Kitimat air shed study raises more questions than it actually answers

The sudden release early Friday, July 18, by the British Columbia Ministry of the Environment about the Kitimat Valley air shed study brings more questions than the answers it provides; some questions are political, some technical.

The questions include

1. Why was the study suddenly released after the province said it was “privileged?”
2. Did the apparently rushed release mean that the study, as far as the public is concerned, is incomplete?
3. While most people in Kitimat believed that the study would be a wide ranging look at all parameters of industrial development in the valley, it was limited to just two factors, sulphur dioxide and nitrogen dioxide.
4. It appears that everyone involved were consulted prior to the release with one key execption, the District of Kitimat. Why?
5. The study appears to have changed in its criterion from the time of the request for proposal and the final release one issue—an oil export terminal, which went from “crude” in the request for proposal  to refined in the final report.

Douglas Channel
Clouds over Douglas Channel. (Robin Rowland/Northwest Coast Energy News)`

While the study is spun has a showing that industrial development in the Kitimat Valley can proceed as long as the environment is properly managed, the gaps and the spin will likely bring doubt to the results. That means that a wider ranging and truly independent study of the air shed is needed so that both residents and industry can then make the proper decisions.

Ironically, a proper study may actually come from industry, rather than government since LNG Canada has said that a full air shed study will be part of its environmental assessment filing expected in the fall.

The air shed proposal

In October  2013, the Ministry of the Environment issues a “request for proposal” to “study potential cumulative effects to environment and human health from existing and proposed industrial facilities in the Kitimat airshed.” to be filed by March 31, 2014.

According to the government website,

The Province will fund a $650,000 scientific study to help inform regulatory and policy development for future industrial activity in the Kitimat area. The goal is to ensure the potential impacts from industrial air emissions are clearly understood prior to new projects being approved and in operation.
The Kitimat Airshed Impact Assessment Project will look at the cumulative effects of existing and proposed industrial air emissions in the airshed. These include emissions from: an existing aluminium smelter, three proposed LNG terminals, a proposed oil refinery, a crude-oil export facility, and gas-turbine-powered electrical generation facilities. The study will focus on sulphur dioxide and nitrogen dioxide emissions from these facilities.
The study will assess the impact of emissions through a number of scenarios, including their potential effects on water and soil, as well as on vegetation and human health from direct exposure.

With that news release, it appears that many people assumed that “cumulative effects of existing and proposed industrial air emissions in the air shed,” would include all possible scenarios and contaminants.

The report, when it was released on Friday, covered just  the “focus” sulphur dioxide and nitrogen dioxide and no other factors in air quality.

Crude or refined oil export?

airshedmap3As Northwest Coast Energy News noted that the report, as released, doesn’t include any references to the Enbridge Northern Gateway project, even though Northern Gateway is a source of “proposed industrial air emissions in the air shed.” The request for proposal also mentions “a crude-oil export facility” but the report as issued concerns a marine terminal for Black’s refinery

David Black’s Kitimat Clean website says 

The products will be exported via a marine terminal on the Douglas Channel. Projected volumes include 320,000 barrels per day of diesel fuel, 110,000 barrels per day of gasoline and 60,000 barrels per day of jet fuel.

The map in the main report clearly shows that the study concerned the “Kitimat Clean Refinery Port” not a crude oil export facility—in other words likely Enbridge Northern Gateway.

Kitimat excluded

On October 21, 2013,  District of Kitimat Council endorsed a motion by former Councillor Corinne Scott:

“The BC Government has recently announced a budget of $650,000 to study the cumulative effects on the air quality due to the proposed industrial development in the District of Kitimat. It would be beneficial to have a representative from the District of Kitimat as an active participant on the committee to provide input and feedback as the study progresses.”

At the time Chief Adminstrative Officer Ron Poole told council that the minister’s office had called and promised to “involve the District.”

At that meeting, Councillor Mary Murphy reported that member were “vocal” at the Union of BC Municpalities that it was essential that Kitimat be involved. Councillors suggested that the study be wide ranging and include emissions already in the area and residual emissions left over from the closed Eurocan and Methaex operations.

The provincial final air shed report makes no mention at all of the District of Kitimat, Eurocan or Methanex.

In April, 2014, after the March 31, reporting deadine, the District and Council had heard nothing from the province. So in April, District Council passed a motion asking for a report on the status of the study.

Crown Privilege

In June, the province refused to release the report to lawyers involved in a suit against the Environmental Assessment Board which is challenging Rio Tinto Alcans’ permit to increase sulphur dixoide emission in the valley. According to the Globe and Mail,  Dennis Doyle, a lawyer with the Ministry of the Attorney General, in the RTA suit, wrote to the Environmental Law Centre in Victoria

In a follow-up letter dated June 12, Mr. Doyle said, “On the matter of the Kitimat Airshed Study I am instructed that this report was prepared to guide development of government policy on industrial development in the Kitimat area and to assist the executive council in its ongoing deliberations. It is not a report that was prepared for the Respondent and played no part of the decision-making process for the permit amendment which is now under appeal.”

In mid-July, the lawyers then asked the Environment Assessment Board to either turn over the air shed report or explain why it was covered by Crown Privilege.

The EAB told the province to respond to that question by July 18. Instead there was a hastily called news conference and the report was released. However, a close look at the report shows that it was likely rushed to meet the EAB deadine and was incomplete—rather surprising for a report that was supposed to be complete by March 31.

Rushed report

airshedcoverWhat evidence is there that the report was rushed out by the Ministry of the Environment? The most compelling indication is that instead of a public-friendly Summary Report with an executive summary and clear conclusions, there was nothing more than a short Power Point presentation.

Most people in Kitimat who follow the energy debate are familiar with the approach of combining a readable summary with technical data. It is most evident in the report of the Enbridge Northern Gateway Joint Review, which issued a relative short summary, Connections along with the long technical report, Considerations.

Let’s take as a prime example, the original report on the Kitimat airshed commissioned by Rio Tinto Alcan. In that case, ESSA Technologies Ltd of Vancouver, the company hired by the RTA Kitimat Modernization Project to study the effects of increased sulphur dioxide emissions in the Kitimat Valley, issued three documents, an easy to understand 37-page summary report, a much longer 456 page Technical Assessment Report and a third  332 page volume of appendices, technical data and tables.

It was the same company, ESSA Technologies, that was retained by the province to do the much larger study of the airshed. However, the only public-friendly information was the 16 page highly simplified Power Point presentation.

The ESSA summary report for RTA shows in plain language, the reasons for its conclusions that the increased sulphur dioxide from KMP on human health “is characterized as moderate, an acceptable impact, but in need of closer scrutiny with moderate monitoring.” That report also outlines the limitations and uncertainties of the study.

There was no similar plain language summary released for the overall provincial air shed study, even though it was produced by the same company and came to similar conclusions.  To find any limitations or uncertainties in the provincial air shed study you have to do a computer search for those key words.

So it is apparent that intended audience for the report is not really  those who live in Kitimat, where over the past five years there is wide knowledge that a summary release along with a technical report is considered a standard procedure.

Kitimat not consulted

At the Friday news conference, reporters asked Environment Minister Mary Polak several times about the delay in releasing the report, and then why it was suddenly released.

In answer to the initial question, Polak said, “We had always intended to release it.” She refused to comment on the claim of cabinet privilege, saying that was the responsibility of government lawyers at the Ministry of the Attorney General. She said that the government had received the March 31 report “by the end of April and “it went through quite a rigorous and thorough review by different agencies… we are satisfied now that the findings have been given the kind of rigorous overview and we’re pleased with what has resulted from that.”

