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Shell, partners, plan giant liquified natural gas project at Kitimat, mayor sees town growing to 15,000 residents

Shell Canada has confirmed that, with three partners, it is developing a giant proposed liquified natural gas export facility at Kitimat.

The project could see up to 12 million tonnes of LNG exported from Kitimat each year. What the companies are now calling LNG Canada would be built in two “trains” or stages, with each producing six million tonnes. A news release from Shell says there is an option to expand the project beyond the 12 million tonne capacity.

The announcement made international news. The Chicago Tribune said Tuesday. “Kitimat… looks set to become a major supply hub for the Pacific Rim.”

Shell’s partners, Korea Gas Corporation, Mitsubishi Corporation, and PetroChina Company Limited will work to export natural gas, mostly from northeastern British Columbia, combining the “four companies’ extensive development experience, technical depth, financial strength and access to markets required to be the leading LNG developer in Canada.”

The four companies did not say how much money is involved in the project. Reports in the Japanese media said the project could cost as much as $12 billion US.

Shell holds a 40 per cent working interest. The partners KOGAS, Mitsubishi and PetroChina each hold a 20 per cent working interest.

“Our combined expertise, and our focus on technological innovation in delivering safe and environmentally sound LNG projects around the globe, ensures that our LNG Canada project would be well-suited to deliver long-term value for British Columbia and increase access to new export markets for Canada,” says Jose-Alberto Lima, Vice President LNG Americas, Shell Energy Resources Company in a news release.

News releases from both Shell and Petrochina both say:

The proposed LNG Canada project includes the design, construction and operation of a gas liquefaction plant and facilities for the storage and export of liquefied natural gas (LNG), including marine off-loading facilities and shipping. LNG Canada can create significant economic benefit for the province, First Nations, local communities and the region. Such a project can create thousands of jobs during construction and hundreds of full-time, permanent jobs during operations. Such a significant energy project can also bring indirect economic development opportunities to the region.

Shell and PetroChina say:

A decision to move this project into development would be taken after conducting necessary engineering, environmental and stakeholder engagement work with start up around the end of the decade, pending regulatory approvals and investment decisions.
The approval process will begin with a formal consultation process with First Nations and local community residents.

“This project will contribute to a further strengthening of trade relationships between China and Canada and will help China use clean burning natural gas to fuel its economic growth,” Bo Qiliang, Vice President, PetroChina, said in the release.

“We are sitting on the doorstep of a very fast-growing market that actually wants to come to Canada because they see it as long-term stability and a secure source of supply,” Shell Canada president Lorraine Mitchelmore said. “We are now, for the first time in the natural gas industry, very competitive with other countries like Australia.”

Kitimat Mayor Joanne Monaghan said her and the District Council have been working on the project for sometime. “Council have been aware of it and have rolled up their sleeves for almost a year and half to two years,” the mayor said.

Kitimat mayor Joanne Monagahn reads notes on the LNG Canada announcement, May 15, 2012. (Robin Rowland/Northwest Coast Energy News)

One aspect was making sure Kitimat is ready for the project, Monaghan said: “We had to make sure there were hospital facilities, rental facilities, that we had housing available. We were getting all our inventories together. Now we know and now we can go full blast ahead.”

Monaghan hopes that eventually Kitimat will return its population peak of between 10,000 and 15,000 residents. (Since the closure of the Eurocan craft paper mill in 2010, Kitimat’s population dropped to around 8,000 but that number has been growing with the LNG projects and the Rio Tinto Alcan Kitimat Modernization Project, even though the KMP project will eventually mean fewer jobs at the aluminum smelter).

“If they have the five to seven thousand construction workers they’re looking for, they will bring in workers from all over BC, probably all over Canada,” Monaghan said.

Shell purchased the former Methanex plant site and the related Kitimat port terminal last fall, raising worldwide speculation about the LNG project. The Methanex site is now used by Cenovus to transport bitumen condensate by rail from Kitimat to the Alberta oil sands. Much of the old Methanex plant has been decommissioned and is being shipped to a buyer in China.

