LNG Canada donates safety school bus for Kitimat high school sports teams

At the ceremonial puck drop at the charity hockey game between the  Vancouver Canucks Alumni and the Kitimat Winterhawks Coaches, Saturday, April 28, 2018, Susannah Pierce  Director External Relations for LNG Canada announced the company will donate a school bus equipped with three point seat belts for  Mt.  Elizabeth Secondary School’s sports teams.

At the ceremony, Pierce noted that the donation was in memory of the Humboldt  Broncos hockey team where team members, coaches and support staff died in a horrific bus crash.

Chester Ronning of the Vancouver Canucks Alumni shakes hands with Kitimat mayor Phil Germuth as Haisla Nation Chief Counsellor Crystal Smith and Susannah Pierce of LNG Canada watch after the ceremonial puck drop. (Robin Rowland)

In a news release, LNG Canada said:

At an event in the Kitimat community on Saturday, April 28th, LNG Canada announced it has purchased a new 2018 Chevrolet Micro Bird G5 School Bus for Kitimat’s Mount Elizabeth Secondary School Sports Team’s use. The new bus can carry up to 24 student passengers plus driver. Importantly, it will be equipped with three-point  seatbelts, increasing transportation safety significantly.

“The importance of seatbelts and road safety was brought home again by the deadly collision on April 6th in Saskatchewan. At LNG Canada, we wear seat belts because we know they save lives and our kids deserve the same level of protection,” says Susannah Pierce, Director External Relations for LNG Canada. “We hope to make a difference in the lives of the people that work and live around LNG Canada and investing in safety will always be our first priority.”

Mount Elizabeth Secondary Students will use the new bus to take full advantage of everything offered at school, including sporting events, collaboration with other schools for peer-to-peer activities, and field trips to explore and enjoy the Kitimat region.

“This donation could not have come at a better time. Our current bus was about to be retired and the prohibitive cost of a new bus was a major concern for us,” says Geraldine Lawlor, Principal Mount Elizabeth Middle Secondary School.  “One of the best things about our new bus will be the three-point seatbelts to help ensure students are transported safely and efficiently to venues outside the school campus.”

A picture of the 2018 Chevrolet Micro Bird G5 School Bus donated to Mount Elizabeth Secondary School (LNG Canada)

The new school bus will be delivered in early September, to coincide with the start of the school year.

Principal Lawlor assures it will be put to good use. “We assure you that we will make good use of this bus and are very appreciative of LNG Canada’s support.”

A drawing of the seatbelts on the new school bus (LNG Canada)

Kitimat welcomes new BC NDP government LNG policy

UPDATED with District of Kitimat news release

The District of Kitimat is very pleased with the decision that the BC government issued today removing some of the barriers associated with the establishment of an LNG industry in BC. This will promote access for natural gas from BC to be exported as LNG to international markets. This would be a significant boost for the North West, the province, and Canada as a whole.
This is a positive step forward for the LNG industry in BC, and the District of Kitimat is looking forward to working with the BC Government, LNG Canada, First Nations groups, other stakeholders as well as the Federal Government to move toward a positive final investment decision in 2018.

Michael Dewar
Director of Economic Development

 

News release from BC Premier John Horgan on his government’s LNG policy

For Immediate Release

March 22, 2018

Office of the Premier

NEWS RELEASE
New framework for natural gas development puts focus on economic and climate targets

VICTORIA – As part of a new approach to natural gas development, the British Columbia government is overhauling the policy framework for future projects, while ensuring those projects adhere to B.C.’s climate targets, Premier John Horgan announced today.

“Our new approach welcomes investment that puts our province’s people and future first, and rejects the old ways of resource development at any cost,” Premier Horgan said. “Our obligation is to the people who call British Columbia home, and our job is to get the best deal for them and the generations that follow.”

Under the new approach, all projects should:

* Guarantee a fair return for B.C.’s natural resources.

* Guarantee jobs and training opportunities for British Columbians.

* Respect and make partners of First Nations.

* Protect B.C.’s air, land and water, including living up to the Province’s climate commitments.

These four conditions form the basis for government’s discussions with LNG Canada, which is moving toward a final investment decision on a project that, if approved, would be the largest private-sector investment in B.C. history. This project would see the construction of a natural gas pipeline from northeast B.C. to Kitimat, where a new terminal will process and ship LNG to Asian markets. It is expected to create up to 10,000 construction and up to 950 full time jobs in northern B.C.

“No premier or government can dismiss this kind of critical economic opportunity for the people of British Columbia,” Premier Horgan said. “But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples.”

At the centre of the discussions with LNG Canada is a revised fiscal framework that is designed to put natural gas development on a level playing field with other industrial sectors, accessing the same fiscal policies and working within the same overall B.C. framework to achieve greenhouse gas (GHG) reductions.

The new framework, to which LNG Canada will be subject, provides:

* Relief from provincial sales tax (PST), in line with the policy for manufacturing sectors, subject to repayment in the form of an equivalent operational payment.

* New GHG emission standards under the Clean Growth Incentive Program, announced in Budget 2018.

* General industrial electricity rates consistent with other industrial users in B.C.

* Elimination of the LNG income tax that had required LNG-specific tax rates.

“The LNG Canada proposal has the potential to earn tens of billions of dollars and create thousands of jobs for British Columbians over the life of the project,” Premier Horgan said. “It’s a private-sector investment that could benefit our province for decades to come, but not at any price – we need to make sure the values British Columbians believe in come first.”

The Premier said his government will also expect the LNG Canada project to fit within the goals of the Province’s climate-change plan and, specifically, its legislated GHG reduction targets.

“We committed, during the election campaign, to reduce our greenhouse gas emissions by 40% below 2007 levels by 2030, and by 80% by 2050. That remains our goal,” Premier Horgan said.

“We cannot achieve the necessary reductions in greenhouse gas emissions and do our part in protecting the global environment without a significant shift to a low carbon economy. The work for all of us – in government, business, labour and beyond – is only just beginning. And all resource development proposals must be considered within the context of our global commitment to protecting our air, land and water.”

