Councillor Phil Germuth questions Northern Gateway officials about their plans for leak detection, Feb. 17, 2014 (Robin Rowland/Northwest Coast Energy News)
Enbridge Northern Gateway officials are loath (to put it mildly) to speak to the media but sometimes they let things slip. Earlier this summer, at a social event, I heard an Enbridge official (probably inadvertently) reveal that when the company’s engineers came before District of Kitimat Council earlier this year they were surprised and somewhat unprepared to fully answer the detailed technical questions from Councillor Phil Germuth on pipeline leak detection.
The results of the municipal election in Kitimat, and elsewhere across BC show one clear message; voters do want industrial development in their communities, but not at any price. Communities are no longer prepared to be drive by casualties for giant corporations on their road to shareholder value.
The federal Conservatives and the BC provincial Liberals have, up until now, successfully used the “all or nothing thinking” argument. That argument is: You either accept everything a project proponent wants, whether in the mining or energy sectors, or you are against all development. Psychologists will tell you that “all or nothing thinking” only leads to personal defeat and depression. In politics, especially in an age of attack ads and polarization, the all or nothing thinking strategy often works. Saturday’s results, however, show that at least at the municipal level, the all or nothing argument is a political loser. Where “all politics is local” the majority of people are aware of the details of the issues and reject black and white thinking.
Northern Gateway’s Ray Philpenko gives a presentation on pipeline leak detection to Kitimat Council, Feb. 17. 2014. (Robin Rowland/Northwest Coast Energy News)
The Enbridge official went on to say that for their company observers, Germuth’s questions were a “what the…..” moment. As in “what the …..” is this small town councillor doing challenging our expertise?
But then Enbridge (and the other pipeline companies) have always tended to under estimate the intelligence of people who live along the route of proposed projects whether in British Columbia or elsewhere in North America, preferring to either ignore or demonize opponents and to lump skeptics into the opponent camp. The Northern Gateway Joint Review Panel also lost credibility when it accepted most of Northern Gateway’s arguments at face value while saying “what the ……” do these amateurs living along the pipeline route know?
Pro Development
“I am pro-development,” Germuth proclaimed to reporters in Kitimat on Saturday night after his landslide victory in his campaign for mayor.
On the issue of leak detection, over a period of two years, Germuth did his homework, checked his facts and looked for the best technology on leak detection for pipelines. That’s a crucial issue here where pipelines cross hundreds of kilometres of wilderness and there just aren’t the people around to notice something is amiss (as the people of Marshall, Michigan wondered at the time of the Line 6B breach back in 2010). Enbridge should have been prepared; Germuth first raised public questions about leak detection at a public forum in August 2012. In February 2014, after another eighteen months of research, he was ready to cross-examine, as much as possible under council rules of procedure. Enbridge fumbled the answers.
So that’s the kind of politician that will be mayor of Kitimat for the next four years, technically astute, pro-development but skeptical of corporate promises and determined to protect the environment.
Across the province, despite obstacles to opposition set up by the federal and provincial governments, proponents are now in for a tougher time (something that some companies will actually welcome since it raises the standards for development).
We see similar results in key votes in British Columbia. In Vancouver, Gregor Roberston, despite some problems with policies in some neighborhoods, won re-election on his green and anti-tankers platform. In Burnaby, Derek Corrigan handily won re-election and has already repeated his determination to stop the twinning of the Kinder Morgan pipeline through his town. In Prince Rupert, Lee Brain defeated incumbent Jack Musselman. Brain, who has on the ground experience working at an oil refinery in India, supports LNG development but has also been vocal in his opposition to Northern Gateway.
The new mayor in Terrace Carol Leclerc is an unknown factor, a former candidate for the BC Liberal party, who campaigned mainly on local issues. In the Terrace debate she refused to be pinned down on whether or not she supported Northern Gateway, saying, “Do I see Enbridge going ahead? Not a hope,” but later adding, “I’d go with a pipeline before I’d go with a rail car.”
Kitimat election signs. (Robin Rowland/Northwest Coast Energy News)
Plebiscite confirmed
Kitimat’s mayor and council elections also confirm that Northern Gateway plebiscite vote last April. Kitimat wants industrial development but not at the price of the community and the environment. The unofficial pro-development slate lost. A last minute attempt to smear Germuth on social media was quickly shot down by people from all sides of the Kitimat debate. Smears don’t usually work in small towns where everyone knows everyone.
Larry Walker, an environmentalist with a track record in municipal politics as an alderman in Spruce Grove, Alberta, won a seat. Together with Rob Goffinet and Germuth, that is three solid votes for the environment. The other new councillor is Claire Rattee who will be one to watch. Will the rookie be the swing vote as Corinne Scott was?
Mario Feldhoff who came to third to Goffinet in the overall vote (Edwin Empinado was second) is a solid councillor with a strong reputation for doing his homework and attention to detail and the unofficial leader of the side more inclined to support development. Feldhoff got votes from all sides in the community.
During the debates, Feldhoff repeated his position that he supports David Black’s Kitimat Clean refinery. But as an accountant, Feldhoff will have to realize that Black’s plan, which many commentators say was economically doubtful with oil at $110 a barrel, is impractical with oil at $78 a barrel for Brent Crude and expected to fall farther. Any idea of a refinery bringing jobs to Kitimat will have to be put on hold for now.
LNG projects are also dependent on the volatility and uncertainty in the marketplace. The companies involved keep postponing the all important Final Investment Decisions.
There are also Kitimat specific issues to deal with. What happens to the airshed, now and in the future? Access to the ocean remains a big issue. RTA’s gift of land on Minette Bay is a step in the right direction, but while estuary land is great for camping, canoeing and nature lovers, it is not a beach. There is still the need for a well-managed marina and boat launch that will be open and available to everyone in the valley.
Germuth will have to unite a sometimes contentious council to ensure Kitimat’s future prosperity without giving up the skepticism necessary when corporations sit on a table facing council on a Monday night, trying to sell their latest projects. That all means that Germuth has his job cut out for him over the next four years.
When the Russian container ship Simushir lost power in heavy weather west of Haida Gwaii last Thursday and driven by westerly winds came dangerously close to the rocky coast, Canada and British Columbia had to scramble to get vessels to the ship and try to tow it out of danger to Prince Rupert.
Like all other issues on the west coast, the debate is raging.
The Simushir tied up at the Ridley Island container port. (Prince Rupert Port Authority)
“Peter Lantin, president of the Haida Nation, told the media at the time, “It was luck.” On Tuesday, Lantin issued another statement, saying. ““Unfortunately, I don’t think anyone considers 20 hours a world class response time. The fact of the matter is that the federal government has little interest in protecting the west coast. From all indications their policy is to calculate an oil spill as an acceptable loss, based on a business model, not on the reality that coastal British Columbians live every day.”
It appears that the Simushir operation was lucky. The normal westerly winds that could have driven the ship onto the rocks of Haida Gwaii changed to southeasterly, keeping the Simushir off shore.
The American heavy duty tug Barbara Foss just happened to be available. The Barbara Foss was towing a cargo barge between Prince Rupert and Whittier, Alaska. The barge was left in Prince Rupert and the tug headed out off the coast of Haida Gwaii a trip that took about 48 hours. (There are also heavy duty Smit tugs at Prince Rupert which joined the operation on Hecate Strait to escort the Simushir into port. There are now reports that the Simushir‘s owners chose to hire the Barbara Foss rather than Smit)
The Canadian Coast Guard vessel Gordon Reid tows the Simushir away from the coast of Haida Gwaii. (Maritime Forces Pacific)
It took the first Canadian Coast Guard vessel, the Gordon Reid, about 14 hours to reach the Simushir (according to Coast Guard officials the original report of 20 hours was wrong). The Gordon Reid did manage to get lines on the Simushir and pull the ship away from the coast, only have the tow lines part (break) three times. So the three Coast Guard vessels, two from Canada, the Gordon Reid and the Sir Wilfred Laurier and the US Coast Guard cutter Spar had to wait for the Barbara Foss to arrive.
