That’s where the pollsters failed and have failed time and time again for the past decade. As long as the pollsters keep asking the stupid question “What’s more important the environment or the economy?” a majority of voters, especially in uncertain times, will choose the economy. Politicians will campaign, as Christy Clark did brilliantly, by promising that there are better economic days ahead, putting the environment far down the priority list.
By the time Canadians and all human beings realize that a viable economy is based on a sustainable environment it may be too late to save either.
The Liberal majority under Christy Clark was a big surprise; the polling data indicated, at first, that there would be a big NDP majority and in the final days that the Adrian Dix and the NDP would sneak into the Legislature still in majority territory.
Instead, Christy Clark, who until (if) she finds a seat, will be running the province as premier from the legislature galleries.
The BC free-enterprise coalition is satisfied, for the moment. The usual cabal of University of Calgary economic pundits are cheering for their sponsors in the oil patch, with the National Post,Globe and Mail and Sunmedia acting as their echo chamber. (Why the eastern media insist on always having Calgary academics write about BC is rather mind boggling. If they want ultra conservative BC point of view, there’s always the Fraser Institute, but even the Fraser Institute is junior to Alberta it seems)
The trouble is that the eastern establishment mainstream media are as out of touch as the pollsters. The Globe and Mail editorial, like most of the eastern media, once again sees British Columbia as nothing more than a junior partner in Confederation, existing to serve the interests of Alberta, with the concerns about our future secondary.
It now falls to Ms. Clark, who was cagey about her position on the Trans Mountain project, to take an objective look at the proposal, let go of her populist, B.C.-first rhetoric, and ensure that her government is an open-minded partner with Alberta in its bid to get its oil to tidewaters for export. Any reviews of the pipeline project must be done quickly and with a deadline.
It’s just plain unmitigated arrogance, but rather typical, to tell a premier who just won a majority in the legislature and the popular vote to “let go of her populist BC-first rhetoric.”
Christy Clark laughs at a joke at the Kitimat Valley Institute, April 4, 2013, where she announced her plan to eliminate the provincial debt in 15 years via taxes and other payments from LNG (Robin Rowland)
The liquifaction factor
There’s one big problem, a very big problem, with Clark’s promises. She opened her campaign in Kitimat by promising that the liquified natural gas developments will not only slay the deficit but pay down the BC provincial debt in 15 years.
I asked Clark in the media scrum after her announcement how she could make such a prediction when the LNG market is so volatile. She replied that her predictions were based on very conservative estimates. That was spin.
Clark based her election campaign on a promise that not only hopes to foretell the future for the next fifteen years but on liquifaction.
Now liquifaction has two meanings. First is the freezing of natural gas to LNG. Second is the problem that occurs during an earthquake when water saturated ground turns into a liquid, bringing about the collapse of countless buildings with the death and injury that follows.
Clark based her campaign on the hope that the LNG market will not liquify—as in the second meaning.
The LNG market looked so simple two years ago. Buy natural gas at low North American prices, pipeline it to the west coast, load it on tankers and sell it in Asia at the higher natural gas price there which is based on the price of oil. But, wait, the free market doesn’t work that way (sorry free enterprise coalition). Customers in Asia don’t want to pay the full oil-based price for natural gas if they can get it via the US Gulf ports at a cost plus North American price. If the export price of LNG falls, even if the BC projects proceed, the price will be a lot lower than Clark and the energy cheerleaders expect and there will be no new golden age for the BC economy.
Changes in the LNG market are happening at warp speed and it is hard to keep up (And many people in Kitimat are trying to keep up with the daily volatility since the future of the town may depend on LNG). Unfortunately, the dying mainstream media failed to explain, even in the simplest terms, that Christy Clark’s LNG promises might be as empty as a mothballed tanker. This is one case where concentrating on the horse race—and the grossly inaccurate polls—was a blunder, when there should have been reality checks on the LNG promise. The conservative cheerleaders in the media actually didn’t do their readers much good when they failed as reporters to check out the real state of the energy industry or predicted economic catastrophe if there was an NDP victory.