With B.C.’s new fiscal framework provided to LNG Canada this week, it is anticipated the company will make a final investment decision sometime before the end of this year.

 

BACKGROUNDER 1
Climate action in British Columbia

On April 1, 2018, the carbon tax will increase by $5 a tonne annually, until 2022.

Increasing the carbon tax meets the requirements set out by the federal government’s pan-Canadian climate framework. Rebates will go to a majority of British Columbians.

However, increasing the carbon tax alone will not enable B.C. to meet its long-term greenhouse gas-reduction goals of 40% below 2007 levels by 2030, and 80% by 2050. Significant new climate-action initiatives will be required in order for B.C. to meet these 2050 legislated targets, while encouraging strong economic growth. To ensure an interim target, new legislated targets for 2030 will be introduced later this year. Specific targets for each of the industrial, transportation and building sectors will also be established.

Meeting climate targets will not be easy and will require a concerted effort across all sectors to make the transition to a low-carbon economy. The addition of emissions from LNG will increase this challenge but government is committed to taking the steps necessary to achieve B.C.’s climate goals.

Specific Measures:

* A portion of the carbon tax revenue, paid by large industry, will fund a rebate program to incent the use of the greenest technology available in the industrial sector, including the natural gas sector, to reduce emissions and encourage jobs and economic growth. Some of the revenue will also go into a technology fund, to help spur new, clean technologies in all sectors, to make sure they fit within B.C.’s climate plan.

* The Climate Solutions Clean Growth Advisory Council (CSCG), established in October 2017, is supporting government’s goal of reducing carbon pollution, preparing for the impacts of climate change and growing a sustainable economy. The CSCG is comprised of community leaders from across British Columbia, including representatives from First Nations, local government, industry, environmental organizations, academia and labour.

* The CSCG is providing advice on actions and policies to achieve significant greenhouse gas reductions, while taking advantage of opportunities for sustainable economic development and job creation.

* Immediate priorities for the CSCG include achieving emissions reductions in the transportation sector, developing pathways to clean economic growth, as well as policies to support the competitiveness of B.C.’s emissions-intensive and trade-exposed industries.

* Government is working to develop a framework for fugitive emissions that match the federal government’s target of a 45% reduction by 2025.

* Government is examining every opportunity to reduce emissions from slash burning by providing alternative economic usage for slash where available.

* Government has initiated a scientific review of hydraulic fracturing aimed at ensuring that industry in B.C. operates according to the highest-possible standards.

More information on the Climate Solutions and Clean Growth Advisory

 

BACKGROUNDER 2
British Columbia establishes new framework for natural gas development

Natural gas has a key role to play to provide clean, reliable, affordable and less-carbon-intensive options to global energy markets.

British Columbia has a vast supply of low carbon-intensive natural gas resources in places like the Montney Basin, and has been developing them to support economic growth and job creation at home for decades. B.C. natural gas is an important transition fuel that can help B.C. move to a lower-carbon economy.

While B.C. has been exporting natural gas to U.S. markets for decades, it has an opportunity to export the same fuel to other jurisdictions. To that end, government will introduce a fiscal framework that will provide fair returns to both British Columbians and investors, as well as a climate strategy that will allow B.C. to meet its legislated climate targets.

To ensure British Columbia does it better than anybody else in the world, the provincial government has four key conditions to ensure British Columbians benefit from any proposed LNG development. They are:

* Guarantee a fair return for B.C.’s natural resources.

* Guarantee jobs and training opportunities for British Columbians.

* Respect and make partners of First Nations.

* Protect B.C.’s air, land and water, including living up to the Province’s climate commitments.

Emerging LNG Proposals

Despite the cancellation of Pacific Northwest LNG, Aurora and Woodside project proposals, several other LNG proponents have expressed renewed interest in developing projects in BC.

LNG Canada

LNG Canada’s proposed Kitimat project, should it proceed, represents a very significant economic opportunity for British Columbia – a project that involves one of the largest private sector developments in B.C. history.

Shell and its joint-venture partners have worked constructively to satisfy the provincial government’s conditions for LNG, and British Columbia expects LNG Canada will continue to do so moving forward.

LNG Canada is also working to achieve global leadership in low-emissions technology and operations.

Kitimat LNG

Chevron and its partners have expressed continued interest in developing its project in northern B.C. and is focusing on the use of new low-emissions liquefaction technology.

These come as the Province is completing a climate-action strategy in place that meets the Province’s greenhouse gas-reduction targets – to reduce B.C.’s greenhouse gas emissions by 40% below 2007 levels by 2030, and by 80% by 2050.

New Framework

The B.C. government has developed a new framework aimed at ensuring British Columbians receive a good return for their natural gas resource and proponents receive a reasonable return on investment.

As part of this work, British Columbia and LNG Canada jointly conducted a financial analysis of the LNG Canada project. This analysis corroborated evidence and information from internationally recognized LNG analysts that B.C. has a competitiveness issue and formed the basis of a mutual understanding upon which the Province is prepared to commit measures that will increase the competiveness of British Columbia’s LNG industry.

These measures provide a framework for other industries in British Columbia in similar circumstances – they are not exclusive to the LNG industry or LNG Canada.

As it pertains to LNG Canada, the measures detailed below will only be implemented if the proponents are able to conclusively decide on or before Nov. 30, 2018, to proceed with the construction of the LNG facility and associated investments. These measures below would apply to the entire LNG sector.

1. New Operating Performance Payments

Under current legislation, proponents constructing significant manufacturing facilities would receive a PST exemption on input costs, whereas those proposing to construct LNG facilities would not.

Under the new framework, The B.C. government will exempt LNG Canada from the provincial sales tax (PST), on the construction of their initial proposed facility. This will be conditional on LNG Canada entering into a separate agreement with the province whereby LNG Canada will pay annual operating performance payments over 20 years, a total amount equivalent to what LNG Canada would have otherwise paid in PST during the initial facility construction period.