Jonathan Whitworth, CEO of Seaspan, speaking to Mark Hume of The Globe and Mail, “it was just bad luck” that none of the tugs that regularly work up and down the west coast were available at the time.
Whitworth told The Globe and Mail that there are about 80 boats between Alaska and Vancouver that could have towed the Simushir to safety. He said that the fact there were no tugs in the immediate vicinity as a “fluke.”
“We certainly have large tugs operating in Haida Gwaii on log barges, for example. So it will be a 6,000-horsepower tug that would [typically] be in that area. It just so happened that over the weekend our two biggest tugs which transit that area were down south,” Whitworth told The Globe and Mail.
Whitworth said that permanently stationing tugs at Haida Gwaii would be both be unnecessary and too expensive.“If there had been a tug stationed in Haida Gwaii then it could have responded possibly quicker. But who’s going to pay for that? Surprisingly from a tug owner it’s not going to be [my view] that there should be a tug every 50 metres up the coast.”
Effective response
In a news release, Rear Admiral Dan Abel, commanding the US Coast Guard 17th District, Alaska said.
“The trusted partnership we have with our Canadian counterparts continues to be a vital component to protecting lives at sea and mitigating potential maritime emergencies. We are pleased this case ended with a positive outcome; preparing for the worst case scenario is the first step in an effective prevention and response plan.”
The question now being asked up and down the BC coast has the provincial or federal governments really have an effective prevention and response plan? If the BC coast had trouble handling a container ship in trouble, how is it ever going to handle a Very Large Crude Carrier loaded with diluted bitumen?
According to the US Coast Guard, although the Simushir was adrift off the coast of Haida Gwaii, the incident triggered Alaska’s emergency response plan. “Coast Guard Sector Juneau deployed six members, including the sector’s commander, to Ketchikan to establish the foundation for a unified command and to exercise their sub area contingency plan with state and local partners.”
Key to Alaska’s response, is a system ready to go soon after a distress call is received. The Emergency Towing System (ETS) has prepackaged equipment that can be transferred to a disabled vessel either by helicopter or tug, depending on the size and position of the vessel in distress.
US Coast Guard C-130 Hercules and Skyhawk helicopter on standby at Sandspit airport. The Hercules carried one of Alaska’s Emergency Towing Systems in case it was needed. (US Coast Guard)
The United States Coast Guard deployed two of its Emergency Towing Systems last week to support the Simushir operation, one on a C-130 Hercules dispatched to Sandspit, the second on board the cutter Spar.
While the Alaska ETS systems were not used in the Simushir incident, how Alaska came up with the system is a lesson for British Columbia, for that state-wide program was started by the tiny municipality of Unalaska after a ship quite similar to the Simushir lost power and came within 15 minutes of running aground in Unalaska Bay.
Now just seven years later those Emergency Towing System packages are pre-positioned up and down the Alaska coast, while although Enbridge proposed the Northern Gateway in 2005, here in Canada both the provincial and federal governments make paper promises about a “world class” response system but so far nothing has happened.
Salica Frigo
Salica Frigo photographed in 2006 (Clipper/Wikipedia Commons)
The Salica Frigo incident in March 2007 was similar to the Simushir incident and like the Simushir, there was luck involved.
According to an Associated Press report at the time, quoting 2005 figures, Dutch Harbor and Unalaska was, for the 17th straight year, the United States leading fishing port for seafood landings in poundage. Commercial fishermen offloaded 887.6 million pounds of fish and shellfish in 2005. The value of its catch, $166.1 million, was second to New Bedford, Mass.
About three years earlier, another ship, the 225 metre (738-foot) Selandang Ayu experienced engine problems, shut off its engines, drifted and ran aground Dec. 9, 2004, in Skan Bay on Unalaska Island’s west side.
Six crewmen died when a US Coast Guard helicopter trying to rescue them crashed. The Selandang Ayu broke in two and spilled an estimated 321,000 gallons of fuel oil, contaminating 54 kilometres (34 miles) of coastline. AP reported that at the time of the Salica Frigo incident in 2007, the cleanup for the Selandang Ayu was more than $100 million.
The Salica Frigo was 135 metre (443 foot) Spanish-flagged ship, the same size as the Simushir.
On Thursday, March 8, 2007, the Salica Frigo was partially loaded with seafood and tied up at dock in Captain’s Bay in Dutch Harbor, Alaska Winds were from the north, from 30 to 40 knots gusting to 60 to 70 knots. The winds began to drive the Salica Frigo away from the dock and the local marine pilot, Capt. Stephen Moreno, consulting with the captain, ordered the ship to sea to ride out the winds. “He really didn’t have enough ground tackle to safely anchor,” Moreno told the AP.
The AP report says Moreno guided the Salica Frigo out to sea, plotted a safe course and then the pilot returned to port. At about, 3 am on March 9, the engine failed. It was not until an hour later, at 4 am, according to KIAL News the Salica Frigo’s captain called the marine pilots and the Coast Guard. North winds were blowing the ship back toward the harbor.
“If it had been from the south, he would have blown offshore,” Moreno told the AP.
The powerless ship drifted for more than three and a half hours toward the shore. Two tugboats came to the ship’s aid but could not establish lines to the stricken vessel.
Moreno and Coast Guard officials estimate the Salica Frigo was just 15 minutes from grounding when crew members were able to restart the engine at 6:43 a.m.
Emergency Towing System
Just weeks later, the Mayor of Unalaska, Shirley Marquardt created and convened a “Disabled Vessel Workgroup” that was tasked with developing a “an emergency towing capability for disabled vessels in the Aleutians using locally available tugboats and an emergency towing system.”
For a demonstration project from July 20 to August 1, 2007, Unalaska had put together and purchased a system suitable for vessels up to 50,000 dead weight tons (DWT) while the state, the the Alaska Department of Environmental Conservation was planning to purchase a system capable of towing vessel greater than 50,000 DWT.
The two types of Emergency Towing System packages are pictured in the operations manual. (Alaska Dept. of Environmental Conservation)
In a news release (pdf) at the time of the exercise, the Alaska Department of Environmental Conservation, said
In the last decade, several distressed or stricken vessels in the Aleutian Islands have adversely impacted the community of Unalaska. In a few cases, these incidents were the cause of environmental and economic repercussions.
In each situation, the vessel was a large tramper or cargo type ship, generally carrying fuel in bottom tanks, thus posing a significant pollution risk. Roughly 67% of port calls to Unalaska/Dutch Harbor in 2004 were either container ships or tramper/reefer vessels.
“These accidents can be devastating to Alaska’s environment and communities. Our goal is to enhance the ability of local assets to respond to distressed vessels in need of assistance due to engine failure,rudder failure, or any other failure which compromises the safe navigation of a vessel,” said DEC Commissioner Larry Hartig.
Tugs not always ready
The Emergency Towing System deployed on a tug. (Alaska Dept. of Environmental Conservation)
The other point in the 2007 ADEC news release is a note that tugs are not always equipped for operations such the one involving the Simushir
Generally tug boats (primary responders in this area) have some capability of retrieving vessels but they are not dedicated to this service and therefore the equipment aboard is not representative of equipment needs in this highly specialized situation. The recommended emergency towing system
will enhance local assets with the ability to respond to an emergency with all the proper equipment necessary to retrieve a distressed vessel.
The Unalaska resident tugs Gyrfalcon and James Dunlap are the most consistent local assets in the Unalaska region, but there are many other tugs in the area at any one time and thus this system is intended to be universally deployable.
The demonstration project, a partnership between the town, the state, the Coast Guard and the private sector was successful.
US Coast Guard helicopters deploy the Emergency Towing System (Alaska Dept. of Environmental Conservation)
An Emergency Towing System (ETS) is a pre-staged package of equipment that may be deployed in the event a disabled vessel requires assistance in accessing a place of refuge. A manual that instructs responders on the operations of system as well as procedures for deployment accompanies the system. The system is designed to use vessels of opportunity to assist disabled vessels that are in Alaskan waters. It consists of a lightweight high performance towline, a messenger line used in deploying the towline, a lighted buoy, and chafing gear. These components may be configured to deploy to a disabled ship from the stern of a tugboat or airdropped to the ship’s deck via helicopter.
