Special report: Clio Bay cleanup: Controversial, complicated and costly
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.
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.”
Special report: Clio Bay cleanup: Controversial, complicated and costly
The Department of Fisheries and Oceans has declined an invitation from District of Kitimat Council to appear at a special meeting on Monday, September 30 to discuss the Clio Bay remediation project. A representative of Chevron will be in the council chambers at the Kitimat branch of Northwest Community College to make a presentation and answer questions.
The letter from DFO to the council from Dave Pehl works at DFO office in Kamloops says:
Thank you for the invitation to attend District of Kitimat Council meeting on September 30, 2013 to address plans by Chevron Canada and Apache Canada(Kitimat LNG) to remediate habitat conditions in Clio Bay. Regretfully, Fisheries and Oceans Canada (DFO) is unable to attend the scheduled council meeting.
Fisheries and Oceans Canada has reviewed a proposal to dispose of soil materials, generated at the Kitimat LNG plant, in Clio Bay, 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 biodiverstiy 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.
Mapping of the seafloor in Clio Bay has been completed and the project plans prioritizes capping on areas of dense woody debris, followed by areas of soft substrate with woody debris distributed throughout. Mapped areas that are avoided include hard substrates and sensitive habitats such as freshwater streams and eelgrass beds. Buffers have been allocated around sensitive areas and no capping will be conducted in areas of less 10m in depth. Proposed mitigation to avoid potential impacts to areas outside Clio Bay includes avoiding deposition of material within 500m of the confluence of Clio Bay and kitimat Arm. Some areas of degraded or partially degraded habitat will not be capped to serve as reference areas.
Chevron will be required to conduct a pre-construction, construction and post construction monitoring program. Pre-construction monitoring will include collection of baseline information that will be used to assess effectiveness monitoring during and at the completion of the project. Water quality monitoring for turbidity and total suspended solids will be undertaken during construction to determine if established performance criteria are met. The monitoring plan for the project will evaluate
1. Water quality near the sea floor.
2. Fish habitat quality and quantity
3. Biodiversity of the seafloor ecosystem and
4. Distribution of a fishery resource (Dungeness crab)
Reference sites will be used to make comparison between capped and uncapped habitats. Monitoring will continue for a period of five years following the completion of the works. The proponent will be required to report the follow-up monitoring program to DFO in years 1,3 and 5 following construction.
Special report: Clio Bay cleanup: Controversial, complicated and costly
Editorial:
Hire the experts. This is not the time to be learning on the job.
Everyone in the Kitimat and Kitamaat Village are facing a dilemma, a dilemma that should have been solved a year ago, when it was first known that the KM LNG project at Bish Cove had grossly underestimated the amount of marine clay and other material that has to be removed for the liquified natural gas terminal, a total of about 3.5 million metric tonnes.
The Haisla and Chevron are proposing that much of the clay be deposited over sunken logs in Clio Bay.
Chevron, which only took over operations at KM LNG in December 2012, is still learning on the job.
When the Clio Bay capping plan became public, far too late in the process, only then did Chevron begin to take a serious look public worries about the environmental problems that might result from depositing all that marine clay in Clio Bay.
Chevron hired Stantec, a well-known international consulting firm with close ties to the energy industry and some experience in remediation to evaluate Clio Bay. Although Chevron said in a statement that Stantec is a company “with extensive experience in many major habitat restoration projects,” it appears that Stantec, in the case of Clio Bay, is a jack of all environmental trades and master of none, just learning on the job.
In answer to questions by Northwest Coast Energy News, Chevron cited two studies supplied to them by Stantec. One was Chris Picard’s (now with the Gitga’at First Nation) study of Clio Bay which anyone can find by using a Google Search. The second was an overview chapter of west coast North American logging practices from a book published 22 years ago.
Any of the web saavy undergraduate journalism students I once taught at Ryerson University could have done better. This semi-retired reporter, without the resources he once had in a major newsroom, easily found the studies of the log filled Ward Cove, the State of Alaska’s recommended remediation practices, the capping procedures recommended by the US Army Corps of Engineers and more. Chevron did not mention Stantec citing the 1995 DFO study of nearby Minette Bay which can easily be found on the DFO website.
