Court challenges and rising costs will stall the Northern Gateway project for most of 2015, Enbridge says in its Fourth Quarter (2014) Strategic Update, released Friday. That means if the Northern Gatway project actually goes ahead, the company now says it will not be completed until at least 2020 or 2021.
The strategic planning report also contains cryptic references that Enbridge may be planning a second pipeline project to the “west coast” possibly to carry LNG, that could also be completed by 2020 or 2021.
Editor’s Note: Some readers have pointed out that the obscure reference to the second pipeline to the west coast might also refer to the proposed twinning of the Kinder Morgan pipeline to the Lower Mainland.
Enbridge executives made no direct references to Northern Gateway during the conference call marking the release of the company’s 2014 results, nor did financial analysts nor media participants ask any questions about the Northern Gateway, an indication, that for now, the controversial project has dropped off the media and financial radar.
As for a possible new Enbridge pipeline to the British Columbia coast, the strategic planning report notes:
Based on the prospect for higher global LNG demand, the large resource base in western Canada and the changing North American natural gas flow patterns discussed above, there is an increasing probability that additional projects to export LNG from the continental United States or potentially off the west Coast of Canada will proceed. However, a sustained period of low crude oil prices or other changes in global supply and demand for natural gas could delay such opportunities.
Then in the conference call, Guy Jarvis, Enbridge president of Liquids Pipelines, made this reference to a slide that projected Enbridge’s future earnings.
In our base case, which is the green line and which we discussed at Enbridge Day, Keystone XL is in service in 2019 and Energy East plus one of the two West Coast projects is in service in 2020. In this scenario, we are currently chockablock full and we remain full as we bring on the two faces of Alberta Clipper expansion capacity and as we squeeze the last bit of capacity availability out of our system leaving about 200,000 barrels a day of capacity that we can’t get at due to upstream bottlenecks and crude slate versus line allocations.
So that means Enbridge expects one of two West Coast projects to be online by 2020. One, of course, is Nothern Gateway, the second, perhaps a LNG project now on the drawing boards in Edmonton. If, however, the reference is to Kinder Morgan, that too may be delayed by opposition to that project. Sources indicate that pipeline companies often have various scenarios and plans on backburners that may be activated if market conditions are favourable.
A slide from the Enbridge presentation speaks of “one” west coast pipeline coming into operation in 2020 or 2021 (Enbridge)
Northern Gateway
As for Northern Gateway itself, Enbridge’s report on the project is buried deep in the strategic review, after almost every other project and pipeline the company is working on.
Enbridge begins by noting the history of the twin 1,177-kilometre (731-mile) pipeline system from near Edmonton, Alberta to a new marine terminal in Kitimat, British Columbia. It then mentions the pipline would carry “crude oil for export” from the Edmonton area to Kitimat, fudging that the pipeline would actually carry diluted bitumen. The other pipeline would carry natural gas based condensate back to the oil sands. On June 17, 2014, the federal government approved the Northern Gateway project subject to the 209 conditions imposed by the Joint Review Panel six months earlier.
First Nations and enviromental groups then filed court challenges to the project.
The report notes that on December 17, 2014, the Federal Court of Canada consolidated all the challenges to Northern Gateway in a single proceeding.
Those challenging the Northern Gateway have until May 22, 2015 to file with the Federal Court the Appellants’ Memoranda of Fact and Law.
Northern Gateway must respond with a Respondents’ Memoranda by June 5, 2015.
The company says the Federal Court hearing will open sometime in the fall of 2015, with a decision possibly late in 2015. Enbridge expects either one side or the other to seek Leave to Appeal to the Supreme Court of Canada which could delay the project into 2016 or 2017.
Current proposed route for the Northern Gateway pipeline. (Enbridge)
Gateway costs
The report says that in October, 2014, Enbridge began reviewing its cost estimate for Northern Gateway, “based on full engineering analysis of the pipeline route and terminal location.” Now the companys says “the final cost of the project will be substantially higher than the preliminary cost figures included in the Northern Gateway filing with the JRP, which reflected a preliminary estimate prepared in 2004 and escalated to 2010.”
What is raising the cost of Northern Gateway include “significant costs associated with escalation of labour and construction costs” probably due to LNG other projects, as well as satisfying the JRP’s 209 conditions. It appears also that Enbridge is finally actually looking at the costs of building the pipeline over BC’s rugged terrain, “a larger portion of high cost pipeline terrain, more extensive terminal site rock excavations and a delayed anticipated in-service date.”
Enbridge adds: “The updated cost estimate is currently being assessed and refined by Northern Gateway and the potential shippers.”
It may be that Northern Gatway’s future is becoming more precarious, especially with the collapse in world oil prices.
Enbridge notes: “Subject to continued commercial support, receipt of regulatory and other approvals and adequately addressing landowner and local community concerns (including those of Aboriginal communities), the Company now estimates that Northern Gateway could be in service in 2019 at the earliest. The timing and outcome of judicial reviews could also impact the start of construction or other project activities, which may lead to a delay in the start of operations beyond the current forecast.” (The 2020 or 2021 figure came from the conference call and slide presentation, not the strategic report)
Enbridge concludes:
Given the many uncertainties surrounding Northern Gateway, including final ownership structure, the potential financial impact of the project cannot be determined at this time.
The Joint Review Panel certificate granting Enbridge permission to proceed expires, under Condition 2, on December 31, 2016. Under Condition 187, Northern Gateway must assure the JRP and National Energy Board that it has sufficient financial resources to both build the project and to implement all the safety and environmental conditions imposed by the JRP and accepted by Stephen Harper’s cabinet when it approved the project.
Chevron, the lead corporation in the Kitimat LNG project announced on January 23 that the Moricetown Indian Band had agreed to join the First Nations Limited Partnership, in effect, approving the Pacific Trail Pipeline that would take natural gas to the project in Kitimat.