Most of the natural gas supply will come from the booming Horn River and Montney shale gas formations in northeastern British Columbia.

Reports say that LNG Canada will work with a third party that would build and probably own a pipeline from the northeast to the coat.

The profit picture comes from the fact that LNG prices in Asia, based on a proportion of the world price of oil, are much higher than the price of natural gas in North America, where the shale gas boom has driven gas prices to a record low.

The price boom in Asia could be a windfall for British Columbia, which could receive up to $600 billion in natural gas royalties over the next 25 years.

There is also fierce international competition to send LNG to Asia. The major energy companies are investing heavily in projects in Australia, while traditional suppliers like Qatar and Russia are ramping up their marketing efforts to Asia.

The old Methanex site in Kitimat — The decommissioned Methanex site by the Kitimat River, now owned by Shell. (Robin Rowland/Northwest Coast Energy News)

As of this week, Japan began closing down the last of its nuclear electrical generation capacity. After the March 11, 2011 earthquake, that country became a major customer for current and future liquified natural gas projects.

Since the earthquake last year, two other projects in Kitimat have proceeded. The Kitimat LNG project, a partnership called KM LNG led by Apache Corporation, Encana Corp, and EOG Resources plan to start up a Kitimat LNG plant in 2015, at Bish Cove with an initial capacity of five million tonnes a year. That project has been approved by the National Energy Board but is still waiting for a final go ahead from the boards of the three corporations, expected now in the fourth quarter of 2012.

A second project, called BC LNG, owned by the Haisla Nation in partnership with Houston-based LNG Partners, will act as broker and exporter for other LNG companies, facilitating exports to Asia from a barge based facility at North Cove, with the first shipment expected in 2014 or 2015.

There are also reports that Malaysia’s Petronas in partnership with Calgary-based Progress Energy Resources Corp., which have major stakes in B.C. shale are also looking for a possible LNG terminal on the west coast. As well, Talisman Energy, Nexen and Imperial Oil are also looking at west coast projects.

Related Links

News release from BC Premier Christy Clark Premier Applauds Progress on Kitimat Project: LNG Canada

Mitsubishi news release

More oil leaking from sunken WWII US transport near Hartley Bay, Gitga’at warn

Oil slick in Grenville Channel (Gitga`at First Nation Guardians)

The Gitga’at First Nation at Hartley Bay report that a large oil slick has been spotted in Grenville Channel near Hartley Bay. It is believed that the oil is coming from the USAT Brigadier General M.G. Zalinski, a U.S. army transport ship that sank in 1946 with 700 tonnes of bunker fuel on board.

A news release from the Gitga’at says the oil spill is between between two and five miles (four to eight kilometres) long and 200 feet wide (70 metres) inside the Grenville Channel.

A Canadian Coast Guard vessel from Prince Rupert is expected in the area sometime this afternoon.

The Gitga’at are sending their own Guardians to take samples and have chartered a plane to take aerial photos of the spill, the release says.

“If this spill is as big as the pilots are reporting, then we’re looking at serious environmental impacts, including threats to our traditional shellfish harvesting areas,” says Arnold Clifton, Chief Councillor of the Gitga’at Nation. “We need an immediate and full clean-up response from the federal government ASAP.”

The USAT Brigadier General M.G. Zalinski was carrying Bunker C when it sank. The First Nation says the Canadian government has been saying it would remove the oil and munitions from the ship since 2006, but with no results.

“Right now we’re focused on getting a handle on the size of the spill and the clean-up that’s required,” says Clifton. “But this incident definitely raises questions about the federal government’s ability to guard against oil spills and to honour its clean-up obligations. As a result, our nation has serious concerns about any proposal to have tankers travel through our coastal waters, including the Enbridge proposal.”

