economy | Northwest Coast Energy News

Linkfarm: The Krause Chronicles

Vivian Krause styles her self as an “independent researcher.” Her work is increasingly a favourite of right wing columnists on Postmedia and now Sunmedia

The spin from the conservative columnists, now echoed by the Conservative government is that the environmental opposition to the Northern Gateway is all coming from US based environmental foundations, with the hidden agenda of undermining the Canadian economy.

Only one main stream media report doesn’t praise Krause to the skies came from Gary Mason in the Globe and Mail

The next great pipeline debate – and U.S. funding

Whether or not Krause has a legitimate point about American foundations funding Canadian environmental causes, there has, so far, been no balancing investigation of the money spent by American or other energy companies in Canada to promote their cause.

Here are a few relevant links

Vivian Krause’s site Fair Questions

Krause’s list (of mostly positive for her) media coverage. It is quite extensive but will give you an idea of how widespread her message has reached.

Coverage not found in Krause’s list at this posting

Enbridge boss points to ‘curious’ funding of pipeline opposition by U.S. charities: Edmonton Journal

Foreigners funding ‘mischief’ against Canada’s oilsands: Kent Sunmedia
Environment Minister Peter Kent adds to the controversy.

U.S. billionaires ‘bullying’ Canada on environment: Researcher Sunmedia (with a quote showing that Stephen Harper supports Krause’s campaign)

Ezra Levant writes a column for Toronto Sun, calling on the Joint Review Panel to restrict the number of people who will testify against the pipeline.

An “ethicial oil” spokeswoman, Kathryn Marsall then adds to the mix with
The Big Money Behind the Anti-Oil Sands Movement in the Huffington Post

The National Post then claims the it also the UK that is funding the opposition

Anti-oil sands think-tank being funded by U.K.

and finally a Black Press columnist named Tom Fletcher repeats it all again in The Alberni Valley News. (I note that as far as I can find out, none of the northern newspapers in the Black Press chain ran this, or at least ran it prominently)

B.C. a playground for eco-stunts

(a Facebook friend linked to the article, somehow our subsequent discussion about Star Trek got posted, probably because Black Press lets you sign in from FB)

Now, the Minister of Natural Resources, Joe Oliver, is pushing the Northern Gateway pipeline every chance he gets despite the fact the Joint Review Panel hasn’t even started hearings. but in The Vancouver Sun in Protests won’t stop Northern Gateway pipeline, minister says

He wouldn’t comment on the argument heard in the oilpatch that American money is being driven by broader interests fearful of the U.S. losing its virtual monopoly on the
landlocked oilsands resource.
“I’m not into conspiracy theories.”

In contrast to this huge campaign, there is no one, no one, as of this date, in the mainstream media putting perspective on the story.

One blog from George Ghoberg at the University of British Columbia is:

Foreign influence on Canadian energy and environmental policy: A request for some balance

I wrote two earlier columns on the subject.

Joint Review media analysis Part one: Calgary Herald columnist advocates
curbing free speech on the Northern Gateway Pipeline hearings

Joint Review media analysis Part two: Postmedia and The Great American Energy Conspiracy

From the Environmental point of view. the Pembina Institute has responded to the attacks on its integrity and credibility

Attacks on environmental group supporters are disingenuous and disturbing

The David Suzuki Foundation has responded to Krause’s separate attacks on Suzuki’s opposition to salmon farming

DSF responds to questions about salmon farming

And to put things in somewhat of a wider perspective, The Hill, which covers Capitol Hill in Washington DC had this story on all the companies that lobbied for the Keystone XL pipeline.

Lobbyists go to battle over Keystone pipeline

International Halibut Commission recommends drastic cuts in quotas, with worse to come

Environment Fishery

The International Pacific Halibut Commission is recommending drastic cuts in quotas along the west coast for the 2012 season and possibly even larger cuts for the 2013 season.

For area 2B, the coast of British Columbia, the IPHC is recommending an overall quota of 6.633 million pounds, down from 7.650 million pounds in 2011, a decrease of 13.3 per cent.

Along the entire Pacific Coast, the IPHC wants the total harvest cut 19 per cent from 41.07 million pounds this year to 33.882 million pounds in 2012.

The recommendations are based on the IPHC’s studies of the 2011 halibut harvest.

The commission says that exploitable biomass of halibut continues to decline, reflecting lower recruitment (the number of fish that are becoming harvestable) from the 1989 to 1997 year classes and smaller size at age.