Here is the news release from all parties involved.
Vancouver, British Columbia, January 23, 2015 – The First Nations Limited Partnership (FNLP) today announced that Moricetown Indian Band (Moricetown) has joined the FNLP. The FNLP is a commercial partnership that, with the addition of Moricetown, now includes all of the 16 First Nations whose traditional territory is located along the proposed 480 kilometre Pacific Trail Pipeline (PTP) route from Summit Lake to Kitimat, B.C.
“The decision of the Moricetown First Nation Band Council to join the First Nations Limited Partnership is one that we warmly welcome,” said the Honourable Bob Rae, Chairman of FNLP.
“It means all 16 First Nations along the proposed Pacific Trail Pipeline route are partners in a unique approach that combines environmental stewardship, extensive job, procurement, and other economic benefits, and direct financial transfers on a regular basis to each First Nations community.”
The FNLP is without precedent in the Canadian energy industry and the Pacific Trail Pipeline is the only proposed natural gas pipeline for a liquefied natural gas (LNG) facility in B.C. with such a benefits agreement. The proposed PTP and Kitimat LNG Facility projects are owned by Chevron and Apache through a 50/50 joint venture and are operated by Chevron.
“This agreement is unparalleled in balancing strong economic growth measures with preserving our cultural heritage and the environment. There is, quite simply, no other deal that comes close to what we’ve been able to achieve in this partnership,” said Chief Dan George of Ts’il Kaz Koh (Burns Lake).
The commercial partnership ensures that FNLP Nations receive immediate and long-term benefits from the PTP project. These include up to $550 million in direct financial benefits over the life of the PTP project, including a recent enhanced benefit of $10 million a year operating life of the PTP project from the Province of British Columbia. The FNLP Nations also receive substantial economic development, skills training, employment and contracting benefits from PTP under the terms of the agreement.
“Chevron Canada wishes to commend all parties for creating a partnership between industry and First Nations based on mutual respect, trust and economic self-determination. We welcome Moricetown as the 16th member of the FNLP, and look forward to building the Pacific Trail Pipeline with First Nations in a manner that places the highest priority on protecting people and the environment,” said Jeff Lehrmann, President, Chevron Canada Limited.
Measures that reflect environmental protection, vitality of traditional cultural values, protection of aboriginal rights and title, economic self-determination and a sustainable future for First Nations are also part of the FNLP agreement. Members of the FNLP have already received significant benefits to date from the agreement, including $17 million in financial payments.
“We have already seen over 1,600 First Nations members receive skills training through the PTP Aboriginal Skills to Employment Partnership, better known as PTP ASEP. Over 900 of these trainees have found jobs,” said Chief Karen Ogen of the Wet’suwet’en First Nation.
First Nations employment currently accounts for 54 per cent of all early works construction workforce hours to date on the Pacific Trail Pipeline. To date, FNLP members have also been awarded over $245 million in PTP construction contracts, and over 65 per cent of construction contract expenditures have been made to member First Nation businesses.
The agreement also facilitates joint ventures between FNLP and companies engaged in the PTP Project. As such, the FNLP Nations not only have a clear financial interest in the pipeline construction but, just as importantly, also have a strong voice in ensuring the preservation of environmental and cultural integrity.
“The FNLP is an innovative model for how industry and First Nations can cooperate effectively with respect to major economic development projects,” said the Honourable Bob Rae.
About First Nations (PTP) Group Limited Partnership (FNLP)
The First Nations (PTP) Group Limited Partnership (FNLP) is a limited partnership of 16 First Nations whose traditional territories are located along the transportation corridor between Summit Lake and Kitimat, British Columbia.
FNLP was formed to secure significant, reliable and long-term economic benefits for its limited partners from the proposed PTP Project.
FNLP member Nations are:
* Haisla Nation
* Kitselas First Nation
* Lax Kw’alaams Band
* Lheidleh T’eneh First Nation
* McLeod Lake Indian Band
* Metlakatla First Nation
* Moricetown Indian Band
* Nadleh Whut’en First Nation
* Nak’azdli Band
* Nee Tahi Buhn Indian Band
* Saik’uz First Nation
* Skin Tyee First Nation
* Stellat’en First Nation
* Ts’il Kaz Koh First Nation (Burns Lake Indian Band)
* West Moberly First Nations
* Wet’suwet’en First Nation
About PTP and the Pacific Trail Pipelines Limited Partnership
The proposed 480-kilometre Pacific Trail Pipeline Project is jointly owned by Chevron Canada Limited (Chevron) and Apache Canada Ltd. (Apache) through the Pacific Trail Pipelines Limited Partnership (PTPLP). The PTP is intended to deliver natural gas from Summit Lake
B.C. to the proposed Kitimat LNG facility on B.C.’s north coast. The Pacific Trail Pipelines Limited Partnership (PTPLP) acquired the project in February 2011 from Pacific Northern Gas.
The fact that the Moricetown Band had held out for so long was seen as one of several factors that was holding up a Final Investment Decision by Chevron and its soon to be new partner, Australia’s Woodside Pretroleum, which is currently finalizing a deal to buy Apache’s stake in the project. Chevron vice chairman, George Kirkland was asked about it during an investor conference call in August, 2014 At the time, Kirkland hinted at the potential problems with the Pacific Trails Pipeline, where there is still a dispute with members of the Wet’suwet’en First Nation. “We’re going to focus on the pipeline and the end of the pipeline corridor. That’s important and we’re putting some money into that to finalize the pipeline routing, get all our clearances and then we’ve got work going on.”