The spill is just the latest in a series of spills of bunker oil and diesel coming from the Zalinski and the BC Ferry Queen of the North, which sank in 2006. Despite government assurances of clean-up, both wreckages continue to leak fuel, fouling the marine environment, and heightening the fear of future oil spills.

The Gitga’at depend on the ocean for 40 per cent of their traditional diet.

According to Wikipedia, the Zalinksi was enroute from Seattle to Whittier Island, Alaska, when it struck rocks at Pitt Island on Grenville Channel 0n September 26 1946, 55 miles (88 kilometres) south of Prince Rupert. The ship sank within twenty minutes, while her crew of 48 were rescued by the tug Sally N and the passenger steamer SS Catala. According to a report in The Vancouver Sun on September 30, 1946, at the time of her sinking she was transporting a cargo of at least twelve 500-pound (230 kg) bombs, large amounts of .30 and .50 caliber ammunition, at least 700 tonnes of bunker oil, and truck axles with army type tires.

Oil was first spotted leaking in Grenville Channel in 2003 and the wreck of the Zalinski was identified later that year by a remotely operated undersea vessel.

Hartley Bay is the entrance to Douglas Channel where tankers will go to Kitimat for the proposed Northern Gateway pipeline and three liquified natural gas projects.

BC approves Pacific Trails Pipeline amendments

: A couple from Vancouver, who refused to give their names, unfurl an anti-Pacific Trails Pipeline banner at the British Columbia legislature in Victoria, Sunday, April 15, 2012. The man said he against all pipelines and that he was supporting the Wet’suwet’en First Nation. About 1,000 people marched through downtown Victoria to oppose the Enbridge Northern Gateway pipeline and coastal tanker traffic. (Robin Rowland/Northwest Coast Energy News)

The BC Environmental Assessment Office has approved an application to increase the capacity of the proposed 463 kilometre Pacific Trails Pipeline from the Summit Creek natural gas hub near Prince George to Kitimat.

The $1 billion pipeline project is crucial to the success of the KM LNG liquified natural gas export terminal at Kitimat, a partnership of Apache Corp., Ecana and EOG Resources.

The main thrust of the application was to increase the capacity of the pipeline to 1066.8 mm (42 inch) from the originally proposed 914 mm (36 inch). Pacific Trails will change the location of pump stations since the original proposal was for an import pipeline while now it is for export. There are also minor changes.

The proposal was generally considered pro forma since the main environmental review was completed under the original application approval in 2008 and the BC government was only considering the changes proposed by PTP.

The government report says officials were convinced that Pacific Trails would be able to handle problems with increased traffic and any potential risk involved in drilling under watercourses.

The Haisla submitted a number of technical questions about the impact of the larger pipes. While the BC Assessment office noted in its report that the Pacific Trails Pipeline is generally outside Haisla traditional territory, it is clear from the documentation that one of the Haisla concerns are any impacts on the Kitimat River watershed, as the questions concern the Stuart and Endako Rivers, the Morice and Gosnell Creeks and Weedene and Little Wedeene Rivers. The EAO ruled that the Haisla questions were outside the scope of the amendment or should be addressed in the “permitting process.”

Some Wet’suwet’en houses have been vocal in their opposition to the Pacific Trails Pipeline crossing their traditional territory, The Office of the Wet’suwet’en filed a strong objection to certain parts of the plan.

Given that the Minister of Natural Resources Joe Oliver and the federal government are now working to fast tracking all major resource projects, a comment from David de Wit, Wet’suwet’en natural resources manager is significant:

Fast tracking projects may result in overlooking important details [that] can have detrimental consequences. It is important to point out that the diligence required post-certification to ensure that impacts and effects on important resources are prevented or avoided is not satisfactory. This leaves the burden and legacy of any impacts to be borne by the Wet’suwet’en.

The letter goes on

We have invested considerable time and resources in the BC EAO review only to find that the level of detail required pre-certification leaves far too many unanswered questions critical for ensuring environmental effects and identification of potential infringements to our Title and associated rights from the project are avoided or minimized.