A letter from Fisheries and Oceans to District of Kitimat Council only mentions Dungeness crab and not the Haisla desire to restore halibut and cod to Clio Bay. That can only raise suspicions that the DFO is also depending solely on Chris Picard’s limited survey of Clio Bay.
In Alaska, at Ward Cove, there were almost five years of studies on the ocean environment before part of the cove was dredged and parts of the cove with thousands of logs there were capped with fine sand.
The people of Kitimat and Kitamaat want the LNG project to proceed. Everyone wants a clean and sustainable ocean enviroment, whether in Clio Bay, Minette Bay or down Douglas Channel. The problem of that 3.5 million cubic metres of marine clay must be handled in a timely fashion so the LNG terminal can move to the next step in the coming months. There is no time for five years of studies before proceeding.
This site would not normally endorse one large corporation over another.
There isn’t time for Chevron and Stantec to be learning on the job, its technicians racing in their boats between Clio Bay and Bish Cove trying to figure out what is going on and casually asking people what they think. No time at all.
The clock is ticking. Chevron and Apache, in partnership with both the Haisla and the District of Kitimat, should immediately hire the companies that do have the expertise in remediating a northwest Pacific coast bay filled with sunken logs, the companies that cleaned up Ward Cove in Alaska. Integral Consulting was the main environmental consulting contractor at Ward Cove, assisted by another large firm, Exponent and by Germano and Associates, a company that according to its website specializes in “rapid seafloor reconnaissance”. Both Integral and Exponent are, like Stantec, giant international consulting firms. In this case, experience has to count. While Stantec’s website does list remediation projects, none are similar to Clio Bay.
A letter from Fisheries and Oceans to the District of Kitimat says that:
Chevron will be required to conduct a pre-construction, construction and post construction monitoring program. Pre-construction monitoring will include collection of baseline information that will be used to assess effectiveness monitoring during and at the completion of the project. Water quality monitoring for turbidity and total suspended solids will be undertaken during construction to determine if established performance criteria are met.
From the reports available from both the EPA and the State of Alaska it appears that the companies that cleaned up Ward Cove did just what DFO is asking, assess and monitor. Another reason to hire the experts rather than the newbies.
Why a three way partnership? Chevron/Apache and the Haisla Nation are already partners in the Clio Bay plan. Adding the District of Kitimat would establish trust and make sure that the results of any scientific and engineering studies, plans and operations would be available to the people of Kitimat (as well as some Haisla members who feel they were excluded) as part of the ongoing process. The partnership would make up for the lack of transparency up until now, make sure the public is kept up-to-date and not just by Chevron’s and DFO’s communications people since reports to the District could be reviewed by the engineering staff and members of council.
It is likely that those companies that worked at Ward Cove could quickly let everyone know whether the idea of capping at Clio Bay with marine clay is a viable option and if it is viable how to do it properly rather than just dumping the clay from a barge using a hose. If marine clay is not viable for Clio Bay, it is likely that those firms could advise whether one of the original plans, to dump the clay in the deep ocean, is a better solution, or if there is another alternative that no one has thought of.
Kitimat and Kitamaat are lucky. The recommended practice for capping sunken logs is using sand. There is here a ready source at the Kitimat Sand Hill. If marine clay is not a viable option, or for future projects, the Sand Hill can easily be used to fulfill the aims of both the Haisla Nation and the residents of Kitimat to clean up Clio Bay, Minette Bay and eventually all 50 other sites identified along Douglas Channel by DFO in 1997. Those consulting firms have the expertise in this area and that expertise should be utilized.
Learning from the job
Even though sand has a track a record in capping, using marine clay from Bish Cove to cap the logs at Clio Bay is probably a good idea, after all that marine clay was once at the bottom of the Ice Age Douglas Channel.
The use of sand for capping sites is well-known, there are established engineering parameters. At Ward Cove, there were studies of the angle of the slopes and how much weight of sand that the debris could hold. Sand is very different from marine clay. At the moment, there are no engineering parameters for marine clay. It appears that no one has thought of doing slope analysis and load bearing engineering studies at Clio Bay.
Marine clay is a potential cap for all the sunken log sites on Douglas Channel and on the whole Pacific coast from Oregon to Alaska. That means that Clio Bay is a pilot project that should be planned as carefully as possible, within the time constraints needed for construction of the LNG terminal, but not regarded as a rush job to get rid of that clay. That means taking the time needed to do all the necessary scientific and engineering studies before the first drop of clay heads to the bottom. That is another reason to hire experts who actually know what they are doing so everyone can learn from the job.
