clio Bay’s habitat and ecosystem.”

In its statement to Northwest Coast Energy News, Chevron cited its work on Barrow Island,  in Western Australia, where the Chevron Gordon LNG project is on the same island as a highly sensitive ecological reserve. Chevron says the Australian site was chosen only after a thorough assessment of the viability of other potential locations, and after the implementation of extensive mitigation measures, including a vigorous quarantine program for all equipment and materials brought on to the Barrow island site to prevent the introduction of potentially harmful alien species.

Reports in the Australian media seem to bare out Chevron’s position on environmental responsibility. Things seem to be working at Barrow Island.

Robinson went on to say:

Those same high environmental standards are being applied to the Kitimat LNG project and the proposed Clio Bay Restoration project. The proposed work would be carried out with a stringent DFO approved  operational plan in place and would be overseen by qualified environmental specialists on-site.

The question that everyone in the Kitimat region must now ask is just how qualified are the environmental specialists hired by Chevron and given staff and budget cuts and pressure from the Prime Minister’s Office to downgrade environmental monitoring just how stringent will DFO be monitoring the Clio Bay remediation?

Alaska standardsIn the absence of comprehensive Canadian studies, the only benchmark available is that set by Alaska which calls for:Capping material, typically a clean sand, or silty to gravelly sand, is placed on top of problem sediments. The type of capping material that is appropriate is usually determined during the design phase of the project after a remediation technology has been selected. Capping material is usually brought to the site by barge and put in place using a variety of methods, depending on the selected remedial action alternative.

Thick Capping

Thick capping usually requires the placement of 18 to 36 inches of sand over the area. The goal of thick capping is to isolate the bark and wood debris and recreate benthic habitat that diverse benthic infauna would inhabit.

Thin Capping

Thin capping requires the placement of approximately 6 – 12 inches of sand on the project area. It is intended to enhance the bottom environment by creating new mini-environments, not necessarily to isolate the bark and wood debris. With thin capping, surface coverage is expected to vary spatially, providing variable areas of capped surface and amended surface sediment (where mixing between capping material and problem sediment occurs) as well as limited areas where no cap is evident.

Mounding

Mounding places small piles of sand or gravel dispersed over the waste material to create habitat that can be colonized by organisms. Mounding can be used where the substrate will not support capping.

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Clio Bay remediation project “killing two birds with one stone,” Ross says

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

 

Ellis Ross
Haisla Nation Chief Counsellor Ellis Ross at Bish Cove, June 19, 2013. (Robin Rowland/Northwest Coast Energy News)

Haisla Chief Counsellor Ellis Ross says that capping the logs at Clio Bay was a Haisla idea, taking advantage of the opportunity to use the marine clay from Bish Cove to bring back the Clio ecosystem.

The Haisla were told by experts who video taped the bottom of Clio Bay that are between 15,000 to 20,000 sunken logs in Clio Bay.

“I know because I’ve spent a lot of time down there plus my dad actually worked for the booming company for years and knew what was going on out there,” Ross said. “There are two extreme areas we’re talking about, if you look at Clio Bay where it’s estimated that there 15,000 to 20,000 logs down there, imagine what Minette Bay looks like? And it’s all iron, it’s steel. It’s not just wood, there are a lot of cables down there.

Retrieved cables
Cables retrieved from Ward Cove, Alaska, during dredging and capping in 2001. (EPA)

“The Haisla have known about the degradation of our territory for years. The problem we have as Haisla members is to restore the habitiat is that nobody wants to clean up the habitat. This was our idea, after review from technical experts from DFO as well as our own experts. We’re looking for a three way solution, with the company, DFO and the Crown and the Haisla.”

“I’d love to go and catch halibut and cod, like my ancestors used to.”

He said that the Haisla have beem aware of environmental problems from sunken logs for decades and have been asking for cleanup of degraded areas since 2004, not just at Clio Bay, but in the Kildala Arm and at Collins Bay, which were studied by DFO in 1997.

“The logs are down there, they are oxidizing, but no one wants to do anything about it, including the company and including the Crown. We had independent people come in and review it and have them come up with a recommendation. There was a small scale project [involving marine clay] that proved that this could work.

“This system here is killing two birds with one stone, get rid of the clay and try to remediate some of the habitat,” Ross said.

He said that the original estimate of marine clay excavated at Bish Cove was 10,000 cubic metres. That has now risen to about 3.5 million cubic metres because the KM LNG project is digging deeper for the foundation of the LNG terminal. The original plan called for disposing 1.2 million cubic metres at sea and another 1.2 million cubic metres on land.

“The original idea was to dump the clay in the middle of the ocean. In small amounts it could have been mitigated, but in large amounts we said ‘no.’ If we try to dump clay in the middle of the channel, we have no idea where it’s going to end up, what the effect is going to be.” Ross said. “We did the same thing here for the terrestrial side, we said ‘OK that with the rock quarries above Bees Creek,’ use the clay to help remediate that as well, bring it back.”

