Haisla Nation Chief Counsellor spoke at Mt. Elizabeth Theatre on June 9, 2015, introducing David Suzuki who was on a speaking tour. This is a lightly edited report on his remarks that outline some of the dilemmas facing the Haisla and the Kitimat valley in an age that needs development but faces climate change.
Among chiefs, I am elected, not hereditary, you are born into that position, I wasn’t born into it.
I am basically a regular commoner just like you guys with a high school education and one year of college and a lot of experience outside my community that I bring back.
These topics about climate change locally, provincially, nationally and worldwide, they’re complicated topics.
There’s no one true fix for all of it. The problem is that the Haisla have been thrust into the middle of it and we have to answer it, which is very unfair.
So when we’re talking about what really is a Haisla value, a west coast, a British Columbia value. I must tell you I value the Haisla people, my people, that land, the territory, I think about the Haisla people because I don’t think anyone has given the Haisla people a priority in the last 40 to 50 years.
All the decisions that were made about Haisla territory, that affected out people, were made without us.
The result was that we ended up with 80 per cent unemployment, historically over the last 40 years we have ended up with cancer and we can’t get rid of it.
Poverty, people couldn’t get enough money to fix their bathrooms when the floor was rotting out.
The saying is that you can always tell when the reserve starts is when the pavement ends is true. Unless there’s a political agenda to actually pave the road to the village. The environmental questions that have been raised over the past ten years are not new to the Haisla.
In the 70s it was the Haisla alone who tried to battle emissions when nobody even knew what emissions meant. They tried to stop the effluent dumping into the river that killed off the river they tried to stop the diking of the river so parts of the land could be protected, parks.
When the Haisla knew that the oolichan that was estimated to be hundreds of thousands of tons, were dying off quickly in the span of five years. Nobody listened.
Now the DFO and Canada is realizing that the demise of the oolichan is a signal that something is wrong with the ecosystem.
I would love that someone would come around to the idea of thanking the Haisla people for all the work that they did and went and unheard even in meetings like this today.
And we’re not even talking about salmon.
In all this time, I’ve read all the documents, all the speeches and listened to all the promises of a better tomorrow for all the people but nobody delivered it.
Countless academic papers have been written about Indian poverty.
Nothing was done.
Non-profit organizations used the Haisla to further their cause and left town when they had achieved what they had achieved.
At the same time all the decisions continued to be made without us. And everybody benefited except us.
What happened in the end and the corporations made their billions and made enough money to pay off the mortgage and move down south, the Haisla were left with the mess to clean up. Today we’re still battling to get some of these sites cleaned up and we’re still not getting help.
I don’t blame anyone for this. Whether you’re am environmental organization, a government or a corporation or a non-profit organization, I don’t blame you for this because you have a mandate, you have a special interest. That’s what you’re trying to achieve.
I have a mandate. I do have an organization now that is fully equipped to look at every single permit that comes from the provincial government and the federal government and try to mitigate it given our capacity and our lack of funding.
But some of that benefit has to flow to the Haisla people. It’s our territory.
When you think about what has happened to us, the Haisla, we think about residential schools and I’ve been reading the debate on whether or not it’s genocide or not and I think people are missing the point.
Residential schools were only 10 per cent of a larger program to get rid of the Indian.
The ninety per cent was what was stolen from us as well. The land was taken away and we were put on a chunk of land across the Channel, that was described by the Indian Agent as worthless, it’s not even good for agriculture so give it to the Indians. We had to get permission from the federal government to leave that reserve. We had to get a piece of paper that said he’s allowed to leave the reserve and go pick berries.
We also have had no help other than some academic programs and some sort of study to deal with our suicides. I’m not just talking Haisla here. I really thought that one suicide every five years was really a bad thing. But finding out that my neighbors down the road from here to Prince George are dealing with ten suicides in the first quarter of this year.
It breaks my heart.
Who is responsible for that? If it’s not the government, if it’s not the non-profits, if it’s not corporations, who is it?
I stepped up and said I’ll take full responsibility for this but that means I have a hard message to deliver and I will deliver it on behalf of the Haisla people.
When it comes to climate change, we are living at a very unfortunate time, because finally we’re accepted at the provincial table, at the federal table, the corporate table.
We’re being included but unfortunately, we have to look at climate change as well. It’s a very tough position to be in when you’ve got a Grade 12 education from 1984 and one year of college education in 1985.
It’s a very tough topic, I can tell you. I’ve been to China, I’ve been to Korea and no matter what you say about the emissions there, Canada and BC have no problems with emissions here until you visit China.
They’re not going to get off crude oil, they’re not going to get off diesel fuel, they’re not going to give up coal because a billion people there want the same standard of living that you have in Canada. And I’m talking about India as well. They want the same standard. They want good houses; they want to own a car. They are not going to stop their thirst for energy.
I don’t have the answers.
I still believe that natural gas is a lot cleaner than coal and even if you put a small dent in it, it’s not enough to get these guys off nuclear power.
And the solar power you’re talking about, they do it for show but that’s not going to meet the energy needs of China. We’re not even talking about India; we’re not even talking about Korea.
You say can you help get China off dirty fuel, but all their pollution keeps getting dumped on South Korea.
I represent 1700 people, how am I going to do that?
We’re being asked to do a near impossible task while I’m trying to dig my people out of poverty. At the same time, when we get this opportunity we’re giving our members very mixed messages, including our young people which is heart breaking for me.
Because we’re telling them get an education, don’t be a burden on society, get a job, but by the way there are no jobs here, there’s no way to get into existing industries so you better go to the oil fields of Alberta to get a job. A lot of our people head over there or to Vancouver.