The Unist’ot’en Camp group which opposes energy development in the traditional territory of that House has not yet commented on the announcement. However, earlier Friday at a protest in Winnipeg, Freda Huson, Spokesperson for the Unist’ot’en People and Hereditary Chief Toghestiy of the Likhts´amisyu Clan, issued this statement.
¨The Hereditary Chiefs of the Wet´suwet´en People will stop all attempts from Pipeline Companies, Colonial Governments, and their sell-out employees from bringing Tar Sands Bitumen or Fracked Gas onto our lands. We have ancestral integrity which guides us and will help us ensure that we make the right decisions to protect our lands for all of our unborn generations. We will hold ALL those accountable for attempting to enable destructive agendas to take hold on our sacred lands. We will use our traditional governing systems, the colonial courts, grassroots Indigenous Peoples, and our media savy to make everyone associated with Pipelines, Tar Sands, and Fracking activity from affecting our unceded lands. We are armed with our indomitable spirit and 2 Supreme Court of Canada decisions and will use them against any more aggressors on our unceded lands. Consider this a warning for attempting to trespass on our homelands. We have defended our lands for countless generations and we will stand up like our ancestors have to ensure that we never are viewed as weak in the eyes of our ancestors or children.
Apache Corporation today announced it has agreed to sell its interest in two LNG projects, Wheatstone LNG and Kitimat LNG, along with accompanying upstream oil and gas reserves, to Australila’s Woodside Petroleum Limited for a purchase price of $2.75 billion.
The news release says:
Apache will also be reimbursed for its net expenditure in the Wheatstone and Kitimat LNG projects between June 30, 2014, and closing which is estimated to be approximately $1 billion.
Under the terms of the agreement, Apache will sell its equity ownership in its Australian subsidiary, Apache Julimar Pty Ltd, which owns a 13-percent interest in the Wheatstone LNG project and a 65-percent interest in the WA-49-L block which includes the Julimar/Brunello offshore gas fields and the Balnaves oil development. The transaction, which has an effective date of June 30, 2014, will also include Apache’s 50-percent interest in the Kitimat LNG project and related upstream acreage in the Horn River and Liard natural gas basins in British Columbia, Canada.
Based on current estimates, Apache’s net proceeds upon closing are expected to be approximately $3.7 billion. Receipt of proceeds from this transaction will trigger an estimated $650 million cash tax liability, approximately $600 million of which is associated with the income tax due on Apache’s Overall Foreign Loss account balance. Upon incurring this income tax liability, Apache estimates that it will have the flexibility to repatriate cash generated from foreign operations and/or future international strategic transactions with minimal U.S. cash tax impact.
“Today’s announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects. Apache recognizes the contribution of our employees who have worked so diligently on these projects since their inception, and we sincerely thank them for their tremendous effort. I would also like to thank Woodside’s CEO and Managing Director, Peter Coleman, and his entire staff for their hard work and professionalism in bringing this transaction to a successful conclusion. I am proud of Apache’s legacy in advancing the Wheatstone and Kitimat LNG projects, and I am confident that Woodside’s participation will have a positive impact in seeing these world-class LNG facilities through to first production. We look forward to the redeployment of the proceeds from this sale, which may be used to reduce debt, repurchase shares and to pursue other opportunities that enhance our asset base and drive profitable production growth,” said G. Steven Farris, chairman, chief executive officer and president.
Upon completion of the transaction, Apache will continue to hold upstream acreage offshore Western Australia in the Carnarvon, Exmouth, and Canning basins along with related hydrocarbon reserves and production. Apache will also retain its 49-percent ownership interest in Yara Holdings Nitrates Pty Ltd and 10-percent interest in the related ammonium nitrate plant.
The transaction is expected to close in the first quarter of 2015 and is subject to necessary government and regulatory approvals and customary post-closing adjustments. The sale of the Kitimat LNG project is subject to certain operator consents.
Kitimat’s new mayor, Phil Germuth (left) sworn in by Chief Administrative Officer Ron Poole (far right) as RCMP Sgt. Graham Morgan and Staff Sergeant Phil Harrison watch. (Robin Rowland/Northwest Coast Energy News)
The District of Kitimat’s new council was sworn in a special ceremony at the Council Chambers at Northwest Community College, Monday, Dec. 1, 2014.
Councillor Phil Germuth questions Northern Gateway officials about their plans for leak detection, Feb. 17, 2014 (Robin Rowland/Northwest Coast Energy News)
Enbridge Northern Gateway officials are loath (to put it mildly) to speak to the media but sometimes they let things slip. Earlier this summer, at a social event, I heard an Enbridge official (probably inadvertently) reveal that when the company’s engineers came before District of Kitimat Council earlier this year they were surprised and somewhat unprepared to fully answer the detailed technical questions from Councillor Phil Germuth on pipeline leak detection.
The results of the municipal election in Kitimat, and elsewhere across BC show one clear message; voters do want industrial development in their communities, but not at any price. Communities are no longer prepared to be drive by casualties for giant corporations on their road to shareholder value.
The federal Conservatives and the BC provincial Liberals have, up until now, successfully used the “all or nothing thinking” argument. That argument is: You either accept everything a project proponent wants, whether in the mining or energy sectors, or you are against all development. Psychologists will tell you that “all or nothing thinking” only leads to personal defeat and depression. In politics, especially in an age of attack ads and polarization, the all or nothing thinking strategy often works. Saturday’s results, however, show that at least at the municipal level, the all or nothing argument is a political loser. Where “all politics is local” the majority of people are aware of the details of the issues and reject black and white thinking.
Northern Gateway’s Ray Philpenko gives a presentation on pipeline leak detection to Kitimat Council, Feb. 17. 2014. (Robin Rowland/Northwest Coast Energy News)
The Enbridge official went on to say that for their company observers, Germuth’s questions were a “what the…..” moment. As in “what the …..” is this small town councillor doing challenging our expertise?