Standards
No matter how the cleanup of Clio Bay proceeds, KM LNG, the Haisla and the District of Kitimat are facing another dilemma. What standards and benchmarks should be applied to the project?
By law, the Department of Fisheries and Oceans is responsible and will, of course, be monitoring the cleanup.
Despite assurances in a letter to the District of Kitimat, it is clear that DFO too is learning on the job.
At the moment, DFO has no standards for remediation, because the Conservative omnibus bills have gutted environmental standards in Canada. Even before the omnibus bills and the LNG rush, cleaning up log dumps was on the DFO low low priority list.
The letter from DFO to District of Kitimat council shows what knowledgeable sources have told us, DFO will be navigating Clio Bay from a desk in Kamloops (of all places). The same sources say that the Prince Rupert office of DFO, which has the expertise on the northwest coast is out of the loop on this project. The residents of the northwest coast already know there are not enough fisheries officers to properly monitor the coast. DFO “estimates” the annual recreational halibut catch (perhaps by using fish entrails rather than the traditional chicken?). DFO has retired or laid off many scientists who have studied the coast. Others have left on their own. The remaining scientists are muzzled by the Harper government, with anything they could say filtered by the Prime Minister’s Office, so it is likely that no one in the northwest will actually trust what they say.
Normally in a free and democratic society, the government tells local residents when a major operation like the remediation of Clio Bay is going to occur. In this case, Fisheries and Oceans did not tell anyone in Kitimat anything until the District of Kitimat Council requested information.
On Monday, Sept. 30, a representative of Chevron will make a presentation to District Council. DFO did nothing more than send a letter that said: “Regretfully, Fisheries and Oceans Canada is unable to attend the scheduled council meeting.” Nobody, in the whole department? One is tempted to say, “That’s not good enough.” Then you remember that if DFO appeared before Council, the presenter would have to face possibly awkward questions from both members of Council and the media. That just doesn’t happen in Stephen Harper’s Canada, not in Ottawa and certainly not in Kitimat.
Despite what DFO has said in its letter, this regulatory vacuum leaves the Kitimat region no choice. Since Canada has no standards, when the Clio Bay project proceeds, the best available standards are those set by Alaska, which has the same type of coast and climate. The Clio Bay clean up should therefore be measured against those Alaska standards.
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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.
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 Australianquotes 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.”
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.
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 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.
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 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.
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).
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.
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.
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.
The Panama registered bulk carrier Azuma Phoenix is seen tied up at Kitimat harbour on the afternoon of Jan 9, 2012. In March 2013. the federal government announced it was making the private port of Kitimat into a public port. (Robin Rowland)
When the story of the Stephen Harper government is told, historians will say that the week of March 17 to 23, 2013, is remembered, not for the release of a lacklustre federal budget, but for day after day of political blunders that undermined Harper’s goal of making a Canada what the Conservatives call a resource superpower.
It was a week where spin overcame substance and spun out of control.
The Conservative government’s aim was, apparently, to increase support for the Enbridge Northern Gateway pipeline project with a spin campaign aimed at moving the middle ground in British Columbia from anti-project to pro-project and at the same time launching a divide and conquer strategy aimed at BC and Alberta First Nations.
It all backfired. If on Monday, March 17, 2013, the troubled and controversial Enbridge Northern Gateway project was on the sick list, by Friday, March 23, the Enbridge pipeline and tanker scheme was added to the Do Not Resuscitate list, all thanks to political arrogance, blindfolded spin and bureaucratic incompetence. The standard boogeymen for conservative media in Canada (who always add the same sentence to their stories on the Northern Gateway) “First Nations and environmentalists who oppose the project” had nothing to do with it.
Stephen Harper has tight control of his party and the government, and in this case the billion bucks stop at the Prime Minister’s Office. He has only himself to blame.
All of this happened on the northern coast of British Columbia, far out of range of the radar of the national media and the Ottawa pundit class (most of whom, it must be admitted, were locked up in an old railway station in the nation’s capital, trying interpret Finance Minister Jim Flaherty’s spreadsheets).
The story begins early on that Monday morning, at my home base in Kitimat, BC, the proposed terminal for Northern Gateway, when a news release pops into my e-mail box, advising that Natural Resources Minister Joe Oliver would be in nearby Terrace early on Tuesday morning for an announcement and photo op.