Asked about Ward Cove in Alaska, where the US Environmental Protection Agency ordered a cleanup, Ross said. “The difference here is that no one is ordering these companies to clean up the sites, they walk away. No one is taking responsiblity, The Haisla are trying to do this within the parameters they’ve given us.So if someone could come in and order these companies and do something, we’ll look for something else to do with the clay. Until that day comes, the Haisla are still stuck with trying to bring back this land by ourselves. If the District of Kitimat wants to pay the bill, great. Let’s see it.

“We need to put pressure on the province or Canada to cleanup these sites. We’ve been trying to do this for the last 30 years. We got nowhere. Before when we talked about getting those logs and cables cleaned up, it fell on deaf ears [at DFO]. They [DFO] had no policy and no authority to hold these companies accountable. So we’re stuck, we’re stuck between a rock and hard place. How do we fix it?”

Ross also noted that Shell’s LNG Canada project also faces remediation problems, “Shell is going to have the same problem, their’s is going to be different, they’re going to have get rid of contamination on the ocean bottom and beneath that it’s basically going to be gravel, it’s not clay, they’re going to have get rid of that product.”

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Clio Bay: Ward Cove, Alaska, benchmark for log remediation

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

Ward Cove
Ward Cove, Alaska, in 2005, after the remediation of the bay was completed in 2001 and old industrial buildings were being demolished. (EPA)

 

Ward Cove, just eight kilometres west of Ketchikan, Alaska, was so polluted by effluent from pulp and saw mills and a fish plant, and filled with 16,000 sunken lots that it qualified for a U.S. Environmental Protection Agency Superfund cleanup.

The Ward Cove project is now considered a benchmark for cleaning up similar bays. Alaska officials emphasized to Northwest Coast Energy News, that while Ward Cove does provide guidelines for capping and dredging logs, they were not aware of any project where logs were capped that did not have other forms of contamination.

If you take a look at satellite images of Clio Bay, BC and Ward Cove side by side you immediately you see the similarities and differences between the two bodies of water. (Note due to parameters of Google Earth, images are slightly different scales)

Satellite image of Clio Bay
Google Earth image of Clio Bay
Google Earth image of Ward Cove, Alaska
Google Earth image of Ward Cove, Alaska

Both Clio Bay and Ward Cove are 1.6 kilometres long, somewhat elbow shaped, off a main channel and surrounded by mountains.Ward Cove is 0.8 kilometres wide. Clio Bay is about 0.5 kilmetres wide, 0.8 at its widest point. Both have steep slopes from the mountains. Ward Cove is 61 metres deep at the mouth of the cove, descreasing toward the head. Clio Bay is deeper, 182 metres at the mouth, 90 metres in the centre and between 20 metres and 9 metres at the head.

Both Clio Bay and Ward Cove are subject to tidal circulation. Both Clio Bay and Ward Cove are also influenced by fresh water. Ward Cove is fed by Ward Creek, a smaller Walsh Creek and runoff precipitation the enters the cover from the steep mountain slopes. Clio Bay is fed by one creek, a number of small streams and mountain slope runoff, especially during the spring melt.

Haisla Chief Counsellor Ellis Ross estimates there are between 10,000 and 20,000 sunken logs in Clio Bay. The official summary from the United States Environmental Protection Agency said there were 16,000 sunken logs in Ward Cove.

The major difference with Ward Cove is that it was the site of major industrial development including a pulp mill, a sawmill and a fish plant. That meant the level of pollutants in Ward Cove were much higher than in Clio Bay, which has never been used for an industrial plant. It was the pollutants in Ward Cove, mainly ammonia, hydrogen sulfide, and 4-methylphenol combined with the thousands of sunken logs that made the cove a target cleanup and the associated studies.

A fish plant, Wards Cove Packing opened in 1912 and ceased operations in 2002. The Ketchikan Paper Company mill began operating in 1954 and closed in 1997. Prior to 1971, with the rise of the enviromental movement no permits were required by KPC for discharging effluent into the cove. After that the US Environmental Protection Agency issued a discharge permit and monitored effluent. Throughout the time the KPC mill was operating, the EPA says, “high volumes of log storage (approximately 7 billion board feet) caused accumulation of bark waste and sunken logs at the bottom of the cove.” Gateway Forest Products, a sawmill and veneer plant, continued to store logs in Wards Cove until 2002.

A 2009 monitoring report, conducted by the US Army Corps of Engineers after the cleanup for the EPA noted:

An ecological risk assessment was also conducted using a food-web assessment to estimate risks of bioaccumulative chemicals to representative birds and mammals at the top of the Ward Cove food web. The chemicals evaluated were arsenic, cadmium, mercury, zinc, chlorinated dioxins/furans, and PAHs. The results of this assessment indicated that there are no unacceptable risks to higher trophic level organisms in Ward Cove.