Polak said the Haisla Nation were consulted before the commissioning of the report.

Asked again about who the BC government consulted during the review period, she replied, “There were a number of other groups involved in technical review, so not just Ministry of Environment, you’ll be aware of Northern Health authority, but Ministry of Natural Gas Development, Health Canada, Environment Canada and also specialist reviewers from the Province of Quebec, the University of Helsinki, UBC, also private consultants. Then we spent some time going over and having a technical review with Gitga’at and Coastal Coastal First Nations. So it was a matter of ensuring that we had done the very best review of the work before the occasion on which we released it.”

Which leaves one big question, why was the Province of Quebec and the University of Helsinki consulted and Kitimat, despite requests, was not?

Not in the report, not my department

The provincial government called for a report on the “cumulative effects of existing and proposed industrial air emissions” and noted it would focus “ focus on sulphur dioxide and nitrogen dioxide emissions from these facilities.” It is clear that the report did not go beyond the narrow focus on those two substances.

At the Vancouver news conference, a reporter  asked Polak why green house gases were not included.

She replied, “That’s not what this study was intended to look at. This department deals with pollutants and pollution and protecting our environment from it, whereas GHG [green house gas] emissions are dealt with in our department around climate change and climate action. These particular substances have an immediate impact on human health and vegetative health and the receiving environment generally unlike GHGs which are a more global impacted and of course have an impact on climate change. This study only looked at those pollutants sulphur doixide and nitrogen dioxide

Then a second reporter asked here about particulate matter, to which Polak replied, “Coming from the Fraser Valley I am very aware of the impact of particulate matter. Any industrial development that we permit in British Columbia or receives an environmental assessment certificate, particulate matter and the release of particulate matter is one of the things that gets evaluated as we determine whether or not to grant those permits. Or to put stipulations on those permits in order to ensure a reduction or management of particulate matter. That’s where that’s dealt with and we have some pretty good understanding of how that operates. We also have some modelling from this study.

“The reason this study didn’t report on that because we hadn’t asked them to. We specifically wanted to get at the issue of sulphur disoxide and nitrogen dioxide but please do not take frm that because it’s not in the study, it doesn’t get looked at. It simply gets looked at in a different process. In this case it was the understanding of the Kitimat air shed with respect to sulphur dixoide and nitrogen dioxide that we needed to have a better answers and better information.”

In other words, despite what the original proposal said: “The goal is to ensure the potential impacts from industrial air emissions are clearly understood prior to new projects being approved and in operation,” the provincial government is content to wait until the permit phase to consider particulate matter, rather than include particulate matter in the long term planning for the air shed.

And for green house gases, the same attitude seems to apply, either it’s not her department or it will be dealt with sometime in the future.

What’s going on in the air shed?

Although the provincial government has been able to spin that the air shed report clears the way for more industrial development in the region, the report isn’t much help for long term planning for those both for and against industrial development in the valley.

First one has to wonder just how comprehensive was the study, even when it comes to sulphur dioxide and nitrogen dioxide?

The report for Rio Tinto Alcan for just one substance—sulphur dixoide—from one industry—aluminum smelting–led to a 456 page technical report with 332 pages of appendices.

The provincial technical report adds  one more substance, nitrogen dioxide,  and adds four LNG facilities, an oil refinery, different export terminals for those industries, and two hydro generating stations plus related shipping, including a passing mention of vehicular and train traffic. The new report  is 363 pages, including the appendices. (It should be noted that the air shed report does reference some of the information in the RTA report)

The various studies for the Enbridge Northern Gateway, which often contained material on air emissions, included a much longer list of what in industry jargon are called CPOC “chemicals of potential concern,” including chemicals that might be released in trace amounts from the Northern Gateway terminal, but may be of more concern from LNG projects. Who knows unless those substances are studied?

As was required by the Joint Review Panel, Enbridge also studied potential problems from accidental release of air-borne contaminants from the Northern Gateway project. There is no mention of accidental release in the current air shed study.

Although the increase in truck traffic in Kitimat is clearly visible to people who live in the town, the air shed report also speculates that with LNG and a possible refinery, there will also be a significant increase in rail traffic coming into Kitimat, hauled, of course, by diesel locomotives, which the report says is “expected to be conservatively captured within the background concentration adjustment.”

Can the Valley “handle industrial expansion”

Stakeholders in the region from the District of Kitimat to the Gitga’at First Nation to various environmental groups asked for a comprehensive review of what is going to happen in the Kitimat air shed with industrial expansion.

So the answer to the question can the valley “handle industrial expansion” after the flawed and limited report from the provincial government is not “yes,” but “we don’t know yet.”

It appears that the report is part of Christy Clark’s ongoing campaign that LNG will save the provincial economy.

There are two factors the report ignores.

First the energy companies are going to make their final investment decision on cold hard facts, including their own assessment of the potential problems from the air shed, not spin from the provincial government.

Second, until there is a proper air shed study, the First Nations, including the Haisla in Kitimat, the Gitga’at at Hartley Bay, the Kitselas in Terrace  will not have solid evidence to make a decision on the details of the LNG or refinery development on their traditional territory and increased ship traffic along the coast and that will come into immediate conflict with the Supreme Court ruling on the Tsilhqot’in decision and the finding that “Whether a particular use is irreconcilable with the ability of succeeding generations to benefit from the land will be a matter to be determined when the issue arises.”

There is a new Orwellian phrase used by both the federal and provincial government. Every report is “independent” and “science-based,” although all they all tend to support the policy of the commissioning agency.

What the Kitimat Valley, Douglas Channel and the Terrace region need is a truly independent and truly science based and truly comprehensive evaluation of the air shed. At the moment, that doesn’t exist. It should whether it comes from industry or if the local governments can find the budget to fund a proper study or some combination of the two.

Links

Kitimat Airshed Assessment
RTA report Sulphur-dioxide-technical-assessment.html

(Scanned version of copy in Kitimat public library)

 

Related

Business in Vancouver

Kitimat airshed modelling has narrow focus

Vancouver Observer

Province’s air pollution study green lights LNG build-up, but ignores climate change

News release: Andrew Weaver MLA
New airshed study is a “nail in the coffin” for government LNG dreams in Kitimat

Kitimat can accommodate industrial growth, air shed study says. But where’s Northern Gateway?

The long awaited Kitimat air shed study, released by the province Friday, July 17, 2014,  says “that with proper management, Kitimat’s ai rshed can safely accommodate new industrial growth” without major affects on either human health or the environment.
Link to news release : Study shows Kitimat airshed can handle new industrial development 

The Kitimat Airshed Assessment looked at the cumulative effects of industrial air emissions, primarily sulphur and nitrogen oxides, and their potential impacts on both human health and the environment from

  • Rio Tinto Alcan’s existing aluminium smelter and its planned modernization
  • David Blacks proposed “Kitimat Clean” oil refinery at Onion flats
  • Four proposed LNG facilities; Shell-led LNG Canada, Chevron lead Kitimat LNG, the floating Douglas Channel LNG at the old log dump and a second floating LNG project called Triton.
  • BC Hydro gas turbine powered electrical generation facilities in Kitimat and near Terrace
  • Predicted increased to marine shipping in Douglas Channel.

The study was divided into two zones.

Health results were first examined for Kitimat townsite, the Kitimat Industrial Service Centre and Kitamaat Village.

The wider study included Gitga’at Old Town, Hartley Bay (Kulkayu), Kitimat-Stikine, Kitselas, Kitsumkaylum, Kshish, and Terrace.