I’ve been following this debate on climate change for quite a while now, for over six years. I’ve been listening to everybody, I’ve been listening to corporations, being listening to governments, been listening to non-profits, but on behalf of the Haisla Nation Council, I’m here to tell you, that when it comes to the future of the Haisla I have very little patience with this. I don’t want to see another essay about what to do about Indian suicides.
I believe that our people are being sick and tired of being left out and left behind, while everyone else is moving on with their lives. I do want to what’s best for the region I do want to do what’s best for the province and Canada and the world. But I will not do it at the expense of the Haisla people. We’ve been at the dirty end of the tick for the last 40 years. It’s going to stop. Thank you very much and enjoy your evening.
In a news release this afternoon, Pacific Northwest LNG announced that the company has given a positive, but conditional, Final Investment Decision, to build an LNG facility on the environmentally sensitive Lelu Island at Port Edward. BC.
Pacific NorthWest LNG (PNW LNG) announced today that the required technical and commercial components of the project have been satisfied. Consequently, PNW LNG has resolved to move forward with a positive Final Investment Decision, subject to two conditions.
The Final Investment Decision will be confirmed by the partners of PNW LNG once two outstanding foundational conditions have been resolved. The first condition is approval of the Project Development Agreement by the Legislative Assembly of British Columbia, and the second is a positive regulatory decision on Pacific NorthWest LNG’s environmental assessment by the Government of Canada.
“In parallel with work to support the Final Investment Decision, Pacific NorthWest LNG will continue constructive engagement with area First Nations, local communities, stakeholders and regulators,” said Michael Culbert, President of Pacific NorthWest LNG. “The integrated project is poised to create thousands of construction and operational careers in the midst of the current energy sector slowdown.”
Progress Energy Canada and the North Montney Joint Venture partners will continue to invest in its North Montney natural gas resources. The investment to date has proved and probable natural gas reserves of over 20 trillion cubic feet (tcf) with $2 billion-plus invested annually, representing approximately 4,000 sustainable jobs in northeast British Columbia.
“A Final Investment Decision is a crucial step to ensure that the project stays on track to service contracted LNG customers,” Culbert continued. “Pacific NorthWest LNG is poised to make a substantial investment that will benefit Canada for generations to come.”
Although Pacific Northwest LNG is first off the mark with a positive, if conditional, Final Investment Decision, putting a shovel in the ground is not guaranteed. Of all the proposed liquified natural gas projects for northwestern BC, the location on Lelu Island, right at the mouth of the Skeena River, is probably the most environmentally sensitive. Even if the Canadian Environmental Assessment Agency does give its approval, probably with a long list of conditions, it is highly likely the decision will be challenged in court by First Nations and environmental groups.
The environmental process was put on hold in early June after the agency asked Pacific Northwest to provide more information about building the terminal. The island sits near Flora Bank, where young salmon shelter in eel grass after coming down the Skeena, taking time to grow before venturing out into the Pacific. Flora Bank has been called the “nursery” for one of the world’s most important salmon runs.
The fact that Pacific Northwest LNG has to supply more studies means that any final environmental assessment decision will come after October’s federal election.
After initial proposals to dredge the area where met with loud and sustained opposition, Pacific Northwest proposed a suspension bridge and trestle which means the LNG tankers would tie up well off the island in Chatham Sound.
Lelu Island is on the traditional territory of the Lax Kw’alaams First Nation. Members of the First Nation recently voted overwhelmingly against accepting a billion dollars over the life of the project from Pacific Northwest.
Pacific NorthWest LNG filed a report, prepared by engineering and environmental company Stantec Inc., that said there would little or no environmental impact impact from building the $11.4-billion LNG terminal. Stantec’s report, however, is unlikely to reassure many people in the northwest because of Stantec’s close to ties to the energy industry. Stantec did major studies for the controversial Enbridge Northern Gateway project, studies that were challenged by other environmental studies opposing that pipeline project.
Petronas holds 62-per-cent of Pacific NorthWest LNG.
Partners are China’s Sinopec, which holds 10 per cent, Indian Oil Corp. Ltd. which holds 10 per cent, Japan Petroleum Exploration, 10 per cent, China Huadian Corp., 5 per cent and Petroleum Brunei, 3 per cent.
As well some First Nations and environmental groups in the northwest of British Columbia, in the northeast, Blueberry River First Nations who live in the North Montey natural gas region have said they are worried about increased drilling in their traditional territory are concerned about increased drilling by Progress Energy for natural gas within their traditional territory.
The Blueberry River group says it plans request judicial review of the B.C. Natural Gas Development Ministry’s decision to sign the 23-year royalty agreement for the region.
The headline on Thursday’s CBC.ca coverage of the sudden controversy over a boycott in British Columbia of Tim Horton’s over the Enbridge ads sums up everything that’s wrong about media coverage not only of the boycotts, but of northwest energy and environment issues overall.
“Tim Hortons yanks Enbridge ads, sparks Alberta backlash.” The anger at Tim Hortons across northwest British Columbia over those Enbridge ads, the calls for a boycott have been building for more than two weeks but no one in the media noticed despite widespread posts on Facebook and other social media.
As usual, the concerns of the northwest didn’t really become a story until Alberta got involved and the story has become the “Alberta backlash.” Now, there’s a backlash on social media to the Alberta backlash, with northwestern British Columbians tweeting and posting their displeasure, angry at the usual blinkered views of Alberta-centric coverage of energy issues.