The NDP failure
The NDP campaign under Adrian Dix was not up to its appointed task of explaining the need for both a viable economy and a sustainable environment. Most pundits point to Dix’s mid-campaign switch to opposing the Kinder Morgan pipeline expansion as the beginning of the NDP decline.
More telling, for me, was Dix’s failure to explain the proposed two-year moratorium on fracking. There are lots of moratoriums and holds on fracking in North America and around the world. The Canadian media, however, failed miserably (if it even bothered to check) that fracking moratoriums are becoming a standard, although controversial, practice worldwide. A moratorium on fracking today is prudent given the uncertainty over current practices.
Yes, fracking has been used for 50 years but on a much smaller scale. There are two new factors. First is the sheer volume of operations, with no idea what the massive increase in fracking will do to the environment, especially the ground water. Second is the stubborn refusal of companies to release proprietary information on the chemicals they use—the same “public be damned” attitude toward environmental concerns that has got pipeline companies in trouble as well.
Christy Clark and the conservative commentators successfully painted the fracking moratorium as stopping all economic development in the province. Dix and the NDP completely failed to emphasize that their platform was that the party wanted industrial development in the province, but didn’t want to rush into development that will cost the province and its taxpayers down the road. (And taxpayers will eventually have to pay to clean up unfettered development long after the companies that profited have left town, something deficit and debt hawks always conveniently ignore.)
The Orange Coast
BC election map shows the coastal areas where tankers and pipelines are the biggest issue went solidly for the NDP
As Tyler Noble (formerly with CFTK News and now with the District of Kitimat) pointed out in a Facebook post, the electoral map shows perhaps the real story of the election. The British Columbia coast is entirely NDP orange. The Interior of BC went Liberal. The fight over tankers and pipelines is not going to go away with the result of this election, it’s going to get louder and a lot nastier.
So the University of Calgary pundits, the conservative columnists and editorialists from Calgary to Toronto and the Globe and Mail editorial board will soon have to forget their cheers and go back to complaining about the BC peasants who have to be “educated” about how good pipelines are for the economy.
The turnout, as currently reported, was 52 per cent. The student vote (an actual vote) went heavily to the NDP and the Greens. Part of the student vote result is traditionally, younger people generally tend to vote “progressive” parties. Young people, increasingly disillusioned by partisan politics, are not turning out to actually vote. With high unemployment among millennials and teenagers, these potential voters want jobs, but they’re also worried about the future of the planet. They’re not turning out to vote because many say they have no one to vote for (despite the appeals of the NDP and the Greens.)
Many older people, both on the left and the right are trapped in an obsolete world view of progressive views versus big business or the dreaded socialism versus free enterprise. Older people, worried about their economic future do vote and are often more small c conservative.
Clark campaigned on that paradigm and she won.
Be careful for what you wish for.
The failure of the economy vs environment question
It may be that by the next federal election in 2015 and by the next BC election in 2017, there might be, it is hoped, a profound change in the political narrative. If the pollsters hadn’t asked that obsolete and stupid question about the environment verus the economy, business versus socialism, they might actually have had some good data in this election.
The times, as Bob Dylan sang, they are a changing. The paradigm is shifting. In just the past few months there are hints of the rise of a growing “green conservative” movement.
In the United States, green conservatives are adding to the ruptures in the Republican Party. There is even a branch of the Christian Coalition, that is splintering because it too supports the idea of green values because it sees green as supporting family values, helping the poor and the idea of stewardship.
We see lots of green conservatives here in northwest BC among the hunters, fishers and fishing guides and those who work in the industrial sector who like hunting, fishing, hiking and boating. Did they vote for the NDP or the Liberals? Usually the sample size in northwest BC is too small, but drilling down might indicate that there were enough green conservatives who voted for what should now be called the Orange Coast.
If Adrian Dix and the NDP had campaigned effectively with an eye on the green conservatives, there might actually be an NDP majority. If Christy Clark actually keeps her hints of a possible tilt toward green conservatism and moves away from the free enterprise at any cost faction of the Liberals (including that 801 coalition that died at 802), she might actually be in for a long run as BC premier.