Enbridge missing

There was one big factor missing from the study, it does not include the Enbridge Northern Gateway project, although the consultants who did the study do cite a couple of the air quality studies that Enbridge filed with the Northern Gateway Joint Review Panel. That despite the fact the Joint Review Panel under Condition 82 required that Enbridge file with the NEB for approval, at least four months prior to commencing construction, “an Air Quality Emissions Management and Soil Monitoring Plan for the Kitimat Terminal.”

The JRP report acknowledged that emissions from the Enbridge terminal would be minimal but would contribute to the cumulative effect of pollutant emissions from other industries and required Enbridge to consult with the District of Kitimat, the environment ministries and other industries in planning for emissions.

The map from the airshed study also shows that the  possible marine terminal for David Black’s proposed Kitimat Clean refinery project is at or close to where the proposed Enbridge Northern Gateway terminal would be.

airshedcover

Health and environment

The study looked at proposed emission levels and the effect of emissions elsewhere in the world and then compared those studies with the Kitimat Valley. It found that the risk of sulphur dioxide was “directly related to proximity to industrial area”–largely the Kitimat Service Centre area–and that there would be a minor increase in respiratory incidents of 0.5 per cent to 2 per cent, with a slight increase of nitrogen dioxide but those were within existing guidelines.

As for environmental impact, the study says nitrogen dioxide impacts will be low. There wil be “some increased risk of soil impacts” from sulphur dioxide. The study says there will be “no negative impacts to vegetation across all scenarios” but did find “potential for acidification” of seven small lakes.  Lakelese Lake is not one of those affected.

The study also doesn’t include particulate matter and although it does consider climate change, did not take into consideration possible increase of green house gases in the Kitimat Valley.

The consultants, Esssa Technologies of Vancouver, based its findings on an earlier study by Rio Tinto Alcan on emissions from the Kitimat Modernization Project and worked on those findings by adding new industries and a greater area to the models they used.

The province and industry says they will continue to monitor air, water, soil and vegetation “to ensure these values are protected.”

The higher levels of sulphur dioxide emissions from the Rio Tinto Alcan Kitimat Mondernization Project will be allowed to continue under the current permit. Environment Minister Mary Polack told reporters that will only change if the current court challenge to the sulphur dioxide levels are successful.

 

Map of Kitiamt
A map by Essa Technologies and Environment BC of the Kitimat valley airshed study shows locations for existing and proposed industrial or infrastructure development. It does not include the proposed Enbridge Northern Gateway project.
What Northern Gateway Joint Review said about emissions in the air shed
Among the 209 conditions imposed on the Enbridge Northern Gateway project is No. 82, an Air Quality Emissions Management and Soil Monitoring Plan.

Northern Gateway must file with the NEB for approval, at least 4 months prior to commencing construction, an Air Quality Emissions Management and Soil Monitoring Plan for the Kitimat Terminal…

This plan must include:
a) a description of the baseline, pre-construction conditions, informed by relevant modelling results and recent, existing monitor data;
b) locations of both air and soil monitoring sites on a map or diagram, including the rationale for the locations selected and the timing for installation;
c) methods and schedule of ambient monitoring for contaminants of potential concern in air (e.g., NO2, SO2, and H2S) and in soils (e.g., pH; major plant nutrients K, P, N, and S; and trace metals), and emissions source tracking;
d) data recording, assessment, and reporting details;
e) a description of the public communication and complaint response process;
f) additional measures that will be implemented as a result of monitoring data or ongoing concern;
g) the criteria or thresholds that will require implementing additional measures;
h) a description of the plan updating process;
i) a summary of Northern Gateway’s consultation with Environmental Canada and the British Columbia Ministry of Environment regarding the Air Quality Emissions Management and Soil Monitoring Plan. This summary must include any issues or concerns raised regarding the plan and how Northern Gateway has addressed or responded to them; and
j) a summary of discussions with the District of Kitimat and local or regional industrial emitters regarding collaborating on the plan’s design and implementation.

One of the things that the Joint Review Panel noted in requiring Enbridge Northern Gateway to have an updated plan and to collaborate with Kitimat and other industries is that levels of acceptable sulphur doixide in the atmosphere are changing and much of Northern Gateway’s modelling was based on standards that were becoming obsolete.

In the Joint Review Panel report, section 8.7, the JRP said:

Northern Gateway assessed changes in the atmospheric environment, including a modelled assessment of criteria air contaminant, hazardous air pollutant, and greenhouse gas emissions. Criteria air contaminants assessed by modelling included sulphur dioxides, nitrogen oxides, carbon monoxide, hydrogen sulphide, and particulate matter. Hazardous air pollutants were also modelled and included total volatile organic compounds (VOCs), benzene, toluene, ethylbenzene, and xylene (combined, BTEX), as well as hydrogen fluoride.

The provincial air shed report considered only two contaminants, sulphur dioxide and nitrogen dioxide.

Northern Gateway said there would be minimal atmospheric emissions from the construction and operation of the pipeline. The focus was on the Kitimat marine terminal.

The modelled assessment for the Kitimat Terminal included emissions associated with terminal operations, with the largest sources being vehicle traffic and
hydrocarbon storage tanks Northern Gateway used the conservative assumption of continuous ship berthing…emission rate) in order to capture the worst case scenario of concurrent adverse meteorology and maximum potential emissions. From the model results, Northern Gateway predicted that sulphur dioxide associated with operating the Kitimat Terminal would exceed the provincial air quality objectives (Level A) for all time periods. This after mitigation.

Environment Canada said that Northern Gateway took appropriate measures in designing and siting its proposed facilities to minimize adverse effects on air quality. It acknowledged Northern Gateway’s commitments to adopt best practices and to use economically-feasible best-available technologies in designing the Kitimat Terminal to minimize effects on air quality.

Northern Gateway ackknowledged that “due to the project interacting with nearby topographical features, where the largest sulphur dioxide emissions are from the
marine vessels, the highest concentrations were predicted to occur infrequently and immediately adjacent to the terminal fence line.

Northern Gateway, Transport Canada, the Heiltsuk First Nation and other stakeholders did acknowledge that eventually the vessels coming to Kitimat “would be subject to the reduced sulphur fuel requirements associated with the joint United States-Canada North American Emission Control Area.

Based on this, marine fuel sulphur requirements permitted in Canadian coastal waters (200-nautical-mile limit) would be 1.0 per cent in 2012, reducing further to 0.1 per cent by 2015. Northern Gateway predicted that sulphur dioxide emissions from marine vessels should be approximately 96 per cent lower than modelled once these new international fuel standards take effect. Northern Gateway also predicted exceedances of provincial air quality objectives in the area for carbon monoxide, particulate matter, hydrogen sulphide, and total reduced sulphur.

Northern Gateway said there “no exceedances of hazardous air pollutant guidelines were predicted as a result of the project itself” but there could be a cumulative effect with other industries in the Kitimat waterfront.

The Joint Review Panel ruled:

By the Kitimat Terminal’s proposed in-service date, there will have been significant changes to the number and magnitude of existing air emission sources since
the provincial emission inventory of 2000 was compiled, and since Northern Gateway completed its modelling assessment.

Regarding the sulphur emissions attributable to the terminal, marine vessel berthing would account for 97 per cent. Given that Northern Gateway used conservative assumptions regarding berthing in the modelling and that regulations coming into force regarding the sulphur content of marine fuels would further decrease predicted missions, the Panel finds that the modelling results presented in the application and subsequent filings are not predictive of the realistic potential effects on local air quality.

Based on the filed information about sulphur dioxide emissions, the Panel is satisfied that new modelling based on the updated information would indicate that sulphur dioxide associated with the Kitimat Terminal’s operations would not exceed provincial air quality objectives.