The EAO responded by saying the issues were covered by the original assessment and through the Oil and Gas Commission permit process. The letter from the Wet’suwet’en was, however, passed on to the Executive Director for further consideration

The Pacific Trials Pipeline, also known as the the Summit-to Kitimat pipeline will supply the Kitimat LNG project, a venture of the KM LNG partners, Apache Corp., Encana Corp., Apache Canada and EOG Resources. The $4.5-billion LNG terminal and facility will likely be operational by 2015, depending on how long it takes for the partners to line up Asian buyers.

Documents

BC Environmental Assessment office ruling on Pacific Trails Pipeline (pdf)

Wet’suwet’en submission to the BC EAO (pdf)

Apache posts job for Kitimat LNG construction manager

The Apache Corporation website has a posting for a construction manager for the Kitimat LNG project.

The posting says the job will initially based in Houston, Texas, with the manager coming to Kitimat sometime in the future.

The posting calls for the manager to provide an overall construction plan, co-ordinate and control the construction project from inception to completion aimed at meeting the Project’s requirements in order to produce a functionally and financially viable safe project that will be completed on time within the authorized budget and to the required quality standards.

Some of the job requirements give hints of the project to come:

Previous LNG Project experience including construction
Experience of modular and stick built construction
Working knowledge of safety system and management to maintain world class safety performance
Working knowledge environment system and management to maintain world class environmental performance
Knowledge of logistics in remote sites
Knowledge of heavy haul and lift works
Proven ability with advanced project management principles
Proven ability with people management
Experience in Canadian labor law and have deep experience working with unionized labor
Experience in working through cold weather climates

The site also has a posting for a Contracts and Procurement Manager.

Both postings expire on May 2, 2012.

Although Apache and its partners, Encana and EOG Resources now say that they have postponed the final go-ahead decision on the KM LNG project until the fourth quarter of 2012, as negotiations continue with Asian natural gas customers, the postings are indication that the project is progressing.

Reports say Shell near deal for Kitimat LNG project, as Oliver approves the BC LNG

The Minister of Natural Resources, Joe Oliver, has confirmed the approval of the 20 year export licence for the BC LNG Export Cooperative. The National Energy Board had approved the licence in February.

Earlier the government had also approved the export for the KM LNG project.

In a statement, Oliver said, “This export licence is another example of our Government’s commitment to diversifying our energy export markets and strengthening our trading partnership with Asia. Canada is a safe, responsible, and reliable supplier of energy contributing to global energy security.”

“Canada is well positioned to grow as a global energy superpower. Projects such as this will show the world that we are serious about getting our energy resources to market.”

The liquefied natural gas facility would be located on the west bank of the Douglas Channel at small cove near Kitimat. BC LNG Export Co-operative intends to ship up to 1.8 million tonnes of liquefied natural gas annually to markets in Asia.

Natural gas would be transported to the proposed Douglas Channel terminal on the existing Pacific Northern Gas Pipeline and potentially on the proposed Pacific Trail Pipeline. The proposed liquefied natural gas facility is undergoing an environmental assessment in accordance with the Canadian Environmental Assessment Act. The initial phase of the facility is expected to be in operation by late 2013 or early 2014 and, if it proceeds, would represent the very first liquefied natural gas exports from Canada.

Meanwhile, Reuters quoting the Japanese Nikkei, reported that Royal Dutch Shell together with Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of negotiations to build a US$12.35-billion liquefied natural gas (LNG) terminal at Kitimat.
The companies will ship gas from their Canadian fields for the project and expect to begin production around 2020 at an annual rate of 12 million tons, Nikkei reported.

Nikkei said a broad agreement is expected as early as this month, after which the four companies will start seeking approval for the project.

Shell brought the old Methanex site and marine terminal in Kitimat last fall.