In December 2010, Unalaska’s plan worked, the town’s ETS system was deployed to assist the disable cargo vessel Golden Seas. “This equipment, along with the availability of an appropriate sized towing vessel helped avert a possible grounding.” the ETS website says.
Since 2007, the Alaska Department of Environmental Conservation has purchased and stored 10 inch Emergency Towing Systems at the USCG Air Station in Kodiak and Sitka, the Navy Supervisor of Salvage warehouse at Fort Richardson, and the Emergency Response warehouse in Adak, Alaska.
Map shows where the Emergency Towing System is deployed across Alaska/. (Alaska Dept. of Environmental Conservation)
The Emergency Towing System can be deployed by helicopter or by tug. A helicopter can lower the tote or cage containing the towing gear onto the deck of the distressed ship. If the tote or cage is carried to the scene by a tug the crew the usual procedure is to use a helicopter to deploy the tote/cage to the distressed vessel or the tug crew. Depending on the circumstances, and although it is not part of the regular system, the tug crew can also line-gun projectile across the deck of the distressed ship so the crew can pull a “messenger line” attached to the tow line on board.
And as for Canada, Gail Shea, Minister of Fisheries and Oceans, answering questions in the Commons Monday about the Simushir incident did nothing more than speak off a prepared script, answering two questions from Nathan Cullen, NDP MP for Skeena Bulkley Valley and from Joyce Murray, Liberal MP from Vancouver Quadra, she said future operations were the responsibility of the private sector,
The Russian ship lost power outside Canadian waters in very rough weather. The private sector provides towing service to the marine industry.
We are grateful that the Canadian Coast Guard was able to keep the situation under control in very difficult conditions until the tug arrived from Prince Rupert.
Whitworth told the Globe that with increased tanker traffic whether LNG or bitumen, the number of tugs on the coast will increase, a point also made by supporters of the various projects.
But without a real commitment from the government for marine safety on the west coast, it is clear, even with the prospect of Very Large Crude Carriers with bitumen or Liquefied Natural Gas tankers plying the coast, the Harper Government considers marine safety nothing more than a case of a paper ship upon a paper ocean.
With such indifference, it is likely that local communities up and down the British Columbia coast will have to follow the example of the small town of Unalaska, population 4,376 in 2010 and create the northwest coast’s own emergency system.
You might not be seeing it at the gas pumps at the moment, but you soon will, the price of gas has gone down by 30 per cent since June.
Prices of key commodities, oil, coal and iron ore are dropping. And the weakness in the market for two of those commodities oil and iron ore should be setting off the alarm bells in Kitimat and the northwest.
The declining price of oil will soon affect all those energy-related projects that are supposed to bring an economic renaissance to northwest British Columbia.
As for iron ore, people might ask, what does iron ore have to do with us, there are no iron mines or steel mills around here.? However, in the highly integrated world economy, Rio Tinto is one of the world’s largest producers of iron ore, the decline in iron ore prices is affecting Rio Tinto’s bottom line and that is why, analysts say, the company may be vulnerable to a take over by the little known commodities giant Glencore.
The oil industry has always experienced very long, slow and deep cycles in supply, demand and prices: the current downturn is no exception.
Kemp says the current up cycle began around 2002, with rising oil prices. The financial collapse in 2007 and 2008 briefly interrupted the cycle but now according to Kemp and other analysts there is a glut of oil on the market and prices are falling world wide.
High prices meant not only new plays, especially in the Alberta bitumen sands, but also stronger efforts to save money by increasing energy efficiency and, yes, turning to cheap natural gas.
There are also new factors at play. In the past when there was a downturn in oil prices, OPEC led by Saudi Arabia, would limit supply to keep the price at a profitable level. However, the flood of oil on to the market from shale oil plays, mainly in the United States but also in Canada, has meant that OPEC can’t do that anymore. Too much competition. So the analysts say, the Saudis and other OPEC members are actually starting a price war to retain market share.
When Kemp was writing last week, he said the key marker, North Sea Brent crude:
if prices are adjusted for inflation (using average U.S. hourly earnings), Brent prices are at the lowest level in real terms since October 2007, exactly seven years ago.
There has always been a lot of skepticism among long term residents of Kitimat who have seen boom and bust cycles before and so they, rightly as it turns out, have been wary of industrial promises. Then there’s the current housing debate which may soon see the out of region speculators and developers caught with their pants down in the midst of a Kitimat January blizzard.
The commodity downturn also shows the foolishness of the politicians, business people and commentators who kept saying that BC is a “natural resource economy” and restrictions on corporations and strong environmental requlations will only hurt that economy. Who needs diversification? Who needs a fishing guide anway? It is fairly clear already that Christy Clark’s promises of a debt free province have as much credibility as speculating in Dutch tulip bulbs.
As for the idea among some here that if Kitimat had only voted in favour of Enbridge Northern Gateway, the gates to ecomonic paradise would open, that is foolishness. You can be certain when the Saudi princes decided on a price war to keep themselves in the luxorious lifestyle which they believe they are entitled, they didn’t consider whether Kitimat voted for or against Northern Gateway.
Part of the impetus behind constructing new pipelines to carry bitumen from northern Alberta to the U.S. Gulf Coast, Kitimat on the Pacific, or even all the way across the country to Saint John, N.B., was to help close the substantial discount between Canadian oil and world prices. Well, crude’s recent drop into the $85‑a‑barrel range has basically collapsed the once wide‑open spread that had existed between West Texas Intermediate and Brent crude with hardly any new lengths of pipe being laid into the ground at all.
Rubin went on to note that the decision by the Saudis to launch the price war has changed everything.
For pipeline companies with major proposals on the table, such as TransCanada and Enbridge, falling oil prices are a game‑changer of the same magnitude that rising prices were a decade ago. Back then, soaring prices created an urgent need to build new pipelines to connect North America’s burgeoning supply to coastal refineries and world markets.
We’re now in a different world. At the root of today’s problem is global demand that is no longer growing quickly enough to support the prices necessary to keep expanding expensive unconventional sources of supply such as the oil sands. Lower prices will effectively strand those reserves regardless of the transportation options that may become available. Even if President Obama approved Keystone XL or the National Energy Board gave the green light to Energy East, falling commodity prices mean that soon there might not be enough oil flowing out of northern Alberta to fill those new pipelines.
This week’s near disaster with the Russian container ship Simushir, where the coast of Haida Gwaii was saved by a change in the wind direction, hasn’t helped either.
Will the refinery fade to black?
Economists have always been skeptical about David Black’s plan for the Kitimat Clean refinery and Black has admitted that he also had not much support for the refinery idea either from the hydrocarbon indusry or from government.
Most important, Black has said that he as a businessman intends to eventually make a profit by selling refined product. In fact on his website, Black said he expected the refinery to go into profit after just seven to ten years of operation.
But now comes the flaw in Black’s business plan. According to the website, the Kitimat Clean project is based on North Sea Brent Crude priced at $110 US a barrel. The refinery would take advantage of the “discount” on deliveries of Alberta bitumen crude which the site estimated at $35 a barrel. Black’s site says the refinery would be profitable if it could purchase bitumen at a $23 discount, making $12 a barrel over the world price.
Unfortunately, as of this writing, 11 am on October 20, the price of Brent Crude is now $85.79 and dropping slightly. West Texas Intermediate Crude, the other bench mark is even lower at $82.79 a barrel.
It looks like the drop in oil prices wipes out Black’s plan for profitability, since Brent Crude is already $25 a barrel cheaper than Black had projected.
What’s that got to do with the price of gas?
The falling price of crude oil is also going to have a major impact on the liquified natural gas projects in the northwest. The current economic situation will soon see the short term players and speculators cut and run, leaving, it is hoped, a couple of long term players in the west coast LNG terminal market. However the volatility in the dropping oil market may mean that the all important Final Investment Decisions are delayed yet again.