The Panel requires that further modelling, reflecting the current level of activity, equipment, and marine sources, must inform Northern Gateway’s design of the Air Quality Emissions Management and Soil Monitoring Plan for the Kitimat Terminal.

Updated modelling would be used to inform the monitoring program’s design, as well as to help ensure that the monitors are placed effectively to monitor both human and environmental health.

Cumulative effects on the atmospheric environment

Northern Gateway said that, during the Kitimat Terminal’s operations, tank maintenance and marine berthing would add a potential measureable contribution to regional cumulative environmental effects from air emissions. Northern Gateway incorporated the existing industrial sources in the Kitimat area in its modelling assessment, using the British Columbia Ministry of Environment’s emissions inventory. At the time the modelling was run, the available emission estimates from 2000 were used to characterize the existing sources in the airshed.

The Joint Review panel noted that over the time of the hearings”it heard of many changes to the industrial make-up of the Kitimat area since the 2000 emissions inventory was developed.”

Combining these with the predicted project emissions, the model results indicated predicted exceedances of regulatory thresholds for sulphur dioxide, carbon monoxide, particulate matter, hydrogen sulphide, and total reduced sulfur, though not at every averaging period.

Northern Gateway said that, due to the existing large emission sources and the region’s complex meteorology and topography, the exceedances are primarily attributable to the other industrial activities around Kitimat and not from the project itself.

Because there would be adverse project effects remaining after mitigation that could combine with the effects of other past, present, and future projects, and because cumulative effects are of primary concern, the Panel’s significance recommendation is given below in its analysis of cumulative effects.

The Panel finds that the emissions associated with the Kitimat Terminal’s operation would be minimal compared to the existing sources presented.

Although the modelled cumulative emissions exceeded many regulatory thresholds, the exceedances were predicted based on an out-of-date emissions inventory, and were predicted to occur prior to adding emissions from the project. Based on the information about sulphur dioxide emissions on the record, in addition to the modelling included in the application, the Panel is satisfied that new modelling based on updated information would indicate that sulphur dioxide associated with the Kitimat Terminal’s operations would not contribute to an increased exceedance of provincial air quality objectives, either through limited emissions or berthing management to limit emissions in particularly adverse conditions.

Related

Kitimat air shed study raises more questions than it actually answers

Haisla purchase old hospital site from province. District agrees to help major new development

The Haisla Nation have purchased the old hospital site in downtown Kitimat from the BC government and are planning what will likely be a multi-million dollar development across from City Centre that will include a condominium-hotel, a new shopping mall and a restaurant.

Premier Christy Clark came to Kitimat Tuesday to announce the sales agreement along with Haisla Nation Chief Counsellor Ellis Ross. The agreement also involves the District of Kitimat indicating the beginning of building a new phase in the sometimes strained relationship between the district council and the First Nation.

Ellis Ross Christy Clark
Haisla Nation Chief Counsellor Ellis Ross presents BC Premier Christy Clark with a gift to mark the sale of the hospital lands to the First Nation. (Robin Rowland/Northwest Coast Energy News)

On the day that the Conservative government approved the Northern Gateway pipeline project, all sides pointed to the hospital site agreement as an example of partnership that could lead to development of liquefied natural gas and other industrial projects in BC’s northwest.

The old pink hospital, built when there were plans for a Kitimat with 50,000 people was closed in 2002 when the new Kitimat General Hospital was opened. The old building was dismantled and then imploded in 2005 at a cost of $1.9 million.  Five years later, in 2010, the land was transferred from Northern Health to the province.

That began four years of negotiations with provincial ministries, the Haisla Nation and the District of Kitimat, so that the First Nation could purchase the land which is on their traditional territory.

The land has sat idle since 2005, although it is prime real estate as the economy of Kitimat begins to boom with the growth of industrial projects like the $3.3 billion Rio Tinto Alcan Kitimat Modernization project at the aluminum smelter as wells the Shell-led LNG Canada and the Chevron-led Kitimat LNG projects.

“It’s an important land transfer from the perspective of the community because this land has sat empty for too long,” Clark said. “It’s time for economic development. It will be such a big part of creating lots of energy, lots of jobs in the community but it’s really a demonstration of the partnerships that we’re going to have to have to make LNG and prosperity work in British Columbia”

Ellis Ross
Haisla Chief Counsellor Ellis Ross speaks at the ceremony transferring the old hospital lands to the Haisla Nation (Robin Rowland/Northwest Coast Energy News)

Haisla Nation Chief Counsellor Ellis Ross told reporters, “This is an example of how things should be done” in regard to First Nations rights and title.  “Case law dictates how consultation must take place and if you respect and abide by them I think it proves we can actually come to a solution. BC’s not going anywhere, Canada’s not going anywhere, and First Nations aren’t going anywhere. None of us are going to get 100 percent of what we want. Where do we find that middle ground? It’s possible to do it if you actually take a page out of BC’s book and learn from the mistakes they made ten years ago to today where they’re doing things right.”

Both remarks were clearly intended to send a message to the federal government and Enbridge about consultations on the controversial Northern Gateway pipeline and tanker project.

Clark concentrated on showing the connection between the land deal and future liquefied natural gas development.

Kitimat Ground Zero

“There are over 13 LNG proposals for British Columbia, all of them are at various stages of developments and if anyone of those and we certainly hope it will be more than one reaches final investment decision, that is going to mean a lot of change,” Clark said.

“To make sure this happens, it means opening our doors, opening our doors to First Nations and of course the Haisla were ready and eager to walk through that door, working with labour to make sure we can build a workforce, working with educational institutions across the province to make sure we are
ready to be sure that British Columbians are first in line for those jobs.”

Christy Clark
Premier Christy Clark at the Kitimat ceremony (Robin Rowland/Northwest Coast Energy News)

“This site is really about nation building, it’s about community building and it’s about partnerships. This transfer of land will enable the Haisla to commercially develop this piece of property and that is going to mean huge opportunities in this community. It’s going to open up economic growth. It’s going to be a big benefit for Kitimat and the entire surrounding region on this piece of land that has sat empty for far far too long.

“We’re going to continue to work with the Haisla that have shown such vision and courage in leading the argument for LNG across this country and we want to make sure, as Ellis says that this property gets developed as soon as you possibly can. We’re very happy to work with the region of Kitimat, with industry with labour with First Nations to make sure we’re growing this opportunity for the future.

“We’re here because this was the day that worked for everybody. If there is a message for the country is that liquefied natural gas is a nation building opportunity. Ground zero is right here in Kitimat, this community is going to build our country the way that energy has built the country in the past. We have the resources in British Columbia to create hundreds of thousands of jobs and prosperity for every Canadian. I really want Canadian to know that this is not just a BC project. It’s not just a northwest BC project. It’s all these projects that are of national importance.

Ross did not put a cost on the project, since the first step is to do a survey for environmental remediation of the site.

An agreement in April between the Haisla and the District of Kitimat on how the lands will be developed was hailed at the ceremony as a step in healing the sometimes strained relationship between the District and the First Nation.

Ross praised the District of Kitimat for “their willingness to sit down and work with us,” adding that Tuesday’s agreement will lead to discussions on other issues.

Ross said Tuesday’s agreement is “a small step but significant” step in making the Haisla Nation members “self-determining from the ground up,” so they can get jobs without being dependent on either the Haisla Nation Council or other levels of government.

 

Spirit of Kitlope dancers
The Spirit of Kitlope dancers opened the land transfer ceremony. (Robin Rowland/Northwest Coast Energy News)

Northern Gateway

At the end of her speech, Clark deliberately brought up Northern Gateway, saying that “no heavy oil” project, including the Enbridge Northern Gateway, has met the province’s five conditions to proceed.