But then Enbridge (and the other pipeline companies) have always tended to under estimate the intelligence of people who live along the route of proposed projects whether in British Columbia or elsewhere in North America, preferring to either ignore or demonize opponents and to lump skeptics into the opponent camp. The Northern Gateway Joint Review Panel also lost credibility when it accepted most of Northern Gateway’s arguments at face value while saying “what the ……” do these amateurs living along the pipeline route know?
Pro Development
“I am pro-development,” Germuth proclaimed to reporters in Kitimat on Saturday night after his landslide victory in his campaign for mayor.
On the issue of leak detection, over a period of two years, Germuth did his homework, checked his facts and looked for the best technology on leak detection for pipelines. That’s a crucial issue here where pipelines cross hundreds of kilometres of wilderness and there just aren’t the people around to notice something is amiss (as the people of Marshall, Michigan wondered at the time of the Line 6B breach back in 2010). Enbridge should have been prepared; Germuth first raised public questions about leak detection at a public forum in August 2012. In February 2014, after another eighteen months of research, he was ready to cross-examine, as much as possible under council rules of procedure. Enbridge fumbled the answers.
So that’s the kind of politician that will be mayor of Kitimat for the next four years, technically astute, pro-development but skeptical of corporate promises and determined to protect the environment.
Across the province, despite obstacles to opposition set up by the federal and provincial governments, proponents are now in for a tougher time (something that some companies will actually welcome since it raises the standards for development).
We see similar results in key votes in British Columbia. In Vancouver, Gregor Roberston, despite some problems with policies in some neighborhoods, won re-election on his green and anti-tankers platform. In Burnaby, Derek Corrigan handily won re-election and has already repeated his determination to stop the twinning of the Kinder Morgan pipeline through his town. In Prince Rupert, Lee Brain defeated incumbent Jack Musselman. Brain, who has on the ground experience working at an oil refinery in India, supports LNG development but has also been vocal in his opposition to Northern Gateway.
The new mayor in Terrace Carol Leclerc is an unknown factor, a former candidate for the BC Liberal party, who campaigned mainly on local issues. In the Terrace debate she refused to be pinned down on whether or not she supported Northern Gateway, saying, “Do I see Enbridge going ahead? Not a hope,” but later adding, “I’d go with a pipeline before I’d go with a rail car.”
Kitimat election signs. (Robin Rowland/Northwest Coast Energy News)
Plebiscite confirmed
Kitimat’s mayor and council elections also confirm that Northern Gateway plebiscite vote last April. Kitimat wants industrial development but not at the price of the community and the environment. The unofficial pro-development slate lost. A last minute attempt to smear Germuth on social media was quickly shot down by people from all sides of the Kitimat debate. Smears don’t usually work in small towns where everyone knows everyone.
Larry Walker, an environmentalist with a track record in municipal politics as an alderman in Spruce Grove, Alberta, won a seat. Together with Rob Goffinet and Germuth, that is three solid votes for the environment. The other new councillor is Claire Rattee who will be one to watch. Will the rookie be the swing vote as Corinne Scott was?
Mario Feldhoff who came to third to Goffinet in the overall vote (Edwin Empinado was second) is a solid councillor with a strong reputation for doing his homework and attention to detail and the unofficial leader of the side more inclined to support development. Feldhoff got votes from all sides in the community.
During the debates, Feldhoff repeated his position that he supports David Black’s Kitimat Clean refinery. But as an accountant, Feldhoff will have to realize that Black’s plan, which many commentators say was economically doubtful with oil at $110 a barrel, is impractical with oil at $78 a barrel for Brent Crude and expected to fall farther. Any idea of a refinery bringing jobs to Kitimat will have to be put on hold for now.
LNG projects are also dependent on the volatility and uncertainty in the marketplace. The companies involved keep postponing the all important Final Investment Decisions.
There are also Kitimat specific issues to deal with. What happens to the airshed, now and in the future? Access to the ocean remains a big issue. RTA’s gift of land on Minette Bay is a step in the right direction, but while estuary land is great for camping, canoeing and nature lovers, it is not a beach. There is still the need for a well-managed marina and boat launch that will be open and available to everyone in the valley.
Germuth will have to unite a sometimes contentious council to ensure Kitimat’s future prosperity without giving up the skepticism necessary when corporations sit on a table facing council on a Monday night, trying to sell their latest projects. That all means that Germuth has his job cut out for him over the next four years.
The best analogy is that of the sports star or coach who stays one season too many. Monaghan had set her sights on 40 years in local politics. But in the 2014 mayor’s race she ran up against a strong sentiment that it was time for a change. She probably allowed that career goal to override any political instincts she may have built up over those years where a small town politician has to keep track of the pulse of events.
Joanne Monaghan’s poor performance in the all candidates debate hurt her campaign (Robin Rowland/Northwest Coast Energy News)
Monaghan has an impressive track record: municipal councillor since 1980, mayor since 2009. That means Monaghan was mayor during some of the toughest times that Kitimat has faced after the Eurocan pull out.
She served two terms as the head of the Union of BC Municipalities (the first woman) the third woman to be president of the Federation of Canadian Municipalities. She was Chair of the Regional District Kitimat Stikine for eight years and Vice Chair for nine. She has served on the British Columbia Heritage Trust, the Northwest Community College Board, the Provincial Tourism Council, and the Provincial Transportation Committee. Monaghan is also a member of the Northern Development Initiative, and is chair of the University of Northern B.C. Advisory Committee.
The Canadian International Development Agency sent her to Ecuador on a “Municipal Government Technology Transfer between a community in Ecuador and Kitimat. She also facilitated workshops in “Women in Politics” in South Africa and Ghana.