If, on the other hand, as the Globe and Mail advocates this morning, if Clark does move, bowing to Alberta’s demands, toward more unfettered development, as environmentalists fear and the aging free entrerprisers would love, the next provincial election will be one to watch, perhaps with the Greens filling a vacuum created by the Liberals and the NDP.
As for the pollsters, there have been two major failures in Canada, the BC and Alberta elections. The pollsters were wrong about the Israeli election as well, which means polling failure is not confined to Canadian politics. It’s time for the pollsters to stand down, go back to the beginning, and take a look at all their practices, including the basic questions they are asking and to wonder if the questions reflect an unconscious bias in favour of the party paying for the poll (good professional pollsters do usually try to avoid open bias question sequences).
If the polling companies don’t change, they too will soon follow the dying mainstream media into oblivion, so neither will be around to see a possible future where the concerns for the environment are a given and the debate is over the real solution to stave off catastrophe.
This post has been updated to clarify that those who I call Conservative cheerleaders failed to be clear about the energy industry, not the overall campaign.
A study by two scholars at Simon Fraser University says that the Enbridge Northern Gateway project is much more hazardous to Kitimat harbour, Douglas Channel and the BC Coast than Enbridge has told the Joint Review Panel.
The study by Dr. Thomas Gunton, director of the School of Resource and Environmental Management at SFU and Phd student Sean Broadbent, released Thursday May 2, 2013 says there are major methodological flaws in the way Enbridge has analyzed the risk of a potential oil spill from the bitumen and condensate tankers that would be loaded (bitumen) or unloaded (condensate) at the proposed terminal at Kitimat.
Enbridge Northern Gateway responded a few hours after the release of the SFU study with a statement of its own attacking the methedology used by the two SFU scholars and also calling into question their motivation since Gunton has worked for Coastal First Nations on their concerns about the tanker traffic.
Combination of events
One crucial factor stands out from the Gunton and Broadbent study (and one which should be confirmed by independent analysis). The two say that Enbridge, in its risk and safety studies for the Northern Gateway project and the associated tanker traffic, consistently failed to consider the possibility of a combination of circumstances that could lead to either a minor or a major incident.
Up until now, critics of the Northern Gateway project have often acknowledged that Enbridge’s risk analysis is robust but has consistently failed to take into consideration the possibilty of human error.
As most accidents and disasters happen not due to one technical event, or a single human error, the SFU finding that Enbridge hasn’t taken into consideration a series of cascading events is a signficant criticism.
Overall the SFU study says there could be a tanker spill every 10 years, not once in 250 years, as calculated by Enbridge.
It also says there could be 776 oil and condensate spills from pipelines over 50 years, not 25 spills over 50 years as projected by Enbridge. (And the life of the project is estimated at just 30 years, raising the question of why the 50 year figure was chosen)
Enbridge track record
The study also bases its analysis of the possibility of a spill not on Enbridge’s estimates before the Joint Review Panel but on the company’s actual track record of pipeline spllls and incidents and concludes that there could be between one and 16 spills (not necessarily major) each year along the Northern Gateway pipeline.
Findings for Kitimat
Among the key findings for Kitimat from the SFU study are:
Enbridge said the possibility of tanker spill was 11.3 to 47.5 per cent over the 30 year life of project. The SFU study says the possibility of a spill within the 30 years is 99.9 per cent.
The SFU study says it is likely there will be a small spill at the Kitimat Enbridge terminal every two years.
The SFU study estimates that there will be eight tanker transits each week on Douglas Channel if the Northern Gateway project goes ahead and more if it is expanded. (This, of course, does not include LNG tankers or regular traffic of bulk carriers and tankers for Rio Tinto Alcan)
The SFU study says that while Endridge did study maneuverability of tankers, it paid little attention to stopping distance required for AfraMax, SuezMax tankers and Very Large Crude Carriers.
The SFU study says Enbridge inflated effectiveness of the proposed tethered tugs and maintains the company did not study ports and operations that use tethered tugs now to see how effective tethering is.