“We settled the five conditions, they’re very clear, they’ve been on the table for a very long time now,” Clark said. “It is up to the proponent in the private sector to figure how, if and when they’re going to be able to meet them. None of them have yet. So I want to assure people, that whatever decision the federal government announces today, our five conditions are not changing and none of the proposals have met those conditions, so we don’t support any of the projects as they stand.”

On the other hand, Clark said the proposed liquefied natural gas projects are “meeting all those five conditions. The companies that have invested in natural gas here in British Columbia are going to show the country that you can do business in British Columbia and we do it in a way that protects our environment and respects First Nations. We are proving we can do it, because we’re proving we can do it with LNG,”

Ross repeated that the Haisla are opposed to the Northern Gateway Project and that should the government’s decision approve the project, the next step is to go to court. He said that consultation by both the federal government and by Enbridge since the first contact in 2009 has been inadequate.

He told reporters, “One of the five conditions is that aboriginal interests are met and on behalf of the Haisla, I can say that one of the conditions that without a doubt that has gone wrong. The rest of the conditions are up to BC.”

 

 

US study finds shale development generally helps local government coffers with revenue gains offsetting costs

A study by Duke University of the US shale gas boom has found that oil and gas development from shale fields has generally helped the public finances of local communities, providing new revenues and resources that usually — but not always — outweigh the increased demand for public services and other costs.

It found that many local governments in western North Dakota and eastern Montana, near the Bakken shale formation, have thus far experienced net negative fiscal effects. Also, some municipalities in rural parts of Colorado and Wyoming struggled to manage rapid population growth as natural gas production accelerated in the mid-to-late 2000s.

The research is a snapshot of the fiscal impact to date in the eight states and does not examine the long-term economic impact to governments and the communities they serve, a question the authors say is important and needs additional study.

Daniel Raimi and Richard Newell gathered data from communities surrounding ten oil and gas “plays” from September 2013 through February 2014, traveling to Arkansas, Colorado, Louisiana, Montana, North Dakota, Pennsylvania, Texas and Wyoming to interview local officials and collect information firsthand.

The report describes major revenue sources for local governments, which can include property taxes, sales taxes and state-collected severance taxes or fees that are sent back to the local level. Some local governments also partner with oil and gas companies to help maintain roads, an approach that helped reduce expenses associated with heavy truck traffic in states including Arkansas, Colorado and Pennsylvania.

New costs for local governments associated with oil and gas development, include damage to roads from heavy truck traffic, water and sewer service expansion, government staffing and other needs brought on by rapid population growth.

The researchers found that the net impact of recent oil and gas development has generally been positive for local public finances.

“The fiscal effects for local governments tend to vary from state to state, but we found that for most of them new revenues were outweighing new demand for services,” said Newell, director of the Duke University Energy Initiative and Gendell Professor of Energy and Environmental Economics at Duke’s Nicholas School of the Environment.

Newell and Raimi found net positive fiscal effects in regions where oil and gas booms were ongoing or had slowed in recent years, as well as in regions that experienced different scales of activity. This includes local governments in diverse regions where population density and government capacity vary substantially.

“One of the key questions is how these fiscal effects change over time,” said Raimi, an associate in research with Duke’s Energy Initiative. “In very rural areas, some local governments have faced challenges when development first surges. In many cases, those challenges faded over time. In most other areas, we found net positive or at least roughly neutral financial effects on local government.”

“In some parts of North Dakota, populations have doubled, tripled or even quadrupled just in the past few years,” Raimi said. “For local governments in these areas, it’s hard to keep up with the demand for services, especially costly infrastructure projects such as sewer and water treatment plants.”

The study was financed with the support of the Alfred P. Sloan Foundation. The Shale Public Finance project will continue to produce a series of publications that describes local experiences from a variety of U.S. local governments and identifies key findings.

 

 Duke Energy Initiative finance page

includes interactive map and downloadable report in PDF.

LNG Canada chooses international consortium for front-end engineering

Sammy Robinson
Haisla Chief Sammy Robinson opens the LNG Canada FEED signing ceremony watched by Hiroyuki Shimizu from CSFW LNG Constructors, left, and Wim Ravesloot, Project Director – LNG Canada, right, May 20 2014. (Robin Rowland/Northwest Coast Energy News)

LNG Canada has chosen CFSW LNG Constructors, a consortium of four engineering companies Constructors as its main contractor for Front End Engineering and Design (FEED) as well as project execution services for the proposed liquified natural gas export facility.

The contractors will begin FEED activities for the LNG Canada project on June 1, 2014.

Final go ahead is still subject to a Final Investment Decision which will come, yay or nay, sometime in the next couple of years.

One of the partners in CFSW familiar to Kitimat residents is WorleyParsons.(company website) Others are Chiyoda, a Japanese company specializing largely in LNG construction (Chiyoda website  in Japanese), Foster Wheeler, an international company with expertise in LNG, off shore oil and similar projects and SAIPEM an Italian based engineering company again with energy industry expertise.

WorleyParsons is also a contractor with the Apache/Chevron Kitimat LNG project.

The announcement was made at the LNG Canada facility at the old Methanex office building in Kitimat. Company representatives, members of council and representatives of the Haisla Nation, including Chief Sammy Robinson were at the ceremony.

LNG Canada’s Susannah Pierce said, subject to the final investment decision, Shell and its partners “We want to make this the first LNG project out of British Columbia, serving the energy needs of Asia.” (repeating a similar statement she made in November 2013 at the environmental assessment open house .)

Wim Ravesloot
Wim Ravesloot, Project Director – LNG Canada at the FEED signing ceremony in Kitimat, May 20 2014. (Robin Rowland/Northwest Coast Energy News)

Wim Ravesloot, LNG Canada Project Director said one of the reasons for choosing the consortium was “experience in developing modular construction.”

Rio Tinto Alcan’s Kitimat Modernization project is also highly dependent on modular construction, with many components of the new aluminum smelter are produced in China, brought to Kitimat and then used to create the new potlines and related facilities. Publisher David Black also recently told Kitimat audiences that the reason for the possible location of his refinery near Kitimat, rather than Alberta, is due to the need for large scale modular construction.

“So we are here today to make a statement that we are here to deliver our project in a safe way without any incidents and with out having any impact on the environment.” Raveslook said. “We also want to make a statement that we want to develop this project responsibly with close cooperation with the local people that live here in this town, in the village, here in Haisla lands where we are a guest and hopefully in the future as a respected neighbor.”

Pierce introduced two documents that outlined what she said is LNG Canada’s commitments to the community.

The first said:

LNG Canada is committed to an approach that the First Nations and local communities in the northwest realize economic benefits from this project. These benefits may come in the form of direct employment opportunities for qualified workers and potential contract opportunities for competitive businesses. Most of the employment and contract opportunities during the construction phase will be through CFSW….as a result CFSW and LNG Canada is committed to work together so that local residents can become qualified to work for LNG including investing in skills training, developing long ter partnerships with local education and training facilities in the region to develop and maintain a skilled workforce to support LNG development….a key component of this contract with the community is for you to develop the skills and training for sustainable employment at this project when it proceeds.

The second concerned Health, safety and the environment.

Health, safety and environment is integral in everything at LNG Canada. Our HSE objectives are Goal Zero, meaning no harm to people, no uncontrolled releases to the environment. We comply with life saving rules we respect and care for people and the environment. We are engaged, committed and lead by example. We set clear expectations for staff and contractors. We communicate openly and honestly, encouraging everyone to speak up. We are learning organization with a focus on continuous improvement. We hold each other accountable, share information and celebrate success.

