Tag: CAPP

Kitimat council endorses tax breaks for LNG facilities

The District of Kitimat Council Monday, Dec. 17, 2012, endorsed a campaign by the Canadian Association of Petroleum Producers asking for tax breaks of Liquified Natural Gas liquefaction facilities in the 2013 federal budget.

A report to the Kitimat council said that on November 23, the mayors of Kitimat and Prince Rupert, sites for proposed LNG terminals, and the mayors of Dawson Creek, Fort St. John and Fort Nelson, where the shale gas deposits are found, held a video conference call with CAPP to discuss the new tax proposals.

CAPP is asking that the federal government to change the classification of LNG liquefaction facilities under tax law so that they are equivalent of manufacturing facilities. Currently LNG liquefaction are can claim depreciation at eight per cent, while manufacturing and processing facilities can claim depreciation at 30 per cent.

The report to Kitimat council from chief administrative officer, Ron Poole, said “This change will increase Canada’s competitiveness for global market access and support significant economic growth.”

A report written by the Canadian Association of Petroleum Producers attached for council argues that by turning natural gas into its cold, liquefaction form, it is actually being manufactured. CAPP quotes tax law as saying:

manufacture of goods normally involves creation of something…processing of goods usually refers to a technique of preparation, handling or other activity designed to effect a physical or change in an article or substance.

CAPP goes on to argue:

The chemical composition of the natural gas is changed through treatment process and physical change occurs through the liquefaction process. The treatment processes include removing impurities such as acid gases and mercury, as well as dehydration and the removal of heavier hydrocarbons in order to facilitate the manufacturing process and to meet end market specifications.

CAPP goes on to argue that the current taxation levels put Canadian LNG facilities at a competitive disadvantage with potential competitors in the United States and Australia. It says that under the current tax treatment in Canada, an LNG liquefaction facility would take 27 years to depreciate. In the United States and Australia, LNG facilities are depreciated over 10 years. Changing to the Canadian manufacturing level would depreciate over seven years.

CAPP notes that there are currently six liquefaction plants under consideration by their respective corporate boards. It says that the tax change could hasten a positive decision by those companies, ensuring the projects go ahead because “Canada is a natural fit with its open-for-business attitude, stable political environment and commitment to responsible development.”

BC, Haisla, file objections to JRP bypassing of Kitimat; Enbridge likes venues, avoids the tanker problem

Both the province of British Columbia and the Haisla Nation have filed strong objections with the Northern Gateway Joint Review Panel about the panel’s plans to bypass Kitimat for the questioning and final argument phases of its examination of the controversial pipeline project.

At present, the Joint Review Panel plans to hold questioning hearings in Prince Rupert, Prince George and either Calgary or Edmonton and final arguments in Prince Rupert and Calgary/Edmonton.

And if Prime Minister Stephen Harper and Natural Resources Minister Joe Oliver wanted to speed up the hearings and therefore approval of the Northern Gateway project, filings from all sides indicate more time is needed than the two months allocated by the JRP.

The JRP secreteriat plan a meeting in Calgary on May 30 to consider the procedures.  The three panel members will not attend.  A large number of intervenors or government participants will be represented in person or take part in a conference call.

The lawyer for the Haisla Nation, Jennifer Griffiths, points out in her filing with the JPR, “Prince Rupert is not a logical location for any of the hearings.”

Updated: The District of Kitimat, which is registered as a “government intervenor” will participate in the conference call.

The law firm representing the Enbridge Northern Gateway, agrees with the JRP preliminary decision to hold the hearings in Prince Rupert, Prince George and Calgary or Edmonton. However, Enbridge’s lawyer Richard Neufeld, of Fraser, Milner, Casgrain, makes it clear that for those hearings they are not involved in the operation of tankers carrying the bitumen they sell to customers.

This includes a marine terminal at Kitimat. Northern Gateway recognizes the interest of the public, government, and First Nations in respect of the potential effects of ships calling on the proposed marine terminal, but it is important to bear in mind that Northern Gateway will not own or operate any marine vessels. No approvals are sought, or required, for such operations, as they are subject only to laws of general application which apply to all shipping into or out of Canadian ports.

The Ecojustice group, also known as the Sustainability Coalition,  an alliance of the Living Oceans Society, Raincoast Conservation and ForestEthicsAdvocacy wants hearings in Vancouver. The Coastal First Nations also want the hearings in Vancouver.

The Wet’suwet’en  want more hearing locations especially in the areas of the proposed route to address those most affected, telling the JRP:

The Office of the Wet’suwet’en (OW) is localized in Smithers, BC, our territory is 22,000 square kilometres and 170 kilometres is proposed to be crossed by NGP prior to crossing the coastal mountain range. The OW requests that hearings be held in Smithers or Burns Lake for full days rather than half days to reduce travel and accommodation costs for intervenors.