The commission says that while recruitment from more recent year classes is stronger but halibut size at age continues to be much lower than that seen in the recent period (1997-1998) of historic high biomass, so these year classes are recruiting to the exploitable biomass more slowly than past year classes.

The IPHC FAQ explains this in easier terms as

For a simple question, this has a bit of a complicated answer. The simple answer is, they are still here. Or at least the same age fish are still here. For the past 15 years or so, halibut growth rates have been depressed to levels that haven’t been seen since the 1920’s. Both females and male halibut have the potential to grow rapidly until about age 10, about 2 inches per year for males and 2.5 inches for females. Thereafter, females have the potential to grow even faster, while males generally would slow down relative to female growth. Growth rates for these larger fish in the last 10 or so years are more on the order of one inch or less per year. This translates into a much smaller fish at any given age. There was a dramatic increase in halibut growth rates in the middle of this century, especially in Alaska. Sometime around 1980, growth rates started to drop, and now Alaska halibut of a given age and sex are about the same size as they were in the 1920’s. For example, in the northern Gulf of Alaska, an 11-year-old female halibut weighed about 20 pounds in the 1920’s, nearly 50 pounds in the 1970’s, and now again about 20 pounds. The reasons for both the increase and the decrease are not yet known but may be tied to increased abundance of other species, such as arrowtooth flounder, and availability of food supply

Steve Hare, the commission’s chief scientist told the Alaska Dispatch that scientists are becoming uncomfortable with the model they are using to calculate the biomass because “season after season the numbers of dead fish don’t add up correctly.”

Hare told the Alaska Dispatch that the commission is considering a new model that could mean “staggering cuts of 63 percent in the halibut fisheries to a mere 15 million pounds” in 2013.

Halibut quotas have been cut half since 2001 and the Alaska Dispatch says: “the implications of such a cut are huge — not only for fishermen of all sorts, but for small coastal communities from British Columbia north through Alaska, and for consumers.”

The quotas will be finalized and confirmed at the IPHC annual meeting in Anchorage, Alaska, during January 24-27, 2012.

IPHC news release Dec. 2, 2011 (pdf)

Oregon moves to block Jordan Cove LNG project

Energy LNG Politics

The state of Oregon has filed a motion with the US Federal Energy Regulatory Commission (the American equivalent of the National Energy Board) to block, perhaps temporarily, the Jordan Cove Liquified Natural Gas project at Coos Bay, Oregon.

Experts at the June NEB hearings in Kitimat testified by the Jordan Cove could be Kitimat’s chief rival as an LNG terminal.

Like the plans for Kitimat in the early 2000s, the Jordan Cove facility was originally planned as an import terminal and the FERC eventually did issue a permit for the construction of the import terminal.

In the meantime, the natural gas market changed, with the growth in the hydraulic fracturing to retrieve gas from shale deposits. In September, the company involved, Jordan Cove LP applied to the Department for authorization to export natural gas. At the time the company said it intended to ask the Commission in early 2012 to amend its existing authorization to add export facilities.

On Dec. 2, 2011, the Oregon Dept. Of Justice filed a motion with the FERC to revoke the approval of the LNG terminal in Coos Bay and reopen the record so the state can submit evidence that a revised terminal proposal is not in the public interest.

Oregon wants the company to file a new application, arguing that is more appropriate than amending of the import application.

The filing says: “The facts demonstrate a change in core circumstances that goes to the very heart of the case. The heart of this case is whether the Jordan Cove LNG import terminal is in the public interest and the pipeline is required by public convenience and necessity….

Oregon wonders how the “additional imported natural gas supply” would benefit the state and how that would outweigh “the adverse impacts on private landowners and the environment.”

Oregon says that “any benefit that may have existed when the import Project was proposed, no longer exists to offset the adverse impacts of the Project.”

The filing also argues that if the United States exports natural gas through Oregon that will increase domestic prices. It also argues that there hasn’t been enough consideration about the environmental impact of the liquefaction facility.

“This is the right thing to do, to tell them we don’t accept this bait and switch with Jordan Cove,” said Dan Serres, an organizer with the conservation group Columbia Riverkeeper, told the Oregonian newspaper.

Bob Braddock, project manager for Jordan Cove, told the Oregonian he wasn’t surprised by the filing, claiming that Oregon Attorney General John Kroger has made no secret of his opposition to any LNG terminal since before he took office

Braddock repeated arguments familiar to northwest BC from both the LNG and Enbridge Northern Gateway projects, saying the public interest in the pipeline and export terminal includes jobs, tax revenue and pipeline interconnections that would bring a better gas supply to southern Oregon.