Related

FosterWheeler News release

Harper’s Northern Gateway strategy and why it will end up in a muddy mess

It appears that the Stephen Harper’s strategy for approving Northern Gateway has been revealed on background to The Globe and Mail’s Gary Mason. (Either it’s a revelation or a trial balloon).

It comes down to the idea that Harper will approve Gateway “in the national interest,” count on a vote split between the NDP and Liberals in British Columbia to avoid any consequences to the Conservative majority and then leave it up to Enbridge to actually get the job of building the pipeline and terminal project done.

Mason quotes “ a senior member of Mr. Harper’s government,” and while Mason doesn’t say what part of Canada the source is from, (unlikely in my view the source is from BC) what the member told Mason reveals that the Harper government is still mired in it the Matrix-world that has always governed its policy on Northern Gateway.

The first step, apparently coming in the next few days, is that the Harper government “rigorous” new tanker protocols for traffic along the west coast.

Tanker protocols
So the obvious question is, will these protocols be new or will the government simply be reannoucing paper policies that they did in the March 2013? How many of the recommendations of the tanker task force is the government actually going to accept?

Even if the protocols are new, just who is going to enforce those policies?

Mason says:

Even if Gateway and the Kinder Morgan expansion went ahead, he argued, B.C. would still only see about 60 per cent of the annual oil tanker traffic the neighbouring state of Washington deals with. And yet Washington has an exceptionally clean record when it comes to the safe transport of oil in and out of its harbours – this, he noted, while operating under marine safety regulations that are not as rigorous as the ones Ottawa intends to put in place for the shipment of oil along the West Coast.

There are a lot big problems with that statement.

First, there’s an organization that the Mason’s source may have heard of known as the United States Coast Guard. The United States rigorously enforces its “weak” regulations, while Canada’s Coast Guard is plagued by staff shortages and budget cuts.

Second, the State of Washington also rigorously enforces its environmental regulations, not only on the coast but across the state. I have been told by retired British Columbia forestry and environmental officials (not to mention Fisheries and Oceans) that there are often more state environmental watch dogs in most Washington State counties than in all of northern British Columbia where the Northern Gateway is supposed to be going.

The September 2013, report by the US National Oceanographic and Atmospheric Administration on the export of Canadian bitumen sands through the US shows that the Washington Department of Ecology is working on strengthening regulations for both pipelines and (where it’s in state jurisdiction) tanker traffic. The same report says the state of Alaska Department of Environmental Conservation is updating its plans and possible regulations in anticipation that bitumen filled tanker traffic from Kitimat would come close to the coast en route to Asia.

Third, the coast of northern British Columbia is more rugged and stormy than the waters off Washington.

Who pays?

The one factor that the urban media seems to ignore, is the big question.

Who pays?

Who pays to enforce the 209 conditions that the Joint Review Panel imposed on the Northern Gateway project?

If the Harper government announces new tanker regulations in the coming days, who pays to enforce those regulations?

There were no provisions in the February budget for enforcing the 209 conditions. Rather there were continuing budget cuts to the very departments that the JRP ruled must be involved in the studying, planning, implementation and enforcement of the 209 conditions, Environment Canada, Fisheries and Oceans and Transport Canada.

So while Mason says “The federal government will play its part in meeting the five conditions laid out by the B.C. government for support of the project,” the response must be “Show me the money!”

During the recent plebiscite campaign, Northern Gateway finally revealed its plans for the “super tugs” that will escort tankers along the coast and up Douglas Channel.  Owen McHugh, a Northern Gateway emergency manager said, “Adding these four or five tugs to the north coast provides a rescue capability that doesn’t exist in this format. So for any large commercial vessel that is traveling on our coast, this capacity to protect the waters of the north coast.”  Those tugs and Northern Gateway’s plans to station teams at small bases along the coast means that the company is, in effect, creating a parallel, private, coast guard on the BC Coast.

What about the Coast Guard itself? The Harper government has been gutting Coast Guard resources along the coast even before it had its majority. It closed and dismantled the Kitsilano Coast Guard station in Vancouver. There is more dependence on the Royal Canadian Marine Search and Rescue volunteers, who have to raise money locally for modern rescue boats which cost up to $750,000. The money that government was “generously” giving to RCMSAR had to be split up to 70 stations in 42 communities along the coast as well as its administrative and training staff.

And speaking of boats, what about Coast Guard vessels on the coast? As the Globe and Mail has reported, the government’s shipbuilding program is already over budget  and behind schedule. The aim is  Arctic/Offshore Patrol Ships  and new destroyers. With the crippling of HMCS Protecteur that has raised the concerns about the already troubled supply ship program.

Does anyone notice what is missing from that list? What’s missing are  better Coast Guard vessels just to police all the expected tanker traffic on the west coast (whether LNG or bitumen) and no mention of dedicated spill response vessels, which under the “polluter pay” policy will likely be left to private contractors (and hope that the ships are available at the time of a spill)

How will we know?

Then there is the question of how will people even know if the 209 conditions are being enforced; whether or not the reports demanded by the Joint Review Panel are going be sitting on the National Energy Board server and ignored.

There is every indication, given the government’s obsession with secrecy that until there is a disaster the Canadian public will never know what’s going on. Harper’s muzzling doesn’t just cover government scientists, it covers the lowest level of bureaucrats, as District of Kitimat Council found out when low level DFO bureaucrats refused to appear publicly before council to discuss the risk to the Kitimat River.

So the scenario is, according to Mason’s source

“I think once this decision is made, Enbridge could have shovels in the ground the next day,” the member said. “They are ready to go. This means the First Nations could start realizing profits from this right away, as opposed to the promised profits from LNG, which may never materialize. I think they need to think about that.”

First, as part of the blunders is that the Conservatives have always made is the assumption that eventually the First Nations of British Columbia can be paid off, ignoring the commitment of the First Nations, especially on the coast, to protect the environment that sustained them for thousands of years.

While the LNG market is volatile, the “member” forgets that most of the First Nations of British Columbia have opposed the Northern Gateway since Enbridge first floated the idea in 2001. The current LNG rush didn’t start until after Japan shut down its nuclear power plants after the March 2011 earthquake, The first major anti-Enbridge rally,  “The Solidarity Gathering of Nations” was held at Kitamaat Village in May 2010.

Writing off BC

It appears that Conservatives, in their election strategy have already written off Gateway opponents:

Still, there is a raw political calculus that needs to be taken into account. Polls measuring support for the pr.oject in B.C. vary, but generally have shown that anywhere from 55 to 60 per cent of the province opposes Gateway and 40 to 45 per cent support it. Isn’t that enough to scare off a government that needs critical votes in B.C. to win another majority?
“Let’s say 60 per cent are against it,” he said. “And that vote splits between the Liberals and the NDP come the next election. Who are the 40 per cent going to vote for?”

As for the cabinet, it has consistently shown its contempt for northwestern British Columbia  and that is unlikely to change.

Mason also speculates that Harper will approve Gateway to stick it to Barack Obama and the delays on Keystone XL. As he points out that’s a political, not an economic decision.

There are civil disobedience classes being held across northwestern BC  this month.  Access to Information requests by the Vancouver Observer revealed increased RCMP surveillance of the anti-Gateway movement.  There has always been talk of a “war in the woods” if the pipeline project is forced on an unwilling population.

So it comes down to a question that Mason and the Conservatives are avoiding. Mason’s source says Northern Gateway is crucial to the national interest:

“At the end of the day, you have to do what’s right, not what’s politically expedient,” he said. “You have to ask: What’s in the best interests of all Canadians?”

So given all that will the Harper government leave Enbridge to tough it out on its own?

