Clio Bay: What happens to sunken logs?

Special report: Clio Bay cleanup: Controversial, complicated and costly

Logs at Clio Bay
Floating logs at Clio Bay, September 14, 2013. (Robin Rowland/Northwest Coast Energy News)

The forest industry has been operating on the Pacific coast from Oregon to Alaska for more than a century. Over that time, it is likely that millions of logs from booms and other operations have sunk to the bottom of bays, cove, estuaries and inlets along the coast.

During that century, scientists in both Canada and the United States have been studying the effects of the those sunken logs on the sea bottom. It is only in recent years that the cumulative effect of all those logs has become an environmental concern.

As well as logs on the sea bottom, ranging, depending on location, from a couple of hundred to the tens of thousands of logs, there are wood chips, wood fibre and discarded log parts and bark. Often metal cables, bolts, ropes, and other manufactured material either dropped accidentally or deliberately discarded are also found among the old logs, further contaminating the seabed. Compounding the problem of the sea bottom is organic material that would occur naturally on the seabed, including tree trunks, roots, branches, conifer needles, deciduous leaves and other material from terrestrial plants.

Anyone who sails Douglas Channel after a storm can see with all the floating tree trunks in the Channe. That means that storms and spring run off ads debris to the natural pile up of old logs and debris. At logging sites, this natural material, brought in by creeks and rivers, piles up on the already sunken logs.

Over the years, depending on the salinity, teredos, more popularly known as ship worms  eat the wood, often leaving a tube of bark that eventually collapses. The rotting wood, bark and other material is often, depending on conditions, pounded into fragments by the action of waves, currents and outflow from rivers. Some species of teredo can live in brackish water, but since teredos are not a fresh water species, that means that logs in fresh or mostly fresh water last longer.

A DFO report on sunken log sites on Douglas Channel, published in 2000, noted:

very few comprehensive, quantitative field studies describing the effects of wood and bark have been published and those that did focused on log handling and storage sites which handled high volumes of more than one million cubic metres.

The DFO report said that thick bark and wood debris deposits resulting from log handling can cause substantial, long-term negative impacts to benthic (sea bottom) ecosystems. Under the worst conditions, the cumulative debris can deprive an area of oxygen and, according to DFO, “virtually eliminate aerobic” sea bottom animal life.

The report noted that studies had shown that “negative biological impacts were localized,” but added that “the cumulative effect of several hundred sites located on the B.C. coast is currently unknown.”

Studying the problem has been a low priority for DFO and other agencies and that meant a limited budget and few studies. Other problems is that, according to the DFO, parts of BC fjords are steep and “much of the likely impacted habitat is beyond diver range.” There is also pressure to study the effect on “economically or socially important species.” Although the use of remotely operated vehicles has increased since the 2000 report, using an ROV can also be a budget buster for a low priority project.

As the ready timber supply in British Columbia particularly old growth forest declined in the last part of the twentieth century, the DFO report says “forest companies have harvested areas where access is more difficult and cut-blocks are smaller.” That meant many smaller dump sites were developed that were used for only one to five years. Plans for log handling at the time, DFO said, were evolving to ensure ensure that fisheries resources and overall fish production capability were not adversely affected by development of log handling facilities and planning was focused on ensuring that sites for log handling facilities did “not have sensitive fish habitats or fisheries resources (such as eel grass beds or shellfish resources) which may be affected by the log handling,”

One of the reasons for the disagreements over Clio Bay is that while some people call it “dead” saying there are no halibut and fewer cod, others say that Clio Bay is very much alive, pointing out that it is easy to catch crab and rock cod.

The studies that have looked at life on the bottom of log dumps sites have shown that it can be highly variable even within one bay or cove, with many factors creating small local ecosystems, including depth, nature of the sea bottom, for example sand, mud, clay or a mixture, whether or not the sea bottom sediment is “enriched,” the flow of currents, fresh water flow into the site, the percentage of wood on the bottom, the percentage of bark on the bottom, whether the wood and/or bark debris is “continuous’ or “discontinuous,” whether or not the seabed is contaminated as was the case with the cleanup of pulp mill sites at Ward Cove and Sitka, Alaska.

Ward Cove had been so polluted for decades by pulp mill effluent that it was eligible for US Superfund clean up funding and was estimated to hold 16,000 sunken logs. At the same time, an EPA report on Ward Cove noted that at the point Ward Creek emptied into Ward Cove was “a popular sport fishing location during salmon season, including commercially guided fishing. Some sport fishing and personal-use crab pot fishing has taken place in the past and may continue in the waters of the cove.” At the same time of the cleanup, the EPA identified that the degradation of Ward Cove put at risk eight species of salmon, 75 “non-salmonid esturine and marine fish species and benthic invertebrate fauna.”  (The EPA says Ward Cove is recovering after the reclamation and fishing is continuing)

In other words, those say Clio Bay is in danger and those who say Clio Bay is a rich source of life are likely both right.