A human health risk assessment was conducted to identify potential risks posed by chemicals detected in sediments or seafood (e.g., fish, shellfish). Ingestion of seafood that may contain chemicals bioaccumulated from the sediments was identified as the only complete exposure pathway for humans. The chemicals that were evaluated included: arsenic, cadmium, mercury, zinc, phenol, 4-methylphenol, chlorinated dioxins/furans, and PAHs. Results concluded that sediments in Ward Cove do not pose an unacceptable risk to human health.

A 2007 report on the Wards Cove remediation from the Alaska Department of Environmental Conservation, noted:

The continuing residues impairment in Ward Cove is caused by the historical accumulation of wood waste on the bottom of the cove. The waste includes an estimated 16,000 sunken logs over at least 75 percent of the bottom and decomposing pulp, wood, and bark waste in sediments in thicknesses up to 10 feet over at least 50 percent of the bottom. Wood waste residues can displace and smother organisms, alter habitat, release leachates, create anoxic conditions, and produce toxic substances, all of which may adversely affect organisms that live both on top of sediments and within sediments.

That is a similar problem to Clio Bay.

The report notes that problems with oxygen increase with depth, noting:

The dissolved oxygen impairment was due largely to the fish-processing waste discharge from the seafood processing facility until 2002, and it was limited to the summer months in deeper waters of the cove (below the picnocline, or stratification layer, approximately 10 meters deep). With that discharge removed, limited monitoring in August and September 2003 indicated that dissolved oxygen impairment might remain near the bottom in waters at depths of 30 meters and greater at certain times and locations due to low natural levels of dissolved oxygen and the continuing decomposition of wood waste. Above 30 meters depth, the waters of the cove appeared to meet the [Alaska state] standard for dissolved oxygen. However, there may be limited capacity for waters at 30 meters and deeper to receive additional loading of oxygen-demanding materials and still meet the standard in summer months.

That should mean that the worries about oxygen depletion at Clio Bay are justified due to Clio’s greater depth.

Studies of the biology of Ward Cove began in 1951, with more in the 1960s and one in 1974. In 1995, Ketchikan Paper Company signed a consent decree with the EPA that called for remediation of Ward Cove, In 2000, KPC and Gateway Forest Products signed a second consent decree with the EPA. Those agreements called on the companies to dredge sediments to improve navigation, remove logs and other debris from the dredging areas and “placing a thin-layer cap of 15-30 cm (six to 12 inches) of sand over about 11 hectares (27 acres) of sunken logs.”

The major studies of Ward Cove began in 1995 after first consent decree. The remediation did not take place until the initial studies were complete in 1999, with dredging and capping taking place from November 2000 to March 2001.

The EPA positioned 13 water quality monitoring stations which operated from 1997 to 2002, to measure salinity, temperature and disolved oxygen, nine inside Ward Cove and four outside the cove in Tongass Narrows. Those studies showed that levels of dissolved oxygen in the cove varied by season, depth and location. Many species from salmon to mobile bottom dwellers like crabs were often able to detect and avoid low oxygen areas.

The plan

The EPA and the companies involved planned the remediation so that it included both dredging, capping logs and sediment and leaving some areas where nature would take its course.

The reports say that complete dredging, removal and disposal of the contamination would have cost $200 million,  The total actual cost of the Ward Cove Remediation Project, beginning with development of the Remedial Design Work Plan, was estimated to have cost $3,964,000 (in 2000 US dollars).

The EPA says cost for the capping component of the project “including preliminary field investigations and reporting, design and plans development, post construction engineering, procurement, construction management, project management, mobilizationm demobilization, engineering/QC and science support, surveys, and capping items” was $2,563,506. Based on the volume of capping material placed, the unit cost of log capping for the Ward Cove Remediation Project was $110 per cubic yard.

Sunken logs retrieved at Ward Cove.
Old logs retrieved from Ward Cove, Alaska during dredging operations to improve navigation. (EPA)

The plan called for dredging about 17,050 cubic yards in the area near the cove’s main dock and the dredging of 3,500 yards metres nearby to improved navigation. Before the dredging, 680 tonnes of sunken logs had to be removed. After dredging, a “thin-layer cap of clean, sandy material” was placed in dredged areas unless native sediments or bedrock was reached during dredging.

In other areas, most covered in sunken logs, the plan called for placement of a thin-layer cap (approximately 6- to 12-inches) of clean, sandy material, with the possibility of “mounding” dropping mounds of sand on specific areas. The 2009 report says the area of sand deposits actually increased “due to the fact that thin layer placement was found to be successful over a broader area, and it was not necessary to construct mounding.”