The SFU says Enbridge’s risk analysis covered just 233 nautical miles of the British Columbia coast, where as it should have covered entire tanker route both to Asia and California, raising the possibility of a tanker disaster outside British Columbia that would be tied to the Kitimat operation.
Based on data on tanker traffic in Valdez, Alaska, from 1978 to 2008, the SFU study estimates probability of a 1,000 barrel spill in Douglas Channel at 98.1 per cent and a 10,000 barrel spill at 74.2 per cent over 30 year Gateway life. The Valdez figures account for introduction of double hulls after Exxon Valdez spill in 1989 and notes that spill frequency is much lower since the introduction of double hulled tankers.
According to a study by Worley Parsons for Enbridge in 2012, the Kitimat River is the most likely area affected by an unconstrained rupture due to geohazards in the region. According to the Worley Parsons study, geohazards represent the most significant threat to the Northern Gateway pipeline system.
Flawed studies
The SFU scholars list a series of what they say are major methological or analytic flaws in the information that Enbridge has presented to the Joint Review Panel, concluding that “Enbridge significantly understates the risk of of spills from the Northern Gatway.
Enbridge’s spill risk analysis contains 28 major deficiencies. As a result of these deficiencies, Enbridge underestimates the risk of the ENGP by a significant margin.
Some of the key deficiencies include:
Failure to present the probabilities of spills over the operating life of the ENGP
Failure to evaluate spill risks outside the narrowly defined BC study area
Reliance on LRFP data that significantly underreport tanker incidents by between 38 and 96%.
Failure to include the expansion capacity shipment volumes in the analysis
Failure to provide confidence ranges of the estimates
Failure to provide adequate sensitivity analysis
Failure to justify the impact of proposed mitigation measures on spill likelihood
Potential double counting of mitigation measures
Failure to provide an overall estimate of spill likelihood for the entire ENGP
Failure to disclose information and data supporting key assumptions that were used to reduce spill risk estimates
Failure to use other well accepted risk models such as the US OSRA model
SFU reports that Enbridge provides separate estimates of the likelihood of spills for each of the three major components of the project:
tanker operations,
terminal operations,
the oil and condensate pipelines.
The SFU scholars say Enbridge does not combine the separate estimates to provide an overall estimate of the probability of spills for the entire project and therefore does not provide sufficient information to determine the likelihood of adverse environmental effects……
It notes that “forecasting spill risk is challenging due to the many variables impacting risk and the uncertainties in forecasting future developments affecting risk. To improve the accuracy of risk assessment, international best practices have been developed.”
Part of the problem for Enbridge may be that when the company appeared before the Joint Review Panel it has repeatedly said that will complete studies long after approval (if the project is approved), leaving large gaps in any risk analysis.
The SFU study may have one example of this when it says Enbridge did not complete any sensitivity analysis for condensate spills at Kitimat Terminal or the condensate pipeline.
Our experts have identified a number of omissions, flawed assumptions and modeling errors in the study and have serious concerns with its conclusions:
The spill probability numbers are inflated: The author uses oil throughput volumes that are nearly 40 per cent higher than those applied for in this project which also inflates the number of tanker transits using these inflated volumes
The pipeline failure frequency methodology adopted by Mr. Gunton is flawed, and does not approximate what would be deemed a best practices approach to the scientific risk analysis of a modern pipeline system
Mr. Gunton based his failure frequency analysis on a small subset of historical failure incident data. Why would he limit the source of his data to two pipelines with incidents not reflective of the industry experience and not reflective of the new technology proposed for Northern Gateway?
The study results are not borne out by real world tanker spill statistics. Based on Mr. Gunton’s estimates we should expect 21 to 77 large tanker spills every year worldwide while in reality after 2000 it has been below 3 per year and in 2012 there were zero.
Most of Enbridge’s rebuttal is a personal attack on Gunton, noting
We are very concerned about the misleading report released by Mr. Gunton, who was a witness for the Coastal First Nations organization during the Northern Gateway Joint Review Panel process.