Alberta Oil magazine describes Kitimat LNG projects as high stakes poker

It looks like the Chinese curse (and journalist’s blessing) “May you live in interesting times,” has come to Kitimat, especially when it comes to selling LNG to Asia.

In the past months the world liquified natural gas market has become more volatile with increased competition across the globe and, in some cases, political factors adding to the molecule mix.

In the past few days, Alberta Oil magazine has published a series of articles on the Kitimat LNG projects, describing the projects as a high stakes poker game.

The point is that the potential Asian buyers for BC (and US) liquified natural gas want a secure supply and they’re not sure what is going on on this side of the Pacific.

That’s apparently why the first project, KM LNG, has put off the final go ahead project from the first quarter of 2012, as originally expected, to the now likely the fourth quarter of 2012.

That has left a lot of uncertainty in town, despite assurances from two of the KM LNG partners, Apache Corporation and EOG Resources that they are optimistic that there will be a deal with Asian gas buyers, even if it means Asian equity in the KM LNG project.

That uncertainty in Kitimat has led to widespread rumours, none substantiated, that the three proposed projects, by KM LNG, by the Houston-Haisla BC LNG partnership and Shell, may be consolidated in one way or another.

At Kitimat council on Monday, April 2, Mayor Joanne Monaghan said “There has been a rumour around recently that Apache is stopping their working for a year and I talked to the CEO, Tim Wall, yesterday and he assured me that that was not true.”

Work is continuing on the KM LNG site at Bish Cove.

This morning, April 5, 2012, Alberta Oil reported that EOG Resources boss still bullish on Kitimat LNG, quoting a company called Bernstein Research that met with EOG’s top executive, CEO Mark Papa, who told Bernstein that EOG considers its 30 per cent holding in KM LNG as a “core holding.”

In a Thursday research note, Bernstein’s Bob Brackett says EOG is willing to sell some of its stake in the Kitimat project to a buyer (likely of the Asian persuasion) looking for equity in the upstream portion of project. “EOG expects to dilute a portion of its stake for that purpose,” Brackett writes.

A day earlier, Alberta Oil reported in Global LNG players jockey for space on a crowded field noting that Australia’s LNG megaprojects are facing competition from North America and cost inflation as the number of projects increase. At the same, US LNG projects are trapped in the current mire of US politics, with many politicians wary of the energy-starved US exporting natural gas.

In Apache Canada makes global push amid fierce competition, the article that uses the poker analogy, the magazine quotes Asish Mohanty, senior research analyst, global LNG, with Wood Mackenzie

Kitimat is due to start pumping out five million tonnes of LNG by 2015, widely viewed as a market “sweet spot” because it beats a number of major Australian projects – among them Shell’s massive Prelude endeavor – into production. “It’s a bit of a race,” Mohanty at Wood Mackenzie says. “The general impression in the industry is that before these Australasian projects start up it’s going to be a sellers’ market.”

Mohanty also looks at the problem of cost inflation and limited resources, a problem Kitimat already faces with not only the three proposed LNG projects but RTA’s Kitimat Modernization Project.

Companies that specialize in engineering, procurement and construction of liquefaction facilities number fewer than 10 internationally, Mohanty says. He expects many of them will be kept busy by construction of several LNG projects underway in northwest Australia, including ongoing work at the massive Gorgon plant at Barrow Island. The Chevron-led venture is due to begin pumping out 15 million tonnes of LNG annually by 2014-15. “All of these are massive projects,” the analyst says. “What that means is order books are pretty full. There is a scarcity of resources in places like Australia right now.”

The shortfall could potentially squeeze Canadian LNG forays. “The fact that most of the B.C. facilities are going to be ‘green-field’ will not make it easy for them to meet a timeline compared to a lot of others.”

Related CBC News Mackenzie Valley pipeline funding reduced

BC understands Gateway won’t create long term jobs, poll for Cullen shows

A poll released by Skeena Bulkley Valley MP and NDP leadership candidate, Nathan Cullen, shows that the majority of B.C. residents understand that the Enbridge Northern Gateway Pipeline project will not create long-term employment.