This framework will be available to all proponents constructing significant manufacturing facilities in the province.Clean Growth Incentive Program

2. The provincial government recognizes that energy-intensive trade-exposed industries, including the natural gas sector, face unfair competition when competing globally with jurisdictions that do not impose carbon taxes. Proponents who make a final investment decision to proceed will be subject to the new Clean Growth Incentive Program, announced by the provincial government in Budget 2018. A benchmark for world-leading clean LNG production will be established as part of this program, replacing existing requirements under the current Greenhouse Gas Industrial Reporting and Control Act.

3. Industrial Electricity Rates

Proponents who make a positive final investment decision will receive the general industrial electricity rate charged by BC Hydro. This is the same rate paid by other industrial users in British Columbia.

4. Removal of LNG Income Tax

The existing LNG income tax is not the most efficient and effective tool for generating returns to British Columbia. It is cumbersome to administer and has led to uncertainties. Government intends to introduce legislation to repeal this tax and instead government will utilize a number other tax and royalty measures under its new fiscal framework, to ensure that British Columbia gets a fair return for its natural gas resource.

New Approach to LNG

As part of establishing a new fiscal framework, the provincial government will take steps to improve the transparency and consistency with which it assesses industrial development opportunities. To that end, government intends to introduce legislation to repeal the Project Development Agreement Act, passed by the previous government, to tie the hands of future governments with respect to the rules governing LNG projects. These measures effectively indemnified proponents against changes. Government will also review and potentially cancel or repeal other LNG measures established by the previous government.

 

▶ READ MOREEconomy, Energy, Mines and Petroleum Resources, Environment and Climate Change Strategy, Government Operations, Office of the Premier

LNG Canada postpones Final Investment Decision

LNG Canada has postponed the Final Investment Decision on the Kitimat project citing the “impact of global industry challenges.”  The latest estimates said that the project would cost $40 billion.

The news release says that despite strong community support and regulatory approval,  what LNG Canada called “the context of global industry challenges, including capital constraints” led to the decision. In other words, the continued low price of oil is constraining projects across the energy industry.

LNG Canada’s Joint Venture Participants Delay Timing of Final
Investment Decision

Impact of global industry challenges, despite strong project fundamentals

Vancouver, British Columbia — Today, LNG Canada announces that its joint venture participants –  Shell, PetroChina, Mitsubishi Corporation and Kogas – have decided to delay a final investment decision on LNG Canada that was planned for end 2016.

LNG Canada remains a promising opportunity – it has strong stakeholder and First Nations’ support, has achieved critical regulatory approvals, has important commercial and engineering contracts in place to design and build the project, and through its pipeline partner Coastal Gas Link, has received necessary environmental approvals and First Nations support along the pipeline right-of-way.

“Our project has benefitted from the overwhelming support of the BC Government, First Nations – in particular the Haisla, and the Kitimat community. We could not have advanced the project thus far without it. I can’t say enough about how valuable this support has been and how important it will be as we look at
a range of options to move the project forward towards a positive FID by the Joint Venture participants,” said Andy Calitz, CEO LNG Canada.

Through their efforts to build a strong LNG sector for Canada, and a critical, cleaner energy alternative for the world, the governments of British Columbia and Canada have developed sound fiscal and regulatory frameworks for success.

LNG-Canada-Media-Release0716However, in the context of global industry challenges, including capital constraints, the LNG Canada Joint Venture participants have determined they need more time prior to taking a final investment decision. At this time, we cannot confirm when this decision will be made.

In the coming weeks, LNG Canada will continue key site preparation activities and work with its joint venture participants, partners, stakeholders and First Nations to define a revised path forward to FID.

LNG Canada Joint Venture Participants are Shell (50%), PetroChina (20%), Mitsubishi Corporation (15%)
and Kogas (15%).

Haisla Nation chief councillor Ellis Ross issued a statement that said:

Haisla Nation Council very firmly believes in the future of liquefied natural gas for the Kitimat Valley and Haisla territory. It is an industry which has the capacity to grow jobs, provide new training opportunities and provide a sustained quality of life for Haisla members. It’s worth remembering that LNG Canada is a relatively new project to the area, and decisions on major projects such as these can take a long time to reach.

Today’s decision was the second time the FID was postponed. Andy Caloz LNG Canada’s CEO was quoted by Bloomberg News as saying that the project hasn’t been canceled. It has all the necessary approvals from regulators in Canada and doesn’t require any more work in the country.

“The whole global LNG industry is in turmoil,” Calitz told a conference call, Bloomberg reported, adding that Western Canada still has advantages including its proximity to customers in Asia. “I’m confident that the Japanese market remains available to LNG Canada.”

Haisla chief counsellor Ellis Ross on the dilemma of climate change and development

Haisla Nation Chief Counsellor spoke at Mt. Elizabeth Theatre on June 9, 2015, introducing David Suzuki who was on a speaking tour. This is a lightly edited report on his remarks that outline some of the dilemmas facing the Haisla and the Kitimat valley in an age that needs development but faces climate change.

Good evening.

Among chiefs, I am elected, not hereditary, you are born into that position, I wasn’t born into it.

I am basically a regular commoner just like you guys with a high school education and one year of college and a lot of experience outside my community that I bring back.

These topics about climate change locally, provincially, nationally and worldwide, they’re complicated topics.

Haisla Chief Counsellor Ellis Ross speaks at Mt. Elizabeth Theatre,  June 9, 2015 (Robin Rowland/Northwest Coast Energy News)
Haisla Chief Counsellor Ellis Ross speaks at Mt. Elizabeth Theatre, June 9, 2015 (Robin Rowland/Northwest Coast Energy News)

There’s no one true fix for all of it. The problem is that the Haisla have been thrust into the middle of it and we have to answer it, which is very unfair.