I started making calls, trying to find out if anyone in Kitimat knew about Oliver’s visit to Terrace and if the minister planned to come to Kitimat.
Visitors to Kitimat
I made those calls because in the past two years, Kitimat has seen a parade of visitors checking out the town and the port’s industrial and transportation potential. The visitors range from members of the BC provincial Liberal cabinet to the staff of the Chinese consulate in Vancouver to top executives of some of the world’s major transnational corporations (and not just in the energy sector). Most of these visits, which usually include meetings with the District of Kitimat Council and District senior staff as well as separate meetings with the Council of the Haisla Nation, are usually considered confidential. There are no photo ops or news conferences. If the news of a visit is made public, (not all are), those visits are usually noted, after the fact, by Mayor Joanne Monaghan at the next public council meeting.
It was quickly clear from my calls that no one in an official capacity in Kitimat knew that, by the next morning, Oliver would be Terrace, 60 kilometres up Highway 37. No meetings in Kitimat, on or off the record, were scheduled with the Minister of Natural Resources who has been talking about Kitimat ever since he was appointed to the Harper cabinet.
I was skeptical about that afternoon’s announcement/photo op in Vancouver by Transport Minister Denis Lebel and Oliver about the “world class” tanker monitoring.
After all, there had been Canadian Coast Guard cutbacks on the northwest coast even before Stephen Harper got his majority government. The inadequacy of oil spill response on the British Columbia coast had been condemned both by former Auditor General Sheila Fraser and in the United States Senate. The government stubbornly closed and dismantled the Kitsilano Coast Guard station. It’s proposing that ocean traffic control for the Port of Vancouver be done remotely from Victoria, with fixed cameras dotted around the harbour. Leaving controllers in Vancouver would, of course, be the best solution, but they must be sacrificed (along with any ship that get’s into trouble in the future, on the altar of a balanced budget).
The part of the announcement that said there would be increased air surveillance is nothing more than a joke (or spin intended just for the Conservative base in Alberta, Saskatchewan and the Toronto suburbs,that is not anyone familiar with BC coastal waters). Currently the Transport Canada surveillance aircraft are used on the coasts to look for vessels that are illegally dumping bilge or oil off shore. As CBC’s Paul Hunter reported in 2010, Transport Canada aircraft were used after the Gulf of Mexico oil disaster to map where the oil was going after it erupted from the Deepwater Horizon.
Given the stormy weather on the west coast (when Coast Guard radio frequently warns of “hurricane force winds”) it is highly unlikely that the surveillance aircraft would even be flying in the conditions that could cause a major tanker disaster. Aerial surveillance, even in good weather, will never prevent a tanker disaster caused by human error.
I got my first chance to look at the Transport Canada website in late afternoon and that’s when a seemingly innocuous section made me sit up and say “what is going on?” (I actually said something much stronger).
Public port
Public port designations: More ports will be designated for traffic control measures, starting with Kitimat.
(Transport Canada actually spelled the name wrong—it has since been fixed—as you can see in this screen grab).
Kitimat has been one of the few private ports in Canada since the Alcan smelter was built and the town founded 60 years ago (the 60th anniversary of the incorporation of the District of Kitimat is March 31, 2013).
The reasons for the designation of Kitimat as a private port go back to a complicated deal between the province of British Columbia and Alcan in the late 1940s as the two were negotiating about electrical power, the aluminum smelter, the building of the town and the harbour.
For 60 years, Alcan, later Rio Tinto Alcan, built, paid for and operated the port as a private sector venture. For a time, additional docks were also operated by Eurocan and Methanex. After Eurocan closed its Kitimat operation that dock was purchased by the parent company Rio Tinto. The Methanex dock was purchased by Royal Dutch Shell last year for its proposed LNG operation.
The announcement that Kitimat was to become a public port was also something that the national media would not recognize as significant unless they are familiar with the history of the port. That history is known only to current and former residents of Kitimat and managers at Rio Tinto Alcan.
The port announcement came so much out of left field; so to speak, that I had doubts it was accurate. In other words, I couldn’t believe it. I went to Monday evening’s meeting of District of Kitimat Council and at the break between the open and in-camera sessions, I asked council members if they had heard about Kitimat being redesignated a public port. The members of the district council were as surprised as I had been.