Monaghan served on many local committees, both community bodies mandated by council as well as volunteer groups.
Her 35 years in local politics mean that she knows everyone in town. Her 35 years in municipal politics allowed her to build up valuable contacts in other municipalities, provincial and federal politics as well as the media.
Joanne Monaghan was a model mayor for a small town, for 35 years she was always available to members of the Kitimat community, always ready to respond to a phone call or an e-mail from a Kitimat resident, working hard on issues from restoring old sidewalks to bringing new industry to the valley. She was always available to show up at a local event, even if it was just for a few minutes.
So want went wrong with her campaign?
Monaghan was successful in bringing Tim Horton’s to Kitimat, an asset to any community. She worked hard to bring other business small and large to Kitimat.
If nothing much ever happened in Kitimat, if it was a small one industry town expanding into tourism, Monaghan would probably have been re-elected on Saturday.
If Kitimat was a town facing one major issue, Monaghan might still be mayor.
What made Joanne Monaghan a great small town mayor was also her weakness, trying to do too much and thus while trying to handle a growing number of cascading important issues, becoming overwhelmed by them.
Kitimat is facing Northern Gateway, three liquified natural gas projects, Rio Tinto Alcan Kitimat Modernization, the airshed problems from all those projects, the housing crisis, bettering relations with the Haisla, just to name a few, as well as sorting out normal municipal priorities like maintaining sidewalks.
As early as a year ago, a feeling began to grow in Kitimat that Monaghan wasn’t skeptical enough about some of the companies coming to town bearing gifts. Monaghan tended to avoid the tough questions on Northern Gateway, punting issues (to continue the sports analogy) until the Joint Review Panel reported. Monaghan was not alone among council in burying its head in the sand over the Joint Review Panel but as the leader of a group that is supposed to operate with collegial consensus, Monaghan blocked any real involvement by the District in the JRP.
While Monaghan had helped bring Kitimat from gloom after Eurocan to current fragile boom with the KMP and LNG, there was a feeling that hungry for good news, she was too often willing to accept the assurances from the big corporations dealing with council.
At council, other members began to outshine Monaghan. On different sides of most issues, Phil Germuth and Mario Feldhoff, despite both working full time, always came prepared, files full of documents, facts and figures. Rob Goffinet was always ready to ask a skeptical question. Rookie Edwin Empinado wore his idealism on his sleeve, although he sometimes struggled expressing his focus on issues. Monaghan, on the other hand, often seemed unprepared and inflexible on major issues.
Throughout the summer, there was speculation and conversations around Kitimat, about whether Joanne Monaghan would stand for another term as mayor. In a metropolitan city, polling would have confirmed that there was a growing feeling that it was time for a change. If Monaghan noted the warning signs, and they were noticeable in a small town, she chose to ignore them.
When Monaghan said in her campaign literature that she would “stand up to outside influences and special interest groups” who did she mean by “special interest groups?” If she meant Douglas Channel Watch the most prominent “special interest group” in town or the no vote in the plebiscite in general, she narrowed her options, since Trish Parsons was the “pro-development” candidate.
Both Trish Parsons and Phil Germuth put forward strong arguments in the all candidates debate while Monaghan appeared to be upnprepared. (Robin Rowland/Northwest Coast Energy News)
If there was a moment where Monaghan really lost the election, it was her performance in the all candidates debate at Mt. Elizabeth Theatre. Phil Germuth shone in the debate and Trish Parsons was a close second. They were clearly prepared and rehearsed, ready with their statements and with their answers to the questions, winging the questions that were totally out of left field. The generational difference between Monaghan and her rivals was clear on stage. It appeared she hadn’t properly prepared, her answers rambled and she was frequently cut off by the moderator for going over the time limit. A solid debate performance might have brought some of Monaghan’s former supporters back into her camp but that never happened.
Although Parsons performed well in debate, the feeling in the community was that, despite her work with the Chamber of Commerce and community groups, she should have “paid her dues” by at least one term on council before trying for the mayor’s chair. So Parsons was unable to build support beyond her pro-development base.
With Monaghan’s support slipping away and Parsons stalled, the community vote went strongly to Phil to Germuth.
So what is Joanne Monaghan’s legacy? That legacy is that she is the model small town mayor who answered everyone’s phone calls and e-mails, who listened to everyone’s points of view, even those she clearly disagreed with, while also being the model small town mayor who worked hard to tackle district wide issues.
As far as the national media is concerned, Toronto’s notorious Rob Ford created his Ford Nation supporters through a personal touch, by always returning phone calls, making sure Toronto responded to even the most minor complaints. But even before Ford’s personal problems became worldwide media fodder, it was clear that Ford was too often neglecting handling the big picture, the Toronto wide issues, for a constituent’s crack in a sidewalk.
Monaghan was working on that personal touch when Ford was still in high school. Monaghan was smarter than Ford (if Monaghan was a A, Ford was an F), for 35 years she balanced the personal touch with active concern and dogged work for the entire District.
Between 2011 and 2014, Kitimat jumped from the minor leagues to the Premier League, and there was a clear demand for fresh blood to strengthen the political team. The voters decided that the veteran team coach should retire. But Coach Monaghan still does have a shelf full of trophies from those 35 years. If this really was the sporting world, her number should be retired as well and lifted to the rafters.
Phil Germuth won a decisive victory Saturday November, 15, 2014 to become the new mayor Kitimat for the next four years. Incumbent mayor Joanne Monaghan came a distant third with Chamber of Commerce director Trish Parsons in second place.
Germuth outpaced his rivals with 1828 votes, Parsons received 530 and Monaghan 447.
Speaking to reporters at the District offices after the results were tabulated, Germuth said, “Relationship building has to be our number one thing. We really need to build a relationship with the Haisla on all the issues here for industry, in recreation and all the other things.”
