Can Kitimat’s historic CN railway station be saved from demolition?

Analysis    (Long Read)

A crowd gathers at the Kitimat CN Station sometime in 1955. This picture may be of the station opening since the windows and trim are unpainted. (Walter Turkenburg/Kitimat Museum & Archives. ) See Note 1.

UPDATE There  will be a public meeting to discuss the future of the station in Kitimat on Thursday,  April 11, 2019 at Riverlodge, in the Activity Room, at 7:30 pm.

March 12: This story has been updated to clarify that Kitimat Heritage has not yet discussed municipal, provincial or federal heritage status with CN. Also more information about CN telegraph communications has been added.

Kitimat Heritage and supporters in the community are campaigning to save the town’s old Canadian National Railway Station. Kitimat Heritage wants to preserve the station because it is symbolic of the earliest days of the townsite when Kitimat was first being built and celebrated as the 1950s “town of the future.”

District of Kitimat Council voted Monday February 25 to send a letter of support to CN and to take other appropriate measures to support an effort to save the old CN Railway Station in the Service Centre.

Retiring Member of Parliament Nathan Cullen (NDP Bulkley Valley) is also working at the federal level to get help to preserve the station. The provincial MLA Ellis Ross (Liberal Skeena) has promised he will work at the provincial level.

Louise Avery and Walter Thorne make a presentation to District of Kitimat Council on the future of the CN Station on February 25, 2019. (Robin Rowland)

Local historian Walter Thorne and Executive Director of the Kitimat Museum & Archives Louise Avery presented a package to council that gave the history of the station and the current state of negotiations with CN. (Disclosure I am chair of the museum board but not directly involved in the campaign. The opinions in this article are strictly my own and may not reflect the views of Kitimat Heritage or the museum)

There have been two architectural assessments of the railway station. The first by John Goritsas on behalf of the Kitimat Museum & Archives in 1992 and this year on behalf of Kitimat Heritage by Prince Rupert architect Alora Griffin.

While the station overall is in “desperate condition” it appears from both assessments that the core of the station is, as far as can be determined, structurally sound.

A close view of the station in 2014, showing the “desperate condition.” (Robin Rowland)

The station, built in 1955, has been in poor repair for years.  According to Kitimat Heritage CN  has said it  sees no other clear alternative than to demolish the station given its run-down nature, the potential liability issues, and the revenue potential of the land.

If CN  did want to demolish the station ,  it can’t at the moment because it is protected by both municipal and provincial heritage status. So far the question of heritage status has not yet come up in the discussions.

District of Kitimat Council first passed a bylaw giving the station heritage status in September 1985.The municipal heritage status of the station is part of the official Kitimat Community Plan, adopted by council in 2008.

The railway stations in Prince Rupert and Smithers are designated under the federal Heritage Railway Stations Act.

Only designated heritage railway stations that are still owned by a railway company under federal jurisdiction are subject to the nationwide Heritage Railway Stations Protection Act. Under the act no railway company may in any way alter, demolish, or transfer ownership of a designated heritage railway station without the authorization of the federal cabinet.

In the case of Kitimat, the Heritage Group has not yet officially asked CN to support designation.

CN officials, speaking to the heritage volunteers, have told them that the station is an “eyesore” and there is “revenue potential” from the station site as Kitimat gears up for the building of the LNG Canada plant and other projects including a proposed propane terminal.

The CN Station in 2012. (Robin Rowland)

Railway stations as brands

To understand what makes the Kitimat station unique, you have to know about the history of railway station construction in North America.

From the mid-nineteenth century until the First World War, a time when railways were the prime form of transportation, railway stations were designed to both attract paying passengers and to promote the railway brand. The railways hired the leading architects of the day to design metropolitan stations in grand style, often neo Classical like Toronto’s Union Station or Grand Central in New York or “Romanesque” such as Union Station in Nashville, Tennessee (now a Marriot Hotel) that resembles the style of Canada’s Parliament Buildings.

Montreal’s Windsor Station, once the headquarters for Canadian Pacific was also built in a Romanesque style.

See Time Magazine’s selection of the world’s ten most beautiful railway stations  and Fodor’s travel has a list of what it believes to be the world’s 20 most beautiful main line stations .

The same care in architectural design and construction was applied to even the smallest railway stations in those early years—although many were based on same designs from stop to stop.

When the Grand Trunk Pacific was building the line to Prince Rupert a century ago the GT built iconic smaller stations (designated by the Plan Number 100-152) along the route, with fourteen in the Smithers subdivision, including at Tyee, Kitwanga and Kwinitsa. (See Vanishing BC Grand Trunk Pacific Stations)

The latter station is now part of the Kwinitsa Station Railway Museum & Park in Prince Rupert.

The Prince Rupert station built in 1921 is an example of a utilitarian brick box that has federal protection.

The designation says the Prince Rupert Station is an example is “significant as a very early example of a public building in the Modern Classical style. Executed in brick and trimmed with Tyndall limestone, the station design combines traditional composition with simple, stripped-down classical detailing.”

The Smithers Station is considered more special it is an important and rare example of the custom-designed “special stations” built by the Grand Trunk Pacific Railway (GTP) at several divisional points along its transcontinental line. This small group of specially designed stations represented a departure from the GTP’s overall policy of rigid standardization in depot design. (like the ones at Tyee, Kwinitsa and Kitwanga)

End of an Era

That era of great railway stations ended in 1929 with the Great Depression when commerce largely collapsed. Railways in North America had little money to spend on grand passenger stations. Then came the Second World War when the priority for the railways was supporting the war effort.