For example, while Chris Picard’s (then with the University of Victoria, now with the Gitga’at First Nation) study of Clio Bay said: “Dungeness crabs were observed five times more often in the unimpacted Eagle Bay than in Clio Bay,” and tied that to log dumping and low oxygen.
Picard’s study noted that both Dungeness crabs and sunflower seastars, while more abundant in Eagle Bay, in Clio Bay “both species were several-fold less abundant in wood-dominated habitats in Clio Bay than in non-wood habitats in that bay.”

Several people have pointed out that since Clio Bay is one of the closest crabbing spots to both Kitimat and Kitamaat Village, while Eagle Bay is further down Douglas Channel, overfishing at Clio may be a factor in the reported species decline.

The DFO study noted

The dumping of logs into water down skids can result in the generation of a considerable amount of bark and wood debris. The abrasive action of boom boats and waves during the sorting and storage of bundles can also generate quantities of wood debris. Bark and wood lost during dumping often forms thick, continuous, anoxic fibre mats extended from the base of the dump skids. The debris mat tends to dissipate with distance from the entry point; however, wood debris can often be observed substantial.” distances from the dump skids as seen at all four of the sites sampled. Debris deposits can also be generated as logs resting on the sea floor decay. Wood boring organisms (e.g., Toredo) quickly reduce the wood fibre content of logs, but the bark of some species (e.g., western red cedar (Thuja plicata) which has a high lignin content) is left relatively untouched. The amount of wood debris generated during handling and storage can be different depending on tree species, tidal levels, and dumping methods. Debris accumulation, distribution, and the resulting biological impacts are affected by physical factors including depth, sea floor slope, dump site aspect, water currents, and wind or wave exposure.

One of the main problems with log dumping is that it has the potential to deplete vital oxygen, especially at deeper levels. Seasonal variations can mean that, even if there are thousands of logs at the bottom, the levels of dissolved oxygen can vary. Years of studies at the cleanup site at Ward Cove, Alaska showed how the oxygen levels can vary by season. In Minette Bay, near Kitimat, a DFO study showed that the Minette is somewhat stagnant and therefore has naturally occurring low oxygen levels, but also that the low levels usually last from May to November and are worst in July.

The DFO study went on to say that oxygen poor thick anoxic bark or wood fibre deposits are likely to cause damage to bottom dwelling species, although in the short term, logs may not cause any impacts. It says that some studies have indicated that large pieces of wood debris can, for a time, increase diversity by providing suitable base for some filter feeders as well as food and cover for epifauna and wood boring organisms. Several species not normally found in sand-bed have occasionally been found in log and rock debris.

(Studies have shown that salmon the ability to detect low oxygen areas and avoid them and some active  invertebrate species can migrate away from a low oxygen area.)

In the long term, logs do decay and the wood and bark left behind can contribute to the wood debris accumulation. One study cited by the DFO survey of Douglas Channel found found that crabs avoided bark deposits when given a choice but when they were forced to live among bark deposits, they were had fewer offspring, had lower feeding rates, and had a decreased survivorship.

One theory is that the decaying organic material produces hydrogen sulphide in combination with ammonia and other unmeasured toxicants. One study of Dungeness crabs, living at a log dump in southeast Alaska with elevated hydrogen sulphide and ammonia concentrations in the bark debris, shows the colony had less than half as many reproducing females as a control population.

The EPA and Alaska reports from Ward Cove show that sand capping does help restore the seabed environment.
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Clio Bay: DFO declines invitation to appear before Kitimat Council

Special report: Clio Bay cleanup: Controversial, complicated and costly

DFO logoThe Department of Fisheries and Oceans has declined an invitation from District of Kitimat Council to appear at a special meeting on Monday, September 30 to discuss the Clio Bay remediation project.  A representative of Chevron will be in the council chambers at the Kitimat branch of Northwest Community College to make a presentation and answer questions.

The letter from DFO to the council  from Dave Pehl works at DFO office in Kamloops says:

Thank you for the invitation to attend District of Kitimat Council meeting on September 30, 2013 to address plans by Chevron Canada and Apache Canada(Kitimat LNG) to remediate habitat conditions in Clio Bay. Regretfully, Fisheries and Oceans Canada (DFO) is unable to attend the scheduled council meeting.