Back from the council meeting, I checked the Transport Canada news release and backgrounders. I also checked the online version of Bill C-57, the enabling act for the changes announced earlier that day. There was no mention of Kitimat in Bill C-57.
Tuesday morning I drove to Terrace for Joe Oliver’s 9 am photo op and the announcement at Northwest Community College (NWCC) that the government had appointed Douglas Eyford as a special envoy to First Nations for energy projects, an attempt on the surface to try and get First Nations onside for the pipeline projects, an appointment seen by some First Nations leaders as an attempt by the Harper government to divide and conquer.
As an on site reporter, I got to ask Oliver two questions before the news conference went to the national media on the phones.
In answer to my first question, Oliver confirmed that the federal government had decided to make Kitimat a public port, saying in his first sentence: “What the purpose is to make sure that the absolute highest standards of marine safety apply in the port of Kitimat.” He then returned to message track saying, “we have as I announced yesterday and I had spoken about before at the port of Vancouver we have an extremely robust marine safety regime in place but we want to make sure that as resource development continues and as technology improves, we are at the world class level. As I also mentioned there has never been off the coast of British Columbia a major tanker spill and we want to keep that perfect record.”
For my second question, I asked Oliver if he planned to visit Kitimat.
He replied. “Not in this particular visit, I have to get back [to Ottawa] There’s a budget coming and I have to be in the House for that but I certainly expect to be going up there.”
The question may not have registered with the national media on the conference call. For the local reporters and leaders in the room at Waap Galts’ap, the long house at Terrace’s Northwest Community College, everyone knew that Kitimat had been snubbed.
Back in Kitimat, I sent an e-mail to Colleen Nyce, the local spokesperson for Rio Tinto Alcan noting that Joe Oliver had confirmed that the federal government intended to make the RTA-run port a public port. I asked if RTA had been consulted and if the company had any comment.
Nyce replied that she was not aware of the announcement and promised to “look into this on our end.” I am now told by sources that it is believed that my inquiry to Nyce was the first time Rio Tinto Alcan, one of Canada’s biggest resource companies, had heard that the federal government was taking over its port.
The next day, Kitimat Mayor Joanne Monaghan told local TV news on CFTK the Kitimat community was never consulted about the decision and she added that she still hadn’t been able to get anyone with the federal government to tell her more about the plan.
Who pays for the navigation aids?
Meanwhile, new questions were being raised in Kitimat about two other parts of the Monday announcement.
New and modified aids to navigation: The CCG will ensure that a system of aids to navigation comprised of buoys, lights and other devices to warn of obstructions and to mark the location of preferred shipping routes is installed and maintained. Modern navigation system: The CCG will develop options for enhancing Canada’s current navigation system (e.g. aids to navigation, hydrographic charts, etc) by fall 2013 for government consideration.
Since its first public meeting in Kitimat, in documents filed with the Northern Gateway Joint Review Panel, in public statements and advertising, Enbridge has been saying for at least the past four years that the company would pay for all the needed upgrades to aids to navigation on Douglas Channel, Wright Sound and other areas for its tanker traffic. It is estimated that those navigation upgrades would cost millions of dollars.
Now days before a federal budget that Jim Flaherty had already telegraphed as emphasizing restraint, it appeared that the Harper government, in its desperation to get approval for energy exports, was going to take over funding for the navigation upgrades from the private sector and hand the bill to the Canadian taxpayer.
RTA not consulted
On Thursday morning, I received an e-mail from Colleen Nyce with a Rio Tinto Alcan statement, noting:
This announcement was not discussed with Rio Tinto Alcan in advance. We are endeavoring to have meetings with the federal government to gain clarity on this announcement as it specifically relates to our operations in Kitimat.
On Friday morning, Mayor Monaghan told Andrew Kurjata on CBC’s Daybreak North that she had had at that time no response to phone calls and e-mails asking for clarification of the announcement. Monaghan also told CBC that Kitimat’s development officer Rose Klukas had tried to “get an audience with minister and had been unable to.” (One reason may be that Oliver’s staff was busy. They ordered NWCC staff to rearrange the usual layout of the chairs at Waap Galts’ap, the long house, to get a better background for the TV cameras for Oliver’s statement).