A few days earlier, on Nov. 22, the U.S. Fish and Wildlife filed a letter with the FERC, saying it was not being kept up to date about changes in plans by Jordan Cove for the LNG terminal and so could not fully assess the environmental impact. The letter said the project’s mitigration plan had not been provided in sufficient detail and assurance about theit nature, location, effects and implementation. The Fish and Wildlife Service also noted that the company had not addressed or supplied information on the impact the LNG project might have on the program to help the recovery of the Northern Spotted Owl population. In fact, according to the Fish and Wildlife filing the plans were so inadequate that it wasn’t possible to begin formal consultations with company over environmental impacts.

Opponents of the project note that Oregon will probably have the final say on the project, since the terminal location is on state-owned land and the state must approve the leases.

Oregon motion to FERC to set aside order (pdf)

Fish and Wildlife Jordan Cove letter (pdf)

TD Waterhouse posts Reuters analysis: Enbridge pipeline deal with native group fraying

Energy First Nations Economy

TD Waterhouse Marketwatch has picked up an analysis from Reuters Enbridge pipeline deal with native group fraying. Not the best news for Enbridge now that a major bank is letting the markets know about the unraveling deal with the Gitxscan Treaty Organization and Elmer Derrick.

A deal with a native chief that Enbridge Inc
held up last week as an example of rising support of their planned oil
pipeline to the Pacific appears to be unravelling as the community
battles over who has the authority to make a deal.

Pipeline
operator Enbridge touted the Gitxsan agreement to take an equity stake
in the Northern Gateway pipeline as the first public display of what it
says is substantial support for the C$5.5 billion ($4.5 billion) project
among British Columbia’s First Nations…

Enbridge signed the deal with Hereditary Chief Elmer Derrick, chief
negotiator for the Gitxsan Treaty Society (GTS), an embattled
organization that is facing a legal challenge to its authority from four
of the five community bands that make up the first nation….

“Many of the hereditary chiefs said that they
had not been directly posed the question of ‘Do you want to sign this
deal with Enbridge?’,” said Doug Donaldson, who represents the region in
the British Columbia legislature. “From a Gitxsan governance point of
view, that’s not the way decisions are made, as far as not consulting
everyone.”

Financial meltdown hits oil tanker fleets

Energy Business Tankers

A tanker entering Prince Rupert harbour. (Robin Rowland/Northwest Coast Energy News)

The world’s oil tanker companies are in financial meltdown, a crisis little noted outside the industry itself and the financial media, a crisis caused, experts say, by combination of the weakening world economy and an over abundance of the giant vessels that ply the world’s oceans filled with crude .

Although oil prices are generally on the rise, this has not helped the tanker fleets, because overall demand for oil is down and there is a “glut” on the tanker market, with too many vessels, so chartering and transportation fees are dropping. ( One ship broker reports that “day rates for leasing tankers” have dropped 47 percent since the start of 2010. Rates for tankers were $229,000-a-day at the peak of the market in 2007. By mid-November that had dropped to $28,829).

The crisis in the tanker industry first hit the financial news in mid-November.

On November 16, 2011, Torm, a Danish tanker company warned investors that it was revising expectations and stated that the company expected to lose $175-$195 million US (pdf) for 2011, because freight rates in the second half of 2011 for tankers, especially the large tankers, had been “lower than expected.”

On November 17, 2011, General Maritime Corp., a New York based major American crude transportation company that describes itself “one of the world’s largest and most diverse fleets of tankers, filed for Chapter 11 bankruptcy. GMC is said to be the second largest American flagged crude carrier.

According to Reuters,the same day, Torm told the markets it was in talks with creditors. Three days later, on Nov. 20, Torm (pdf) cancelled an order for a new tanker that would have been delivered in 2013.

On Nov. 22, Frontline Ltd, based in Bermuda, reported that the company could run out of money in early 2012. Frontline has one of the world’s largest tanker fleets, including Very Large Crude Carriers. The company has $1 billion in bonds and loans due in the coming decade, and is looking for new cash.

On Nov. 23, ACM Shipping, a British company, told The Financial Times that company was taking a £6.85 million write-off largely due to poor market conditions. The paper added that ACM had strong cash reserves and ACM CEO Johnny Plumbe was confident about ACM’s medium to long-term prospects.

The Financial Times says the oil tanker industry is facing “the worst market conditions in 25 years.” The FT adds that the oversupply of ships has pushed earnings for most tankers to well below the level required to cover operating costs The paper also noted that ACM is “one of a handful” of tanker companies publicly listed on stock exchanges, raising questions about the state of the books of privately held tanker companies, which do not report.