Kitimat mayor -elect Phil Germuth speaks to reporters at the District of Kitimat offices after winning the mayor’s chair, Nov. 15, 2014. (Robin Rowland/Northwest Coast Energy News)
Germuth said, “We have to deal with affordable housing, we only just got the land from RTA, so we’re going to start trying to work on that and… do everything we can to support industry who wants to come here.”
“I would definitely want to give a thanks to Joanne Monaghan for her 30 plus years of dedicated service, so many good things have come to this community because of her time on council and her time as mayor. Joanne really deserves a big thank you from the community of Kitimat,” Germuth said.
Reached at her home late Saturday, Joanne Monaghan said, “I’m disappointed that I can’t finish some of the things I started doing. It’s going to be very different for me because I’ve given half my life working for the people of Kitimat, it’s going to be different. so I’m going to have to do something else but what will it be I have no idea, I guess when God takes one thing away He gives you another, so we will have to see what it is.
At first Monaghan said she had no specific comment on Germuth’s win but then she added, “He had the support of the union behind him and usually when you have the union behind you, you usually come out on top.”
Four incumbents are returning to Council, Rob Goffinet, Mario Feldhoff, Edward Empinado and Mary Murphy, Two newcomers took the seats vacated when Germuth stood for mayor and Corinne Scott stepped down. Larry Walker who came to Kitimat to retire and 22 year old art enthusiast Claire Rattee owner of the DivineInk Tattoos & Piercing studio.
Unofficial results were Rob Goffinet: 1997; Edwin Empinado: 1966; Mario Feldhoff: 1918; Mary Murphy: 1577; Claire Rattee: 1381 and Larry Walker: 1129
Updates with corrected figure 156 acres from Rio Tinto Alcan and District of Kitimat
Rio Tinto Alcan has donated 156 acres (63 hectares) of waterfront land on Minette Bay to the District of Kitimat, Gaby Poirier, RTA General manager BC Operations, said Wednesday, November 12, 2014. It’s a major step in getting people in Kitimat access to the waterfront which is being closed off by industrial development.
In a news release, Poirier said.
It is with great pleasure that Rio Tinto Alcan confirms today a gift to the people of Kitimat of approximately 56 acres of water front land that make up District Lot 471, located in Minette Bay.
For more than half a century Rio Tinto Alcan has participated with pride in the development of Kitimat and Northwest British Columbia. In the 1950’s Rio Tinto Alcan developed a company town from mostly undeveloped land. Today it is a mature, vibrant, and highly liveable northern community. We are very proud of our involvement in making this happen.
Now, 60 years later, a new era of industrial development is on our doorsteps. Rio Tinto Alcan’s BC Operations is looking forward to having new neighbours beside us near the smelter site and port terminals. It is important now, more than ever, to ensure the people of Kitimat continue to have direct ocean access.
A view of Minette Bay June 5. 2014. (Robin Rowland/Northwest Coast Energy News)
To that end, Rio Tinto Alcan is pleased and committed, in this our 60th Anniversary year, to transfer ownership of the water front lot DL 471 to the District of Kitimat in trust for its citizens use for all time.
Map shows land that Rio Tinto Alcan has donated to the District of Kitimat (RTA)
Ron Poole, District of Kitimat Chief Administrative Officer, tells Northwest Coast Energy News, “As part of the gifting of Lot 471, RTA has agreed to guaranteeing road access across their property to access this lot.”
“It has roughly one kilometre of waterfront on Minette Bay,” Poole says. “We do not have preliminary plans for the site, however, council for years has been negotiating with RTA to provide water access and this is one lot they owned that meets the public need.”
If the Shell-led LNG Canada project goes ahead, with LNG Canada taking over the old Eurocan dock (it already owns the old Methanex dock), that means Rio Tinto Alcan would have to expand its port facilities at “Terminal A” (the original port) and that would cut off access to Hospital Beach which has been the only beachfront available to residents since the 1950s.
All Farris would say is, “We have lots of people working on the projects to do just that.”
At that same time, Apache is still spending money on the Kitimat project. The quarterly report says that Apache spent $151 million on the project in the third quarter, and a total of $498 million so far this year. That includes an equity investment in the Pacific Trail Pipelines $15 million in the third quarter and $44 million so far this year.
Chevron, Apache’s partner continues to work on the Kitimat project.
When the Russian container ship Simushir lost power in heavy weather west of Haida Gwaii last Thursday and driven by westerly winds came dangerously close to the rocky coast, Canada and British Columbia had to scramble to get vessels to the ship and try to tow it out of danger to Prince Rupert.
Like all other issues on the west coast, the debate is raging.
The Simushir tied up at the Ridley Island container port. (Prince Rupert Port Authority)
“Peter Lantin, president of the Haida Nation, told the media at the time, “It was luck.” On Tuesday, Lantin issued another statement, saying. ““Unfortunately, I don’t think anyone considers 20 hours a world class response time. The fact of the matter is that the federal government has little interest in protecting the west coast. From all indications their policy is to calculate an oil spill as an acceptable loss, based on a business model, not on the reality that coastal British Columbians live every day.”
It appears that the Simushir operation was lucky. The normal westerly winds that could have driven the ship onto the rocks of Haida Gwaii changed to southeasterly, keeping the Simushir off shore.