Fisheries and Oceans Canada has reviewed a proposal to dispose of soil materials, generated at the Kitimat LNG plant, in Clio Bay, Clio Bay has been used as a log handling site for decades which has resulted in areas of degraded habitat from accumulations of woody debris materials on the sea floor. The project intends to cap impacted areas with inert materials and restore soft substrate seafloor. The remediation of the seafloor is predicted to enhance natural biodiverstiy and improve the productivity of the local fishery for Dungeness crab. The project area does support a variety of life that will be impact and therefore the project will require authorization from Fisheries and Oceans Canada for the Harmful Alteration, Disruption or Destruction (HADD) of fish and fish habitat.

Mapping of the seafloor in Clio Bay has been completed and the project plans prioritizes capping on areas of dense woody debris, followed by areas of soft substrate with woody debris distributed throughout. Mapped areas that are avoided include hard substrates and sensitive habitats such as freshwater streams and eelgrass beds. Buffers have been allocated around sensitive areas and no capping will be conducted in areas of less 10m in depth. Proposed mitigation to avoid potential impacts to areas outside Clio Bay includes avoiding deposition of material within 500m of the confluence of Clio Bay and kitimat Arm. Some areas of degraded or partially degraded habitat will not be capped to serve as reference areas.

Chevron will be required to conduct a pre-construction, construction and post construction monitoring program. Pre-construction monitoring will include collection of baseline information that will be used to assess effectiveness monitoring during and at the completion of the project. Water quality monitoring for turbidity and total suspended solids will be undertaken during construction to determine if established performance criteria are met. The monitoring plan for the project will evaluate

1. Water quality near the sea floor.
2. Fish habitat quality and quantity
3. Biodiversity of the seafloor ecosystem and
4. Distribution of a fishery resource (Dungeness crab)

Reference sites will be used to make comparison between capped and uncapped habitats. Monitoring will continue for a period of five years following the completion of the works. The proponent will be required to report the follow-up monitoring program to DFO in years 1,3 and 5 following construction.

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Clio Bay: Chevron statement

Chevron LogoSpecial report: Clio Bay cleanup: Controversial, complicated and costly

Here is the text of a statement Chevron spokesperson Gillian Robinson Riddell sent to Northwest Coast Energy News

The Clio Bay Restoration Project proposed by Chevron, is planned to get underway sometime in early 2014. The proposal is fully supported by the Federal Department of Fisheries and Oceans and the Haisla First Nation Council. The project has been put forward as the best option for removal of the marine clay that is being excavated from the Kitimat LNG site at Bish Cove. Chevron hired Stantec, an independent engineering and environmental consulting firm with extensive experience in many major habitat restoration projects that involve public safety and environmental conservation. The Haisla, along with Stantec’s local marine biologists, identified Clio Bay as a site that has undergone significant environmental degradation over years of accumulation of underwater wood debris caused by historic log-booming operations. The proposal put forward by the marine biologists was that restoration of the marine ecosystem in the Bay could be achieved if marine clay from Chevron’s facility site, was used to cover the woody debris at the bottom of the Bay. The process outlined by the project proposal is designed to restore the Clio Bay seafloor to its original soft substrate that could sustain a recovery of biological diversity.

In preparing this restoration project proposal for Chevron, Stantec conducted independent field studies carried out by their own marine biologists who are registered with BC College of Applied Biology. Two of the studies used in the development of the proposed project were previously published scientific studies on the effects of log-boom activity and log boom activity in Clio Bay that determined log boom and storage activity has had a negative impact on marine diversity. There are previous case studies where capping activity has been used in marine environments.

Stantec’s, and previous studies, have determined that Clio Bay has changed from a once highly productive marine bay characterized by plentiful predatory species such as Dungeness Crab and sunflower stars to a less productive environment hosting more opportunistic and resilient species such as squat lobster and sea anemones. One such study found that compared to Eagle Bay, which has not been affected by logging activity had five times the Dungeness Crab population of Clio Bay. Independent studies conducted before Chevron began working at Bish Cove found that if Clio Bay is left in its current degraded condition, the woody debris will continue to foster and abnormal, species-deficient habitat for several decades. Extensive fieldwork carried out by Stantec’s marine biologists used SCUBA and Remote Operated Vehicle surveys to observe and record all flora and fauna in the bay and its levels of abundance. Stantec’s observations echoed the previous studies which determined that the massive amount of wood has harmed Clio Bay’s habitat and ecosystem.