Both the Reuters report and the financial website The Street quoted analysts as saying that more tanker company bankruptcies were expected. The analysts say at least in the near future, the tanker companies will probably have trouble getting bank financing. The reports also say that the Eurozone crisis could make things worse, but if the economy rebounds, the industry could recover in late 2012, or 2013.

General Maritime Corp listed total assets of $1.72 billion and liabilities of $1.41 billion as of September. The private equity company Oaktree Capital Management will provide it with $175 million in equity. Creditors will defer cash payments of about $140 million to June 2014. GMC.

ACM said its revenue decreased by 9% to £13.2 million mainly due to adverse currency movements and the company still made a before tax and amortization of £2.3 million. It said it had a strong cash position of £4.9 million at 30 September 2011 and no debt (£5.0 million as at 31 March 2011)

Frontline’s third quarter report said it had a net loss $44.7 million in the third quarter of 2011. The company’s long term outlook says world oil consumption is rising but American imports (at least by tanker) will continue to decline unless that country’s economy recovers.

According to Bloomberg, John Fredriksen, the Norwegian-born billionaire who controls a 34 percent stake in Frontline and serves as its chairman, “has the funds available and he is prepared to go in and try to find solutions” if creditors go along, says Tor Olav Troim, one of his aides.

The Financial Times notes that the shipbrokers – who arrange the buying, selling and chartering of ships – suffer earnings declines as their commission is dependent on earnings by the shipowner.

The financial crisis in the tanker industry is going to add new factors to the debate over current and proposed tanker traffic along the west coast of British Columbia, especially with the energy industry and the government of Prime Minister Stephen Harper pushing for greatly increased tanker traffic along the coast on the assumption that the Enbridge Northern Gateway pipeline is approved.

That’s because Enbridge has acknowledged that company is no longer legally responsible for the bitumen crude once it has been loaded on a tanker for shipment to a customer. Enbridge, has however, filed thousands of pages of contingency plans for handling any oil spill that may occur in Kitimat harbour, along Douglas Channel or the British Columbia coast.

Under Canadian and international law, the tanker owners are legally responsible for any damage caused by a wreck or spill along the coast. Under plans filed by Enbridge with the Joint Review Panel, the tanker companies are also supposed to have to have special training for officers and crew, not only to ply the waters of British Columbia but what do in the case of an accident at sea, in the Douglas Channel and the Kitimat terminal.

Many of the tankers that will call at the proposed Enbridge terminal will be the Very Large Crude Carriers. Frontline, one of the companies’ in financial difficulty, owns many of the world’s VLCC (see list)

While there are international contingency funds marked to handle spills, one question has to be whether or not a bankrupt company, now or, if in the future if still in bankruptcy protection, be able to able or willing to pay compensation for a spill.

It is highly unlikely that tanker rates will return to the highs seen in 2007. Operating costs are likely to be a problem for tanker companies in the future, even if the economy comes back to life.

As has been seen in other industries, financial problems, even if a company is not bankrupt, usually leads to cutbacks in areas such as maintenance and training.

Not just energy: Asia’s demand for aluminum brings $2.7 billion upgrade for RTA Kitimat smelter

Aluminum
Rio Tinto Alcan president primary metals, Jean Simon, announces the go-ahead for the Kitimat Modernization Project at ceremony at the plant in Kitimat, Dec. 1, 2011. (Robin Rowland/Northwest Coast Energy News)

“It’s a go.”

The “go” meant that the Rio Tinto Alcan board had finally approved spending $2.7 billion for the long awaited Kitimat modernization project that would update the 60-year old aluminum smelter, increasing production capacity by 48 per cent to 420,000 tonnes a year.

Rio Tinto Alcan primary metal president Jean Simon made the announcement Thursday, Dec. 1, 2011 to cheers at a theatre (converted from the dining hall) at the new construction camp at the Kitimat smelter.

That money is in addition to expenditures already approved, bringing the total investment in the modernization project to $3.3 billion US.

“This will help us put Kitimat and Canada at the forefront of the 21st century global aluminum industry,” Simon said. “It is a truly transformational project.” He said it was in line with RTA’s long term strategic objective of long life, large scale, low cost assets. The project, Simon said, will take advantage of Rio Tinto Alcan’s competitive advantages: clean self generated hydro power and leading edge technology.

If all goes as expected, the first new metal will be poured in the first of half of 2014.

The new smelter will use a RTA proprietary smelting technology that reduce carbon dioxide emissions by 50 per cent.