Let’s make one thing clear– despite the outraged cries of the usual suspects like Defence Minister Jason Kenney, Conservative MP Michelle Rempel, who represents Calgary Centre-North and Kyle Harrietha, the Liberal candidate for Fort McMurray-Cold Lake that the boycott was aimed at Alberta’s entire energy industry and the province’s views of a manifest destiny as an energy super power, the doughnut boycott was really aimed specifically at Enbridge, and the company’s arrogance and incompetence.
Of course Jean, like most Albertans, isn’t looking at the bigger picture. The question that Jean should really be asking, is the continuing unquestioning support for Enbridge actually harming the rest of the Alberta energy industry by increasing the resistance in northwestern BC to other energy projects? When are Alberta politicians, whether federal or provincial, ever actually going to show even a Timbit of respect for the issues in northwestern British Columbia?
Look at what Enbridge is doing
There is strong support (with some reservations) for the liquified natural gas projects. There is a level of support for pipelines that would carry refined hydrocarbons to the coast, something that the new premier of Alberta, Rachel Notley is seriously considering. But it is so typical of Alberta, the Alberta media and most of the Canadian media, to believe that the boycott was an attack on the entire energy industry.
Ask any executive of an energy company that wants to do business in northwestern British Columbia and they’ll come up with the a joke that is now so old and so often repeated that it’s become a cliché, “We look at what Enbridge is doing and then do the exact opposite.”
The fact is that Enbridge has been dealing with northwestern British Columbia for more than ten years and they still can’t do anything right. Shell, Chevron, Petronas (and before them Apache) and even TransCanada make more efforts to listen to the people, First Nations and non-Aboriginal residents alike, than Enbridge ever has or ever will (despite their claims in their PR campaigns).
While these energy giants may not agree with what they hear, they are respectful and depending on their corporate culture are making genuine efforts to come up with ways to make their projects work. After a decade of blunders, however, Enbridge still hasn’t shown that much respect for anyone here. Those touchy feely ads that appear on television and at Tim Horton’s are just another example of how not to run a public relations campaign.
There are those who oppose any bitumen sands extraction who signed the online petition, but the core of opposition, as always, comes from northwestern BC and the issue is an ill-conceived pipeline.
Enbridge has been successful in one area of its public relations strategy. They’ve convinced Albertans that Enbridge and the Northern Gateway pipeline is an essential part of not only the Alberta economy but Alberta culture. Any attack on Enbridge becomes an attack on Alberta. Hence the unreasoned anger when after Tim Hortons pulled the ads.
The big blame America lie
The other Big Lie we keep hearing from the Harper Government, is that this all orchestrated by American NGOs and activists. Again this shows Alberta-centric contempt for British Columbia. It’s very easy and convenient to keep believing that everyone in northern British Columbia are dumb and stupid and are being led by the ear by those nasty green Americans who have it in for the efforts to make Canada an energy superpower. That idea, promoted by the more conservative Canadian media has always been animal waste. The battle to protect the environment of northwestern British Columbia while at the same time attracting resource projects that have recognized and obtained social licence to operate has always and will always in BC on a case by case, community by community basis.
A morning shock with your morning coffee and Timbits
Social media across northwestern British Columbia, mostly Facebook, began spreading the news within hours of the ads appearing in the local Timmys. There were angry posts from individuals who had walked in Tim Hortons and saw the ads.
Why didn’t the media get the story?
So why wasn’t the story covered by the media at least ten days ago?
That’s because in this age of tight budgets, it’s considered easy and economical to try to all of northern BC cover from either Vancouver or Calgary; that means covering from far away both the coast where the pipelines and tankers may or may not operate to the east near the Rockies where the natural gas extraction is on going
If you look at map of northern BC, and the two federal ridings Skeena Bulkley Valley and Prince George–Peace River–Northern Rockies, the population is about 200,000 spread over an area about half the size of Europe. Both ridings in this region are supposedly vital to the future of the Canadian economy, but you wouldn’t know it from most of the media. (The Globe and Mail is an exception, with more ongoing coverage of northern BC than you will find in either The Vancouver Sun or The Province).
As for CBC, there are just eight radio staff, two in Prince Rupert and six in Prince George to cover all the apparently vital issues across half the province. ( Almost all the staff work mostly for the Daybreak North morning show which dominates the regional rates but it looks like with the latest CBC cutbacks that at least one of those positions will be eliminated). CBC TV and Global cover the region from Vancouver.
At least the Vancouver based media make efforts to cover the north from time to time. The Alberta media, however, especially the Calgary Herald, is hopeless, and so biased against British Columbia and so dismissive of the issues here, that the coverage across Alberta is completely unreliable about 90 per cent of the time—it’s no wonder that the majority of Albertans have no understanding of British Columbia culture and issues.
Then there are the punditi, pontificating from their cubicles in Ottawa and Toronto without a clue, without doing the basic journalism of picking up the phone (or writing an e-mail) to actually find out what’s going on.
Andrew Coyne, for example, made these rather silly two tongue-in-cheek tweets Thursday night. While Coyne’s tweets do often exhibit a sense of humour, his excellent coverage of the decline of our democratic parliament has to be compared with his blind, unchecked ideological assumptions about the issues of the northwest, which are simplistic, cubicle bound and far off the mark. The same can be said for Jeffrey Simpson in his occasional writing about this region. Neither the view from the Hill, where you can see as far as the Queensway, nor from Bloor Street, where you can see part of the Don Valley, are vantage points to understand what is going in northern British Columbia.