Most importantly, when considering the work Chevron is proposing to carry out in Clio Bay, it is important to note that a primary objective of all Chevron’s operations is to protect people and the environment. A good example of how we have done that on other projects can be seen in the construction of Chevron’s Gorgon LNG plant in Australia on Barrow Island, which is a Class A nature reserve. Although identified as one of the most important wildlife refuges in the world, and the site was chosen only after a thorough assessment of the viability of other potential locations, and after the implementation of extensive mitigation measures, including a vigorous quarantine program for all equipment and materials brought on to the Barrow island site to prevent the introduction of potentially harmful alien species. Those same high environmental standards are being applied to the Kitimat LNG project and the proposed Clio Bay Restoration project. The proposed work would be carried out with a stringent DFO approved operational plan in place and would be overseen by qualified environmental specialists on-site.

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Clio Bay Editorial:Hire the experts. This is not the time to be learning on the job

Special report: Clio Bay cleanup: Controversial, complicated and costly

Editorial:

Hire the experts. This is not the time to be learning on the job.

Everyone in the Kitimat and Kitamaat Village are facing a dilemma, a dilemma that should have been solved a year ago, when it was first known that the KM LNG project at Bish Cove had grossly underestimated the amount of marine clay and other material that has to be removed for the liquified natural gas terminal, a total of about 3.5 million metric tonnes.

The Haisla and Chevron are proposing that much of the clay be deposited over sunken logs in Clio Bay.

Chevron, which only took over operations at KM LNG in December 2012, is still learning on the job.

When the Clio Bay capping plan became public, far too late in the process, only then did Chevron begin to take a serious look public worries about the environmental problems that might result from depositing all that marine clay in Clio Bay.

Chevron hired Stantec, a well-known international  consulting firm with close ties to the energy industry and some experience in remediation to evaluate Clio Bay. Although Chevron said in a statement that Stantec is a company  “with extensive experience in many major habitat restoration projects,” it appears that Stantec, in the case of Clio Bay, is a jack of all environmental trades and master of none, just learning on the job.

In answer to questions by Northwest Coast Energy News, Chevron cited two studies supplied to them by Stantec. One was Chris Picard’s (now with the Gitga’at First Nation) study of Clio Bay which anyone can find by using a Google Search. The second was an overview chapter of west coast North American logging practices from a book published 22 years ago.

Any of the web saavy undergraduate journalism students I once taught at Ryerson University could have done better. This semi-retired reporter, without the resources he once had in a major newsroom, easily found the studies of the log filled Ward Cove, the State of Alaska’s recommended remediation practices, the capping procedures recommended by the US Army Corps of Engineers and more. Chevron did not mention Stantec citing the 1995 DFO study of nearby Minette Bay which can easily be found on the DFO website.

A letter from Fisheries and Oceans to District of Kitimat Council only mentions Dungeness crab and not the Haisla desire to restore halibut and cod to Clio Bay. That can only raise suspicions that the DFO is also depending solely on Chris Picard’s limited survey of Clio Bay.

In Alaska, at Ward Cove, there were almost five years of studies on the ocean environment before part of the cove was dredged and parts of the cove with thousands of logs there were capped with fine sand.

The people of Kitimat and Kitamaat want the LNG project to proceed. Everyone wants a clean and sustainable ocean enviroment, whether in Clio Bay, Minette Bay or down Douglas Channel. The problem of that 3.5 million cubic metres of marine clay must be handled in a timely fashion so the LNG terminal can move to the next step in the coming months. There is no time for five years of studies before proceeding.

This site would not normally endorse one large corporation over another.

There isn’t time for Chevron and Stantec to be learning on the job, its technicians racing in their boats between Clio Bay and Bish Cove trying to figure out what is going on and casually asking people what they think. No time at all.

The clock is ticking. Chevron and Apache, in partnership with both the Haisla and the District of Kitimat, should immediately hire the companies that do have the expertise in remediating a northwest Pacific coast bay filled with sunken logs, the companies that cleaned up Ward Cove in Alaska. Integral Consulting was the main environmental consulting contractor at Ward Cove, assisted by another large firm, Exponent  and by Germano and Associates, a company that  according to its website specializes in “rapid seafloor reconnaissance”. Both Integral and Exponent are, like Stantec, giant international consulting firms.  In this case, experience has to count. While Stantec’s website does list remediation projects, none are similar to Clio Bay.

A letter from Fisheries and Oceans to the District of Kitimat says that:

Chevron will be required to conduct a pre-construction, construction and post construction monitoring program. Pre-construction monitoring will include collection of baseline information that will be used to assess effectiveness monitoring during and at the completion of the project. Water quality monitoring for turbidity and total suspended solids will be undertaken during construction to determine if established performance criteria are met.