A release from Cullen’s office says that 61% of respondents to the Mustel poll believe that “most jobs are short-term and many long-term jobs will be lost because unrefined oil is being shipped to other countries for refining.”

This result contradicts an earlier Ipsos Reid poll conducted in December 2011. In that poll, respondents cited employment and economic reasons to be the main benefit.

“People get that the project will not create permanent jobs,” said Cullen said. “We certainly want jobs in my riding, but people are not going to settle for short-term cash instead of long-term value-added jobs.”

It its initial submission to the Joint Review Panel, Enbridge states that the project will offer less than 80 direct permanent jobs in B.C., Cullen’s release says.

“Most have understood that this project poses major risks to the environment. These poll results show that British Columbians see that there would be economic losses as well.”

The poll also showed that the majority of B.C. residents are aware of the proposed pipeline project, and that opposition outweighs support for the project.

A total of 87% are familiar with the proposal and have read or heard something about it. 46% oppose the construction of a pipeline in contrast to 37% who support it. The remaining 17% are undecided or do not have an opinion.

“The results convey what I’ve already heard on the ground,” said Cullen, who commissioned the survey. “There is simply too much at risk to push the project through.”

These findings also contradict the earlier Ipsos Reid poll where only 42% of respondents were somewhat or very familiar with the project. It also showed that only 32% opposed the pipeline.

“It appears that at the same time knowledge of the project is growing, so is opposition,” said Cullen.

The Mustel survey was based on 500 interviews completed by telephone (landlines and cellular) January 25 to February 8, 2012 with a margin of error of +/-4.4% at the 95% level of confidence.

Kitimat Modernization will create competitive contractors for future energy projects: RTA CEO

Jacynthe Côté, CEO Rio Tinto Alcan — Jacynthe Côté,the CEO of Rio Tinto Alcan, briefs reporters on the progress of the Kitimat Modernization Project,March 8, 2011(Robin Rowland/Northwest Coast Energy News)

The Kitimat Modernization Project, the $3.3 billion upgrade of the Kitimat aluminum smelter will create capable and competitive contractors that can go on to work at the future energy developments in the region, Rio Tinto Alcan CEO Jacynthe Côté said Thursday, March 8.

Côté was in Kitimat to tour the region, a trip that was postponed in December, at the time of the “Notice to Proceed” on the modernization project, when her aircraft was diverted to Prince Rupert by a snow and sleet storm the day of the announcement.

During a dinner on Wednesday night, Côté met with leading contractors, the leaders of the Haisla First Nation, Mayor Joanne Monaghan and members of the District of Kitimat Council.

The prospect of future energy projects, three liquified natural gas terminals to be built by the KM LNG partners, by the BC LNG partnership and by Shell was one factor in Rio Tinto Alcan giving the go ahead for the modernization project, she told local reporters.

“We have seen the critical mass in other parts of the world, “she said. “One of the reason to do full speed in December was to aim that we will be ramping down as the others are ramping up. Of course, I cannot say for the other projects that will be their decision.” Given the current schedules, she said, “we should be out of the way when others pick up.” (Another key reason for the go ahead, according to RTA primary metal vice president Jean Simon, speaking at the launch last December was the growing market for aluminum in Asia)

Côté added that the contractors now have “great abilities that could be redeployed.”

Michel Lamarre, Director of KMP said that despite some delays due to the harsh winter, RTA is still aiming for first concrete at the new potlines on June 1. First new metal is scheduled for the second quarter of 2014. Peak employment, about 2,500 people, is expected to be in the first quarter of 2013.

“We have the ambition to make the project a real showcase, for us, for British Columbia, for Canada,” Côté said. “So we’re pretty proud that 62 per cent of the work done so far has been done by the community in the area., 95 per cent of them in British Columbia, which is absolutely spectacular for a project of that complexity and magnitude.