The American heavy duty tug Barbara Foss just happened to be available. The Barbara Foss was towing a cargo barge between Prince Rupert and Whittier, Alaska. The barge was left in Prince Rupert and the tug headed out off the coast of Haida Gwaii a trip that took about 48 hours. (There are also heavy duty Smit tugs at Prince Rupert which joined the operation on Hecate Strait to escort the Simushir into port. There are now reports that the Simushir‘s owners chose to hire the Barbara Foss rather than Smit)
The Canadian Coast Guard vessel Gordon Reid tows the Simushir away from the coast of Haida Gwaii. (Maritime Forces Pacific)
It took the first Canadian Coast Guard vessel, the Gordon Reid, about 14 hours to reach the Simushir (according to Coast Guard officials the original report of 20 hours was wrong). The Gordon Reid did manage to get lines on the Simushir and pull the ship away from the coast, only have the tow lines part (break) three times. So the three Coast Guard vessels, two from Canada, the Gordon Reid and the Sir Wilfred Laurier and the US Coast Guard cutter Spar had to wait for the Barbara Foss to arrive.
Jonathan Whitworth, CEO of Seaspan, speaking to Mark Hume of The Globe and Mail, “it was just bad luck” that none of the tugs that regularly work up and down the west coast were available at the time.
Whitworth told The Globe and Mail that there are about 80 boats between Alaska and Vancouver that could have towed the Simushir to safety. He said that the fact there were no tugs in the immediate vicinity as a “fluke.”
“We certainly have large tugs operating in Haida Gwaii on log barges, for example. So it will be a 6,000-horsepower tug that would [typically] be in that area. It just so happened that over the weekend our two biggest tugs which transit that area were down south,” Whitworth told The Globe and Mail.
Whitworth said that permanently stationing tugs at Haida Gwaii would be both be unnecessary and too expensive.“If there had been a tug stationed in Haida Gwaii then it could have responded possibly quicker. But who’s going to pay for that? Surprisingly from a tug owner it’s not going to be [my view] that there should be a tug every 50 metres up the coast.”
Effective response
In a news release, Rear Admiral Dan Abel, commanding the US Coast Guard 17th District, Alaska said.
“The trusted partnership we have with our Canadian counterparts continues to be a vital component to protecting lives at sea and mitigating potential maritime emergencies. We are pleased this case ended with a positive outcome; preparing for the worst case scenario is the first step in an effective prevention and response plan.”
The question now being asked up and down the BC coast has the provincial or federal governments really have an effective prevention and response plan? If the BC coast had trouble handling a container ship in trouble, how is it ever going to handle a Very Large Crude Carrier loaded with diluted bitumen?
According to the US Coast Guard, although the Simushir was adrift off the coast of Haida Gwaii, the incident triggered Alaska’s emergency response plan. “Coast Guard Sector Juneau deployed six members, including the sector’s commander, to Ketchikan to establish the foundation for a unified command and to exercise their sub area contingency plan with state and local partners.”
Key to Alaska’s response, is a system ready to go soon after a distress call is received. The Emergency Towing System (ETS) has prepackaged equipment that can be transferred to a disabled vessel either by helicopter or tug, depending on the size and position of the vessel in distress.
US Coast Guard C-130 Hercules and Skyhawk helicopter on standby at Sandspit airport. The Hercules carried one of Alaska’s Emergency Towing Systems in case it was needed. (US Coast Guard)
The United States Coast Guard deployed two of its Emergency Towing Systems last week to support the Simushir operation, one on a C-130 Hercules dispatched to Sandspit, the second on board the cutter Spar.
While the Alaska ETS systems were not used in the Simushir incident, how Alaska came up with the system is a lesson for British Columbia, for that state-wide program was started by the tiny municipality of Unalaska after a ship quite similar to the Simushir lost power and came within 15 minutes of running aground in Unalaska Bay.
Now just seven years later those Emergency Towing System packages are pre-positioned up and down the Alaska coast, while although Enbridge proposed the Northern Gateway in 2005, here in Canada both the provincial and federal governments make paper promises about a “world class” response system but so far nothing has happened.
Salica Frigo
Salica Frigo photographed in 2006 (Clipper/Wikipedia Commons)
The Salica Frigo incident in March 2007 was similar to the Simushir incident and like the Simushir, there was luck involved.
According to an Associated Press report at the time, quoting 2005 figures, Dutch Harbor and Unalaska was, for the 17th straight year, the United States leading fishing port for seafood landings in poundage. Commercial fishermen offloaded 887.6 million pounds of fish and shellfish in 2005. The value of its catch, $166.1 million, was second to New Bedford, Mass.
About three years earlier, another ship, the 225 metre (738-foot) Selandang Ayu experienced engine problems, shut off its engines, drifted and ran aground Dec. 9, 2004, in Skan Bay on Unalaska Island’s west side.
Six crewmen died when a US Coast Guard helicopter trying to rescue them crashed. The Selandang Ayu broke in two and spilled an estimated 321,000 gallons of fuel oil, contaminating 54 kilometres (34 miles) of coastline. AP reported that at the time of the Salica Frigo incident in 2007, the cleanup for the Selandang Ayu was more than $100 million.
The Salica Frigo was 135 metre (443 foot) Spanish-flagged ship, the same size as the Simushir.
On Thursday, March 8, 2007, the Salica Frigo was partially loaded with seafood and tied up at dock in Captain’s Bay in Dutch Harbor, Alaska Winds were from the north, from 30 to 40 knots gusting to 60 to 70 knots. The winds began to drive the Salica Frigo away from the dock and the local marine pilot, Capt. Stephen Moreno, consulting with the captain, ordered the ship to sea to ride out the winds. “He really didn’t have enough ground tackle to safely anchor,” Moreno told the AP.
The AP report says Moreno guided the Salica Frigo out to sea, plotted a safe course and then the pilot returned to port. At about, 3 am on March 9, the engine failed. It was not until an hour later, at 4 am, according to KIAL News the Salica Frigo’s captain called the marine pilots and the Coast Guard. North winds were blowing the ship back toward the harbor.
“If it had been from the south, he would have blown offshore,” Moreno told the AP.