From the reports available from both the EPA and the State of Alaska it appears that the companies that cleaned up Ward Cove did just what DFO is asking, assess and monitor.  Another reason to hire the experts rather than the newbies.

Why a three way partnership? Chevron/Apache and the Haisla Nation are already partners in the Clio Bay plan. Adding the District of Kitimat would establish trust and make sure that the results of any scientific and engineering studies, plans and operations would be available to the people of Kitimat (as well as some Haisla members who feel they were excluded) as part of the ongoing process. The partnership would make up for the lack of transparency up until now, make sure the public is kept up-to-date and not just by Chevron’s and DFO’s communications people since reports to the District could be reviewed by the engineering staff and members of council.

It is likely that those companies that worked at Ward Cove could quickly let everyone know whether the idea of capping at Clio Bay with marine clay is a viable option and if it is viable how to do it properly rather than just dumping the clay from a barge using a hose. If marine clay is not viable for Clio Bay, it is likely that those firms could advise whether one of the original plans, to dump the clay in the deep ocean, is a better solution, or if there is another alternative that no one has thought of.

Kitimat and Kitamaat are lucky. The recommended practice for capping sunken logs is using sand. There is here a ready source at the Kitimat Sand Hill. If marine clay is not a viable option, or for future projects, the Sand Hill can easily be used to fulfill the aims of both the Haisla Nation and the residents of Kitimat to clean up Clio Bay, Minette Bay and eventually all 50 other sites identified along Douglas Channel by DFO in 1997. Those consulting firms have the expertise in this area and that expertise should be utilized.

Learning from the job

Even though sand has a track a record in capping, using marine clay from Bish Cove  to cap the logs at Clio Bay is probably a good idea, after all that marine clay was once at the bottom of the Ice Age Douglas Channel.

The use of sand for capping sites is well-known, there are established engineering parameters. At Ward Cove, there were studies of the angle of the slopes and how much weight of sand that the debris could hold.  Sand is very different from marine clay. At the moment, there are no engineering parameters for marine clay. It appears that no one has thought of doing slope analysis and load bearing engineering studies at Clio Bay.

Marine clay is a potential cap for all the sunken log sites on Douglas Channel and on the whole Pacific coast from Oregon to Alaska.  That means that Clio Bay is a pilot project that should be planned as carefully as possible, within the time constraints needed for construction of the LNG terminal, but not regarded as a rush job to get rid of that clay.  That means taking the time needed to do all the necessary scientific and engineering studies before the first drop of clay heads to the bottom. That is another reason to hire experts who actually know what they are doing so everyone can learn from the job.

 

Standards

No matter how the cleanup of Clio Bay proceeds, KM LNG, the Haisla and the District of Kitimat are facing another dilemma. What standards and benchmarks should be applied to the project?

By law, the Department of Fisheries and Oceans is responsible and will, of course, be monitoring the cleanup.

Despite assurances in a letter to the District of Kitimat, it is clear that DFO too is learning on the job.

At the moment, DFO has no standards for remediation, because the Conservative omnibus bills have gutted environmental standards in Canada. Even before the omnibus bills and the LNG rush, cleaning up log dumps was on the DFO low low priority list.

The letter from DFO to District of Kitimat council shows what knowledgeable sources have told us, DFO will be navigating Clio Bay from a desk in Kamloops (of all places). The same sources say that the Prince Rupert office of DFO, which has the expertise on the northwest coast is out of the loop on this project. The residents of the northwest coast already know there are not enough fisheries officers to properly monitor the coast. DFO “estimates” the annual recreational halibut catch (perhaps by using fish entrails rather than the traditional chicken?). DFO has retired or laid off many scientists who have studied the coast. Others have left on their own. The remaining scientists are muzzled by the Harper government, with anything they could say filtered by the Prime Minister’s Office, so it is likely that no one in the northwest will actually trust what they say.

Normally in a free and democratic society, the government tells local residents when a major operation like the remediation of Clio Bay is going to occur.  In this case, Fisheries and Oceans did not tell anyone in Kitimat anything until the District of Kitimat Council requested information.

On Monday, Sept. 30, a representative of Chevron will make a presentation to District Council. DFO did nothing more than send a letter that said: “Regretfully, Fisheries and Oceans Canada is unable to attend the scheduled council meeting.” Nobody, in the whole department? One is tempted to say, “That’s not good enough.” Then you remember that if DFO appeared before Council, the presenter would have to face possibly awkward questions from both members of Council and the media. That just doesn’t happen in Stephen Harper’s Canada, not in Ottawa and certainly not in Kitimat.