In the provincial filing, Christopher Jones, counsel for British Columbia says:

the Province submits that it is essential for a portion of the final hearings to take place in Kitimat. Kitimat is the proposed location of one terminus of the proposed pipeline, and of the proposed marine terminal. As a result, that locality has a particular interest in these proceedings. There are sufficient facilities and transport access to Kitimat to allow the hearings to take place there…..

The letter from Jones goes on to stay that BC believes “the Province would again submit that certain issues should be dealt with at Kitimat” rather than Prince Rupert.

Griffith, of the Vancouver law firm, Donavan and Company, filing on behalf of the Haisla Nation says:

The Haisla Nation questions why no final hearings are proposed for Kitimat. Given the significant new infrastructure associated with the project that is proposed to be located in the Kitimat area, Kitimat is a logical location for hearings. Kitimat is serviced by the Terrace airport, which is only 56 km away. Kitimat also has dock facilities for parties who may be travelling to the hearings by boat. Finally, there is ample accommodation in the Kitimat I Terrace area. Prince Rupert is not a logical location for any of the hearings. The proposed pipeline does not go near Prince Rupert, the terminal is far from Prince Rupert, the tankers would go through Douglas Channel, not past Prince Rupert. Prince Rupert is not accessible to the Haisla Nation by way of a direct flight.

Griffith also says the final arguments should be held either in Kitimat or Vancouver.

The Haisla Nation will have to participate in every aspect of the hearings. Yet the Panel is currently not proposing to hold any of the questioning phase or final hearings in Kitimat. As set out in the comments below, the Haisla Nation is of the view that the questioning and final hearing locations slated for the western terminus of the project should be held in Kitimat, not in Prince Rupert.

Enbridge, on the other hand, through its lawyer, Richard Neufeld, says:

Northern Gateway agrees with the Panel’s observations regarding the need to select hearing venues that are centrally located, have adequate facilities and reasonable transportation access for the large numbers of witnesses and back-up support personal required. Northern Gateway also agrees that Prince Rupert, Prince George and Calgary/Edmonton meet these criteria. Northern Gateway also agrees that if economic issues are to be dealt with in a single venue, it would be appropriate to do so in Calgary or Edmonton. Of the two, Calgary would be a more logical location given its convenience for those participating in that aspect of the proceeding.

Enbridge also has reservations about the process, while it wants the hearings “streamlined,” the company is concerned about the plan to split the hearings into various issues could be “prejudicial” to the project.

Northern Gateway expects that the Panel is considering an issues-based hearing in an effort to streamline the hearing process, and to make the process more accessible to those who want to participate only when specific issues or topics are under discussion. Both objectives are laudable.

However, an issues-based hearing format has the effect of forcing the Applicant to split its case into multiple parts. This is potentially prejudicial to the Applicant – especially if the issues identified for litigation do not correspond to the manner in which the Application has been structured.

The EcoJustice group wants hearings in Vancouver, largely because many of its members are there, with staff lawyer Barry Robinson, saying to the JRP:

The Coalition recommends that the Panel consider adding a fourth hearing location in Vancouver. The Coalition notes that, logistically, many of the witnesses and counsel that would appear in Prince Rupert would travel through Vancouver. If the vast majority of the witnesses and counsel to appear on any given issue will be required to travel from or through Vancouver, the Coalition recommends that the issue be heard in Vancouver to reduce travel costs and related greenhouse gas emissions.

However, the Coalition is sensitive to the needs of local intervenors in the Prince Rupert area and would ask that the Panel use its discretion in allocating topics to be heard in Prince Rupert and Vancouver.

And later:

The Coalition recommends that the Panel consider hearing final argument in Vancouver as a third location. The Coalition is supportive of the Panel providing an option for remote participation.

Coastal First Nations have a similar proposal. Art Sterritt, Executive Director says:

the JRP should consider holding hearings on marine issues in Vancouver with video links to Prince Rupert and Kitimat as a way of reducing the costs to Intervenors (many experts and legal and technical representatives live in the lower mainland) and in recognition that Kitimat is the proposed site of the Marine Terminal and that there are many people in the lower mainland who use the area for recreational, commercial fishing and other uses.

It appears that there will soon be controversy over the time allotted both for questioning and final arguments. The Haisla, other First Nations and Ecojustice and even Northern Gateway appear to want more time for questioning and cross-examination, while, for example, the Canadian Association of Petroluem Producers, the industry representative says it:

is still considering the scope and extent of its participation in questioning during the final hearings. CAPP will work with other intervenors in order to minimize the overall time required for cross­ examination.