That’s because, at the moment, in Asia, the price of natural gas is calculated as a per centage of the price of crude oil, what is called the Japan Cleared Customs price. And as the LNG Journal has reported the price of LNG in Japan has dropped to the 2009 level.
East Asian Delivered LNG Indicator Price hit its lowest level since 2009 at $12.30 million British thermal units with European Brent crude oil prices collapsing to $82.85 per barrel. The East Asia LNG price is based on the Japanese Crude Cocktail method of assessing long-term contract cargo prices for Japan, based on oil which last hit current levels and then slipped below $80.00 per barrel during 2009.
The idea of LNG exports, especially since the Japanese earthquake in 2011, is that the companies can make a big profit by buying natural gas at low North American prices, exporting and then selling at the higher Asia price. In a free market world, however, the Asian countries and companies have, for the past few years been balking at buying at the higher JCC price and attempting to buy at the much lower North American Henry Hub price which at this writing was $3.72 MMBTu. Today’s JCC LNG price was $12.75, still higher than the North American price, but as LNG Journal notes, at a five year low.
Weaker oil prices may put proposed LNG projects “to sleep for a number of years,” Fereidun Fesharaki, chairman of Facts Global Energy, an industry consultant, said in a phone interview. “For the projects that are already under construction, it hits their pocketbooks seriously.”
Prices below $80 a barrel may be a “disaster” for some projects, said Fesharaki, who forecasts Brent may decline to $60 a barrel before the end of the year, then rebound to about $80 by the end of 2015.
and
“There’s no doubt if we were to see the type of crude oil prices we’re seeing now continue they would be looking at lower LNG prices,” Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking Group Ltd., said by phone. “On face value, it would put pressure on margins.”
Long term LNG prospects
On the other hand, long term prospects for LNG exports are good. Demand in the Asian markets is still growing.
According to the Nikkei Asian Review, the Japanese Ministry of Economy, Trade and Industry projects that by 2020, 70 per cent of Japan’s LNG will come from Australia and North America. That doesn’t mean that Canada won’t have rivals, the projections say that the United States, which is just starting many of its LNG export projects could be Japan’s third largest customer with Canada in fourth place.
There are big benefits to getting LNG from North America and Australia. The unlikeliness of pirate attacks is one. There is also less political uncertainty. And then there is the price. U.S. shale gas, for example, costs about 20% less than what Japan currently pays for LNG.
Diversification
With the Rio Tinto Alcan Kitimat Modernization Project construction phase winding down, with some uncertainty about the future of Rio Tinto itself and with more possible delays in the Final Investment Decisions for LNG Canada and Kitimat LNG, Kitimat needs a Plan B (and a Plan C or D or E).
The idea of a retirement community is no longer viable, costs of housing, even if they drop, are just too great.
Kitimat’s second strength has always been tourism and fishing. In 2015, there must be stronger efforts of support both fishing and tourism, which, in the long term will support that regions economy through good times and bad.
That means the new council must be firm in demanding (yes demanding) full access to the Kitimat waterfront and that includes a well-managed marina or marinas that have the capacity for recreational, adventure and fishing guiding and industrial use.
The District of Kitimat must come up with a plan that will promote the advantages of the region as a tourist and fishing destination. While the Chamber of Commerce has being doing a good job, up to now as the main promoter of tourism, Kitimat’s public image across Canada and the world is soley industrial and the District should assume more responsiblity for changing that image. The economic development staff at the district have been working largely on large scale industry. It should devote more time and money to the natural wonders of the area.
The plan B should also mean balance. Balance between industry and environment. The sneering contempt for those who want to protect the environment of the northwest is short sighted thinking, because a large proportion of the economy will depend for decades to come on attracting visitors to the wild beauty of of this part of British Columbia. That means, as much as it can within municipal powers, the new council must strengthen environmental protection in Kitimat.
Back in the 50s, Kitimat was planned for a future, a future that didn’t exactly work out when the price of aluminum slumped in the early 60s. Now we’re facing a slump in energy prices, so those plans will change. The plan B must include, as much as possible, creating a mainstay base that will smooth out the boom and bust of the commodities cycle.
The motto on the Kitimat snowflake logo is “A marvel of nature and industry.” The new council should make sure that motto is applied during the coming years.
There’s a dumb, dumb, really dumb idea that just won’t go away—that Enbridge could solve all its problems if only, if only, it would send the Northern Gateway Pipeline to Prince Rupert.
Enbridge long ago rejected the idea. Before Enbridge updated its website to make Gateway Facts, to make it slick and more attractive, the old website had an FAQ where Enbridge explained why it wasn’t going to Prince Rupert.
Did you consider running the pipeline to Prince Rupert where a major port already exists?
We considered Prince Rupert and Kitimat as possible locations. We carried out a feasibility study that took into account a number of considerations. The study found that the routes to Prince Rupert were too steep to safely run the pipeline, and that Kitimat was the best and safest option available.
Current proposed route for the Northern Gateway pipeline. (Enbridge)
Here in the northwest even the supporters of the Northern Gateway roll their eyes when they hear the old Prince Rupert story come up again and again – and it’s not just because these people support the Kitimat plans for Northern Gateway, it’s because those supporters (not to mention the opponents) have driven along the Skeena from Terrace to Prince Rupert.
There just isn’t any room for a pipeline. It’s a game of centimetres.
A rainbow hugs the mountains near the Telegraph Point rest area on the Skeena River between Terrace and Prince Rupert, Sept. 29, 2014. Traffic is seen on the narrow corridor between the mountains and the river (Robin Rowland/Northwest Coast Energy News)
Alternatives to Kitimat?
Now the new premier of Alberta, Jim Prentice, who should know better if he’s going to lead that province, is hinting that Kitimat isn’t the only possible solution for the Northern Gateway.
Without specifying Prince Rupert, according to Gary Mason reporting in The Globe and Mail, Prentice was speculating about an alternative to Kitimat.
Asked whether he believes the Gateway terminus should be relocated to Prince Rupert or another destination, Mr. Prentice said, “Everything I’ve heard from the Haisla who live there is they don’t agree with the terminal being in Kitimat.” Is it possible to get First Nations approval if there is no support at the planned terminus site? “It’s pretty tough,” the Premier said.
Prince Rupert has a thriving local fishing industry that employs hundreds of people and is critically important to the local First Nations. He is convinced the community would not be willing to put that at risk.
“Overwhelmingly people in my community are much more comfortable with liquefied natural gas, with wood pellets, with coal, than any oil product,” he said.
The Prince Rupert Port Authority also rejected the idea
A spokesman for the Prince Rupert Port Authority said Wednesday there is currently no room for Enbridge to build at the port even if it wanted to. “We are fully subscribed,” Michael Gurney said. There are two large vacant lots within the port authority’s jurisdiction, but both are locked by other energy companies, earmarked for LNG projects.
So not only is there no room on the road to Prince Rupert, there is no room in Prince Rupert.
Shovel-ready?
Let’s just consider for a moment that if Prince Rupert was the ideal location for the Northern Gateway terminal (which it is not), what would be needed to get the project going today.
The Northern Gateway Joint Review Panel would have be reconstituted or a new JRP created by the National Energy Board. That’s because the bitumen comes from Bruderheim, Alberta, crossing provincial boundaries and thus it’s in federal jurisdiction.
Even under the fast track rules imposed on the NEB by Stephen Harper’s Conservative government, new environmental and social impact studies would be required, starting from scratch. So add another five years of paperwork before a single shovel goes into the ground.
The pipeline would have to cross the traditional territory of First Nations that, so far, have not been part of the negotiations, mostly the Tsimshian First Nation as well as the Nisga’a First Nation which has a treaty establishing local rule over their territory.
Traditional leaders of the Gitga’at First Nation lead a protest march through the streets of Prince Rupert, February 4, 2012. (Robin Rowland/Northwest Coast Energy News)
In February 2012, the largest anti-Enbridge demonstration outside of the Lower Mainland took place in Prince Rupert, with the elders of the Tsimshian First Nation welcoming the elders and members of the Gitga’at First Nation, at Hartley Bay, which had organized the protest.