So when we’re talking about what really is a Haisla value, a west coast, a British Columbia value. I must tell you I value the Haisla people, my people, that land, the territory, I think about the Haisla people because I don’t think anyone has given the Haisla people a priority in the last 40 to 50 years.

All the decisions that were made about Haisla territory, that affected out people, were made without us.

The result was that we ended up with 80 per cent unemployment, historically over the last 40 years we have ended up with cancer and we can’t get rid of it.

Poverty, people couldn’t get enough money to fix their bathrooms when the floor was rotting out.

The saying is that you can always tell when the reserve starts is when the pavement ends is true. Unless there’s a political agenda to actually pave the road to the village. The environmental questions that have been raised over the past ten years are not new to the Haisla.

In the 70s it was the Haisla alone who tried to battle emissions when nobody even knew what emissions meant. They tried to stop the effluent dumping into the river that killed off the river they tried to stop the diking of the river so parts of the land could be protected, parks.

When the Haisla knew that the oolichan that was estimated to be hundreds of thousands of tons, were dying off quickly in the span of five years. Nobody listened.
Now the DFO and Canada is realizing that the demise of the oolichan is a signal that something is wrong with the ecosystem.

I would love that someone would come around to the idea of thanking the Haisla people for all the work that they did and went and unheard even in meetings like this today.

And we’re not even talking about salmon.
In all this time, I’ve read all the documents, all the speeches and listened to all the promises of a better tomorrow for all the people but nobody delivered it.

Countless academic papers have been written about Indian poverty.

Nothing was done.

Non-profit organizations used the Haisla to further their cause and left town when they had achieved what they had achieved.

At the same time all the decisions continued to be made without us. And everybody benefited except us.

What happened in the end and the corporations made their billions and made enough money to pay off the mortgage and move down south, the Haisla were left with the mess to clean up. Today we’re still battling to get some of these sites cleaned up and we’re still not getting help.

I don’t blame anyone for this. Whether you’re am environmental organization, a government or a corporation or a non-profit organization, I don’t blame you for this because you have a mandate, you have a special interest. That’s what you’re trying to achieve.

I have a mandate. I do have an organization now that is fully equipped to look at every single permit that comes from the provincial government and the federal government and try to mitigate it given our capacity and our lack of funding.

But some of that benefit has to flow to the Haisla people. It’s our territory.

When you think about what has happened to us, the Haisla, we think about residential schools and I’ve been reading the debate on whether or not it’s genocide or not and I think people are missing the point.

Residential schools were only 10 per cent of a larger program to get rid of the Indian.

The ninety per cent was what was stolen from us as well. The land was taken away and we were put on a chunk of land across the Channel, that was described by the Indian Agent as worthless, it’s not even good for agriculture so give it to the Indians. We had to get permission from the federal government to leave that reserve. We had to get a piece of paper that said he’s allowed to leave the reserve and go pick berries.

We also have had no help other than some academic programs and some sort of study to deal with our suicides. I’m not just talking Haisla here. I really thought that one suicide every five years was really a bad thing. But finding out that my neighbors down the road from here to Prince George are dealing with ten suicides in the first quarter of this year.

It breaks my heart.

Who is responsible for that? If it’s not the government, if it’s not the non-profits, if it’s not corporations, who is it?

I stepped up and said I’ll take full responsibility for this but that means I have a hard message to deliver and I will deliver it on behalf of the Haisla people.

When it comes to climate change, we are living at a very unfortunate time, because finally we’re accepted at the provincial table, at the federal table, the corporate table.

We’re being included but unfortunately, we have to look at climate change as well. It’s a very tough position to be in when you’ve got a Grade 12 education from 1984 and one year of college education in 1985.

It’s a very tough topic, I can tell you. I’ve been to China, I’ve been to Korea and no matter what you say about the emissions there, Canada and BC have no problems with emissions here until you visit China.

They’re not going to get off crude oil, they’re not going to get off diesel fuel, they’re not going to give up coal because a billion people there want the same standard of living that you have in Canada. And I’m talking about India as well. They want the same standard. They want good houses; they want to own a car. They are not going to stop their thirst for energy.

I don’t have the answers.

I still believe that natural gas is a lot cleaner than coal and even if you put a small dent in it, it’s not enough to get these guys off nuclear power.

And the solar power you’re talking about, they do it for show but that’s not going to meet the energy needs of China. We’re not even talking about India; we’re not even talking about Korea.

You say can you help get China off dirty fuel, but all their pollution keeps getting dumped on South Korea.

I represent 1700 people, how am I going to do that?

We’re being asked to do a near impossible task while I’m trying to dig my people out of poverty. At the same time, when we get this opportunity we’re giving our members very mixed messages, including our young people which is heart breaking for me.

Because we’re telling them get an education, don’t be a burden on society, get a job, but by the way there are no jobs here, there’s no way to get into existing industries so you better go to the oil fields of Alberta to get a job. A lot of our people head over there or to Vancouver.

I’ve been following this debate on climate change for quite a while now, for over six years. I’ve been listening to everybody, I’ve been listening to corporations, being listening to governments, been listening to non-profits, but on behalf of the Haisla Nation Council, I’m here to tell you, that when it comes to the future of the Haisla I have very little patience with this. I don’t want to see another essay about what to do about Indian suicides.

I believe that our people are being sick and tired of being left out and left behind, while everyone else is moving on with their lives. I do want to what’s best for the region I do want to do what’s best for the province and Canada and the world. But I will not do it at the expense of the Haisla people. We’ve been at the dirty end of the tick for the last 40 years. It’s going to stop. Thank you very much and enjoy your evening.

Petronas and partners announce conditional Final Investment Decision for Lelu Island subject to environmental assessment

In a news release this afternoon, Pacific Northwest LNG announced that the company has given a positive, but conditional, Final Investment Decision, to build an LNG facility on the environmentally sensitive Lelu Island at Port Edward. BC.

pacificnorthwestlogo100Pacific NorthWest LNG (PNW LNG) announced today that the required technical and commercial components of the project have been satisfied. Consequently, PNW LNG has resolved to move forward with a positive Final Investment Decision, subject to two conditions.