Despite what DFO has said in its letter, this regulatory vacuum leaves the Kitimat region no choice. Since Canada has no standards, when the Clio Bay project proceeds, the best available standards are those set by Alaska, which has the same type of coast and climate. The Clio Bay clean up should therefore be measured against those Alaska standards.
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Clio Bay: Links and Documents

Links and documents relating to sunken logs and site remediation

Note many, not all, external links are to pdf files.

Canada

DFO study of sunken log sites in Douglas Channel

DFO Study Dissolved oxygen cycle in Minette Bay

Impact of Wood debris in British Columbia estuaries

Chris Picard’s study of Clio and Eagle Bays as posted on the University of Laval website

United States

Links

Alaska Department of Environmental Conservation

Environmental Protection Agency

Ketchikan Paper Company
This is the EPA Web site on the Ward Cove cleanup and remediation with numerous documents.

EPA capping guidance
EPA contaminated sediment capping guidance

US Army Corps of Engineers

US Army Corps of Engineers capping guidance

Documents

Alaska log site remediation guide  (pdf)

EPA study of dissolved oxygen in Ward Cove (pdf)

Marine Log Transfer Facilities and Wood Waste (pdf)

Academic paper by Ward Cove consultants Geramano & Associates on sediments in Ward Cove and Thorne  Bay, Alaska.

Ward Cove Sediment Remediation Project Revisited

Academic paper by Ward Cove consultants Integral Consulting

 


 Other Links

Kitimat LNG (KM LNG)

Stantec

Stantec remediation project page

Integral Consulting

Integral Consulting Ward Cove web page

Exponent 

Exponent Ward Cove web page

Exponent LNG Safety web page

Germano & Associates

(Note not all documents used in this report are available online. Some sent to NWCEN are too large to upload)

 


 
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Chevron announces open house on Clio Bay, seeks input from stakeholders

Updates with open house location

Chevron LogoChevron, the partner with Apache in the KM LNG (also known as Kitimat LNG) project at Bish Cove, said Sunday that the company will hold an open house in Kitimat on the controversial Clio Bay reclamation project.

Chevron says there will be a public open house at Riverlodge Tuesday, October 8 from 4 pm to 8 pm.

In an e-mail to politicians and local groups, including Douglas Channel Watch, Marc Douglas, a senior advisor for Chevron, based in Calgary, invited local stakeholders for a series of one hour meetings the same day at the KM LNG offices in City Centre.

Chevron Canada invites you to a meeting to discuss the Clio Bay Marine Life Restoration Project.
This proposed project would see Chevron excavate marine clay from the Kitimat LNG construction site at Bish Cove and work closely with the Federal Department of Fisheries and Oceans to deposit this natural material in specific locations in Clio Bay. The clay will cap-off decaying wood debris left by historic log booming operations that has accumulated on the bottom of Clio Bay, damaging the Bay’s natural ecosystem. A key goal of the project is to restore natural marine life populations in Clio Bay. Come and share your thoughts and ideas with us and learn more about this innovative restoration project.

 

Ad for open houseThere has been growing controversy over the Clio Bay project in recent weeks. Members of the Haisla Nation and residents of Kitimat were initially told that due to the large number of sunken logs at Clio Bay, that the area was deprived of oxygen, with limited sealife and that capping the logs with clay from Bish Cove would restore the ecosystem. However, beginning with a discussion at District of Kitimat Council on September 3, more people have been challenging the idea that Clio Bay needs restoration, with fishers posting photographs of recent catches on Facebook pages.

On Sept.3, Councillor Phil Germuth told Council:  “Those logs have actually created a woody reef, where like any other reef, an ecosystem is being sustained. So to say that those logs are suffocating the life out of Clio Bay doesn’t seem to have a lot of merit.”

At the time, Chevron told the media  that they had consulted with the Department of Fisheries and Oceans and  concluded that carefully placed clay would improve the ecosystem.

Special report: Clio Bay cleanup: Controversial, complicated and costly

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Apache sells some of its gas and oil assets, confirms commitment to Kitimat project

Apache CorporationApache Corporation said Thursday it will  sell oil and gas producing properties in the Nevis, North Grant Lands and South Grant Lands areas of western Alberta, to Ember Resources Inc., a private Canadian company, for CAN$220 million, as part of the company’s “portfolio rebalancing,” Apache said in a news release.

At the same time, Apache CEO Rodney Eichler said,  “We also remain focused on advancing the Kitimat LNG project to monetize large unconventional resources in the Liard and Horn River basins in northern British Columbia.”