So let’s look at the specific errors in the media coverage of the Tim Horton’s story.
Both Shawn McCarthy in the Globe and Mail and Kyle Bakyx on CBC.ca seem to accept without question that SumofUs, was the instigator of the petition. Like many issues in northwestern BC, the Lower Mainland or US based activist groups follow the lead of northwestern BC and jump on the bandwagon, not the other way around. Jason Kirby in MacLean’s says the boycott movement began a week ago. Here in Kitimat, it began within hours of the ads appearing in the local Timmys and was picked up on activist social media groups before the SumofUs petition site.
McCarthy repeats the conventional wisdom: “The Conservatives and oil industry supporters have been waging a public relations war with the environmental groups that oppose expansion of the oil sands and construction of new pipelines.”
CBC.ca quotes Alan Middleton of York University “Enbridge, of course, is not just pipelines and oilsands; they are a whole range of products including heating people’s homes. Tims should have thought about that.” Again a mistake. I lived in Toronto for many years. A company called Consumers Gas supplied natural gas to homes until it was taken over by Enbridge, so Enbridge does heat the homes in Toronto. But what has that got to do with northwestern British Columbia? Why didn’t CBC.ca call the University of Northern British Columbia? Easier to call York (which by the way is where I got both my BA and MA)
McCarthy quotes Rempel as saying, “One has to wonder whether head office talked to their franchise owners in Alberta before making the decision. I imagine those calls are being made this afternoon – certainly there are a lot of people voicing their displeasure.”
The question that should have been asked whether or not Tim Hortons consulted their franchise owners in British Columbia before ordering them to play the ads. People here were “voicing their displeasure” from the moment the first Kitimatian walked into the local Timmys for an early morning coffee and had to stand in line while being told how wonderful Enbridge is.
Of course, if Albertans force Tim Hortons into reinstating the ads, that will only trigger a bigger boycott in British Columbia. As Maclean’s asks, “what were they thinking?”
Jason Kenney, flying in, flying out
As for Jason Kenney, who is quoted by the CBC as tweeting: “I’m proud to represent thousands of constituents who work for Enbridge & other CDN energy companies,” if Kenney aspires to be Prime Minister one day, he had better start thinking about representing more Canadians than just those employed by the energy industry—a mistake that his boss Stephen Harper keeps making.
Jason Kenney did visit Kitimat for a just a few hours in February 2014 for a tour of the Rio Tinto modernization project and an obligatory and brief meeting with the Haisla First Nation council. If Kenney had actually bothered to stick around a few more hours and talk to the community, everyone from the environmentalists to the industrial development advocates, he might not have been so quick on the trigger in the Twitter wars.
Not one of the major media who covered this story, not The Globe and Mail, not CBC.ca, not MacLean’s, no one else, once bothered to actually call or e-mail someone who lives along the Northern Gateway pipeline route in British Columbia, the area where the boycott movement actually began to ask about Enbridge’s track record in this region. The media still doesn’t get it. This morning’s stories are all about Alberta. As usual, my dear, the media doesn’t give a damn about northwestern British Columbia.
That is why the coverage of the Tim Hortons boycott is a double double failure of the Canadian media.
Where else the media is failing northwestern BC
Full disclosure. Since I took early retirement from CBC in 2010 and returned to Kitimat, I have worked as a freelancer for CBC radio and television, Global News, Canadian Press, The National Post, The Globe and Mail and other media.
However, largely due to budget cuts, freelance opportunities, not only for myself, but others across the region have dried up. The media seems to be concentrating more on the major urban areas where there is larger population base and at least more of the ever shrinking advertising dollar. I am now told more often than I was a couple of years ago that “we don’t have the budget.”
Now this isn’t just a freelancer who would like some more work (although it would be nice). If the media these days actually had environmental beats for reporters the boycott of Tim Hortons in northwest BC would have been flagged within a couple of days, not almost two and half weeks and later only when Alberta got hot under its oily collar.
So as well as the Tim Horton’s boycott here are two major ongoing stories from Kitimat that the media haven’t been covering.
100 day municipal strike
-Kitimat’s municipal workers, Unifor 2300, have been on strike since February 28. Three rounds of mediation have failed, the union has refused binding arbitration, the pool, gym and community meeting halls have been closed since February, the municipal parks and byways are now returning to the wilderness. Only essential services are being maintained (but residents still have to pay their property taxes by July 2, taxes that are skyrocketing due to increased assessments for home values based on LNG projects that haven’t started) By the time most people read this the strike will have been on for 100 days. There is no settlement in sight and both sides, despite a mediator ordered blackout, are fighting a press release war on social media. Can you imagine any other place that had a 100 day municipal workers strike with no coverage in the province’s main media outlets, whether newspaper or television? Local CBC radio has covered the strike, as has the local TV station CFTK. (Update: District of Kitimat says in a news release that the mediator has now approved the DoK news releases.)
Of course, in the bigger picture the media concentrates on business reporting. There haven’t been labour reporters for a generation.
So if most Canadians were surprised that there was a boycott of the unofficial national symbol, Tim Hortons, it’s because of that double double media fail and as the media continues to decline, as budgets are cut, as “commodity news” disappears, expect more surprises in the future. Oh by the way Kitimat is vital to the national economy but we can cover it from a cubicle in Toronto.
Final disclosure: I am not a coffee drinker. When I go to Timmy’s I prefer a large steeped tea and an apple fritter.
The United States Coast Guard says it is monitoring repairs aboard the liquid natural gas carrier Excel in Homer, Alaska, Friday, May 1.