The Final Investment Decision will be confirmed by the partners of PNW LNG once two outstanding foundational conditions have been resolved. The first condition is approval of the Project Development Agreement by the Legislative Assembly of British Columbia, and the second is a positive regulatory decision on Pacific NorthWest LNG’s environmental assessment by the Government of Canada.

“In parallel with work to support the Final Investment Decision, Pacific NorthWest LNG will continue constructive engagement with area First Nations, local communities, stakeholders and regulators,” said Michael Culbert, President of Pacific NorthWest LNG. “The integrated project is poised to create thousands of construction and operational careers in the midst of the current energy sector slowdown.”

ProgressenergyProgress Energy Canada and the North Montney Joint Venture partners will continue to invest in its North Montney natural gas resources. The investment to date has proved and probable natural gas reserves of over 20 trillion cubic feet (tcf) with $2 billion-plus invested annually, representing approximately 4,000 sustainable jobs in northeast British Columbia.

“A Final Investment Decision is a crucial step to ensure that the project stays on track to service contracted LNG customers,” Culbert continued. “Pacific NorthWest LNG is poised to make a substantial investment that will benefit Canada for generations to come.”

Lelu Island, the flat area in the left of the image, across from the harbour at Port Edward is the potential site of the Petronas  Pacific Northwest LNG project.  (Robin Rowland/Northwest Coast Energy News)
Lelu Island, the flat area in the left of the image, across from the harbour at Port Edward is the potential site of the Petronas Pacific Northwest LNG project. (Robin Rowland/Northwest Coast Energy News)

Although Pacific Northwest LNG is first off the mark with a positive, if conditional, Final Investment Decision, putting a shovel in the ground is not guaranteed. Of all the proposed liquified natural gas projects for northwestern BC, the location on Lelu Island, right at the mouth of the Skeena River, is probably the most environmentally sensitive. Even if the Canadian Environmental Assessment Agency does give its approval, probably with a long list of conditions, it is highly likely the decision will be challenged in court by First Nations and environmental groups.

The environmental process was put on hold in early June after the agency asked Pacific Northwest to provide more information about building the terminal. The island sits near Flora Bank, where young salmon shelter in eel grass after coming down the Skeena, taking time to grow before venturing out into the Pacific. Flora Bank has been called the “nursery” for one of the world’s most important salmon runs.

The fact that Pacific Northwest LNG has to supply more studies means that any final environmental assessment decision will come after October’s federal election.

After initial proposals to dredge the area where met with loud and sustained opposition, Pacific Northwest proposed a suspension bridge and trestle which means the LNG tankers would tie up well off the island in Chatham Sound.

Lelu Island is on the traditional territory of the Lax Kw’alaams First Nation. Members of the First Nation recently voted overwhelmingly against accepting a billion dollars over the life of the project from Pacific Northwest.

Pacific NorthWest LNG filed a report, prepared by engineering and environmental company Stantec Inc., that said there would little or no environmental impact impact from building the $11.4-billion LNG terminal. Stantec’s report, however, is unlikely to reassure many people in the northwest because of Stantec’s close to ties to the energy industry.  Stantec did major studies for the controversial Enbridge Northern Gateway project, studies that were challenged by other environmental studies opposing that pipeline project.

Petronas_LogoPetronas holds  62-per-cent of Pacific NorthWest LNG.

Partners are China’s Sinopec, which holds 10 per cent, Indian Oil Corp. Ltd. which holds 10 per cent, Japan Petroleum Exploration, 10 per cent, China Huadian Corp., 5 per cent and Petroleum Brunei, 3 per cent.

As well some First Nations and environmental groups in the northwest of British Columbia, in the northeast, Blueberry River First Nations who live in the North Montey natural gas region have said they are worried about increased drilling in their traditional territory are concerned about increased drilling by Progress Energy for natural gas within their traditional territory.

The Blueberry River group says it plans request judicial review of the B.C. Natural Gas Development Ministry’s decision to sign the 23-year royalty agreement for the region.

 

Why the media coverage of the Tim Hortons boycott is a double double failure

The headline on Thursday’s CBC.ca coverage of the sudden controversy over a boycott  in British Columbia of Tim Horton’s over the Enbridge ads sums up everything that’s wrong about media coverage not only of the boycotts, but of northwest energy and environment issues overall.

“Tim Hortons yanks Enbridge ads, sparks Alberta backlash.” The anger at Tim Hortons across northwest British Columbia over those Enbridge ads, the calls for a boycott have been building for more than two weeks but no one in the media noticed despite widespread posts on Facebook and other social media.

CBC.ca

As usual, the concerns of the northwest didn’t really become a story until Alberta got involved and  the story has become the “Alberta backlash.”  Now, there’s a backlash on social media to the Alberta backlash, with northwestern British Columbians tweeting and posting their displeasure, angry at the usual blinkered views of Alberta-centric coverage of energy issues.

Let’s make one thing clear– despite the outraged cries of the usual suspects like Defence Minister Jason Kenney, Conservative MP Michelle Rempel, who represents Calgary Centre-North and Kyle Harrietha, the Liberal candidate for Fort McMurray-Cold Lake that the boycott was aimed  at Alberta’s entire energy industry and the province’s views of a manifest destiny as an energy super power, the doughnut boycott was really aimed specifically at Enbridge, and the company’s arrogance and incompetence.

This morning Wildrose party leader Brian Jean has joined the Alberta boycott and is demanding the Enbridge ads be reinstated. “I’ll pick up my Tim’s coffee again when they decide to apologize for taking jabs at our industry, which is so important to Albertans,” Jean is quoted on CBC.ca.

Of course Jean, like most Albertans, isn’t  looking at the bigger picture. The question that Jean should really be asking, is the continuing unquestioning support for Enbridge actually harming the rest of the Alberta energy industry by increasing the resistance in northwestern BC to other energy projects? When are Alberta politicians, whether federal or provincial, ever actually going to show even a Timbit of respect for the issues in northwestern British Columbia?