The long planned project had been put on hold in 2008 as the world weathered the financial meltdown.

Kitimat mayor Joanne Monaghan said at the ceremony, “This is something our community has been waiting a very long, long time for….Kitimat has suffered through some very had economic times over the last several years and this announcement means we have the certainty that the aluminum business will be here for the next 35 to 50 years… We’ve seen a lot of industry disappear from Kitimat over the past few year and its been hard on our community. In fact, with Methanex leaving, with Eurocan leaving I felt like the mayor of doom. And then, all of a sudden, all of these things are happening. And I feel like the mayor of boom.

“We know the importance of that first initial investment to show that Kitimat is the strategic place to invest. And when RTA began its expansion, and its construction camp, then all of a sudden three LNG plants came on stream. We had a biomass plant ready to come in. So thank you Alcan for starting that whole trend for people coming into our community.”

It is Asia is fueling Kitimat’s new boom, and not just in natural gas, but also in aluminum. When Kitimat was planned and built 60 and more years ago, Asia, China, Japan, Korea were in ruins, devastated by the Second World War. Now it is Asia, and the short great circle route from Kitimat harbour to the market ports, that is one reason that the Kitimat modernization project was approved.

“Most of the aluminum is going into Asia. Korea, Japan and other countries,” Simon said in a post-ceremony news conference. “We’ve been producing here for 60 years and Kitimat has always been recognized as a very solid, reliable and good quality producer of aluminum so our customers from Asia are demanding the metal from Kitimat. So this is good news for them too.”

Paul Henning, RTA vice president of BC operations, is not only a corporate manager. He was the very entertaining master of ceremonies for the announcement. (Robin Rowland/Northwest Coast Energy News).

Paul Henning, VP BC Operations and strategic projects Western Canada, was asked if Kitimat can handle the demand and possible bottle necks with, as well as Kitimat modernization, three LNG projects, possibly the Enbridge Northern Gateway pipeline and perhaps other projects in the coming couple of years.

“The good news is that we’re first,” Henning said. “The folks who grab the ball usually have a chance. We’re working with those folks. People availability will be the key. I think there’s a lot of common sense going on, these are mega projects. Mega projects need lots of people. I wouldn’t call it coordination, but there is an understanding. They understand our timing, we understand their timing.

“All being equal we’re not competitors. It’s going to be an extended boom for the region. And of course, the projects are stacked, all trying to happen at the same time.

“It’s challenging, just for resources and infrastructure. If they can be spread, it’s a win, win, win. At the end of the day Our business drives what we do in the timing. Their business care drives their timing. At the end of the day, we’re first in.”

Thursday wasn’t the best day to show Kitimat off to the world, with a cold wind driving sleet, snow and rain all at the same time. BC Premier Christy Clark’s plane was turned back from Terrace Kitimat airport and a second aircraft with RTA CEO Jacynthe Cote was redirected to Prince Rupert.

RTA employees and guests watch a slideshow of historic photos of the early days of Kitimat before the official ceremony announcing the go-ahead for the Kitimat modernization project. (Robin Rowland/Northwest Coast Energy News)

As the audience and guests waited for the arrivals that were not to come, there was a slideshow of historic photos on giant LED screens, showing the early days of Kitimat, the construction of the dam, transmission lines, townsite and the potlines.

Then the elaborate ceremony began, with Paul Henning acting as master of ceremonies, introducing the Haisla Spirit of the Kitlope drummers before Simon made the “go” announcement.

It was good community relations that helped the RTA board give the go-head, Simon said.

“We will also honour the landmark Haisla Nation, Rio Tinto Alcan Legacy Agreement and are proud of this partnership to provide opportunities and training and that is resulting in increasing numbers of Haisla Nation members working on the project,” said Simon.

Haisla chief councillor Ellis Ross had been flying up with Christy Clark, so Councillors Henry Amos, Alex Grant and Keith Nyce were at the ceremony on behalf of the Haisla. “On behalf of the Haisla Nation, we offer you a warm welcome to our Traditional Territory. The Haisla Nation has worked very closely with RTA and supported the reality of this important and exciting decision. Together with RTA, our Nation is very proud of the legacy agreement we have reached.” Nyce said.

The Haisla are not only our closest neighbours but our best friends,” Henning said at the news conference. “It hasn’t always been like that. I think leadership from the Haisla, starting with Steve Wilson, transferring to Ellis Ross. Ellis has taken it to another level. The recognition of wanting to engage in the future was the key. We had to recognize and respect that past, to learn how to work together and build for the future.