According to a news release from Coast Guard Sector Anchorage, USCG issued an order for the vessel to remain anchored in Kachemak Bay near Homer after the 908-foot, Belgium-flagged vessel experienced a loss of propulsion due to a failed engineering gasket while inbound to Cook Inlet Monday.
The Excel was bound for the existing LNG facility, the Kenai LNG Plant, located in Nikiski on the Kenai Peninsula, in Alaska. The state of Alaska is planning to expand the LNG facilities there, and that site is a potential rival for British Columbia’s LNG export plans.
The Coast Guard release says:
The Excel was examined by Coast Guard inspectors from Marine Safety Detachment Homer, Tuesday, who conducted a Port State Control annual exam and verified the engineering gasket was replaced.
While preparing to get underway Wednesday, the vessel experienced an automated engineering casualty and canceled its voyage until a Bureau Veritas (BV) classification surveyor could arrive and verify the engineering casualty was fully resolved. After arriving aboard the vessel, the class surveyor directed the vessel’s crew to test the automated engineering system and deduced that the casualty was a product of a faulty engine order telegraph; a device used on ships for the pilot on the bridge to order engineers in the engine room to power the vessel at a certain desired speed. Coast Guard Sector Anchorage issued another order for the vessel to remain in Kachemak Bay.
Friday, the vessel was allowed to continue sailing to her destination at the ConocoPhilips LNG plant in Nikiski after additional safety measures were implemented. As part of the safety measures, the tug Stellar Wind escorted the vessel from Kachemack Bay to Nikiski and a second tug, the Glacier Wind, stood by in Nikiski to assist with docking operations.
The Excel completed her voyage and safely moored at the ConocoPhilips pier in Nikiski at approximately noon Friday where it remains until permanent repairs are verified by the class surveyor and Coast Guard inspectors.
“Ensuring safe navigation in Western Alaska, particularly in Cook Inlet, is one of my highest priorities,” said Capt. Paul Mehler III. “Our crews worked closely with the Southwest Alaska Pilots Association, the class surveyor and towing vessel industry to coordinate a safe and secure transit of the Excel from Kachemak Bay to Nikiski. The weather was also in our favor with clear skies, light winds, and steady ebb tide during the transit in Cook Inlet.”
The LNG export plant at Nikiski was built in 1969 by Phillips Petroleum and Marathon Oil. Phillips later merged with Conoco and subsequently purchased Marathon’s 30 per cent share. The Nikiski plant sent LNG shipments to Japan from 1969 to 2010 under long-term contracts with Tokyo Gas and Tokyo Electric, when the contracts expired.
In 2011 ConocoPhillips announced that it would be ceasing LNG exports from Kenai and preserving the plant for potential future use.
With the LNG rush, market conditions changed and the the plant resumed making LNG in early 2012 and exported four cargoes to Asian customers over the course of that year.
In March 2013, the export licence expired and the LNG plant was put on standby. As interest in LNG grew, and at the urging of the state of Alaska, in December 2013 ConocoPhillips Alaska applied to resume LNG exports and the U.S. Department of Energy approved the resumption in April, 2014. ConocoPhillips says it received authorization to export a total of 40 BCF of liquefied natural gas over a two-year period from 2014 through 2016.
The Alaska LNG project is “a proposed $45 to $65 billion liquefied natural gas export project – it would be the largest single investment in Alaska history. The project has the potential to create between 9,000 and 15,000 jobs during the design and construction phases; plus approximately 1,000 jobs for continued operations. In addition to generating billions of dollars in revenue for Alaska, the project will provide access to natural gas for Alaskans.” The project’s participants are the Alaska Gasline Development Corporation (AGDC) and affiliates of TransCanada, BP, ConocoPhillips, and ExxonMobil.
Chevron will not be making a final investment decision on the Kitimat LNG project in 2015, Pat Yarrington, the company’s vice president and chief financial officer told the first quarter earnings conference call Friday, May 1.
All FIDs for Chevron projects around the world, with one exception, are on hold for this year Yarrington said.
“In terms of other FID projects, part of the reduction that we took in our capital spending from 2014 to 2015 really did relate to the pacing of other major capital projects,” Yarrington said. “Kitimat is a primary one there, we moved spending on that out considerably. We are only limiting ourself to appraisal work and continuing to look at the design and the cost structure. “
Overall, in all aspects of the company’s operations, Yarrington said Chevron is “aggressively pursuing cost reductions” by reopening contracts with suppliers, resulting in $900 million in agreed reductions around the world.
Meanwhile, two of Chevron’s LNG projects in Australia have reached “key milestones,” she said. As for the Gorgon project in Western Australia, she said. “We’re on schedule for Gorgon startup in the third quarter of this year and first commercial cargo before the end of the year.”
The Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent) supplied by the Greater Gorgon Area gas fields. 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.
“We’re on schedule for Wheatstone,” Yarrington said. “We’ve had seven of 24 major process modules delivered on site, the trunk line is installed and hydro tested, the dredging is complete, the piling has been completed, the roofs are on both of the LNG tanks. We continue to make good processs both on shore and off shore.”
The Wheatstone Project is an LNG and domestic gas operation near Onslow, in the West Pilbara region of Western Australia. The project’s initial capacity is expected to be 8.9 million metric tons per year of LNG.
Chevron promotional video showing Gorgon is one of the world’s largest natural gas projects and the largest single resource development in Australia’s history. (Kitimat residents note the cruise ship docked at the project)
As well, Chevron in Australia has announced new gas discoveries as a result of further drilling success in the Greater Gorgon Area located in the Carnarvon Basin, a premier hydrocarbon basin offshore northwest Australia.