When I say there isn’t room for a pipeline along the Skeena, it also means that there isn’t any room for the pipeline corridor right-of-way. Enbridge, in its submissions to the Joint Review Panel, said it requires a 25 metre wide right of way for the pipeline corridor. (For the record that’s just over 82 feet).
Along that highway, as you will see, there’s barely enough room for the CN mainline and Highway 16 (also known as the Yellowhead Highway) and on a lot of places both the highway and the railway roadbed are built on fill along the side of a cliff.
Albertans’ desperate desire to see the Northern Gateway go to anywhere to what they call “tide water” keeps coming up like the proverbial bad penny. The latest came when Jim Prentice speculated about a new route for the Northern Gateway.
I knew I had an appointment coming up in Prince Rupert on Monday, September 29. So I decided that only way to prove to people sitting in Calgary, Edmonton and Fort McMurray playing with Google Maps that the pipeline to Prince Rupert was a really dumb idea was to shoot photographs to show just why the Northern Gateway will never go to Prince Rupert—at least along the Skeena.
As you drive out of Terrace, you pass two large swing gates (also called by some “Checkpoint Charlie” gates after the Cold War era crossing in Berlin.) At the first rest stop west of Terrace, there are another set of gates at the Exstew. There’s a third set of gates just outside Prince Rupert.
A logging truck passes the avalanche gates at Exstew on Highway 16, Sept. 29, 2014. (Robin Rowland)
The swing gates are avalanche gates and, in the winter, Highway 16 can be shut down if an avalanche closes the highway or the danger from avalanche is too great to allow motorists to proceed. When you drive the highway from Terrace to Prince Rupert in the winter (the signs were covered up when I drove Monday) you are warned “Avalanche danger Next 13 kilometres. No stopping.”
The Exstew avalanche gates, (Robin Rowland/Northwest Coast Energy News)
The drive along the Skeena from just west of Exchamsiks River Provincial Park all the way to Tyee where the highway turns inland to reach northwest to Prince Rupert on Kaien Island is one of the most spectacular drives on this planet. The highway snakes along a narrow strip of land with steep mountain cliffs on one side and the vast river on the other.
The problem is that apart from locals and tourists, none of the “experts” whether journalist, think tanker, bureaucrat or politician have, apparently ever driven from Prince Rupert to Terrace.
When both Opposition Leader Tom Mulcair and Liberal Leader Justin Trudeau were in the northwest earlier this summer to “engage” with the local people, apart from short boat trips down Douglas Channel, they flew everywhere. Scheduling you know. Stephen Harper has never visited northwest BC and probably never intends to. His cabinet members fly in for photo ops and then are on the next plane out of town.
Of all the visiting journalists who have come to the northwest only a couple have bothered to drive around the region. Most fly-in fly-out. These days, most often budget-strapped reporters never leave their offices, interviewing the same usual suspects by phone on every story.
On Monday, I took most of the photographs on my way back from Prince Rupert to Terrace after my appointment, so the sequence is from west to east. There are also very few places along the river where you can safely stop. There are concrete barricades on both sides of the highway to prevent vehicles either going into the river or onto the narrow CN right-of-way.
There are, however, two rest stops and a number of small turnoffs on the highway, the turnoffs mainly intended for use by BC Highways, but which are also used by tourists, fishers and photographers.
The first image was taken at one of those highway turnoffs just east of Aberdeen Creek. This is what the highway and rail corridor are like all along the Skeena, the highway, bounded by concrete barricades, the CN rail line and then the towering mountains. Note where the telegraph and telephone lines are—further up the cliffside.
A closer view of the highway and rail corridor just east of Aberdeen Creek.
Here is the view of the Skeena River from the Aberdeen Creek turnoff. You can see to the east, a mountain and the narrow strip of fill land that supports the highway and the rail line.
You see the broad width of the mighty Skeena, the Misty River, as it is called by the Tsimshian First Nation and by everyone else who lives in the northwest and on the right side of the image, the highway and rail corridor built on fill.
Any room for a pipeline?
There’s another turnoff on the other side of the headland east of Aberdeen Creek, looking back the way we came.
The final small turnoff is just by the Kylex River. Again you can see how narrow the highway and rail corridor are.
A few kilometres further along—as I said the highway snakes and curves its way along the riverbank– you come to the Basalt Creek rest area. So this telephoto image shows a logging truck heading west, taken from Basalt Creek, looking back at the highway.
Again you can see both the highway and CN line are built on fill. Is there any room for a pipeline?
Any room for a 25 metre pipeline right-of-way?
Between Basalt Creek and Telegraph Point, a few kilometres to the east, again the highway and rail line hug the narrow strip between the river and mountains.
This shot, taken from Telegraph Point, in October 2013, shows a CN intermodal container train heading to Prince Rupert. The container trains and the coal trains usually have between 150 and 180 cars. If a winter avalanche took out a train, there would be environmental damage, but that damage would be insignificant from coal or containers compared to a train of railbit tankers carrying diluted bitumen.
At Telegraph Point, the second of the three rest stops between Prince Rupert and Terrace, again there is just a narrow strip between the mountain, the highway and the river.
Across the highway from the rest stop, you can again see the narrow corridor, the first shot looking west the rail line close to the cliff face, the second, east, with the waterfall, which you don’t see during the rest of the year, fed by the fall monsoon.
Two shots from the same location, Telegraph Point, taken in March, 2013, of a CN locomotive hauling empty coal cars back to the fields around Tumbler Ridge. (No waterfall in March)
Alternative routes
Everyone has assumed that if Northern Gateway changed its route, the most likely choice given the configuration of the pipeline at the moment is to follow the Skeena.
There are alternatives. The Petronas LNG project and its partner TransCanada Pipelines have proposed a more northern cross-country route, which would go north from the Hazeltons, avoiding the Skeena
If Enbridge wanted to try a northern route, similar to the one TransCanada contemplates for Petronas, Northern Gateway would again run into trouble.
It would require reopening or creating a new Joint Review Panel, many more years of environmental and social impact studies of the route, even under Stephen Harper’s fast track system. The TransCanada/Petronas pipeline would also cross the traditional territory of the Gitxsan First Nation and if Enbridge tried that the company would have to deal with the fact that it signed a controversial agreement with Elmer Derrick that was immediately repudiated by most members of the Gitxsan First Nation and eventually dropped by Enbridge.
So why does this idea of a pipeline to Prince Rupert keep coming up?
In most cases, the idea of the pipeline to Prince Rupert is always proposed by Albertans, not from any credible source in British Columbia, or the suggestions come from desk bound analysts in Toronto and Ottawa both in think tanks and in the newsrooms of dying newspapers who have never seen the Skeena River apart from a tiny handful who have looked at Google Street View
(Yes you can Google Street View Highway 16 along the Skeena, I recommend it if you can’t do the drive)
Perhaps the worst example of this failure of both analysis and journalism came in the Edmonton Journal on July 7,2014, when it published a piece by Bob Russell, entitled Opinion: Make Prince Rupert the terminus, which went over the same old inaccurate arguments.
The overland route currently proposed by Enbridge is fraught with environmental issues because it goes over coastal mountains and streams before entering Kitimat’s port. This port will also be the base of perhaps as many as four liquefied natural gas terminals, which will result in the channel always busy with LNG ships outbound and returning from many Asian ports.
There are existing rights of way for the major highway, the Yellowhead, and CN Rail line from Edmonton to the Port of Prince Rupert, so this eliminates the issue of transgressing First Nations lands. The technical issues of narrow passages can be overcome with engineering. In fact, the pipeline can be buried in the roadway at some restricted locations if absolutely necessary, but two different engineers have assured me that for the most part, the right of way should be able to handle the pipeline. A vital factor, of course, is to reduce the impact by eliminating the need for two pipelines.
The clue is how the Edmonton Journal describes Russell;
Bob Russell has an extensive background in planning and was a member of the Edmonton Metro Regional Planning Commission. He has flown the Douglas Channel, visited Kitimat and toured the Port of Prince Rupert.