Natural Resources Minister Joe Oliver (front far right) answers questions after his news conference at the Northwest Community College Long House, March 19, 2013. (Robin Rowland)
Monaghan told Kurjata, “I feel like it’s a slap in the face because we’re always being told that we’re the instrument for the whole world right now because Kitimat is supposed to be the capital of the economy right now. So I thought we’d have a little more clout by now and they’d at least tell us they were going to do this. There was absolutely no consultation whatsoever.”
By Friday afternoon, five days after the announcement, Transport Canada officials finally returned the calls from Mayor Monaghan and Rose Klukas promising to consult Kitimat officials in the future.
Monaghan said that Transport Canada told her that it would take at least one year because the change from a private port to a public port requires a change in legislation.
Transport Canada is now promising “extensive public and stakeholder consultation will occur before the legislation is changed,” the mayor was told.
On this Mayor Monaghan commented, “It seems to me that now they want to do consultation….sort of like closing the barn door after all of the cows got out!”
Blunder No 1. Pulling the rug out from Northern Gateway
Joe Oliver and the Harper government sent a strong political signal to Kitimat on Tuesday; (to paraphrase an old movie) your little town doesn’t amount of a hill of beans in this crazy world.
There are a tiny handful of people in Kitimat openly in favour of the Northern Gateway project. A significant minority are on the fence and some perhaps leaning toward acceptance of the project. There is strong opposition and many with a wait and see attitude. (Those in favour will usually only speak on background, and then when you talk to them most of those “in favour” have lists of conditions. If BC Premier Christy Clark has five conditions, many of these people have a dozen or more).
Oliver was speaking in Terrace, 60 kilometres from Kitimat. It is about a 40 to 45 minute drive to Kitimat over a beautiful stretch of highway, with views of lakes, rivers and mountains.
Scenic Highway 37 is the route to the main location not only for the controversial Northern Gateway pipeline but three liquefied natural gas projects, not to mention David Black’s proposed refinery half way between Terrace and Kitimat.
Why wouldn’t Kitimat be a must stop on the schedule for the Minister of Natural Resources? In Terrace, Oliver declared that Kitimat was to become a public port, run by the federal government. Although technically that would be the responsibility of Denis Lebel, the Minister of Transport, one has to wonder why the Minister of Natural Resources would not want to see the port that is supposedly vital to Canada’s economy? You have to ask why he didn’t want to meet the representatives of the Haisla Nation, the staff and council of the District of Kitimat and local business leaders?
Oliver has been going across Canada, the United States and to foreign countries promoting pipelines and tanker traffic, pipelines that would terminate at Kitimat and tankers that would send either bitumen or liquefied natural gas to customers in Asia.
Yet the Minister of Natural Resources is too important, too busy to take a few hours out of his schedule, while he is in the region, to actually visit the town he has been talking about for years.
He told me that he had to be in Ottawa for the budget. Really? The budget is always the finance minister’s show and tell (with a little help from whomever the Prime Minister is at the time). On budget day, Oliver would have been nothing more than a background extra whenever the television cameras “dipped in” on the House of Commons, between stories from reporters and experts who had been in the budget lockup.
According to the time code on my video camera, Oliver’s news conference wrapped at 9:50 a.m., which certainly gave the minister and his staff plenty of time to drive to Kitimat, meet with the representatives of the District, the Haisla Nation and the Chamber of Commerce and still get to Vancouver for a late flight back to Ontario.
On Tuesday, Joe Oliver’s snub pulled the political rug out from under the Northern Gateway supporters and fence sitters in Kitimat. Oliver’s snub showed those few people in Kitimat that if they do go out on a limb to support the Northern Gateway project, the Conservatives would saw off that limb so it can be used as a good background prop for a photo op.
Prince Rupert, Terrace and Smithers councils have all voted against the Northern Gateway project. Kitimat Council, despite some clear divisions, has maintained a position of absolute neutrality. Kitimat Council will continue to be officially neutral until after the Joint Review report, but this week you could hear the air slowly leaking out of the neutrality balloon.
Oliver may still believe, as he has frequently said, that the only people who oppose Northern Gateway are dangerous radicals paid by foreign foundations.
What he did on Tuesday was to make the opposition to Northern Gateway in Kitimat into an even more solid majority across the political spectrum.