“It requires a lot of skills, a lot of organization.”

Côté said she stressed RTA’s safety priorities when she met with the local contractors (a point the company made both at the Notice to Proceed gathering in December and at a local meeting for contractors last month). The contractors are very enthusiastic, Côté said. “I’ve seen in other regions as contractor and employees moved to that level of safety performance, it becomes a competitive edge, there’s going to be other projects coming in the region, there’s a lot of discussion around LNG, and it will be an advantage for contractors who have demonstrated superior performance and safety. We’re here to support that. I think they’re going to be more compelling and competitive, I mean it’s good business.”

She says that RTA is spending $3.1 million each day on the modernization project.

Asked about both the prospective LNG projects and the fact that accommodation in Kitimat is now at a premium, she said that “crowding” was a significant part of her discussions with both the Haisla and the District of Kitimat.

Rio Tinto has worked on what she called “disproportionately big” projects at sites compared to local communities around the world. “So we adjust, my message was we adjust.[There are] Different formulas in different parts of the world, depending on the conditions. The model is to bring in as many people from the community as we can.”

Pacific Trails Pipeline holds community meetings

Pacific Trails Pipeline meeting — Hatha Callis, left, of Progressive Ventures Construction, discusses contracting possibilities with the staff of the Pacific Trails Pipeline at a community meeting in Terrace, BC, March 1, 2012 (Robin Rowland/Northwest Coast Energy News)

Pacific Trails, which has proposed to build a natural gas pipeline from Summit Lake, near Prince George, to Kitimat, held four community meetings in Vanderhoof, Burns Lake, Houston and Terrace, to discuss changes to a plan for the pipeline that was approved the BC Environmental Assessment Office in 2008.

Paul Wyke, a spokesman for Apache Corp., one of the main investors in the Kitimat LNG project as well as the Pacific Trails Pipeline, said the companies considered the meetings successful. About a dozen people showed up in Vanderhoof and Burns Lake and about 25 to 30 in Terrace and Houston, perhaps an indication of the lack of controversy, so far, for the PTP, which will follow roughly the same route as the Enbridge Northern Gateway pipeline. Apache and Pacific Trails also took part in a job fair on February 10 in Burns Lake, the town hard hit when a huge explosion flattened the Babine Forest Products sawmill on January 20, killing two, injuring 19 and left about 250 workers jobless.

About half the people showing up at the meetings were interested in job or contracting opportunities while the rest were concerned about environmental issues.

Nathan Hagan-Braun, project assessment manager for the BC Environmental Assessment Office, who also attended the community meetings, said that a decision on approval of the amendments to the PTP plans will likely come in May.

PTP says that once the project adjustments are approved, logging and clearing is scheduled for the summer of 2012, pipeline construction in 2013 and 2014, with the pipeline going into operation in 2015.

Joint Review Panel refuses to consider possible Enbridge plans for a natural gas Northern Gateway

The Joint Review Panel has ruled that it doesn’t have to include possible plans by Enbridge to add a natural gas pipeline to to the Northern Gateway project in its consideration of the bitumen pipeline.

Since the JRP has no evidence at the moment to suggest that Enbridge has such a project “in sufficient planning stages to warrant inclusionwithin Northern Gateway’s cumulative effects assessment,” the Panel considers that it is inappropriate to consider a possible natural gas pipeline. If Enbridge did want to build a natural gas pipeline along the route, it would be subject to new and separate hearings.

Last fall there were reports in the media that Enbridge CEO Pat Daniel (who is now about to retire) wanted to join the natural gas rush to the Pacific coast by adding a natural gas pipeline to the Northern Gateway bitumen project (there was also some speculation that Enbridge might want to replace the bitumen pipeline with a natural gas pipeline).