This is so typical of the Albertan attitude toward northwest British Columbia, people fly in for a couple of days, make a quick observation, and fly out again and present themselves as experts on the region. (Some “experts” on Kitimat, very active on Twitter have apparently never left Calgary).
It obvious that the “two engineers” who assured him “the right-of-way could handle of pipeline” have no idea what they’re talking about. As the photos show there is barely enough room for a highway and a rail line much less a 25 metre wide pipeline corridor.
If the pipeline was to be built as Russell proposed, the only highway between Prince Rupert and the rest of Canada would have to be closed for years, there are no detours. All so a pipeline can be buried under the asphalt not in solid ground, but in the fill on the side of a riverbank in an avalanche zone?
Of course, closing a highway up here won’t inconvenience anyone in Edmonton or Calgary, will it?
Would CN be happy with years of disruption of their lucrative traffic to Prince Rupert with grain and coal outbound to Asia and all those containers coming in to feed Chinese products to the North American market? (you can be sure Walmart wouldn’t be happy about that, not to mention prairie farmers including those from Alberta)
Russell’s statement
There are existing rights of way for the major highway, the Yellowhead, and CN Rail line from Edmonton to the Port of Prince Rupert, so this eliminates the issue of transgressing First Nations lands.
Is also inaccurate.
I was told by First Nations leaders during the Idle No More demonstrations in the winter of 2013, that, a century ago, when the Grand Trunk built the railway along the Skeena , they did just that, built it without consulting the First Nations along the route, sometime digging up native cemeteries and sacred spots.
While apparently CN has worked in recent years to improve relations with the First Nations along the rail line, according to those leaders some issues of right-of-way remain to be resolved.
If there were any plans to build a diluted bitumen pipeline along that route, that would likely mean another court battle adding to those already before the Federal Court, a court battle that would cost Enbridge, CN, the federal government, environmental NGOs and the First Nations more millions in lawyers’ fees.
It’s doubtful if in the long gone (and perhaps mythical) days of “get it right” journalism that the Russell opinion piece would have passed the scrutiny of an old fashioned copy editor and fact checker.
In 2012, the Edmonton Journal (in a story no longer available on their website) also cited former Alberta Premier Peter Lougheed and former Bank of Canada governor David Dodge, as also favouring Prince Rupert.
Dodge, who was in Edmonton Tuesday to deliver a speech on the global economic outlook at MacEwan University, said Enbridge’s proposed Northern Gateway pipeline to Kitimat looks like even more of a long shot.
“I think the project to Kitimat looks, objectively, more risky. So why hasn’t much greater effort gone into looking at Prince Rupert and taking (bitumen) out that way? My guess is, the easiest place to get B.C. to buy into the project would be to go to Rupert.”
Dodge’s views echo those of former Alberta Premier Peter Lougheed, who also favours looking at an alternate pipeline route to Prince Rupert, where ocean-going supertankers can navigate more easily.
Back in 2012, I finished my piece for the Huffington Post by saying:
So why do people insist, despite the evidence, that the Northern Gateway go to Prince Rupert? It’s no longer an pipeline; it’s emotion and ideology. Ideology in that opposition to the Northern Gateway is seen by conservatives as heretical opposition to free enterprise itself. Emotion among those who see promoting the oil patch as an issue of “Alberta pride” and even Canadian patriotism.
For the promoters of the pipeline to Prince Rupert, ignoring the science of geology and the study of geography across all of northwestern B.C. is no different than repeatedly knocking your head against the Paleozoic metamorphic greenstone of the mountain cliffs along the Skeena. It only gives you a headache.
Things haven’t gotten much better in the past two years. In fact they’re getting worse as opposition to pipelines mounts.
It seems that in 2014 the Alberta and the federal government policy in promoting pipelines Northern Gateway, KinderMorgan’s TransMountain, Keystone XL, Line 9 Reversal and Energy East (slick PR and smiling representatives at open houses, politicians at strictly controlled photo ops) is to ignore facts on the ground and to refuse to deal with the concerns of local people from coast to coast.
There could, perhaps, be a more inclusive and truly science-based pipeline planning process that could see pipelines go on optimum routes but that isn’t happening.
The policy for the oil patch and its politician supporters when it comes to pipelines is facts and geology don’t really matter. So they put on ruby slippers, knock their heels together three times and send pipelines down a yellow brick road to an Emerald City (while telling the locals to ignore the man behind the curtain)
The cost of Enbridge’s cleanup from the spill at Marshall, Michigan in 2010 is now $1.157 billion the company said Friday as it released its second quarter results. That is an increase of $35 million from the estimates Enbridge released at the end of 2013 and the first quarter of 2014.
As of June, 2014, Enbridge faces possibly $30 million in fines and penalties from the United States government.
In its quarterly report Enbridge said
EEP [Embridge Energy Partners] continues to perform necessary remediation, restoration and monitoring of the areas affected by the Line 6B crude oil release. All the initiatives EEP is undertaking in the monitoring and restoration phase are intended to restore the crude oil release area to the satisfaction of the appropriate regulatory authorities.
On March 14, 2013, as previously reported, the United States Environmental Protection Agency ordered in Enbridge to undertake “additional containment and active recovery of submerged oil relating to the Line 6B crude oil release.”
Enbridge says it has “completed substantially all of the EPA order, “with the exception of required dredging in and around Morrow Lake and its delta.”
“Approximately $30 million of the increase in the total cost estimate during the three months ended June 30, 2014 is primarily related to the finalization of the MDEQ approved Schedule of Work and other costs related to the on-going river restoration activities near Ceresco,” Enbridge reported.
Enbridge also said it is working with the Michigan Department of Environmental Quality “to transition submerged oil reassessment, sheen management and sediment trap monitoring and maintenance activities from the EPA to the MDEQ, through a Kalamazoo River Residual Oil Monitoring and Maintenance Work Plan.”
Enbridge also said that costs may still go up, saying there continues to be the potential for “additional costs in connection with this crude oil release due to variations in any or all of the cost categories, including modified or revised requirements from regulatory agencies, in addition to fines and penalties and expenditures associated with litigation and settlement of claims.”
Enbridge said that “a majority of the costs incurred in connection with the crude oil release for Line 6B are covered by Enbridge’s comprehensive insurance policy…. which had an aggregate limit of $650 million for pollution liability.” So far, Enbridge has recovered $547 million of the $650 million from its insurers. Enbridge is suing its insurers to recover the rest of the money.
That means that “Enbridge and its affiliates have exceeded the limits of their coverage under this insurance policy. Additionally, fines and penalties would not be covered under the existing insurance policy,” the company said.
Insurance renewed
Enbridge said it has “renewed its comprehensive property and liability insurance programs under which the Company is insured through April 30, 2015 with a liability aggregate limit of $700 million, including sudden and accidental pollution liability, with a deductible applicable to oil pollution events of $30 million per event, from the previous $10 million.”
It adds:
In the unlikely event multiple insurable incidents occur which exceed coverage limits within the same insurance period, the total insurance coverage will be allocated among Enbridge entities on an equitable basis based on an insurance allocation agreement among Enbridge and its subsidiaries.
All Enbridge figures are in US dollars
The Northern Gateway Joint Review Panel required Enbridge that “its Northern Gateway’s Financial Assurances Plan must provide a total coverage of $950 million for the costs of liabilities for, without limitation, cleanup, remediation, and other damages caused by the Project during the operations phase. The plan should include the following components and minimum coverage levels.” (That figure in Canadian dollars)
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.
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.
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.
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?
As 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
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.”
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
What 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.
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.
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.
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.
The response to the Joint Review Panel decision on the Northern Gateway, beginning in December and continuing until this Canada Day, both in the public and in the media is sharply divided by the Rocky Mountains.
A lof of Albertans, most of the energy companies and many in the media, especially the Toronto-based business press, keep telling Canadians that the NEB is an independent, quasi-judicial body, that carefully weighs the scientific and other evidence before coming to a conclusion.