Highly unlikely.

But will the Harper government, with its bean counting obsession on balancing the budget be willing to pay for all that is needed?

Highly likely.

There’s lots of marine clay along the pipeline route, laid down by ancient oceans. That brings to mind just one word. Quagmire, not just the wet, sticky BC mud but a political quagmire.

LNG Canada final investment decision 18 to 24 months away, CEO says. Has concerns about air shed, pipelines

LNG Banada
The LNG Canada site at the old Methanex plant in Kitimat, April 29, 2014. (Robin Rowland/Northwest Coast Energy News)

The final investment decision for the LNG Canada project is 18 to 24 months ahead,  Andy Calitz, CEO LNG Canada said Wednesday.

Calitz said that the project must go through a series of what are called “stage gates” before the respective corporate boards of the partners make that decision. Calitz said the project has already completed three stages, identifying the project, testing the idea, selecting what exactly the proponents are going to do. “Then there is the so-called design stage when all the design experts come in. We are hundred per cent certain we are tackling the next phase.” It is when the design phase is complete and then depending on world market conditions, that the final investment decision will be made.

Caltiz also pointed to one reason that while the LNG Canada project is moving ahead slowly,it appears to be moving faster than the rival Chevron-Apache Kitimat LNG project. That’s because the four investors in the LNG Canada project, Shell, PetroChina, Mitsubishi and KoGas (Korea Gas) are the customers, shipping their own product via the proposed TransCanada Coastal Gaslink pipeline, to the jointly owned terminal that will be built on the old Methanex site in Kitimat.

Caltiz’s comments came at a Vancouver news conference called to announce a joint venture agreement between the four partners. Under today’s agreement, Shell has increased its stake in the project to 50 per cent from 40 per cent; PetroChina will hold 20 per cent and each of Kogas and Mitsubishi Corporation holding 15 per cent. PetroChina and Shell increased their holdings by buying from the other partners.

Calitz said, “They each bring their own gas, they each put their own capacity in the pipeline to be transported by Transcanada, they together own the energy plant, then they lift the cargo in the same proportion, taking in to their own potrfolios, for every cargo that is produced, say for every 100,000 cubic metres, 15 will go Kogas 15 to Mitsubishi 20 will go Petrochina and 50 will go to Shell.”

One reason, along with the volatility and uncertainty of the liquified natural gas market that the Chevron Apache Kitmat LNG project appears to have stalled is a lack of customers. Kitimat LNG has said it is looking for equity partners similar to what was said today about the LNG Canada project.

Air shed

Asked a general question about environmental concerns, Calitz singled out local concerns about the air shed quality in the Kitimat valley and similar concerns up in Prince Rupert, saying, “We are at all times very sensitive to our environmental impact… In the case of the airshed around the LNG plant, it is being quantified, it;s being looked at cumulatively in Prince Rupert, in Kitimat. We also make sure that we work with the government about the sensitivity of air shed impact to the communities of Terrace and Kitimat. I can confirm your point it is high on our agenda. We understand the issues we all developed energy projects before and will continue to be vigilant.”

He said there were three main concerns that would affect the final investment decision: “Where does the Asian gas price go? Two will we have enough labor and what will the labor rates and labor productivity be and three between the various companies that have a lot of experience in Canada specifically TransCanada pipelines into Kitimat, and the other pipeline company going into Prince Rupert, we need to get those pipelines through the mountains.”

While it may be reading too much into one statement, it appears that LNG Canada and its partners are taking a more careful approach to pipeline construction than the Enbridge Northern Gateway project where that company was always certain its plans for crossing the rugged northwest BC mountains would yield few problems.

Russia crisis

The other major factor governing any decision on LNG plants in British Columbia is the volatile marketplace.

Reporters at the Vancouver news conference asked Caltiz about reported talks between China and Russia where Russia, now facing economic sanctions for its actions against Ukraine, would ship natural gas to China and if that would affect BC plans to export LNG to China.

“One can always draw linkages between any two subjects but I would say the linkage is between very weak and non existant,” Calitz said. “The closeest that anyone can come to a linkage is do the events in Europe and Ukraine increase the likelihood of a major pipeline between Russia and China, that’s for Russia and China to decide, but apart from that very very weak linkage.”

That state of prices remains a concern among reports that several Asian nations including the giants India and China plan to form a sort of buyers club, to drive down the high price of natural gas, which in Asia is a percentage of the price of crude oil, while in North America, market conditions have driven the price of natural gas much lower.

“There is a very active daily debate about prices paid for LNG in Asia. That debate, I am sure, will continue as long as the Henry Hub [the North America market price] is at $4 and Europe is at $8 and Asia based is somewhat from 12 to 18 dollars, depending on whether its contract or spot.

“If you ask is that of concern, then every project here will be affected by changes in price, whether the price goes up or down. will impact the final investment decision and it will impact in the way say the Pacific Northwest or the Kitimat LNG project.

“We as an energy project in British Columbia, like all other energy projects, like even from East Africa are looking at production costs and what the Asian prices are. So by 2015, what happens to that price and what happens in those negotiations will feature in the decisions of all the players.”

In a prepared statement, Calitz said,”“While we are in the early evaluation process and a decision to build the project is still a while away, this agreement reinforces our commitment to developing an LNG facility in British Columbia and allows us to proceed with the next steps in our project assessment, We will need to continue to work closely with the provincial and federal government to ensure that the project is economically viable, as well as working closely with First Nations, the local communities, and regulatory agencies, and move forward on a number of commercial agreements and contracts. We remain cautiously enthusiastic about the potential opportunity in B.C. and look forward to exploring it further.”

Premier Christy Clark, who made a brief appearance at the news conference before leaving to a prepare for another sales trip to Asia, was more optimistic, saying: “The private sector doesn’t make billion dollar investment decisions if they don’t think there isn’t going to be a return on it. It’s not for me … to determine what the market looks like, it’s the private sector that does that and I think the answer to them is you would not see those major companies taking the next step signing a joint venture agreement today if they didn’t think there was a market for BC gas.

“The other advantage that BC has that we will never sacrifice is our reputation as a dependable, reliable, honourable trading partner. When people do business in British Columbia on natural gas, they know we won’t play politics with them.They know we will keep our promises about where the tax levels will be and how they’re going to be treated as trading partners. That is a tremendous advantage for us in an unstable world.”

 

Temporary foreign workers

Asked by a reporter about LNG projects using temporary foreign workers, Clark replied. “The thing about temporary foreign workers is that temporary workers should come for temporary jobs, And in the process of building these huge facilities and pipelines with peaks in construction that we will not be able to meet within British Columbia or even Canada. There’s no question about that.
“Our view is very much British Columbians first, and the way to do that is to make sure people have all the skills training that they need to take advantage of those jobs, second reach out to the rest of the country and then third work with the unions and other organizations when needed to support temporary foreign workers coming in.

“We’ve had remarkable consensus with the trade unions, recognizing the need for some temporary foreign workers at some point in the construction of these projects. That’s why we’ve gone about planning it so carefully because we want to make sure when we will need workers in what skill set in what month and what years. We’re really breaking it down so we can be sure we have exhausted British Colunbia’s potential to fill those jobs before we start to look across the country or around the world.”

LNG Canada signing
LNG Canada joint venture agreement signing cermony in Vancouver, April 30, 2014, left to right, Jorge Santos Silva, Executive Vice President Shell Upstream Americas Commercial, Bi Jingshuang, Director – Legal Department of China National Oil and Gas Exploration and Development Corporation (CNODC), representing PetroChina, Andy Calitz, CEO, LNG Canada, Hiroki Haba, Vice President, Natural Gas Business Division, Mitsubishi and Jongkook Lim, Vice President, LNG Business Department, Korea Gas. Standing wathc are Christy Clark, Premier of British Columbia and Rich Coleman, Minister of Natural Gas Development. (LNG Canada)

Projects on the go

The news release listed the many LNG projects under way from the four partners.