One of the JRP intervenors, Dr. Josette Weir of Smithers filed a motion in December with the JRP asking that the Joint Review Panel:
.

a. order Northern Gateway Pipelines Limited Partnership (“NGPLP”) to confirm if it plans a gas pipeline in the same right-of-way as the tar sands and condensate proposed pipelines;
b. order NGPLP to confirm if such gas pipeline is planned to be constructed during the same time as the two proposed pipelines under review;

Weir also asked the JRP to include possible plans for a gas pipeline in its overall assessment of the cumulative affects of the Northern Gateway pipeline.

In response to the motion, Ken MacDonald Vice President, Law and Regulatory Northern Gateway Pipelines Limited Partnership replied that Gateway confirms that it is not currently proposing to construct a gas pipeline in the right-of-way that would be required for the construction of the Northern Gateway Project and, making a legal point, called an Enbridge natural gas pipeline along the same route as “hypothetical.”

However, the next sentence in MacDonald’s letter could be a problem for the existing Pacific Trails Pipelines plans for their own natural gas pipeline, which some in the region fear is paving the way for the Northern Gateway pipeline. The letter reads: “Northern Gateway
has been attempting to engage the proponents of the Pacific Trails Pipeline for an extended
period of time regarding collaboration on routing, construction and access management, and will
continue to do so in the future.”

Last fall, members of the Wet’suwet’en First Nation blockaded an Apache/Pacific Trails Pipeline survey crew and one reason for the blockade was the possible use of the Pacific Trail survey for the Northern Gateway. PTP and Apache, both in a report to the BC Environmental Assessment Office, and at a public meeting in Terrace on Thursday, March 1, say they continue to consult with the Wet’suwet’en houses and the Office of the Wet’suwet’en on the issue.

MacDonald’s letter to the JRP goes on to complain about the time it is taking for the review process

The project inclusion list for the Northern Gateway cumulative effects assessment was determined at the time of finalizing the Terms of Reference established for the Project’s environmental assessment. This was more than 2-years ago. Northern Gateway’s Application has been under review for over a year and a half with the information request phase of the proceeding on the Application having been completed. It would be impossible to ever complete an environmental assessment for a major project if the project proponent had to continually update its cumulative effects assessment for projects announced during the course of the review
proceedings on regulatory applications. In the case of the Northern Gateway Pipeline Project, it may end up taking four years to complete the regulatory approvals process. During such an extended period of time, new projects will inevitably be planned and announced. Northern Gateway cannot be expected to revise its cumulative effects assessment to take into account projects announced during the course of the current regulatory review.

Enbridge pointed to earlier legal rulings on “hypothetical projects”

with respect to other projects to consider in a cumulative environmental effects assessment, the NEB has ruled in the past that the other projects considered in a cumulative effects assessment cannot be hypothetical. The Courts have said that the decisions of RAs are not required to “consider fanciful projects by imagined parties producing purely hypothetical effects”. The Board is of the view that EBPC’s methods for identifying other projects for consideration in the cumulative effects assessment were appropriate.
Northern Gateway submits that, at this point, any natural gas pipelines beyond the Pacific Trails Pipeline are hypothetical. Requiring Northern Gateway to include such hypothetical projects in its cumulative environmental impact assessment would be inconsistent with previous practice and NEB decisions and would result in further delay to what has already become a protracted regulatory process.

The Joint Review Panel agreed, ruling

The Panel acknowledges the media statements by Enbridge that you noted in your motion. However, based on Northern Gateway’s comments and the fact that the Panel has no other evidence to indicate that such a project is in sufficient planning stages to warrant inclusion within Northern Gateway’s cumulative effects assessment, the Panel is of the view that it would not be appropriate to order Northern Gateway to do so. Further, the Panel notes that should Northern Gateway or any other proponent propose a gas pipeline to the west coast in the future,
that project would be subject at that time to the relevant environmental assessment and regulatory requirements.

Panel Commission Ruling on Enbridge natural gas pipeline

Northern Gateway Pipelines response to motion