“It’s actually a cohesive joint approach to economic development and sustainability within the Haisla First Nation and the plant. It actually betters the plant because we have employees that live here, work here, there are 120 Haisla folks who are working within the operation. That to me is sustainability in real time.”

Henning is also confident that the company will successfully negotiate a new contract with the Canadian Auto Workers local. Henning said that 2007 contract was designed to get the company through to first hot metal but then the financial crisis struck.”The good news gives us certainty.”Henning said. “We know what we have to drive for. We’ll get a contract, we’ll get a contract, we always do. Some are prettier than others. The confidence from this is a great start. The union were here today, I am confident that we will get through and get a contract that really fits this program.”

After he took the podium, Michel Lamarre, director of the Kitimat Modernization Project joked. “We often say that when we get married, and it’s raining, the marriage is very strong and I think this is going to be the case for the KMP project.” He said Kitimat management had made a very solid case for a very solid project to the RTA board.

Michel Lamarre, director of the Kitimat modernization project, talks about the challenges of the next two years until first metal in 2014. (Robin Rowland/Northwest Coast Energy News)

“We are building a state of the art facility which will be a jewel. This is something we can all be proud of… The next two years will be very busy and very exciting. Let’s build the project with zero harm, zero harm to the people who are building it and zero harm to the environment.”

The weather was just too nasty for an official ground breaking ceremony at the construction site, so it was moved indoors, with RTA executives and employees, the Haisla representatives and Mayor Monaghan turning the shovels into a ceremonial pile of dirt.

The indoor groundbreaking ceremony marking the approval of the Kitimat modernization project. Left to right Michel Lamarre, director KMP, RTA operations employee Ron Leibach, Brent Hegger, VP major projects, Kitimat mayor Joanne Monaghan, Jean Simon, RTA president primary metals, Paul Henning, VP BC operations and Henry Amos, Councillor, Haisla Nation. (Dwight Magee/RTA)

Gitxsan Hereditary Chiefs take $7 million stake in Northern Gateway project

Energy First Nations

Note this update: Gitxsan chiefs, band
leaders, “stand in solidarity” opposing Gateway pipeline, say they do
not support Derrick’s Enbridge agreement

Update 2: Enbridge video embedded at end of this story.

Elmer Derrick, representing the Gitxsan Hereditary Chiefs today announced the Gitxsan Nation was taking a $7 million stake in the controversial Northern Gateway Pipeline.

Derrick told a conference call with reporters that the the hereditary chiefs signed the agreement with Enbridge on the basis of a 1997 Supreme Court decision that granted the chiefs “rights and title” to their traditional territory.

Derrick spoke about the poverty of the Gitxsan people, especially after the collapse of the forest industry beginning in the 1980s, with the exhaustion of good quality timber, leaving only pulp trees. He said “the situation was bleak” with a high number of youth suicides then said “young people cannot eat Gitxsan rights and title.”

He said the Gitxsan have been looking for economic development partners in many fields, including mining and biofuels and that Enbridge was one of the companies that had approached the nation with a partnership offer.

The agreement, Derrick said, calls for the pipeline to be built and operated safely by Enbridge.

Under questioning by reporters, Derrick acknowledged that the Northern Gateway pipeline will only a cover a small area of the 33,000 square kilometres of Gitxsan traditional territory, “five or six small streams that feed into the Babine Lake.” (Babine Lake itself is largely in the traditional territory of the Dakleh or Carrier First Nation). Gitxsan traditional territory is partly along the upper reaches of the Skeena River. Enbridge’s plans call for the pipeline to avoid that area altogether by crossing directly west from the Burns Lake area over and through the mountains, including using two tunnels, to the Upper Kitimat River.

Derrick said there had been no consultation with the local band councils, because, he said, the hereditary chiefs have the right and title to the land. He characterized the band councils as the equivalent of municipal councils.

There are six band councils in Gitxsan traditional territory and like many other BC First Nations there are those who support the hereditary system and those who prefer the elected councils.

There were repeated questions from reporters about how much consultation there had been with the band councils and members of the Gitxsan Nation. Asked if the Gitxsan band councils approved the deal, Derrick replied, “I don’t know.” He did say that the hereditary chiefs had “conferred” with the elected officials and had “talked to as many people as possible over the past six years.”