Mr. Gunton should have made his study available to the JRP process, the most thorough review of a pipeline that’s ever taken place in Canada. All of Northern Gateway’s conclusions have been subject to peer review, information requests and questioning by intervenors and the Joint Review Panel.
In response, Gunton told the Globe and Mail “the report took over a year to complete and it was not ready in time to be submitted as evidence before the federal Joint Review Panel which is now examining the proposed pipeline.”
Enbridge’s statement also ignores the fact under the arcane rules of evidence, any study such as the one from Simon Fraser had to be submitted to the JRP early in the process, while evidence was still being submitted.
The recent ruling by the JRP for closing arguments also precludes anyone using material that was not entered into evidence during the actual hearings.
That means that the SFU study will be ignored in the final round of the Joint Review Panel, which can only increase the disillusionment and distrust of the process that is already common throughout northwest British Columbia.
The Northern Gateway Joint Review Panel has confirmed that final, closing arguments for the controversial Enbridge pipeline project will take place in Terrace for approximately two weeks, beginning on Monday, June 17, 2013.
The Panel says the purpose of closing arugments is to provide Parties Northern Gateway, intervenors, and government participants the opportunity to:
tell the Panel their views and opinions about the Project including whether Parties believe it is in the public interest;
persuade the Panel to recommend approval or denial of the Project;
make their case about the relevance and weight of any evidence on the Panel’s public registry;
discuss the merits of conditions that the Panel might place on any Certificate that may be issued for the Project;
suggest additional conditions should the Project be approved
.
As is common with National Energy Board and Joint Reivew procedures, final arguments argument should be in writing, followed by oral responses. Only one arugment document is permitted.
The written final arguments must be based on JRP evidence that is on the public record. No one can introduce new evidence in either the written argument or in their oral response.
The “aids to cross-examination” used during the questioning phase of the final
hearings cannot be used unless they were admitted onto the record by the Panel as evidence.
However a witness’ answer to questions given when an aid was used is evidence and can be
relied upon.
The absolute deadline for filing the written arugment is noon Pacific Time (1:00 pm Mountain
Time) on 31 May 2013.
Participants can take part either in the hearing room or remotely via a conferencing system.
A party of the proceeding cannot make an oral argument unless they have filed a written arugment.
The purpose of the oral argument is to let one party respond orally to the written argument filed by others. A party may also respond to the Oral Argument of other Parties who have presented Oral Argument before them and whose arguments they disagree with.
Participants are expected to have read in advance all the written arguments they may wish to challenge and are restricted from repeating arguments made by others but are allowed to indicate they agree with the earlier argument.
Top Down Bottom Up
There are very specific rules for how the closing arguments will proceed, which the JRP calls “Top Down Bottom Up”
In order to allow all Parties to respond to all of the Oral Arguments of other Parties, they will be given two opportunities to provide Oral Argument in what is referred to as a “Top Down –Bottom Up” process….
During either the Top Down or Bottom Up portion, parties may simply state that they adopt the position of specific parties who have gone before them.
In the Top Down portion, Northern Gateway will first provide its Oral Argument in response to the Written Argument of other Parties. This will be followed by the Oral Argument of intervenors and government participants in the order set out in the Order of Appearances (alphabetically, A-Z). During the Top Down, Parties will respond to the Written Argument of Parties they are opposed to as well as the Oral Argument of those who have argued before them.
Intervenors and government participants will have up to one (1) hour each to provide their Oral Argument. Since Northern Gateway has the burden of proving its case and will be responding to all other Parties, it will have up to two (2) hours for its Oral Argument.
After the Top Down Oral Argument, Parties will have the opportunity to very briefly reply to any new matters that were raised in the Oral Argument of other Parties who presented after them. This will proceed in a Bottom Up format where the Panel will start at the bottom of the Order of Appearances and proceed up from there (alphabetically, Z-A), ending with Northern Gateway.
During the Bottom Up Oral Argument, Parties can only reply to new matters that arose in Oral Argument after they presented their Oral Argument. For this reason, the Bottom Up Oral Argument should be very brief. Parties who do not have any reply comments specifically related to arguments they have not had the opportunity to address should not provide Bottom Up Oral Argument.