Prime Minister Stephen Harper stands up in Question Period and from his prepared script also claims the JRP and NEB are independent bodies.
Most of those writing about the attitude of the National Energy Board have never attended a single hearing, As for the Joint Review,. those from the major media who did attend were only there for the opening and closing sessions.
Members of the Northern Gateway Joint Review Panel, left to right, Kenneth Bateman, chair Sheila Leggett and Hans Matthews make notes at the June 25, 2012 hearings at the Haisla Recreation Centre, Kitamaat Village. A map of Douglas Channel can be seen behind the panel. (Robin Rowland/Northwest Coast Energy News)
In British Columbia, those attended the Northern Gateway Joint Review sessions saw a strange and arcane bureaucratic system with rules of evidence and procedure often tilted toward a proponent in the energy sector.
Those rules of evidence were created for the cosy club atmosphere of the NEB in Calgary where mostly there are friendly hearings attended only by the proponents and energy sector lawyers. Those same rules were infuriating to those in northwest British Columbia trying and failing to persuade the JRP to take seriously many of the concerns of the region. The rules of evidence and procedure were baffling to lawyers practicing in BC; even the highly experienced lawyers from the BC Department of Justice were chewed out by the JRP in Prince George for not following proper procedures.
The tail fins of a humpback whale are seen in Douglas Channel near Bish Cove, as a fishing boat speeds toward Kitimat harbour in a rain storm on Aug. 21, 2013. (Robin Rowland/Northwest Coast Energy News)
The JRP seemed to believe that time stopped at the evidentiary deadline, and although it acknowledged that Northern Gateway was a 50 year project, the panel didn’t need to know anything new.
A careful reading of the two volumes of the Joint Review Panel report and decision clearly shows that JRP finding was not, as one columnist called it, a triumph of science over emotion, but a proceeding that was biased from the outset to find in favour of Enbridge. It is clear that even though the Joint Review Panel did impose 209 conditions on Northern Gateway, reading those almost 500 pages one sees time and time again that Northern Gateway’s evidence and assurances were accepted at face value, while the panel treated the evidence and testimony from opponents with a much higher level of skepticism.
Moving to Calgary
One of my sources once told me that the “NEB is nothing more than an extension of the Petroleum Club.” In the 1991 budget, then Prime Minister Brian Mulroney moved the NEB headquarters from Ottawa to Calgary as a political gift to Alberta.
At that time the move was also seen as practical, Alberta was still complaining no one in Ottawa was listening to it. So if the Conservative government moved the NEB to Calgary, it would be there listening to the oil patch. NEB offices were scattered across the country, consolidating them in Calgary seemed, at the time, to be a way of saving taxpayers’ money and enhancing internal communications.
Seen now, about 25 years later, it’s clear the NEB move from its Ottawa headquarters and regional offices to Calgary was a disaster waiting to happen. Over the past quarter century, despite its claims of independence, the NEB and its staff have become so embedded in the oil patch energy culture of Calgary that (probably subconsciously) the NEB has shown that it is largely incapable of really taking seriously the culture of British Columbia on issues such as the Northern Gateway and Kinder Morgan projects. The NEB Calgary culture is also colliding,with the concerns and culture of other parts of the country as diluted bitumen pipelines head eastward.
The Conservative omnibus bills that gutted environmental protection and speed up the review process has made things much worse–at least until this week.
Now the Supreme Court has sent a shot across the bow of the full steam ahead National Energy Board, compelling the board to put much more weight on the concerns of First Nations.
The decision upholding the Tsilhqot’in claim to its traditional territory means the NEB and any future joint review panel (whether involving multiple federal agencies or federal agencies and a province) are going to have to take the concerns of First Nations and indeed all Canadians a lot more seriously—and the future of the planet as well, as described in the first part of this analysis. Chief Justice Beverly McLaughlin wrote that on First Nations` traditional territory:
that it is collective title held not only for the present generation but for all succeeding generations. This means it cannot be alienated except to the Crown or encumbered in ways that would prevent future generations of the group from using and enjoying it.
“Future generations” is the key phrase.
Future generations could undermine that whole world view of the Joint Review Panel, since the panel so casually dismissed the fears of a major disaster on the coast, saying it was “unlikely” and could be “mitigated.”
The JRP basically had a so-what attitude to British Columbia, arguing that since parts of the British Columbia environment had already been degraded any future environmental problems would be minimal and could be “mitigated.”
Public interest
While in the introduction to its definition of the Public Interest, the JRP says
If approved and built, the Enbridge Northern Gateway Project could operate for 50 years or more. Sustainable development was an important factor in our environmental assessment and our consideration of the public interest. The project would have to meet today’s needs without compromising the ability of future generations.
Sounds like that might match the Chief Justice. But, as the old saying goes, the devil is in the details. And just a few paragraphs later, the JRP says:
Our assessment of the project’s effects on residents and communities Considering Northern Gateway’s project design, its commitments, and our conditions, we concluded that the project’s potential effects on people’s land, water, and resource use could be mitigated. We were not persuaded that construction and routine operations of the project would have a negative effect on the social fabric of communities in the project area. We also were not persuaded that the project would adversely affect the health and well being of people and communities along the route or in coastal areas. We found that the net overall economic effects of the project would be positive and would provide potential benefits and opportunities to those individuals and businesses that choose to participate in the project.
“Trust Enbridge”
The JRP’s attitude toward a major disaster was “trust Enbridge.”
We found that some level of risk is inherent in the Enbridge Northern Gateway project, and that no party could guarantee that a large spill would not occur. We found that a large spill, due to a malfunction or accident, from the pipeline facilities, terminal, or tankers, is not likely.
We found that Northern Gateway has taken steps to minimize the likelihood of a large spill through its precautionary design approach and its commitments to use innovative and redundant safety systems, such as its commitments to address human error, equipment failures, and its corporate safety culture. These commitments and all others made by the company
Oh well, the ecosystem will recover eventually—a conclusion that could be reached only by ignoring the evidence from Prince William Sound, site of the Exxon Valdez spill.
We found that, in the unlikely event of a large oil spill, there will be significant adverse environmental effects, and that functioning ecosystems recover through mitigation and natural processes.
We found that a large oil spill would not cause permanent, widespread damage to the environment. The extent of the significant adverse effects would depend on the circumstances associated with the spill. Scientific research from past spill events indicates that the environment recovers to a state that supports functioning ecosystems similar to those existing before the spill. We found that, in the unlikely event of a large oil spill, there would be significant adverse effects on lands, waters, or resources used by residents, communities, and Aboriginal groups.
We found that, in rare circumstances, a localized population or species could potentially be permanently affected by an oil spill. Scientific research from a past spill event indicates that this will not impact the recovery of functioning ecosystems.
In other words, some communities, probably aboriginal communities, would have be sacrificed in the public interest and the economics of Alberta while the economy of that part of British Columbia would be destroyed.
Will the JRP have to start over?
The environmental law community and First Nations leaders are already taking a look at another paragraph in the Supreme Court judgement. Paragraph 92 in lawyer speak.
At the celebration of the Supreme Court decision, on June 26, Gerald Amos welcomed the suggestion from lawyers that the ruling could force a re-examination of Northern Gateway. (Robin Rowland/Northwest Coast Energy News)
One of the many reports comes from West Coast Environmental Law which noted in an e-mail
[T]he Tsilhqot’in decision, Canada’s highest court brings home the implications of this for Enbridge and other project proponents:
Once title is established, it may be necessary for the Crown to reassess prior conduct in light of the new reality in order to faithfully discharge its fiduciary duty to the title-holding group going forward.
For example, if the Crown begins a project without consent prior to Aboriginal title being established, it may be required to cancel the project upon establishment of the title if continuation of the project would be unjustifiably infringing.
And what about the overhaul of environmental legislation in 2012 to smooth the way for pipeline and other industrial development?
The court notes: “Similarly, if legislation was validly enacted before title was established, such legislation may be rendered inapplicable going forward to the extent that it unjustifiably infringes Aboriginal title.”
Reset
In other words, the Supreme Court decision resets everything.