Derrick said that the $7 million dollar would go into a trust fund, likely for the education and training of younger members of the Gitxsan First Nation. He could not give specific details, but did add that the whole community would be consulted about the trust fund. That number is based on an offer from Enbridge of a total of 10 per cent equity in the pipeline project. With 50 First Nations along the route, Derrick said the Gitxsan will be getting approximately one fortieth of that ten per cent. The pipeline project is estimated to be worth $5.5 billion Canadian.

He said there was no estimate of the jobs that the Gitxsan Nation would get as a result of the agreement. He noted that the members of the Gitxsan nation travel across northwestern BC in search of work and said that if Gitxsan worked for the pipeline project, that wouldn’t be much different from other jobs. In response to a question about rumours that the Gitxsan had been in negotiations with Enbridge about operating the “pig” the robot that monitors the interior of a pipeline for maintenance and safety purposes, he said that was no part of this deal.

Derrick also said he did not anticipate any problems with neighbouring First Nations that have expressed opposition to the pipeline.

Derrick said there was no connection with the announcement Thursday by 131 First Nations from across North America that they opposed the Northern Gateway Pipeline, saying he wasn’t even aware of the Save the Fraser Gathering until asked about it. Derrick said the news of the deal was released “because of the opportunity to sign today.”

Janet Holder, executive vice president of Western Access for Enbridge emphasized to reporters that it was the Gitxsan making the announcement, not Enbridge. Like other, unspecified, agreements with other First Nations along or near the pipeline route, the Gitxsan agreement had confidentiality clauses and it was up to the First Nations to make public whether or not they had agreements with the company. Pressed by reporters how many other First Nations had agreements with the company, Holder would not even give a rough figure.

She said “we are making good progress along the right of way and we’re optimistic from our discussions that the majority of First Nations support the project.”

An earlier news release from Enbridge says:

“Over time we have established a relationship of trust with Enbridge, we have examined and assessed this project, and we believe it can be built and operated safely,” said Chief Derrick. “We believe that the construction of this pipeline is of vital importance to the future of Canadian energy security and prosperity.”

The agreement is expected to deliver at least $7 million in net profit to the Gitxsan people. Enbridge will be providing financing at favourable rates, and the partnership will provide a solid foundation for an ongoing dialogue between the Gitxsan and Enbridge regarding regional renewable energy projects.

“Let me stress that all decisions we make in pursuing business on Gitxsan land remain faithful to the laws of our people, said Chief Derrick. “Those who wish to do business in Gitxsan territory will be held to Gitxsan standards.”

Janet Holder, Executive Vice-President of Western Access for Enbridge, welcomed the announcement and the support of the Gitxsan Nation. “I want to acknowledge the vision demonstrated by Chief Derrick and the Hereditary Chiefs,” said Ms. Holder. “The most significant way in which Aboriginal people can benefit from the Northern Gateway project is by owning a stake in it and sharing in the net income it produces.”

The announcement comes a day after 61 First Nations declared their opposition to the Northern Gateway pipeline. According to the Vancouver Sun by the end of the day Thursday, that number had grown to 131 First Nations.

Enbridge video of Janet Holder and Elmer Derrick (via Youtube)

Coalition of First Nations stands against Northern Gateway pipeline

Energy Environment Politics

An alliance of up to 130 First Nations from across North America say they will oppose any efforts to construct the Northern Gateway pipeline from the Alberta bitumen sands to the port of Kitimat.

Vancouver Sun: First nations claim alliance is barrier that pipelines won’t break

On Thursday, signatories to the initiative called the Save the Fraser Gathering of Nations, said they had increased their roster to 130 from 61 western Canadian first nations that oppose not just construction of Enbridge Inc.’s Northern Gateway project, but any project to increase Canada’s exports of oilsands crude, on the grounds that they infringe on aboriginal title.

“I have news for you [Prime Minister Stephen Harper], you’re never going to achieve your dream of pushing pipelines through our rivers and lands,” said Chief Jackie Thomas, of the Saik’uz First Nation, and head of the Yinka Dene Alliance, a key spokeswoman for the group in B.C.’s interior.

“It doesn’t matter what route you take, you can’t get a pipeline around opposed first nations. The path is blocked, and it’s going to stay blocked,” Thomas said.

Globe and Mail: B.C. natives form front to fight oil pipelines

First Nations say they fear the consequences of a spill from the pipeline, which would pass through some of Canada’s most spectacular mountain landscape. They also oppose the idea of shipping oil from British Columbia ports.

“First Nations, whose unceded territory encompasses the entire coastline of British Columbia, have formed a united front, banning all exports of tar sands crude oil through their territories,” more than 60 aboriginal groups said in a statement.