“There is no need to scare people,” about tankers, Transport Minister Denis Lebel told the House of Commons on Thursday, March 28.
Lebel was answering a question from Skeena Bulkley Valley MP and NDP House Leader Nathan Cullen.
The official transcript from Hansard records Cullen’s question about the federal government’s unexpected declaration that Kitimat would become a public port.
Mr. Speaker, last week, in their panic to ram a bitumen pipeline through to British Columbia’s north coast, the Conservatives simply decreed that they would take over the Port of Kitimat. Rather than picking up the phone and talking with the local council or the Haisla Nation, the government parachuted in a minister from Toronto to make the announcement. There was no consultation, no respect, just bulldozers.
We see again the fundamental disrespect the government has for first nations here today. Now the Conservatives are scrambling, saying that they will consult after they have clearly made up their minds, the exact approach they take on the pipeline. When will the government start to respect the people of the northwest?
Lebel replied in French, and as is usual in Question Period did not answer Cullen’s question.
Mr. Speaker, last week we announced the creation of an expert panel. These people will work together to think of how to improve things.
We have a very good system for dealing with oil spills. We will continue to move forward and keep everyone safe.
Canada has not had any major oil spills in its history. There is no need to scare people. We will continue to work on measures.
I thank all members of the panel led by Mr. Houston for their ability to find solutions.
This Youtube video shows Cullen’s question and Lebel’s response. The live translation is a little different, but the effect is the same.
Cullen later issued a news release commenting
Cullen’s question came on the heels of reports that neither Kitimat Council nor the Haisla Nation were consulted in advance of the federal government’s decision to take over the Kitimat port. The move represents an apparent ongoing tendency by the Conservative federal government to offer consultation with communities and First Nations, but only after they’ve already made their decision.
Cullen later reflected that, regardless of one’s position on the Northern Gateway pipeline, open and prior consultation is crucial to fostering good governance and the trust of the general public. By contrast, said Cullen, “the Conservatives are writing the book on how to ignore communities and First Nations, and damage public faith. This is just the latest chapter.”
a large, relatively shallow lake in south-central Quebec, Canada, in the Laurentian Highlands. It is situated 206 kilometres north of the Saint Lawrence River, into which it drains via the Saguenay River. It covers an area of 1,053 km2 (407 sq mi), and is 63.1 m (207 ft) at its deepest point.
It is unlikely there will ever be a Very Large Crude Carrier on Lac St. Jean.
In its earliest statements the Harper Conservatives were careful to say that there had never been a tanker disaster on the west coast. Now, in its Orwellian fashion, the government is now saying “Canada has not had any major oil spills in its history.”
That statement, of course, ignores the Arrow tanker disaster off Chedabucto Bay, Nova Scotia on February 4, 1970, which the Environment Canada website, (as of April 1, 2013), describes this way
the calamity had reached catastrophic proportions. Out of the 375 statute miles of shoreline in the Bay area, 190 miles had been contaminated in varying degrees.
A report issued by Ernst & Young, The Global LNG Report, says that there will be strong demand for liquified natural gas over the next 10 to 20 years. At the same time LNG buyers will increasingly push back from “price-sensitive buyers who are likely to be less willing to pay supply security premiums.
That means that the pricing for LNG in Asia will move away from the link to the price of oil, which, so far, has been driving the potential profit picture of Kitimat’s LNG projects.
Ernst & Young says:
Even with reasonably strong demand growth, this implies growing supply-side competition and upward pressures on development costs and downward pressures on natural gas prices. Nevertheless, the very positive longer-term outlook for natural gas is driving investment decisions, both in terms of buyers’ willingness to sign long-term contracts and sellers’ willingness to commit capital to develop the needed projects.
The report says there have been three waves of LNG development.
The first wave was dominated by Algeria, Malaysia and Indonesia, while the second wave has been dominated by Qatar and Australia. The third wave could come from as many as 25 other countries, many of which currently have little or no capacity; but by 2020, these countries could provide as much as 30 per cent of the world’s LNG capacity.