Look at what Enbridge is doing

There is strong support (with some reservations) for the liquified natural gas projects. There is a level of support for pipelines that would carry refined hydrocarbons to the coast, something that the new premier of Alberta, Rachel Notley is seriously considering.  But it is so typical of Alberta, the Alberta media and most of the Canadian media, to believe that the boycott was an attack on the entire energy industry.

Ask any executive of an energy company that wants to do business in northwestern British Columbia and they’ll come  up with the a joke that is now so old and so often repeated that it’s become a cliché, “We look at what Enbridge is doing and then do the exact opposite.”

timmysamos

The fact is that Enbridge has been dealing with northwestern British Columbia for more than ten years and they still can’t do anything right. Shell, Chevron, Petronas (and before them Apache) and even TransCanada make more efforts to listen to the people, First Nations and non-Aboriginal residents alike, than Enbridge ever has or ever will (despite their claims in their PR campaigns).

While these energy giants may not agree with what they hear, they are respectful and depending on their corporate culture are making genuine efforts to come up with ways to make their projects work. After a decade of blunders, however, Enbridge still hasn’t shown that much respect for anyone here. Those touchy feely ads that appear on television and at Tim Horton’s are just another example of how not to run a public relations campaign.

There are those who oppose any bitumen sands extraction who signed the online petition, but the core of opposition, as always, comes from northwestern BC and the issue is an ill-conceived pipeline.

Enbridge has been successful in one area of its public relations strategy. They’ve convinced Albertans that Enbridge and the Northern Gateway pipeline is an essential part of not only the Alberta economy but Alberta culture. Any attack on Enbridge becomes an attack on Alberta. Hence the unreasoned anger when after Tim Hortons pulled the ads.

The big blame America lie

The other Big Lie we keep hearing from the Harper Government, is that this all orchestrated by American NGOs and activists. Again this shows Alberta-centric contempt for British Columbia. It’s very easy and convenient to keep believing that everyone in northern British Columbia are dumb and stupid and are being led by the ear by those nasty green Americans who have it in for the efforts to make Canada an energy superpower. That idea, promoted by the more conservative Canadian media has always been animal waste. The battle to protect the environment of northwestern British Columbia while at the same time attracting resource projects that have recognized and obtained social licence to operate has always and will always in BC on a case by case, community by community basis.

Macleans

The only media that so far has managed to get it half right is Jason Kirby writing in MacLean’s who notes that the trouble began on May 18 when Enbridge put up the Tim Hortons ad on their own website. (Did I mention that Enbridge is both incompetent and arrogant?) and it was immediately noticed by those individuals and activists that monitor the Enbridge website.

A morning shock with your morning coffee and Timbits

Social media across northwestern British Columbia, mostly Facebook, began spreading the news within hours of the ads appearing in the local Timmys. There were angry posts from individuals who had walked in Tim Hortons and saw the ads.

Post in the Kitimat Politics Facebook group.
Post in the Kitimat Politics Facebook group.

Why didn’t the media get the story?

So why wasn’t the story covered by the media at least ten days ago?

That’s because in this age of tight budgets, it’s considered easy and economical to try to all of northern BC cover from either Vancouver or Calgary; that means covering from far away both the coast where the pipelines and tankers may or may not operate to the east near the Rockies where the natural gas extraction is on going

If you look at map of northern BC, and the two federal ridings Skeena Bulkley Valley and Prince George–Peace River–Northern Rockies, the population is about 200,000 spread over an area about half the size of Europe. Both ridings in this region are supposedly vital to the future of the Canadian economy, but you wouldn’t know it from most of the media. (The Globe and Mail is an exception, with more ongoing coverage of northern BC than you will find in either The Vancouver Sun or The Province).

Elections Canada map showing just how big the two northern BC ridings are.  (Elections Canada)
Elections Canada map showing just how big the two northern BC ridings are. (Elections Canada)

As for CBC, there are just eight radio staff, two in Prince Rupert and six in Prince George to cover all the apparently vital issues across half the province. ( Almost all the staff work mostly for the Daybreak North morning show which dominates the regional rates but it looks like with the latest CBC cutbacks that at least one of those positions will be eliminated). CBC TV and Global cover the region from Vancouver.

At least the Vancouver based media make efforts to cover the north from time to time. The Alberta media, however, especially the Calgary Herald, is hopeless, and so biased against British Columbia and so dismissive of the issues here, that the coverage across Alberta is completely unreliable about 90 per cent of the time—it’s no wonder that the majority of Albertans have no understanding of British Columbia culture and issues.

Then there are the punditi, pontificating from their cubicles in Ottawa and Toronto without a clue, without doing the basic journalism of picking up the phone (or writing an e-mail) to actually find out what’s going on.

coyne1

coyne2

Andrew Coyne, for example, made these rather silly two tongue-in-cheek tweets Thursday night. While Coyne’s tweets do often exhibit a sense of humour, his excellent coverage of the decline of our democratic parliament has to be compared with his blind, unchecked ideological assumptions about the issues of the northwest, which are simplistic, cubicle bound and far off the mark. The same can be said for Jeffrey Simpson in his occasional writing about this region. Neither the view from the Hill, where you can see as far as the Queensway, nor from Bloor Street, where you can see part of the Don Valley, are vantage points to understand what is going in northern British Columbia.


Update: Rex Murphy, writing in the National Post,  has now joined the fray, no longer making a secret of his absolute disbelief in climate change and support for Enbridge. However, if you read his column, it is scathing in its contempt for the working men and women of British Columbia who want sustainable environmentally safe resource projects. It appears that to Murphy the only people in this country who actually work for a living in Canada are in Alberta and Newfoundland and no where else.   Kitimat has been an industrial town since it was founded in the 1950s, Kitimat rejoiced when former Mayor Joanne Monaghan succeeded in bringing a Timmys to Kitimat and the majority of Kitimat residents voted in the plebiscite against Enbridge.  But, of course, all those facts are irrelevant to Murphy and the other conservative pundits who never come within a thousand kilometres of northwestern BC, who believe we can’t think for ourselves and are easily misled by American environmentalists.  No wonder journalism is in a death spiral.