It is clear that Enbridge Northern Gateway is planning tough cross-examination of the intervenors and their evidence:

Northern Gateway intends to cross-examine each of the authors of reports prepared for Interveners opposing the Project, and filed as written evidence. In some cases, the evidence filed with the Panel does not identify authorship, which makes it impossible to specify who will be cross-examined. Materials filed by certain interveners also include information collected through means such as access to information requests, which also makes it impossible to identify who might speak to such evidence if it is allowed to remain on the record.

Northern Gateway’s review of the written evidence filed by interveners has identified approximately forty five detailed reports that have been prepared for this proceeding. Reports of a more basic variety, those that provide general information on traditional use matters and reports of marginal relevance need not be subject to extensive cross-examination by Northern Gateway (if at all). Although no final decision has been made, for planning purposes the Panel should allot approximately twenty hearing days for cross-examination by Northern Gateway. Once a decision has been made on hearing venues and format, we will provide a more definitive estimate to Panel counsel and to counsel for the interveners involved. Where Northern Gateway does not consider it necessary to cross-examine a particular author, we will advise others of that so as to avoid unnecessary expense and inconvenience.

The Coastal First Nations are also planning tough cross-examination:

Coastal First Nations intends to cross-examine NGP, Transport Canada, Canadian Coast Guard, DFO, CEAA (as crown consultation coordinator and expert on environmental assessment methodology) and possibly the Government of B.C. These cross­ examinations will focus on risk assessment, spill response, measures to prevent incidents, and reduce risk of spills, consequences of spills, and Aboriginal consultation. Naturally, until the JRP approves the government participants we wish to cross-examine, and NGP identifies the witnesses they will present, it is difficult to determine the amount of time needed for cross-examination. It would likely take several hours of cross-examination for each party.

The Hasila say:

The Haisla Nation does not have any input into the proposed general schedule as set out above, but does question the two-month period provisionally allotted for the questioning phase in accordance with the revised Hearing Order. The Haisla Nation anticipates that the questioning phase will require substantially more than two months.

The Wet’suwet’en also object to the short notice given for the May 30 procedural meeting:

The estab!ishment of this regulatory process is insufficient to afford meaningful consultation to the Wet’suwet’en. We are hard pressed to try and prepare our hereditary leaders and clan speakers in such short notice, especially with a long weekend within the timeframe, some of our leaders and speakers are out on the territories preparing themselves for their summer traditional food gathering, and cultural activities. There is insufficient time given to the Wet’suwet’en for this process.

The Wet’suwet’en say (and this likely applies to other BC First Nations) that hearings as proposed could make it difficult to consult with elders saying “discussions with hereditary leaders and elders must take place, as per our custom…”

All of this comes as Prime Minister Stephen Harper and Natural Resoures minister Joe Oliver and many in the right-wing media want the hearings sped up, which means the May 30 meeting may be heated and any decision politically charged.

JRP filings from

Province of British Columbia  (pdf)

Haisla Nation  (pdf)

Enbridge Northern Gateway Pipelines  (pdf)

EcoJustice (Living Oceans Society, Raincoast Conservation Foundation, ForestEthics Advocacy Sustainability Coalition)  (pdf)

CAPP (pdf)

Coastal First Nations Great Bear Initiative (pdf)

Office of the Wet’suwet’en  (pdf)

Government of Canada (pdf)


Conservatives to limit time for environmental reviews, including Northern Gateway

The Conservative government is taking aim at environmental reviews of major resource projects and will impose time limits on those reviews from 12 to 24 months.

In a briefing in the Ottawa budget lockup, Finance Minister Jim Flaherty said, “The new timelines will apply to the Northern Gateway Pipeline.”

Currently, major resource projects can take as long six years to approve. Under the new rules the whole process will take no more than 24 months. Rosemary Barton of CBC said on air that the Gateway project will be now limited to 18 months, but there were no details when the 18 month limit actually starts.

Skeena Bulkley Valley NDP MP Nathan Cullen called the new limits “a rubber stamp that is not good for business or the environment,” noting that one major oil spill would wipe out any savings for government and industry for decades.

Cullen said limiting the Northern Gateway Joint Review proceedings “changes the rules of the game and opens it up to court proceedings. I’ve never heard of a government changing everything half way through. They’re rigging the entire process and they’re not ashamed of it.”