The Isosceles-1 exploration discovery well encountered approximately 134 metres (440 feet) of net gas pay in the Triassic Mungaroo Sands in 968 metres of water (3,175 feet). The well fulfilled the second year work commitment in the exploration program. It is located in the WA-392-P permit area approximately 95 kilometres (60 miles) northwest of Barrow Island, off the coast of Western Australia.
“This discovery is a continuation of our exploration success and further positions our company as a key supplier for future liquefied natural gas (LNG) demand in the Asia-Pacific region,” said Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company
Overall Chevron (NYSE: CVX) reported earnings of $2.6 billion ($1.37 per share – diluted) for first quarter 2015, compared with $4.5 billion ($2.36 per share – diluted) in the 2014 first quarter. Foreign currency effects increased earnings in the 2015 quarter by $580 million, compared with a decrease of $79 million a year earlier.
Sales and other operating revenues in first quarter 2015 were $32 billion, compared to $51 billion in the year-ago period.
Numerous media sources are saying that Royal Dutch Shell is in talks to acquire the BG Group.
Shell is developing the LNG Canada project in Kitimat, while BG had been developing an LNG proposal for Prince Rupert. BG announced last fall it was delaying further development of the Prince Rupert project due to uncertainty in the liquified natural gas market.
Buying BG would be Shell’s largest acquisition since the $60.3-billion (U.S.) merger of its Dutch and U.K. parent companies in 2005, according to data compiled by Bloomberg. It would unite the U.K.’s first- and third-largest natural gas producers….BG posted a record $5-billion loss in the fourth quarter, mainly due to writing down the value of its Australian assets as commodity prices fell.
BBC News quotes the Wall Street Journal as matching the report.
A Shell spokesman told the BBC: “We’re not making any comment.”
No-one from BG Group was immediately available to confirm or deny the WSJ’s report.
Last fall, when BG put the Prince Rupert project on hold, with a financial investment decision postponed until 2019, theFinancial Post, quoted BG executive chairman Andrew Gould as saying, “We’re not abandoning Prince Rupert, we’re pausing on Prince Rupert to see how the market evolves particularly in function of total supply that will come out of the U.S.”
At the time, analysts noted that unlike Shell, Chevron and Petronas, BG had no gas extraction assets in Canada. BG is a privatized spinoff of the once nationalized British Gas company in the UK.
A news release from Woodside says “the bonds will be issued by Woodside Finance Ltd, a wholly owned subsidiary of Woodside Petroleum Ltd, and will consist of US$1 billion of 10 year bonds with a coupon of 3.65 per cent. The bonds will be guaranteed by Woodside Petroleum Ltd and its wholly owned subsidiary, Woodside Energy Ltd.”
Bloomberg notes that Woodside paid $2.75 billion to Apache for its stakes in the Kitimat LNG and the Australian Wheatstone LNG project.
Woodside agreed in December to pay $2.75 billion to Apache Corp. for stakes in two natural gas projects, and it expects to spend about $6.2 billion in 2015.
Even after its agreement with Apache, Woodside has a strong balance sheet that may allow the company to make another acquisition and take advantage of low crude oil prices, according to a Feb. 18 report from Goldman Sachs Group Inc. Woodside has $6.8 billion in cash and available debt facilities, the energy producer said in a presentation that same day.
Woodside said last week that full-year net income rose 38 percent to $2.41 billion, helped by its Pluto project. Brent crude oil prices have tumbled 44 percent over the past 12 months.
In January, Australian Mining reported that Woodside had reached an “non-binding contract… as an agreement between Woodside Petroleum and Adani Enterprises to cooperate in developing commercial initiatives for long-term supply of gas to the Indian market.”
The Bish Forest Service Road will reopen to the public on March 1, 2015. With the upgrades created by the Chevron-led Kitimat LNG project, the single lane logging rough logging is now a high quality gravel “resource road.”
The first 12 kilometres of the road will be open “to provide public access to connecting roads, recreational areas and natural hiking trails,” Chevron says.
“In terms of Kitimat specifically we’ve completed a number of key projects,” said David Molinski, Chevron’s lead for Regulatory and External Affairs. “We’ve made the upgrades to the Forest Service Road, and the Early Works we’ve been doing on site at the Bish Cove site.
“So we’ve been for the past couple of years putting a lot of effort on advancing that part of the project. We’ve completed the key elements of the Forest Service Road upgrades over the past four years,” Molinksi said, “When we got there it was essentially a single track logging road and it was very difficult to access the Bish Cove site. So we wanted to make sure we had a road that would help support the project. That means having an all weather access all year round. That’s a very substantial development.
“It’s a public road, it’s always has been a public road, in fact it’s owned by the Crown.
“It’s time now for us to reopen that road. We had it closed for safety reasons. We wanted to make sure we completed the work on the road. There was blasting, moving rock, breaking down rock, stabilizing slopes.
“We had to make sure we could that work done in a safe way. Now that’s done, we’ve completed the road upgrades and we’re very happy to reopen it to the public. We look at it as being a long term legacy for the community.
“The road is available for people in the community to use. There’s a number of recreation sites people in the community have used for many generations. So we’re pleased we can turn that road back into being publicly available and they can use it safely so they can get access to the areas they love around this community.”
In 2015, Chevron says, some work may continue on the road and “may include power line installation, paving and other construction activities.” There is also a need for the road to “stabilize” Molinksi said. “We’ll come back down the road and make a decision about what the right timing is to cap that road. Right now we don’t have a specific schedule It’s good for the road to stabilize and settle over the next couple of seasonal cycles.”