The accounting and consulting firm says the most important LNG exporters will be those in western Canada and the United States “where the source gas is likely to be priced on a spot basis, unlike gas elsewhere in the world which is generally priced (wholly or partially) on an oil-linked basis.”
The report, and the charts that accompany it, show that Kitimat appears to be well positioned in the new LNG market. That’s because the capital cost of developing LNG projects in Kitimat, when
compared to potential return, is a lot lower than in many competing countries.
The one problem Kitimat may face in the future is competition from U.S. “brownfield” developments that could turn import terminals into export terminals.
Ernst and Young says that country most cited as Kitimat’s competition Australia, is facing problems.
LNG project proposals are growing faster than industry’s capabilities to develop them. Generally at the high-end of the cost curve, with development bottlenecks and spiraling construction costs, Australian projects are typically under the most pressure. Sanctioned projects are generally less significantly impacted, but projects still seeking contracted off-take are at substantial risk.
One advantage for Kitimat may be that buyers, worried about the volatility of the market, may be more inclined to sign long term contracts.
Overall Ernst & Young concludes:
The proposed North American LNG export projects are particularly well-positioned, even though the US Gulf Coast projects will give up some of their Free On Board (FOB) cost advantage with higher shipping costs. As substantial volumes of lower-cost LNG move into Asian markets, projects at the high end of the supply curve – namely, many of the Australian projects – will become increasingly vulnerable.
Going forward over the medium-to-longer-term, Ernst & Young expects to see a gradual but partial migration away from oil-linked pricing to more spot or hub-based pricing. LNG sellers are reluctantly facing realities and are offering concessions in order to remain competitive.
Dale Nijoka, Ernst & Young’s Global Oil & Gas Leader concludes: “LNG prices are unlikely to collapse, simply because the cost to supply is high and incentives to develop new capacity must be maintained.”
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?
Coastal First Nations have launched a commercial aimed at the British Columbia electorate, using the call from the Exxon Valedez to US Coast Guard Valdez traffic control saying that the tanker had run aground.
The commercial makes the connection between the Exxon Valdez disaster and the possibility of a tanker disaster on the British Columbia coast if the Enbridge Northern Gateway project goes ahead.
The BC New Democrats, who are leading the polls have said they oppose Northern Gateway. The ruling BC Liberals have set out five conditions that must be met if the project is to go ahead.
Five days after the announcement that the private port of Kitimat will become a public port under federal jurisdiction, Transport Canada is now promising to consult District of Kitimat officials as the Douglas Channel waterfront transitions to a public port.
Both Kitimat Mayor Joanne Monaghan and Economic Development Officer Rose Klukas, after numerous calls and attempts over the past few days, finally spoke to different Transport Canada officials Friday.
According to the mayor, both were told that Kitimat will not become a public port for at least one year because the change from a private port to a public port requires a change in legislation. (Something Transport Canada may only just be realizing since Bill C-57, introduced Monday to cover all the changes for what the Harper government calls a “world-class” tanker policy makes no mention of Kitimat).
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!”
Transport Canada says that beause there are no federal lands in the Kitimat harbour, the amending legislation will only cover navigable waters in Kitimat.
Transport Canada will appoint a harbour master and the cost of that office will be “paid by offsetting fees charged to ships coming into the harbour.”
But it looks like the fees charged to incoming ships by the federal government could be causing a headache for Rio Tinto Alcan. Claudine Gagnon, an RTA spokesperson based in Shawnigan, Quebec, told Radio Canada, the French language network of the CBC, that the company is trying to assess the impact of the announcement on its operations in Kitimat. Among other things, the change in the port’s status could result in higher transportation costs for the company.
At this point, Transport Canada officials told the District is unlikely that there will be Port Authority in Kitimat like the one in Prince Rupert.
Cullen surprised
Asked about the port announcement during a post budget news conference on Thursday, Skeena Bulkley Valley MP and NDP House Leader Nathan Cullen said, “I’m as surprised as everybody in Kitimat is. I’ve been phoning around to local leaders to find out if anyone had been consulted or spoken to about this. And it’s a shock for everyone including people from Alcan.