The changes to environmental assessment are, at the moment, expected to be part of the budget omnibus bill. Cullen said the Opposition will try to “hive it off” in the committee stage into a stand alone bill. He was not optimistic and noted that using budget riders to get unpopular measures into law was a common Republican tactic in the United States.

“The cost of approving bad projects is going to cost us multiple times more,” Cullen said. “For example, we used to approve projects with hardly any review at all and we are still paying about 170 million dollars in Yukon for bad mines that were approved without anybody doing any science. The idea that you can short cut this things and it won’t cost in the end, is insanity.”

Cullen pointed to $80 million in cuts to the Department of Fisheries and Oceans, will cut the already under resourced DFO monitoring of the fisheries, at the time that the Harper government is accelerating the Northern Gateway project. While the Canadian Coast Guard will get $5.2 billion over 11 years, Cullen noted that this money will go for new ships and there are unlikely to be any increases in the operational budget.

There appear to be no changes in the budget to the habitat provisions of the Fisheries Act, unless it is buried in the fine print. In his interview with the CBC, Flaherty called some provisions of the Fisheries Act aimed at preserving habitat as “ridiculous,” repeating the story about a flooded farmer’s field in Saskatchewan.

Flaherty said “It’s anticipated there will be $500 billion investment in mining and oil, minerals in the next ten years. That’s an incredible opportunity. We can blow it, but that would be ridiculous. one study, one project, one review. ”

The Canadian Association of Petroleum Producers welcomed the government move to speed up environmental reviews  saying:

[T]he plan to improve Canada’s regulatory process for natural resource projects will generate more jobs and a stronger Canadian economy while ensuring continued environmental performance, Canada’s upstream oil and natural gas producers said today.

“Broad-based regulatory reform is fundamental to attracting investment that creates Canadian jobs, prosperity and economic growth,” said Canadian Association of Petroleum Producers President Dave Collyer. “The government’s plan will improve the timeliness and efficiency of the decision-making process while the regulatory scrutiny that Canadians expect remains intact…”

The upstream petroleum industry is the largest single private sector investor in Canada – investing over $50 billion each year and employing more than 500,000 Canadians. Regulatory bottlenecks in the current system have often led to project delays or outright cancellations due to missed market opportunities, with a resultant reduction in economic benefits that would flow from these delayed or foregone investments.

“The changes broadly outlined in the federal budget will improve our business climate and competitiveness without compromising our commitment to responsible, sustainable development,” Collyer said.

The environmental movement was quick to disagree. The BC based Wilderness Committee said in a release

Corporations and polluters could reap the rewards of today’s federal Budget and the follow-up legislation, which will weaken the environmental assessment process.
The Budget includes major cuts to Fisheries and Oceans Canada, and eliminates the National Round Table on the Environment and the Economy.

The changes to the environmental assessment process explicitly aim to help speed up approval of tar sands pipelines like the Enbridge Northern Gateway Pipeline and Kinder Morgan’s Trans Mountain pipeline expansion. This will put the Canadian people at increased risk of oil spills, polluted rivers and fish kills, as well as lost wildlife.

“Energy giant Kinder Morgan had said they would formally submit their application to the National Energy Board to twin their tar sands pipeline by the end of this month, but now they’ve delayed,” said Ben West, the Wilderness Committee’s Healthy Communities Campaigner. “It seems to me that Kinder Morgan could be waiting to take advantage of a weakened review process,” said West.

The West Coast Environmental law group which has opposed the Northern Gateway pipeline said in an e-mail to the media

Today’s budget announcements make it clear that long-standing legal protections for the environment, including environmental reviews of major industrial projects like mines and oil pipelines will soon be rolled back or eliminated.

For decades, Canadians have depended on the federal government to safeguard our families and nature from pollution, toxic contamination and other environmental problems through a safety net of environmental laws. Today?s budget would cut up this environmental safety net to serve the interests of a few big companies.

Canadians want strong environmental laws to protect our communities, ecosystems, health, and economy. Recklessly rushing approvals for major industrial projects like pipelines is not the same as building a sustainable economy. A robust, sustainable economy depends on a healthy environment. The multi-billion dollar clean up costs from the Exxon Valdez and the Gulf oil spill remind us that it is citizens who pay the price when things go wrong.

John Bennett, Executive Director of the Sierra Club Canada said:

“Environmental assessments need to be thorough, consultative and science-based. Creating hard-time limits and rushing the process compromises all these things.”

The changes will result in weaker environmental assessments and projects being approved without a full understanding of the social, economic and environmental impacts they will have.

“We have environmental assessment laws to prevent repeating the mistakes of the past. It is far better to identify problems and then improve a design than to breathe polluted air or clean up dead fish,” said Mr. Bennett.