The powerless ship drifted for more than three and a half hours toward the shore. Two tugboats came to the ship’s aid but could not establish lines to the stricken vessel.
Moreno and Coast Guard officials estimate the Salica Frigo was just 15 minutes from grounding when crew members were able to restart the engine at 6:43 a.m.
Emergency Towing System
Just weeks later, the Mayor of Unalaska, Shirley Marquardt created and convened a “Disabled Vessel Workgroup” that was tasked with developing a “an emergency towing capability for disabled vessels in the Aleutians using locally available tugboats and an emergency towing system.”
For a demonstration project from July 20 to August 1, 2007, Unalaska had put together and purchased a system suitable for vessels up to 50,000 dead weight tons (DWT) while the state, the the Alaska Department of Environmental Conservation was planning to purchase a system capable of towing vessel greater than 50,000 DWT.
The two types of Emergency Towing System packages are pictured in the operations manual. (Alaska Dept. of Environmental Conservation)
In a news release (pdf) at the time of the exercise, the Alaska Department of Environmental Conservation, said
In the last decade, several distressed or stricken vessels in the Aleutian Islands have adversely impacted the community of Unalaska. In a few cases, these incidents were the cause of environmental and economic repercussions.
In each situation, the vessel was a large tramper or cargo type ship, generally carrying fuel in bottom tanks, thus posing a significant pollution risk. Roughly 67% of port calls to Unalaska/Dutch Harbor in 2004 were either container ships or tramper/reefer vessels.
“These accidents can be devastating to Alaska’s environment and communities. Our goal is to enhance the ability of local assets to respond to distressed vessels in need of assistance due to engine failure,rudder failure, or any other failure which compromises the safe navigation of a vessel,” said DEC Commissioner Larry Hartig.
Tugs not always ready
The Emergency Towing System deployed on a tug. (Alaska Dept. of Environmental Conservation)
The other point in the 2007 ADEC news release is a note that tugs are not always equipped for operations such the one involving the Simushir
Generally tug boats (primary responders in this area) have some capability of retrieving vessels but they are not dedicated to this service and therefore the equipment aboard is not representative of equipment needs in this highly specialized situation. The recommended emergency towing system
will enhance local assets with the ability to respond to an emergency with all the proper equipment necessary to retrieve a distressed vessel.
The Unalaska resident tugs Gyrfalcon and James Dunlap are the most consistent local assets in the Unalaska region, but there are many other tugs in the area at any one time and thus this system is intended to be universally deployable.
The demonstration project, a partnership between the town, the state, the Coast Guard and the private sector was successful.
US Coast Guard helicopters deploy the Emergency Towing System (Alaska Dept. of Environmental Conservation)
An Emergency Towing System (ETS) is a pre-staged package of equipment that may be deployed in the event a disabled vessel requires assistance in accessing a place of refuge. A manual that instructs responders on the operations of system as well as procedures for deployment accompanies the system. The system is designed to use vessels of opportunity to assist disabled vessels that are in Alaskan waters. It consists of a lightweight high performance towline, a messenger line used in deploying the towline, a lighted buoy, and chafing gear. These components may be configured to deploy to a disabled ship from the stern of a tugboat or airdropped to the ship’s deck via helicopter.
In December 2010, Unalaska’s plan worked, the town’s ETS system was deployed to assist the disable cargo vessel Golden Seas. “This equipment, along with the availability of an appropriate sized towing vessel helped avert a possible grounding.” the ETS website says.
Since 2007, the Alaska Department of Environmental Conservation has purchased and stored 10 inch Emergency Towing Systems at the USCG Air Station in Kodiak and Sitka, the Navy Supervisor of Salvage warehouse at Fort Richardson, and the Emergency Response warehouse in Adak, Alaska.
Map shows where the Emergency Towing System is deployed across Alaska/. (Alaska Dept. of Environmental Conservation)
The Emergency Towing System can be deployed by helicopter or by tug. A helicopter can lower the tote or cage containing the towing gear onto the deck of the distressed ship. If the tote or cage is carried to the scene by a tug the crew the usual procedure is to use a helicopter to deploy the tote/cage to the distressed vessel or the tug crew. Depending on the circumstances, and although it is not part of the regular system, the tug crew can also line-gun projectile across the deck of the distressed ship so the crew can pull a “messenger line” attached to the tow line on board.
And as for Canada, Gail Shea, Minister of Fisheries and Oceans, answering questions in the Commons Monday about the Simushir incident did nothing more than speak off a prepared script, answering two questions from Nathan Cullen, NDP MP for Skeena Bulkley Valley and from Joyce Murray, Liberal MP from Vancouver Quadra, she said future operations were the responsibility of the private sector,
The Russian ship lost power outside Canadian waters in very rough weather. The private sector provides towing service to the marine industry.
We are grateful that the Canadian Coast Guard was able to keep the situation under control in very difficult conditions until the tug arrived from Prince Rupert.
Whitworth told the Globe that with increased tanker traffic whether LNG or bitumen, the number of tugs on the coast will increase, a point also made by supporters of the various projects.
But without a real commitment from the government for marine safety on the west coast, it is clear, even with the prospect of Very Large Crude Carriers with bitumen or Liquefied Natural Gas tankers plying the coast, the Harper Government considers marine safety nothing more than a case of a paper ship upon a paper ocean.
With such indifference, it is likely that local communities up and down the British Columbia coast will have to follow the example of the small town of Unalaska, population 4,376 in 2010 and create the northwest coast’s own emergency system.
Court challenges and rising costs will stall the Northern Gateway project for most of 2015, Enbridge says in its Fourth Quarter (2014) Strategic Update, released Friday. That means if the Northern Gatway project actually goes ahead, the company now says it will not be completed until at least 2020 or 2021.