The decision about the future of the road will depend on the uncertain investment climate, due to the downturn in the energy industry.
In a panel at the open house on Feb. 24, Chevron said that projects like Kitimat LNG “are significant, very large and extremely complex with multiple moving parts that must all come together through hard work and perseverance in order to be successful.”
Chevron will continue to make a capital investment on the Kitimat side of the project but “the pace of field work in Kitimat at the LNG Plant will be decreasing as we focus capital spending on other aspects of the project.
For 2015, Chevron will concentrate on exploration in northeast British Columbia, Molinksi said, “That’s where the Liard Basin and the Horn River Basin are located and that’s where we’re developing the natural gas, substantial natural gas resources to support this project… This year we’re going to focus on getting additional data on the natural gas that we have a number of rigs that are running right now. We’re going to be drilling wells over 2015 and make sure we have a good understanding of those wells that are going to be supplying gas to this project. We have to know as much about that resource as this site here.”
“As a result there will be a decrease in site preparation work associated with the Kitimat LNG project and the Pacific Trails Pipeline during 2015,” the Chevron panel said.
Court challenges and rising costs will stall the Northern Gateway project for most of 2015, Enbridge says in its Fourth Quarter (2014) Strategic Update, released Friday. That means if the Northern Gatway project actually goes ahead, the company now says it will not be completed until at least 2020 or 2021.
The strategic planning report also contains cryptic references that Enbridge may be planning a second pipeline project to the “west coast” possibly to carry LNG, that could also be completed by 2020 or 2021.
Editor’s Note: Some readers have pointed out that the obscure reference to the second pipeline to the west coast might also refer to the proposed twinning of the Kinder Morgan pipeline to the Lower Mainland.
Enbridge executives made no direct references to Northern Gateway during the conference call marking the release of the company’s 2014 results, nor did financial analysts nor media participants ask any questions about the Northern Gateway, an indication, that for now, the controversial project has dropped off the media and financial radar.
As for a possible new Enbridge pipeline to the British Columbia coast, the strategic planning report notes:
Based on the prospect for higher global LNG demand, the large resource base in western Canada and the changing North American natural gas flow patterns discussed above, there is an increasing probability that additional projects to export LNG from the continental United States or potentially off the west Coast of Canada will proceed. However, a sustained period of low crude oil prices or other changes in global supply and demand for natural gas could delay such opportunities.
Then in the conference call, Guy Jarvis, Enbridge president of Liquids Pipelines, made this reference to a slide that projected Enbridge’s future earnings.
In our base case, which is the green line and which we discussed at Enbridge Day, Keystone XL is in service in 2019 and Energy East plus one of the two West Coast projects is in service in 2020. In this scenario, we are currently chockablock full and we remain full as we bring on the two faces of Alberta Clipper expansion capacity and as we squeeze the last bit of capacity availability out of our system leaving about 200,000 barrels a day of capacity that we can’t get at due to upstream bottlenecks and crude slate versus line allocations.
So that means Enbridge expects one of two West Coast projects to be online by 2020. One, of course, is Nothern Gateway, the second, perhaps a LNG project now on the drawing boards in Edmonton. If, however, the reference is to Kinder Morgan, that too may be delayed by opposition to that project. Sources indicate that pipeline companies often have various scenarios and plans on backburners that may be activated if market conditions are favourable.
As for Northern Gateway itself, Enbridge’s report on the project is buried deep in the strategic review, after almost every other project and pipeline the company is working on.
Enbridge begins by noting the history of the twin 1,177-kilometre (731-mile) pipeline system from near Edmonton, Alberta to a new marine terminal in Kitimat, British Columbia. It then mentions the pipline would carry “crude oil for export” from the Edmonton area to Kitimat, fudging that the pipeline would actually carry diluted bitumen. The other pipeline would carry natural gas based condensate back to the oil sands. On June 17, 2014, the federal government approved the Northern Gateway project subject to the 209 conditions imposed by the Joint Review Panel six months earlier.
First Nations and enviromental groups then filed court challenges to the project.
The report notes that on December 17, 2014, the Federal Court of Canada consolidated all the challenges to Northern Gateway in a single proceeding.
Those challenging the Northern Gateway have until May 22, 2015 to file with the Federal Court the Appellants’ Memoranda of Fact and Law.
Northern Gateway must respond with a Respondents’ Memoranda by June 5, 2015.
The company says the Federal Court hearing will open sometime in the fall of 2015, with a decision possibly late in 2015. Enbridge expects either one side or the other to seek Leave to Appeal to the Supreme Court of Canada which could delay the project into 2016 or 2017.
The report says that in October, 2014, Enbridge began reviewing its cost estimate for Northern Gateway, “based on full engineering analysis of the pipeline route and terminal location.” Now the companys says “the final cost of the project will be substantially higher than the preliminary cost figures included in the Northern Gateway filing with the JRP, which reflected a preliminary estimate prepared in 2004 and escalated to 2010.”
What is raising the cost of Northern Gateway include “significant costs associated with escalation of labour and construction costs” probably due to LNG other projects, as well as satisfying the JRP’s 209 conditions. It appears also that Enbridge is finally actually looking at the costs of building the pipeline over BC’s rugged terrain, “a larger portion of high cost pipeline terrain, more extensive terminal site rock excavations and a delayed anticipated in-service date.”
Enbridge adds: “The updated cost estimate is currently being assessed and refined by Northern Gateway and the potential shippers.”