“Going forward, Apache is focused on growing our liquids production from a deep inventory of crude oil- and liquids-rich opportunities that generate attractive rates of return on our extensive remaining acreage in Canada’s Western Sedimentary Basin,”  Eichler said.

“This transaction is one element of a comprehensive review of Apache’s portfolio to determine which assets make the most sense for Apache to own given our growth and return objectives and which assets are better owned by others,” Eichler said. “The Nevis, North Grant Lands and South Grant Lands assets fit in the latter category.”

Apache is selling 621,000 gross acres (530,000 net acres) and more than 2,700 wells that had average net production during the second quarter of 2013 of 67 million cubic feet of gas and 237 barrels of liquid hydrocarbons per day from late Cretaceous sands and coal seams. Apache says “it  will retain 100 per cent working interest in horizons below the Cretaceous, such as potential Duvernay and Nisku, in Nevis and North Grant Lands.”

Apache previously announced plans to divest $4 billion in assets by  the end of 2013. The company intends to use proceeds from the asset divestitures to reduce debt and enhance financial flexibility and to repurchase Apache common shares under a 30-million-share repurchase program authorized by the Board of Directors earlier this year.

In July, Apache announced an agreement to sell its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC(Fieldwood), an affiliate of Riverstone Holdings, for cash proceeds of $3.75 billion. In addition, Fieldwood will assume all asset retirement obligations for these properties, which, as of June 30, 2013, Apache estimated at a discounted value of approximately $1.5 billion.

 

Kitimat in “horse race” with Australian LNG project Chevron says

Gorgon project in Australia
The Gorgon LNG project in Western Australia. Chevron says  Gorgon Project work continues to progress with the installation of the second of three amine absorbers, two condensate stabilization modules and a recycled gas compression module. (Chevron Australia)

Kitimat LNG is in a “horse race” with an LNG project in Western Australia–and at this point, according to the Australian media–Kitimat is winning, even though the Australian Gorgon project is much further ahead while the Kitimat LNG project at Bish Cove hasn’t really started.

The Australian reports come from the same conference call Chevron held with financial analysts last week, when the company said the final investment decision for Kitimat LNG has been postponed to 2014.

The Brisbane Times  is quoting Chevron as saying that expansion of the Gorgon “will be in direct competition with exports from North America, which have a cost advantage.”

Chevron has a 47.3 per cent stake in Gorgon. Shell which is developing its own project at Kitimat, LNG Canada, has a 25 per cent stake in Gorgon. ExxonMobil holds 25 per cent.

”In the case of Gorgon train four … we are happy to see both of them move forward,” Chevron vice-chairman George Kirkland told analysts late last week, referring to the competition with Kitimat. ”[There is] a bit of a horse race between them at this point.”

Shipping gas to north Asia from Canada is cheaper than exports from Australia, he said, although the challenge is to find markets for the gas. ”The development cost at Kitimat … may end up being less than in the case of Gorgon,” he said, which ”has the benefit of [being a] brownfield development on the plant side”.

”We’re going to offer volumes … and interest in the plant as a combination,” Mr Kirkland said of the Kitimat marketing plans. ”We think that’s a big advantage.

”Our goal is to maintain our … first-mover advantage … We have had some initial discussions with Asian buyers.”

The Gorgon project in the northwestern area of Western Australia. (Chevron Australia)
The Gorgon project in the northwestern area of Western Australia. (Chevron Australia)

According to Wikipedia, the Gorgon area of Western Australia is the site for a number of liquified natural gas projects. The projects are off shore and close to the export terminals, much different from British Columbia where the gas fields are in the Peace River district in the northeast of the province.

Wikipedia says

The Gorgon field is centered about 130 kilometres (81 mi) off the north-west coast of Western Australia, where the water depth is approximately 200 metres (660 ft). Other fields in the group lie to the north, such as Jansz-Io, which covers an area of 2,000 square kilometres (770 sq mi), in a water depth of 1,300 metres (4,300 ft).

Chevron says

It is one of the world’s largest natural gas projects and the largest single resource development in Australia’s history.
The Gorgon Project is developing the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 130 and 220 kilometres off the northwest coast of Western Australia.
It includes the construction of a 15.6 million tonne per annum (MTPA) liquefied natural gas (LNG) plant on Barrow Island and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.
Gorgon LNG will be off loaded via a 2.1 kilometre long loading jetty for transport to international markets. The domestic gas will be piped to the Western Australian mainland.
The Gorgon joint venture is investing approximately $2 billion in the design and construction of the world’s largest commercial-scale CO2 injection facility to reduce the project’s overall greenhouse gas emissions by between 3.4 and 4.1 million tonnes per year. The Australian Government has committed $60 million to the Gorgon Carbon Dioxide Injection Project as part of the Low Emissions Technology Demonstration Fund.