Error checks

So let’s look at the specific errors in the media coverage of the Tim Horton’s story.

globetimmys

Both Shawn McCarthy in the Globe and Mail and Kyle Bakyx on CBC.ca seem to accept without question that SumofUs, was the instigator of the petition. Like many issues in northwestern BC, the Lower Mainland or US based activist groups follow the lead of northwestern BC and jump on the bandwagon, not the other way around. Jason Kirby in MacLean’s says the boycott movement began a week ago. Here in Kitimat, it began within hours of the ads appearing in the local Timmys and was picked up on activist social media groups before the SumofUs petition site.

McCarthy repeats the conventional wisdom: “The Conservatives and oil industry supporters have been waging a public relations war with the environmental groups that oppose expansion of the oil sands and construction of new pipelines.”

When is the media ever going to learn that opposition to Enbridge is widespread across most of northern British Columbia, from First Nations to city and regional councils to a plurality of residents? When is the media going to drop the stock phrase “First Nations and environmentalists”? Does anyone remember the vote in Kitimat last April against the Northern Gateway project?

CBC.ca quotes Alan Middleton of York University “Enbridge, of course, is not just pipelines and oilsands; they are a whole range of products including heating people’s homes. Tims should have thought about that.” Again a mistake. I lived in Toronto for many years. A company called Consumers Gas supplied natural gas to homes until it was taken over by Enbridge, so Enbridge does heat the homes in Toronto. But what has that got to do with northwestern British Columbia? Why didn’t CBC.ca call the University of Northern British Columbia? Easier to call York (which by the way is where I got both my BA and MA)

McCarthy quotes Rempel as saying, “One has to wonder whether head office talked to their franchise owners in Alberta before making the decision. I imagine those calls are being made this afternoon – certainly there are a lot of people voicing their displeasure.”

The question that should have been asked whether or not Tim Hortons consulted their franchise owners in British Columbia before ordering them to play the ads. People here were “voicing their displeasure” from the moment the first Kitimatian walked into the local Timmys for an early morning coffee and had to stand in line while being told how wonderful Enbridge is.

Of course, if Albertans force Tim Hortons into reinstating the ads, that will only trigger a bigger boycott in British Columbia.  As Maclean’s asks, “what were they thinking?”

Jason Kenney, flying in, flying out

As for Jason Kenney, who is quoted by the CBC as tweeting:  “I’m proud to represent thousands of constituents who work for Enbridge & other CDN energy companies,” if Kenney aspires to be Prime Minister one day, he had better start thinking about representing more Canadians than just those employed by the energy industry—a mistake that his boss Stephen Harper keeps making.

Jason Kenney did visit Kitimat for a just a few hours in February 2014  for a tour of the Rio Tinto modernization project and an obligatory and brief meeting with the Haisla First Nation council. If Kenney had actually bothered to stick around a few more hours and talk to the community, everyone from the environmentalists to the industrial development advocates, he might not have been so quick on the trigger in the Twitter wars.

Not one of the major media who covered this story, not The Globe and Mail, not CBC.ca, not MacLean’s, no one else, once bothered to actually call or e-mail someone who lives along the Northern Gateway pipeline route in British Columbia, the area where the boycott movement actually began to ask about Enbridge’s track record in this region. The media still doesn’t get it. This morning’s stories are all about Alberta. As usual, my dear, the media doesn’t give a damn about northwestern British Columbia.

That is why the coverage of the Tim Hortons boycott is a double double failure of the Canadian media.

timmyskpoljune4




Where else the media is failing northwestern BC

Full disclosure. Since I took early retirement from CBC in 2010 and returned to Kitimat, I have worked as a freelancer for CBC radio and television, Global News, Canadian Press, The National Post, The Globe and Mail and other media.

However, largely due to budget cuts, freelance opportunities, not only for myself, but others across the region have dried up. The media seems to be concentrating more on the major urban areas where there is larger population base and at least more of the ever shrinking advertising dollar. I am now told more often than I was a couple of years ago that “we don’t have the budget.”

Now this isn’t just a freelancer who would like some more work (although it would be nice). If the media these days actually had environmental beats for reporters the boycott of Tim Hortons in northwest BC would have been flagged within a couple of days, not almost two and half weeks and later only when Alberta got hot under its oily collar.

So as well as the Tim Horton’s boycott here are two major ongoing stories from Kitimat that the media haven’t been covering.

100 day municipal strike

-Kitimat’s municipal workers, Unifor 2300, have been on strike since February 28. Three rounds of mediation have failed, the union has refused binding arbitration, the pool, gym and community meeting halls have been closed since February, the municipal parks and byways are now returning to the wilderness. Only essential services are being maintained (but residents still have to pay their property taxes by July 2, taxes that are skyrocketing due to increased assessments for home values based on LNG projects that haven’t started) By the time most people read this the strike will have been on for 100 days. There is no settlement in sight and both sides, despite a mediator ordered blackout, are fighting a press release war on social media. Can you imagine any other place that had a 100 day municipal workers strike with no coverage in the province’s main media outlets, whether newspaper or television? Local CBC radio has covered the strike, as has the local TV station CFTK.  (Update: District of Kitimat says in a news release that the mediator has now approved the DoK news releases.)

Of course, in the bigger picture the media concentrates on business reporting. There haven’t been labour reporters for a generation.

Kitimat air shed hearings

-The environmental hearings on the Rio Tinto Alcan proposal to increase sulphur dioxide emissions in the Kitimat Terrace air shed, after two weeks in Victoria, where there was no media coverage, are now continuing in Kitimat, where again there is little media coverage. CFTK is covering the hearings; otherwise the main coverage comes from the activist group DeSmog, hardly a credible or unbiased source. I made the decision not to cover the hearings either. I can’t afford any longer to sit around for two weeks, unpaid, no matter how vital the hearings are to the community.