Shell currently has ten LNG projects in operation with approximately 26.1 million tonnes per annum (mtpa) operational LNG capacity, in nine countries, and two projects
with an additional 7.5 mtpa under construction. Shell is also one of the largest LNG vessel operators in the world, with interests in around a quarter of the LNG vessels in operation.

Phoenix Energy Holdings Limited (an affiliate of Petro-China Investment (Hong Kong) Limited) (“PetroChina”) is China’s largest oil and gas producer and supplier, as well as
one of the world’s major oilfield service providers and a contractor in engineering construction. PetroChina officially launched three LNG projects in June 2004, two of
which started operations in the first half of 2011.

Kogas Canada LNG is the world’s largest LNG importer. As the nation’s sole LNG provider, KOGAS currently operates three LNG terminals and a nationwide pipeline network, supplying natural gas fromaround the world to power generation plants, gas-utility companies and city gas companies throughout the country.

Since pioneering the first LNG import to Japan from Alaska in 1969, Mistubishi handles 40 per cent of Japan’s LNG imports and has successfully built a portfolio of LNG export investments across Australia, Indonesia, Malaysia, Brunei, Oman, Russia and North America.

With the joint venture agreement, the group has incorporated a new federal corporation, LNG Canada Development Inc. The project’s corporate offices will continue to be located in Vancouver and Calgary, with the project office based in Kitimat.

Although pegged as a “major milestone” in the development of LNG Canada, the Kitimat social media rumour mill was correct in speculation Tuesday that the news conference concerned a corporate name change and sale of assets.   The event was probably more a kickoff for Christy Clark’s upcoming tour of Asia.

 

LNG Canada calls Wednesday morning news conference

LNG Canada logoLNG Canada has called a news conference in Vancouver early Wednesday morning to “announce a project milestone.”
BC Premier Christy Clark, BC LNG Minister Rich Coleman, LNG Canada executives and delegations from the joint venture partners, Shell Canada Energy, Diamond LNG Canada, an (“affiliate” of Mitsubishi), Korea Gas Corporation and Phoenix Energy (an “affiliate” of PetroChina) will be present at a downtown hotel.

Ottawa announces upgrades to Douglas Channel, Kitimat, navigation systems

Smart Ocean Systems map
Map from the Smart Ocean Systems website showing navigation upgrades. The map also shows potential LNG development and what it calls “Tidewater Oil Exports” in Kitimat and Vancouver. (Smart Ocean Systems)

The federal government today announced that it is going to spend $9,127,000 through the Western Diversification Program to support  “the development of Ocean Networks Canada’s (ONC) Smart Oceans BC program” to upgrade radar and other navigation aids on the BC coast.

The upgrades include adding the Automatic Identification System (AIS) ship tracking system, which means that those using a web-based ship tracker will be able to monitor major vessel traffic in Douglas Channel.

A news release from Michelle Rempel, Minister of State for Western Economic Diversification said:

The project will add small scale underwater observatories, high frequency coastal radars and an Automatic Identification System to ONC’s existing marine observatory footprint including near Port Metro Vancouver, Campbell River, Kitimat, the Douglas Channel waterway, as well as Prince Rupert.

The news release goes on to say an “expanded footprint”  will contribute to what the Conservatives call “responsible resource development”  by helping to prevent accidents, predicting and warning of natural hazards, and “improving overall marine operational situational awareness.”

The government says that IBM is developing a system to monitor the data streams from the hundreds of sensors that are being expanded as part of the Smart Oceans BC program. Improved data collection will allow modeling systems to better support disaster planning. In addition, highly qualified personnel will be trained in ocean analytics.

Additionally, SMEs will gain access to technology demonstrations and commercialization assistance, as well as international business development services offered by the ONC Innovation Centre.

The news release places special emphasis on Kitimat saying:

  • This project will allow for real-time monitoring of vessel traffic, waves, currents and water quality, in areas such as the Douglas Channel, a shipping artery leading to Kitimat.

 The news release quotes David Fissel, Chair and Senior Oceanographer, ASL Environmental Sciences, Inc, as saying: “This substantial investment in Smart Oceans BC will also benefit British Columbia’s many ocean science and technology SME’s. Access to ONC’s observatories and their innovative technology provides a competitive advantage to BC companies seeking to expand their export sales. Our success in global markets also benefits from the support of the ONC Innovation Centre’s international business development services.”

The Smart Oceans website describes the project this way: “Smart Oceans BC is the next phase in the world-class Ocean Networks Canada system that will position Canada as a global leader in ocean technology that delivers science and information for good ocean management and responsible ocean use.”

 It adds:

The Smart Ocean BC footprint will cover areas critical to Canada’s economic future including:

Strait of Georgia and Port of Vancouver
Proposed oil and gas export facilities located at the Port of Prince Rupert, Kitimat, Campbell River, Port Alberni, and Douglas Channel waterways
Associated shipping routes to the high seas

The announcement came just two days after the residents of Kitimat voted in a plebiscite against the Northern Gateway project. The ballot count from Saturday’s vote was 1,793 opposed versus 1,278 who supported the multi-billion dollar project — a margin of 58.4 per cent to 41.6 per cent.

Coastal GasLink pipeline opens environmental assessment process

The Coastal Gaslink pipeline proposal  to bring natural gas to Kitimat for the Shell LNG Canada project is now entering the 45 day public comment environmental assessment period. It opens on March 21, 2014 and closes May 5, 2014.

Coastal GasLink Pipeline is a wholly-owned subsidiary of TransCanada Pipelines. The company is proposing to develop an approximately 650 kilometre pipeline to deliver natural gas from the area near the community of Groundbirch, B.C., to the LNG Canada gas liquefaction facility proposed to be developed by Shell Canada Ltd. and its partners in Kitimat.

An electronic copy of the Application and information regarding the British Columbia environmental assessment process are available at www.eao.gov.bc.ca.

The British Columbia Environmental Assessment Office, with the support of Coastal GasLink, will host four open houses in northern B.C. communities during the comment period.

The proposed Project would have an initial capacity of about two to three billion cubic feet (bcf) of natural gas per day with the potential for expansion up to about five billion cubic feet per day. The company says the expansion scenario assessed in the application does not involve the construction of additional pipeline; the number of potential future compressor stations would change.

The proposed pipeline is subject to review under British Columbia’s Environmental Assessment Act.

Starting on March 21, there are 45 days for the submission of comments by the public in relation to the Application. All comments received during this comment period will be considered. The intention of seeking public comments is to ensure that all potential adverse effects – environmental, economic, social, heritage and health – that might result from the proposed Project are identified for consideration as part of the assessment process.

The BC EAO accepts public comments by:

By Online Form: http://www.eao.gov.bc.ca

• By Mail:

Mr. Brian Westgate
Project Assessment Manager
Environmental Assessment Office
P.O. Box 9426 Stn Prov Govt
Victoria, B.C. V8W 9V1

• By Fax: 250-356-7477

Copies of the application are available in digital or paper form at public libraries in the project area.

The BC EAO invites the public to Open House events on the following dates:

  • March 27, 2014: Chetwynd & District Recreation Centre
  • April 1, 2014: Fraser Lake Recreation Complex
  • April 2, 2014: Burns Lake Heritage Centre
  • April 3, 2014: Riverlodge Recreation Centre, Kitimat