It may be that Northern Gatway’s future is becoming more precarious, especially with the collapse in world oil prices.
Enbridge notes: “Subject to continued commercial support, receipt of regulatory and other approvals and adequately addressing landowner and local community concerns (including those of Aboriginal communities), the Company now estimates that Northern Gateway could be in service in 2019 at the earliest. The timing and outcome of judicial reviews could also impact the start of construction or other project activities, which may lead to a delay in the start of operations beyond the current forecast.” (The 2020 or 2021 figure came from the conference call and slide presentation, not the strategic report)
Given the many uncertainties surrounding Northern Gateway, including final ownership structure, the potential financial impact of the project cannot be determined at this time.
The Joint Review Panel certificate granting Enbridge permission to proceed expires, under Condition 2, on December 31, 2016. Under Condition 187, Northern Gateway must assure the JRP and National Energy Board that it has sufficient financial resources to both build the project and to implement all the safety and environmental conditions imposed by the JRP and accepted by Stephen Harper’s cabinet when it approved the project.
The report mainly concerns the United States, where the race for LNG exports is as fierce as it is in Canada.
“Tens of billions of dollars in capital are targeted for the seven LNG export terminals currently granted licenses by the U.S. Department of Energy (DOE),” said Deepa Poduval, Principal Consultant with Black & Veatch’s management consulting business. “Infrastructure construction, real estate transactions and other services associated with these projects are expected to spur significant levels of economic activity throughout the value chain.”
As far as Canada is concerned, Poduval said, “proposed projects continue to suffer from regulatory and environmental delays, high costs and fiscal uncertainty that have hindered development on all but a couple of frontrunners.”
The report was based on experts surveyed by the company. Respondents were asked to select their expectation of the volume of natural gas that will be exported from the United States and Canada as LNG by 2020.
Nearly 37 percent of respondents said they believed exports would total more than 6 Bcf/d by 2020. In 2013, less than 25 percent of respondents expected exports at this level. In 2014, 60 percent of respondents said they expected LNG exports to be less than 10 Bcf/d by 2020. Less than 7 percent of respondents put the figure at more than 10 Bcf/d.
Poduval said that as less expensive U.S. gas becomes more viable, Asian buyers are increasingly pushing back on higher cost supplies from their suppliers in Asia, Australia and the Middle East, Poduval said.
This pushback is stalling some of the more expensive LNG projects in Canada, Australia and East Africa, with Asian buyers holding back on long-term purchase commitments from these projects in pursuit of more favorable price terms… One of the dangers for U.S. LNG exports continues to be that they could shrink the very price spread that makes them attractive.
Poduval said the first trains at Sabine Pass in Louisiana are expected to go online starting in the fourth quarter of 2015.
Poduval noted the announcement of the 30-year $400 billion agreement for Russia to supply natural gas to China via a new pipeline was considered by some as the “Holy Grail” of international natural gas agreements following stalemated negotiations for more than 10 years between the two countries.
The deal could provide much-needed market diversity for Russia, which exports 80 percent of its natural gas to an increasingly unfriendly Europe that is pursuing other sources of supply. In addition, Russia would potentially supplant some LNG demand from China by supplying about 3.5 Bcf/d of natural gas under this agreement.
Her report also says that an Alaska LNG pipeline project that has been on and off for the past 30 years is now in a pre-FEED (Front End Engineering and Design) stage.
If it goes ahead, the project, which would be the largest in North America, with a capital cost estimate of $45 billion to $65 billion, will bring gas from the North Slope along an 800-mile pipeline to south-central Alaska, where it will be liquefied for shipping to Asian markets.
“But the marketplace continues to be subject to geopolitical events and regional economics,” Poduval said.
Royal Dutch Shell has finally ditched plans for a new $US20 billion-plus liquefied natural gas project in Queensland,making it the latest casualty of the oil price slump.
Global chief executive Ben van Beurden said the proposed greenfield Arrow LNG project with PetroChina was “off the table”, while other ventures would be slowed as priority was given instead to Shell’s North American LNG projects.
“We are prioiritising North America LNG options in that timeframe, LNG Canada and Elba,” he explained, referring to Shell’s LNG export projects in western Canada and the US state of Georgia.
Shell is also a partner in the Woodside Petroleum-led Browse floating LNG project, the Sydney Morning Herald reported. Woodside recently announced it will buy Apache’s stake in the Chevron-led Kitimat LNG project. Shell says:
the timing for starting engineering and design had already been deferred by six months to mid-2015. While the Shell chief executive’s words place some uncertainty whether the oil major wants to proceed in that timeframe, the company has still listed Browse among final investment decision “choices” for the 2015-16 period.
The Douglas Channel project, which contemplates a floating LNG project at the old log sort half way between Kitimat harbour and the Chevron-led Kitimat LNG project at Bish Cove is a now partnership between EXMAR, “an independent Belgium-based company with 35 years’ experience in LNG shipping,” EDF Trading (“EDFT”) a subsidiary and wholesale market operator of Electricite de France S.A., an international energy company with over 39 million customers and AIJVLP, “a limited partnership between AltaGas Ltd. (“AltaGas”) and Idemitsu Kosan Co.,Ltd. (“Idemitsu”). Idemitsu is a Japan-based global leader in the supply of energy and petroleum. AltaGas is the parent company of Pacific Northern Gas which supplies consumers in Kitimat.
The news release says the “Consortium has also executed long-term lease agreements with the Haisla Nation regarding land and water tenure, and with Pacific Northern Gas Ltd. (PNG) for long-term pipeline capacity to supply gas.”