So if most Canadians were surprised that there was a boycott of the unofficial national symbol, Tim Hortons, it’s because of that double double media fail and as the media continues to decline, as budgets are cut, as “commodity news” disappears, expect more surprises in the future. Oh by the way Kitimat is vital to the national economy but we can cover it from a cubicle in Toronto.

Final disclosure: I am not a coffee drinker. When I go to Timmy’s I prefer a large steeped tea and an apple fritter.

Another LNG shake up: Shell reported to be in talks to acquire BG Group

Shell logoNumerous media sources are saying that Royal Dutch Shell is in talks to acquire the BG Group.

Shell is developing the LNG Canada project in Kitimat,  while BG had been developing an LNG proposal for Prince Rupert.  BG announced last fall it was delaying further development of the Prince Rupert project due to uncertainty in the liquified natural gas market.

An initial report came from Bloomberg, which said:

Buying BG would be Shell’s largest acquisition since the $60.3-billion (U.S.) merger of its Dutch and U.K. parent companies in 2005, according to data compiled by Bloomberg. It would unite the U.K.’s first- and third-largest natural gas producers….BG posted a record $5-billion loss in the fourth quarter, mainly due to writing down the value of its Australian assets as commodity prices fell.

BBC News quotes the Wall Street Journal as matching the report.

A Shell spokesman told the BBC: “We’re not making any comment.”
No-one from BG Group was immediately available to confirm or deny the WSJ’s report.

Last fall, when BG put the Prince Rupert project on hold, with a financial investment decision postponed until 2019, the Financial Post, quoted BG executive chairman Andrew Gould as saying, “We’re not abandoning Prince Rupert, we’re pausing on Prince Rupert to see how the market evolves particularly in function of total supply that will come out of the U.S.”

At the time, analysts noted that unlike Shell, Chevron and Petronas, BG had no gas extraction assets in Canada. BG is a privatized spinoff of the once nationalized British Gas company in the UK.

 

 

 

 

 

 

Bish Forest Service Road reopens to the public on March 1, 2015

The Bish Forest Service Road will reopen to the public on March 1, 2015. With the upgrades created by the Chevron-led Kitimat LNG project, the single lane logging rough logging is now a high quality gravel “resource road.”

The first 12 kilometres of the road will be open “to provide public access to connecting roads, recreational areas and natural hiking trails,” Chevron says.

“In terms of Kitimat specifically we’ve completed a number of key projects,” said David Molinski, Chevron’s lead for Regulatory and External Affairs. “We’ve made the upgrades to the Forest Service Road, and the Early Works we’ve been doing on site at the Bish Cove site.

Bish FSR
A construction check point on the Bish Forest Service Road during a media tour, October, 2014. (Robin Rowland/Northwest Coast Energy News)

“So we’ve been for the past couple of years putting a lot of effort on advancing that part of the project. We’ve completed the key elements of the Forest Service Road upgrades over the past four years,”  Molinksi said, “When we got there it was essentially a single track logging road and it was very difficult to access the Bish Cove site. So we wanted to make sure we had a road that would help support the project. That means having an all weather access all year round. That’s a very substantial development.

“It’s a public road, it’s always has been a public road, in fact it’s owned by the Crown.

“It’s time now for us to reopen that road. We had it closed for safety reasons. We wanted to make sure we completed the work on the road. There was blasting, moving rock, breaking down rock, stabilizing slopes.

“We had to make sure we could that work done in a safe way. Now that’s done, we’ve completed the road upgrades and we’re very happy to reopen it to the public. We look at it as being a long term legacy for the community.

Safety poster
Safety rules for travelling on the Bish Forest Service Road. (Chevron poster)

“The road is available for people in the community to use. There’s a number of recreation sites people in the community have used for many generations. So we’re pleased we can turn that road back into being publicly available and they can use it safely so they can get access to the areas they love around this community.”

In 2015, Chevron says, some work may continue on the road and “may include power line installation, paving and other construction activities.” There is also a need for the road to “stabilize” Molinksi said. “We’ll come back down the road and make a decision about what the right timing is to cap that road. Right now we don’t have a specific schedule It’s good for the road to stabilize and settle over the next couple of seasonal cycles.”

The decision about the future of the road will depend on the uncertain investment climate, due to the downturn in the energy industry.

In a panel at the open house on Feb. 24, Chevron said that projects like Kitimat LNG “are significant, very large and extremely complex with multiple moving parts that must all come together through hard work and perseverance in order to be successful.”

Open house
The Kitimat LNG open house at Riverlodge, Feb. 25, 2015. (Robin Rowland/Northwest Coast Energy News)

Chevron will continue to make a capital investment on the Kitimat side of the project but “the pace of field work in Kitimat at the LNG Plant will be decreasing as we focus capital spending on other aspects of the project.

For 2015, Chevron will concentrate on exploration in northeast British Columbia, Molinksi said, “That’s where the Liard Basin and the Horn River Basin are located and that’s where we’re developing the natural gas, substantial natural gas resources to support this project… This year we’re going to focus on getting additional data on the natural gas that we have a number of rigs that are running right now. We’re going to be drilling wells over 2015 and make sure we have a good understanding of those wells that are going to be supplying gas to this project. We have to know as much about that resource as this site here.”

“As a result there will be a decrease in site preparation work associated with the Kitimat LNG project and the Pacific Trails Pipeline during 2015,” the Chevron panel said.

Courts, costs stall Northern Gateway

Updated Feb. 26, 2015

Enbridge logoCourt 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)
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)
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.

Apache sells Kitimat LNG stake to Australia’s Woodside Petroleum

Apache CorporationApache 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.

Woodside PetroleumBased 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.

https://storify.com/nwcstenergynews/apache-sells-kitimat-lng-stake-to-woodside-petrole