The plan called for natural recovery in areas where neither capping nor mounding was practicable and so about 50 acres was left alone. (DFO says it plans to leave some parts of Clio Bay uncapped as “reference areas.”)
Slope and sand

Sand capping at Ward Cove
A dredging barge depositing clean sand (originally from Sechelt, BC) during capping operations at Ward Cove, Alaska in 2001. (EPA)

Two studies were carried out as part of the remediation at Ward Cove that do not appear to be contemplated at Clio Bay. The first looked at the “ability of the organic material to support the weight of 15 to 30 centimetres of sand.” Standard engineering equations used at other fill and capping sites were used as part of that study. A second study was carried out to determine the “minimum safety for a given slope,” which given the steep mountains that line Clio Bay, are likely to be factor in the deposit of marine clay. That study determined “For a silty fine sand and a factor of safety of 1.5, the maximum slope would be approximately 40 per cent.”

Those studies led to the conclusion that for the Ward Cove remediation project, the material to be placed on the fine organic sediment could not be gravel and course sand.”

That’s because the larger gravel and course sand “would tend to sink into the sediment and would not provide quality benethic (seabottom) habitat.”

The project decided to use “fine to medium sand with minimal fines.” It also concluded “Because of the very soft existing sediments and steep slopes at Ward Cove, the … material must be released slowly so that the settling velocity is low and bed impact minimized.”

That meant that the EPA had look for a source of quality sand that met their criterion. The sand was found at Construction Aggregates in Sechelt, BC, loaded on 10,000 tonne deck barges, tugged up the coast, unloaded onto land using a conveyor and stockpiled while more tests were done to determine how to deposit the sand on the sunken logs.

Sand bucket at Ward Cove
Dredging bucket modified to deposit sand during capping operations at Ward Cove, Alaska. (EPA)

Sand was placed on a smaller barge and taken to the deposit site. Initial tests were done with a mechanical dredge equipped with a clamshell bucket. The operator deposited the sand using “swaths” released from the bucket. To make it work properly, the bucket, as supplied by a manufacturer had to be modified by welding baffle plates to the bucket and lengthening the chains to insure consistent deposition of the sand. Two computers with special software called WINOPS, designed for dredging operations  “provided the operator and deck engineer the precise locations of the derrick barge position” in order to ensure precise deposition of the sand. WINOPS dredge positioning and guidance software. The WINOPS system made use of three differential global positioning receivers. One GPS receiver was located at the top of the derrick and provided the center positioning of the dredge bucket. Two fixed receivers, one near the starboard center spud and one near the center aft, provided the barge position and heading.

Although using marine clay is likely to produce different engineering challenges at Clio Bay, it is not currently clear that the project has contemplated the level of precision that was used at Ward Cove.

While KM LNG must find a way to dispose of the marine clay from the Bish Cove excavation site, there is a silver lining for the Haisla Nation’s aim of restoring both Clio Bay and the other 50 sites in their traditional territory, since the Kitimat Sand Hill would likely be a ready resource for any future projects.
Monitoring

The EPA considered the project finished in September 2001, and long term monitoring began, with major updates every five years in 2004 and 2009.

An EPA report on the 2004 review showed that the three sand-capped areas and one shallow natural recovery area (not sand-capped) had achieved biological recovery; three other natural recovery areas tested had not achieved biological recovery but were making significant progress.

The  2004 studies showed that benethic (sea bottom) communities in uncapped areas showed “species commonly found in areas where organic enrichment is low or declining.” adding “In three other natural recovery areas, benthic communities have not progressed as far toward recovery but are making significant progress.

By the time of the 2009 update, most of the old industrial infrastucture on land at Ward Cove had been demolished and the land area was slated for redevelopment. Many of the companies that had been there had either gone out of business or had declared bankruptcy and the land was taken over by the Ketchikan Gateway Borough,mostly through foreclosure.

The EPA declared that “The remedial action construction is complete, and the remedial action is an operating or ongoing remedial action.”

The 2009 report says that the project was successful in eliminating sediment toxicity. The area was then quickly being recolonized by a diverse bottom dwelling macroinvertebrate species and those species were spreading beyond the specific study areas, so recovery of Ward Cove is expected to continue.

However the 2004 report went on to say that “the achievement of stable benthic biological communities with balanced species composition in more than 75 percent of the area with documented coverage by wood residues on the bottom of Ward Cove” would happen within 40 years from the 2004 study.

The next review of Ward Cove is slated for August 2015.

 

Sand capping
Diagram of a sand capping operation from a barge. (US Army Corps of Engineers)

 

Diagram of a sediment capping operation knowing as diffusion (US Army Corps of Engineers)
Diagram of a sediment capping operation knowing as diffusion (US Army Corps of Engineers)

 

 

Termie
Diagram of a Japanese system called tremie that uses a hose system to deposit capping material on the seabed. (US Army Corps of Engineers)

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