It could nullify the recent decision by the Prime Minister to permit the Northern Gateway to go ahead. Or it could mean, especially given the number of court challenges just to the JRP, that, in light of the Tsilhqot’in decision the panel will be ordered by a court to go back to the drawing board and reconsider its findings.
Then there are the pending challenges to the Harper decision allowing the Northern Gateway to go ahead. Sources told Northwest Coast Energy News that the first of a number of court challenges were to be filed last week. It is likely that after the holiday weekend, lawyers will be rewriting their filings and their briefs in light of the Tsilhqot’in decision and presenting the Federal Court with those challenges some time in July.
The justices of the Supreme Court did allow a public interest exemption on the use of First Nations land for a larger purpose, but there must now be genuine consultation and the public interest will likely have be proven beyond a reasonable doubt, it can’t just be the whim of a prime minister with a tame, unquestioning caucus who decides what is in the public interest.
Who consults whom?
In the decision, Chief Justice McLaughlin wrote:
Governments and individuals proposing to use or exploit land, whether before or after a declaration of Aboriginal title, can avoid a charge of infringement or failure to adequately consult by obtaining the consent of the interested Aboriginal group
and later
The right to control the land conferred by Aboriginal title means that governments and others seeking to use the land must obtain the consent of the Aboriginal title holders. If the Aboriginal group does not consent to the use, the government’s only recourse is to establish that the proposed incursion on the land is justified under s. 35 of the Constitution Act, 1982.
Compare that again with what the JRP said. As with the environmental impact it begins by saying:
The Panel finds that the magnitude, extent, and potential impacts of this project required an extensive program of public consultation. The Panel considers thorough and effective consultation to be a process that is inclusive of, and responsive to, all potentially-affected groups and individuals.
Then the JRP says:
The Panel notes that, among potentially-affected parties, there were differing perspectives on what constitutes a thorough and effective process of consultation. There were also different views among some parties about how consultation should occur, and their roles and responsibilities during consultation.
And then:
The Panel believes that it is critical for all parties to recognize and understand their respective roles and responsibilities for achieving effective dialogue during consultation. The Panel noted the principles of thorough and effective consultation at the beginning of this chapter. The Panel finds that these principles require that a process must provide timely, appropriate, and effective opportunities for all potentially-affected parties to learn about a project, provide their comments and concerns, and to discuss how these can be addressed by the applicant.
So what does it mean?
The JRP starts off by giving Northern Gateway a slap on the wrist:
The applicant [Enbridge] must be genuinely responsive. Affected parties have an ongoing and mutual responsibility to respond to opportunities for consultation, to communicate concerns they may have, and to discuss how these can be addressed.
But then it goes on in the same paragraph:
Consultation requires trust, mutual respect, and relationship-building. All parties have an obligation to seek a level of cultural fluency, in order to better understand the values, customs, needs, and preferences of the other parties involved in the consultation process. All parties may be required to adjust their expectations in response to the information, concerns, and interests raised and considered through the process. The Panel observed that this approach did not always occur in this proceeding.
Get the phrase “all parties.” It is clear here that the JRP is taking on the First Nations and other opponents for not seeing Northern Gateway’s point of view, since it accepts, as seen below, Northern Gateway’s contention that it is doing a good job with consultation,
And the word “trust.” Again the Alberta-bound JRP (the panel had no members from British Columbia, two from Alberta, one from Ontario) are saying “trust Enbridge.”
Unfortunately after a decade of operating in the northwest, and despite its spin, Enbridge has failed time and time again to establish trust with First Nations and it has equally failed to establish trust with a significant number non-aboriginal residents of the northwest.
The companies developing LNG projects have, for the most part, established a level of trust.
The joke up here is now so old it’s a cliche (but still unknown to the eastern media) where an LNG executive says, “We look at what Enbridge did and do the exact opposite.”
The Panel accepts Northern Gateway’s view that consultation is a process which should ensure that all parties are better informed through consultation, and that it involves being prepared to amend proposals in light of information received. In this regard, the Panel notes that Northern Gateway made numerous changes to the design and operation of the project in response to input provided by the public, landowners, governments, and stakeholders
In fact, Northern Gateway is still fumbling the ball.
It is true that Northern Gateway did change its plans and put another $500 million into the plans for the project–after a lot of public pressure and growing controversy during the JRP hearings over its plans.
JRP Chair Sheila Legget during the final arguments in Terrace, June 17, 2013. (Robin Rowland/Northwest Coast Energy News)
Equally telling was Northern Gateway’s dismissal in its final arguments (arguments accepted by the JRP) that there was no earthquake hazard in the region, despite two major earthquakes at Haida Gwaii and southern Alaska just months earlier, both of which shook Kitimat.
In the final oral arguments, Northern Gateway’s lawyer Richard Neufeld summarily dismissed the fears of the Haida and Heiltskuk First Nations about destruction of the herring spawning beds because, he said, first, the chances of a tanker disaster were unlikely and second, even if there was a tanker disaster it was even more unlikely that it would occur during the spawning season. (Not that the spawning season matters, herring beds in San Francisco Bay are still damaged years after a spill there).
Now with the Tsilhqot’in decision, Enbridge can no longer summarily dismiss those fears. The companies who have proposed liquefied natural gas projects are meeting with anyone, including avowed opponents, and opening dialogues, even if both sides continue to disagree. Despite its spin, accepted by the political pundits and eastern business media, those who live in the northwest know Northern Gateway’s consultations and engagement, so far, have mostly been with friendly groups and friendly audiences.
The Supreme Court decision is going to change that attitude in the coming weeks. If Enbridge wants Northern Gateway to go ahead, the company is going to have to genuinely engage with First Nations. Given all the damage created by Enbridge over the past decade, that engagement is unlikely to change anything.
The Supreme Court decision is going to have one more consequence.
Eventually, in a few years, the decision will negate that stupid attitude from the conservative media and some in the business community that the people of northwestern British Columbia are against all development. That was never true but it’s a convenient excuse for those columnists and conservatives not to question their own assumptions.
If the reporters and columnists had bothered to come up here, if the press-release dispatching business leaders had bothered to leave their executive suites, they’d know what northwestern BC wants is responsible and sustainable development, not quick in and out profits.
The Supreme Court decision means that any future industrial development in the northwest will be much different from anything seen in the past because First Nations must be involved from the beginning.
Given its sorry track record, it is unlikely that Enbridge will be part of that development. but others will profit, yes profit, from that failure.
In the coming years it is also likely that there will be a new approach to development from the National Energy Board after they begin to see their narrow oil-patch friendly approach and rulings struck down by the courts quoting the Tsilhqot’in decision.
Both Prime Minister Stephen Harper and the Conservative political minister for British Columbia, James Moore, have brushed off Kitimat’s concerns about the Northern Gateway Pipeline after a majority of residents voted to oppose the project.
On June 13, the Prime Minister’s Office responded to Kitimat with what was essentially a form letter brushing off the district’s concerns and the plebiscite vote. That was four days before the government officially approved Northern Gateway along with the 209 conditions set by the Joint Review Panel. At the time, the government issued a news release about the approval, but no cabinet ministers or Conservative Members of Parliament commented on the decision for the media.
Even though Northern Gateway is a high priority for the Harper government, the Prime Minister did not bother to sign the letter himself. Instead it was Salpie Stepanian , an assistant to the prime minister who responded to the District for “taking the time to write.”
June 13 letter from Harper assistant Salpie Stepanian to the District of Kitimat
James Moore responded with a much shorter letter but apparently did sign the letter himself (if it wasn’t a sign-o-robot). He too thanked the District for writing and asked to be kept informed. Both letters were released at Monday’s District of Kitimat Council meeting.
James Moore’s letter to the District of Kitimat
Notes: On Monday District of Kitimat Council approved a $2500 support grant to the Kitimat EconomicDevelopment Association that says it is “active in pursuing development that will return Kitimat to a robust, self-sufficient community.” The grant was conditional in that it cannot be used for “initiatives Council does not support”–in other words Enbridge.
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.
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”
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.”
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.
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.”