Thursday’s declaration could also affect a planned expansion of Kinder Morgan Energy Partners’ Trans Mountain oil pipeline, which runs from Alberta to Vancouver. The company is seeking commitments from potential shippers for the project.

Canadian Press First Nation leaders say they are closing B.C. borders to Gateway pipeline

Chief Art Adolph, of the St’at’imc Nation, said he’s opposed to any plans by the federal Conservative government to push the pipeline through.

“If they are serious about respecting our rights, the government of Canada must stop pushing the oil companies’ line that this is in the public interest, and the government of B.C. should step up to the plate too and begin protecting our rivers and coastlines from further environmental damages that violate our basic human rights,” he said.

Related: Save the Fraser website

Rio Tinto Alcan to make announcement Thursday about Kitimat growth plans

Rio Tinto Alcan has called a news conference for Thursday, December 1 in Kitimat “to make an announcement regarding
the company’s multi-billion dollar growth plans.”

BC Premier Christy Clark, Rio Tinto CEO Jacynthe Cote, Jean Simon, president, RTA Primary Metal North America, Paul Henning, RTA vice president, British Columbia Operations & Strategic Projects, Western Canada and key regional stakeholders and First Nations representatives will be at the announcement at the Kitimat Modernization site during the noon hour.

The RTA news release says the announcement will be a significant event for Kitimat, the northwest region of the province, and all of British Columbia. It is likely, especially with the BC premier in attendance, the RTA is giving the go ahead for the long planned $2.5 billion smelter modernization project.

Updates

Sources have told Northwest Coast Energy News that applicants for jobs at the Kitimat Modernization Project, where the prime contractor is Bechtel, were told during the past month to wait until the end of November and that time, the applicants were told, there would probably be between 500 and 550 jobs available.

The Globe and Mail reports:

Rio Tinto to go ahead with Kitimat smelter expansion

Rio Tinto Alcan is pushing ahead with construction of a $3.3-billion (U.S.) smelter in Kitimat, B.C., even as stagnant prices have spurred a selloff of other aluminum assets.

London-based Rio Tinto PLC, which acquired Montreal-based aluminum giant Alcan for $38.1-billion in 2007, is expected to announce Thursday it has final approval to modernize the 57-year-old smelter to double its capacity

Approval will see Rio spend another $2.7-billion on Kitimat, after already setting aside $650-million towards the upgrade, raising the construction price tag more than 30 per cent from $2.5-billion. The plan includes demolishing a building and clearing space for a new plant.

Giant Japanese energy consortium buys into BC shale gas

Energy

A large Japanese consortium lead by Inpex Corporation has agreed to buy a 40 per cent stake in shale gas assets owned by Calgary-based Nexen, an energy exploration company.

A Nexen news release calls the deal “a strategic partnership.” The deal is worth $700 million and covers the development of shale gas deposits in the Horn River, Cordova and Liard basins in northeast BC

Inpex is a partner with Shell in an Indonesian liquified natural gas project. Shell recently purchased the old Methanex site and marine terminal in Kitimat.

Nexen will continue to manage operations at the deposits.

The news release quotes Marvin Romanow, Nexen’s President and Chief Executive Officer, as saying :”This joint venture represents a significant milestone in the advancement of our shale gas strategy and the premium over our invested cost shows the value we have created in a short time. The transaction provides us with world-class partners that have significant upstream and LNG expertise. It also recognizes the outstanding team we have put in place and the execution excellence they have consistently demonstrated.”

The Nexen release goes on to say:

Inpex currently conducts 71 oil and gas projects in 26 countries, making them Japan’s largest oil and gas exploration and production company. They are engaged in exploration, development and production activities around the globe with production of over 400,000 boe/d and have the largest oil and gas reserves and production volume of any Japanese E&P company.

Inpex brings significant LNG expertise and market access to the partnership. They own interests in large LNG projects including resource in both Indonesia and Australia and are building a regasification terminal in Japan. Inpex holds a 76% working interest in the Ichthys LNG project offshore Australia and is the operator. The project is expected to deliver LNG production volumes of 8.4 million tonnes per year. Inpex holds a 60% working interest in the Abadi LNG project offshore eastern Indonesia and is the operator (in July 2011, Inpex signed an agreement with Shell for transfer of a 30% participating interest. This transaction is subject to certain conditions). The project is expected to deliver LNG production volumes of 2.5 million tonnes per year. The production volume from these two projects is equivalent to 15% or more of Japan’s current LNG annual import volumes.

Energy industry tweeters are already speculating that the natural gas will likely be exported through Kitimat.