Gorgon project wharf
A view of construction on the 2.1-km (1.3-mile ) LNG wharf with 24 caissons in place. (Chevron Australia)

 

In May, Reuters reported that the $52 billion Gorgon liquefied natural gas (LNG) development was 60 per cent complete. At the time, Reuters said Chevron planned to start engineering and design work for an expansion by the end of the year.

Parts of the Gorgon project are in an environmentally sensitive area, Barrow Island, which has been a nature reserve in Australia since 1910.

Wikipedia says

Barrow Island’s ecology. The island is a Class A nature reserve, and home to theflatback turtle (classified as a vulnerable species) and numerous other animals not found on the Australian mainland. Other concerns are related to the adequacy of quarantine procedures on Barrow Island to protect against the introduction of non-endemic species, and risks associated with geological sequestration of CO2.It was reported in November 2011 that native animals on Barrow Island had been accidentally killed daily with a known total of 1550 since construction began.

Chevron says

The Gorgon Project is being undertaken in accordance with strict environmental standards to preserve the island’s ecology.
Central to the Gorgon Project’s commitment to protect the conservation values of Barrow Island is the Quarantine Management System (QMS), which directs
the Project’s quarantine operations. The QMS is the largest non-government quarantine initiative in the world and was considered to be “likely world’s best practice” by the Western Australian Environmental Protection Authority. The Project’s gas processing facilities are being constructed within a 300 hectare ground disturbance limit, which represents 1.3 percent of Barrow Island’s uncleared land area.

Gorgon Project Overview Chevron document pdf

Gorgon-Progress Update August 2, 2013 pdf

Chevron postpones Kitimat LNG decision to 2014, seeks new equity partners, Dow Jones reports

The Dow Jones wire is reporting that Chevron has postponed a final investment decision on the Kitimat LNG project until 2014, “putting a deadline on a project that has already seen delays.”

Competitors are trying to sell natural gas to Asian customers using the cheaper Henry Hub North American market  benchmark rather than higher Japanese bench mark which is based on the price of oil. 

The Dow Jones report says Chevron, which is partnered with Apache, is still having problems finding customers in Asia.  It quotes George Kirkland, head of Chevron’s upstream business, as saying that the company is offering customers equity stakes in the Kitimat project. Kirkland told a conference call that equity should be more attractive to buyers.

Kirkland said the company won’t approve the project until it has lined up customers for at least 60 per cent of Kitimat’s total 5 million metric tons a year of export capacity, although Kirkland expects that to happen in 2014.

“We’ve have had some discussions with Asian buyers,” Mr. Kirkland said during a call with investors. He declined to name the companies with which Chevron was negotiating. “It’s more likely to be a 2014 (decision), not late 2013,” he said.

U.S. natural gas prices were $3.37 per million British thermal units Friday, down from $13.69 in July 2008.
Chevron to Make Final Kitimat LNG Decision in 2014

Shell’s LNG Canada holds open house for Kitimat

The Shell LNG Canada project officially opened its Information Centre at the old Methanex site offices in Kitimat on Tuesday, June 25, 2013.  About  180 people attended the event, which included a barbeque, kids activities with face painting,  a tour  of the office/information centre and a chance to  community to meet the LNG Canada project team. Shell’s partners in LNG Canada are Mitsubishi, PetroChina and Korea’s Kogas.

 

Sammy Robinson

Samuel “Sammy” Robinson, Chief Jassee of the Haisla Nation, offered an opening prayer and welcoming remarks on behalf of the Haisla for the project in Haisla traditional territory (Robin Rowland)

Rob Seeley

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LNG Canada project Director Rob Seeley makes opening remarks. “We are confident that the Shell-led LNG Canada Project Team has the combined expertise to safely and successfully design and operate this project. We thank you for welcoming us to your community and look forward to working together to develop a project that we can all benefit from and be proud of.” (Robin Rowland)

Craig Jackson

LNG Canada’s Craig Jackson explains shipping issues to Kitimat residents touring the LNG Canada open house. (Robin Rowland)

Seiichi  Tsurumi

LNG Canada’s Seiichi Tsurumi speaks to Kitimat residents touring the information centre. (Robin Rowland)

Watching video

Kitimat residents touring the information centre watch a video on LNG tankers. (Robin Rowland)

 

LNG Canada building Kitimat

The LNG Canada information centre and office building during the open house. (Robin Rowland)