Blunder No 2. Rio Tinto Alcan
It doesn’t do much for the credibility of a minister of natural resources to thoroughly piss off, for no good reason, the world’s second largest mining and smelting conglomerate, Rio Tinto. But that’s just what Joe Oliver did this week.
I am not one to usually have much sympathy with rich, giant, transnational corporations.
But look at this way, over the past 60 years Alcan and now Rio Tinto Alcan have invested millions upon millions of dollars in building and maintaining the Kitimat smelter and the port of Kitimat. RTA is now completing the $3.3 billion Kitimat Modernization Project. Then without notice, or consultation, the Conservative government—the Conservative government—announces it is going to take over RTA’s port operations. What’s more, if what Transport Canada told Mayor Joanne Monaghan is correct, the federal government is going to start charging RTA fees to use the port it has built and operated for 60 years.
Too often RTA’s London headquarters acts like it is still the nineteenth century and the senior executives are like British colonialists dictating to the far reaches of the Empire on what do to do.
No matter what you think of RTA, it boggles the mind, whether you are right wing, left wing or mushy middle, that the federal government simply issues a press release–a press release– with not even a phone call, not even a visit (even to corporate headquarters) saying “Hey RTA, we’re taking over.”
There’s one thing that you can be sure of, Rio Tinto Alcan’s lobbyists are going to be earning their fees in the coming weeks.
(One more point, even if there wasn’t a single pipeline project planned for Kitimat you would think that the Minister of Natural Resources would want to see what is currently the largest and most expensive construction project in Canada, a project that comes under his area of political responsibility).
It took five days, from the time of the minister’s news conference on Monday until Friday afternoon, for officials in Transport Canada to return phone calls from Mayor Joanne Monaghan and Rose Klukas, to explain what was going to happen to the Port of Kitimat.
This week was yet another example of the decay of Canadian democracy under Stephen Harper. Executives from Tokyo to Houston to the City of London quickly return phone calls from the District of Kitimat, after all Kitimat is where the economic action is supposed to be. At the same time, the federal government doesn’t return those calls, it shows that something really is rotten in our state.
Blunder No 5. LNG
There are three liquefied natural gas projects slated for Kitimat harbour, the Chevron-Apache partnership in KM LNG, now under construction at Bish Cove; the Royal Dutch Shell project based on the old Methanex site and the barge based BC LNG partnership that will work out of North Cove.
None of these projects have had the final go ahead from the respective company board of directors. So has the federal government thrown the proverbial monkey wrench into these projects? Will making Kitimat a public port to promote Enbridge, help or hinder the LNG projects? Did the Ministry of Natural Resources even consider the LNG projects when they made the decision along with Transport Canada to take over the port?
And then there’s…..
Kitimat has a marina shortage, especially since RTA closed the Moon Bay Marina. The only one left, the MK Bay Marina, which is straining from overcapacity, is owned by the Kitimat-Stikine Regional District. That means there will be another level of government in any talks and decisions on the future of the Kitimat harbour. There are also the controversial raw log exports from nearby Minette Bay.
Although Transport Canada has promised “extensive public and stakeholder consultation,” one has to wonder how much input will be allowed for the residents of Kitimat and region, especially the guiding and tourism industries as well as recreational boaters. After all, the Harper government is determined to make Kitimat an export port for Alberta and the experience of the past couple of years has shown that people of northwest count for little in that process. Just look at the Northern Gateway Joint Review, which more and more people here say has no credibility.
Big blunder or more of the same?
I’ve listed five big blunders that are the result of the decision by the Harper government to turn Kitimat into a public port.
Are they really blunders or just more of the same policies we’ve seen from Stephen Harper since he became a majority prime minister?
This is a government that has muzzled scientific research and the exchange of scientific ideas. The minister who was in the northwest last week, who has demonized respect for the environment, is now squeezing the words “science” and “environment” anywhere into any message track or speech anyway he can.
That’s just the point. Joe Oliver’s fly-in, fly-out trip to Terrace was not supposed to have any substance. Changing the chairs at the Waap Galts’ap long house showed that it was more important to the Harper government to have some northwest coast wall art behind Joe Oliver for his photo op than it was to engage meaningfully with the northwest, including major corporations, First Nations and local civic and business leaders.