“This doesn’t make any sense at all. The conversation around a public port is a good one and one we need to have and we’re open to the idea, but what a terrible start to the process, when a minister flies in from Ottawa, announces something, doesn’t tell any of the local government about it and then expects everyone to pop the champagne corks. You want to get this thing right. You want to make sure the public interests are met.
“There’s a real arrogant feeling, when a minister flies in from Toronto and says this is how it’s going to be and there’s no need to talk to anyone in the region about it.
Cullen was also asked about the provisions in the safe tankers announcement on Monday by Transport Minister Denis Lebel and Natural Resources Minister Joe Oliver that the federal government appears to be taking over responsibility for navigation aids on the British Columbia coast, something that until now, Enbridge Northern Gateway has said they will pay for.
“Suddenly taking costs away from a multi-billion dollar oil company, seems to be what this Conservative Canadian government wants to do. It’s so wrong, I can’t describe it any better than that,”Cullen said, “that we’re supposed to be picking up the tab for Enbridge’s project, while all the while running huge deficits and not getting the training support and cuts to health care programs that continue.”
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.
Monaghan told CFTK she still hasn’t been able to get anyone with the federal government to tell her more about the plan.
Since today, Thursday, is budget day, it is likely that federal officials would be unavailable for further comment until next week.
Who pays for upgrades?
Another point that is unclear from Monday’s announcement is whether or not the federal government fully intends to take over the navigation aids and enhancements on Douglas Channel and the BC Coast. If so, that means that the Canadian taxpayer would become, at a time of budget cuts, responsible for millions of dollars that Enbridge Northern Gateway has consistently said that the company will pay for.
Minister of Natural Resources Joe Oliver answers a reporter’s question during a news conference in Terrace, March 19, 2013 (Robin Rowland)
Joe Oliver, the Minister of Natural Resources, has confirmed that the federal government intends to make Kitimat a public port.
Oliver was in Terrace, March 19, 2013, to announce the appointment of Vancouver lawyer Douglas Eyford as “Special Federal Representative on West Coast Energy Infrastructure.” Eyford’s job will be to “engage aboriginal communities in British Columbia and Alberta that are most likely to have an interest in West Coast energy infrastructure.”
Oliver replied: “The news release was accurate. What the purpose is to make sure that the absolute highest standards of marine safety apply in the port of Kitimat. And 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.”
No visit to Kitimat
Oliver was also asked if he intended to visit Kitimat during his visit to the northwest (Kitimat is a 40 minute drive from Terrace). Oliver 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 federal budget will be released on Thursday.
At Monday’s meeting of District of Kitimat council, some members quietly expressed frustration, to say the least, that Oliver, the man responsible for pushing the Northern Gateway pipeline through British Columbia to Kitimat had not bothered to include the town in his visit to the northwest.
Members of the District of Kitimat council, which on paper at least, is responsible for the port of Kitimat (even though it is really run by Rio Tinto Alcan) also expressed frustration that no one in Ottawa gave the council advance notice of the government decision to take the port public.
Asked for comment on Oliver’s statement, Rio Tinto Alcan officials in Kitimat also seemed unaware of the government announcement and promised a statement in the near future.
Oliver’s announcement in Vancouver Monday about a “world class” marine safety system and today’s announcement about the appointment of Douglas Eyford, appear to be a campaign by the Harper government to establish a stake in the middle ground in the pipeline debates, in hopes of undermining the opponents of the projects.
Skeena Bulkley Valley MP Nathan Cullen, in a news release, expressed reservations about Eyford’s appointment.
“The primary concern with the appointment, Cullen said, is that Mr. Eyford will report to the Prime Minister, not to Parliament or the public. “So, if Mr. Eyford’s report is in any way unfavourable to the Conservative pipeline agenda, what assurances do we have that his report will make its way into the public eye?
“It is also unclear how the appointment would affect Eyford’s work as the chief government negotiator for the federal government’s comprehensive land claims process, and what kind of effect his absence will have on that process.”