Joe Oliver’s visit to Terrace was an example of government by reality television. The decision to change the private port of Kitimat into a public port was another example of Harper’s government by decree without consulting a single stakeholder. The problem is, of course, that for decades to come, it will be everyone in northwest British Columbia who will be paying for those 30 second sound bites I recorded on Tuesday.
Epilogue: Alcan’s legacy for the socialist Prime Minister, Stephen Harper
If an NDP or Liberal government had done what Harper and Oliver did on Monday, every conservative MP, every conservative pundit, every conservative media outlet in Canada would be hoarse from screaming about the danger from the socialists to the Canadian economy.
That brings us to the legacy left by R. E. Powell who was president of Alcan in the 1940s and 50s as the company was building the Kitimat project.
As Global Mission, the company’s official history, relates, in 1951, Alcan signed an agreement with the British Columbia provincial government, that “called upon the company to risk a huge investment, without any government subsidy or financial backing and without any assured market for its product.”
According to the book, Powell sought to anticipate any future problems, given the tenor of the times, the possible or even likely nationalization of the smelter and the hydro-electric project.
So Powell insisted that the contract signed between Alcan and the province include preliminary clauses acknowledging that Alcan was paying for Kitimat without a single cent from the government:
Whereas the government is unwilling to provide and risk the very large amounts of money required to develop those water powers to produce power for which no market now exists or can be foreseen except through the construction of the facilities for the production of aluminum in the vicinity and….
Whereas the construction of the aluminum plant at or near the site of the said waterpower would accomplish without risk or to the GOVERNMENT the development power, the establishment of a permanent industry and the new of population and….
(Government in all caps in the original)
…the parties hereto agree as follows (the agreement, water licence and land permit)
Powell is quoted in the book as saying:
I asked the political leaders of BC if the government would develop the power and sell the energy to Alcan and they refused. We had to do it ourselves. Someday, perhaps, some politician will try to nationalize that power and grab it for the state. I will be dead and gone but some of you or your successors at Alcan may be here, and I hope the clauses in the agreement, approved by the solemn vote of the BC legislature, will give those future socialists good reason to pause and reflect.
In the late 1940s and early 1950s, the federal government had very little to do with the Kitimat project. With the declaration that Kitimat will be a public port, the federal government comes to the party 60 years late. But one has to wonder if the late Alcan president, R.E. Powell, ever considered that the “future socialists” he hoped would “pause and reflect” would be members of Canada’s Conservative party, Stephen Harper, Joe Oliver and Denis Lebel?
Ron Link of KM LNG addresses District of Kitimat Council on a building permit for the work camp. (Robin Rowland)
District of Kitimat Council tonight (March 4, 2013) approved building permits for the KMLNG work camp at the old West Fraser Eurocan paper mill site.
The first phase of the camp, called 1A will have 155 beds, followed by a second camp, called 1B with 145 beds. Council also approved a second phase, Camp 2, which will have an additional 300 beds. The camp will consist of single-storey, 44 bed dormitories, similar to those now being used at the Rio Tinto Alcan Kitimat Modernization project, a couple of kilometres away.
“This camp will support the construction of the LNG terminal,” KM LNG’s Ron Link told council, “the focus right now is a 600 man camp. Beyond that, if the final investment decision is approved, it will eventually grow to 2,800.
To build the camp KMLNG will have to demolish some of the remaining blow pipes and chip screening facilites that are there.
“Under the regulations it is a contaminated site and we have a company called Constega Rovers that are participating in sampling the site. It is certainly our attention to clean it up.
If the full 2,800 bed camp is built, the remaining part of the facility will be directly west of the current proposed campsite.
Later in the meeting council continued to debate the contenious issue of an over all camp policy for the District of Kitimat and voted to instruct district staff to “bring back a calendar with the process and dates for discussing camp policy.”
Staff would prepare a document indicating where camps are presently permitted within the District of Kitimat followd by a committee of the whole meeting dedicated to the pros and cons of camps within the district and perferred locations, services provided by the district and size limits.
There will likely be both a public town hall and a “public meeting” of council to discussion the issues later in the spring,
The debate was prompted bya proposal from the PTI Group to build a large “lodge style” work camp within the boundaries of the residential part of Kitimat, near the hospital and City Centre Mall. The PTI proposal would require amendments to both zoning and the Official City Plan. The KMLNG and RTA camps are in areas zoned for industrial use and would not be affected by a change to the official plan for the residential area.