Railway historians say that after 1945 most spending for North American railways was to replace aging  steam locomotives with new diesel locomotives. The railways also had to retire old rolling stock such as boxcars that had been kept in service during the war.

That meant even in the post war decade from 1945 to 1955 constructing new stations was not a priority. Those stations that were built, mostly in the United States, replaced buildings that were no longer usable. Most were “modern” brick boxes based on a utilitarian design that reached back to the 1920s or the newer “brutalist” buildings of mostly poured concrete.

Kitimat was a different case—there was a brand new branch line from Terrace.  That meant Kitimat needed a railway station.

The architects who assessed the Kitimat station say it is an example of the modernist “form follows function” style of architecture popularized by Frank Lloyd Wright. The load bearing 2 x 6 trusses align the exterior walls which was one of Wright’s innovative ideas.

The station was designed by CN staff. The 1992 architect, John Goritos, said, “it was designed to suit the site and wasn’t a replica of any of other CN railway stations.”

The architects say that one reason the Kitimat Station was built of wood was not only that it had to be constructed quickly but the light weight was suited to the site which was on the Kitimat River flood plain filled in with sandy landfill.

Building the Kitimat branch line

As Alcan was planning and building Kitimat, the company signed transportation contracts with CN. That was the reason the branch line was built to the townsite, then past the sandhill to the aluminum smelter.

CN worked to build the new branch line for 38.5 miles crossing “difficult terrain of the area, including swamps, hard clay, rocks and watersheds.’ The route included three steel Pratt triangular truss bridges over the Lakelse, Wedeene, Little Wedeene Rivers and plus a number of smaller old fashioned traditional wooden trestles over creeks.

Canadian Transportation magazine reported in July 1952 that the branch line alone would cost $10 million 1952 dollars or $217,391.30 per mile.

Freight travel began as soon as the branch line was completed in December 1954. Temporary huts acted as the train station when passenger service began in January 1955 but were soon overwhelmed.

It was CN practice to use huts (and sometimes a retired boxcar) to act as a temporary station until a new one was built. (Mrs. L Byron collection/Kitimat Museum & Archives)

Former Kitimat mayor Joanne Monaghan who worked at the station recalls that once the Alcan plant became operational although most of the ingots were shipped out by sea, there were long trains outbound with car after car loaded with aluminum ingots.

The British news magazine The Sphere published a photograph of the first passenger train to arrive in Kitimat in February 1955,

The British magazine The Sphere (an equivalent of Life or Look) covered the story this way in a report on Feb. 19, 1955.

“In the far north-west of Canada new trains have just started to run along a new railway. The line starts in a small town called Terrace and its only forty-three miles long. But its importance is out of all proportion to its length for the new terminus is in Kitimat, the new wonder aluminum manufacturing of the Canadian Aluminum Company (sic).”

The anonymous reporter photographed what The Sphere said was the arrival of the first passenger train in Kitimat. The locomotive was Canadian National steam locomotive 2129, a 2-8-0 “Consolidation” that had been in service since 1911 with three railways, the Canadian Northern and the Duluth, Winnipeg and Pacific ( a CN subsidiary in the United States) before being transferred to CN. The loco hauled three passenger coaches and two boxcars on that initial run from Terrace. Note 2.

A Northern Sentinel photo taken a little later than the Sphere photo, showing the “:twice weekly train” in Kitimat, February 1955, before the new station was built. (Northern Sentinel/Kitimat Museum & Archives)

The 2-8-0 was a heavy-duty locomotive designed for hauling freight. All those outbound boxcars filled with ingots and, inbound, as the town was being built, boxcar after boxcar filled with lumber to build the houses and stores of the brand-new town.

Building a town of 8,000 almost overnight required whole CN trains filled with lumber (Walter Turkenburg/ Kitimat Museum & Archives)

The “milk-run” train also serviced Lakelse Lake (where there was a whistle stop in a clearing by the tracks, which I remember from a vacation at Lakesle in the summer of 1957) as well as “stations” (again really just clearings) on the timetable at Wedeene, Dubois, Lakelse and Thunderbird, to pick up loggers, surveyors, fishers and hunters. The trip from Lakelse to Kitimat would have taken one hour and thirty minutes if the train was running on schedule.

Once dedicated passenger service began, CN assigned another steam locomotive, a lighter 4-6-2 Pacific, Number 5000, built in 1913.

As CN was transitioning to diesel, it assigned its last remaining steam locomotives to more remote parts of Canada, like northwest BC.  The Pacific, Number 5000, was retired in May 1958. The 2-8-0 Consolidation Number 2129 was scrapped in May 1960.

RELATED: The Kitimat branch line operating trestle bridges

The station

CN put the station construction out to tender in June 55. The building was completed by the Skeena Construction Company, based in Terrace, before the end of the year.

Dignitaries welcome the first daily train to arrive in Kitimat on June 2,1955 . (Northern Sentinel/Kitimat Museum & Archives)

Train was the main mode of travel between Terrace and Kitimat from December 1954 until November 1957 when the highway to Terrace was opened.

Freight operations continued to use the depot for years after passenger traffic ended.

Like many branch line railway stations in North America, the Kitimat station combined passenger and some freight and express operations (most of the freight operations were carried on down the line to Kitimat Concrete Products at the sandhill and on to the Alcan smelter.)

There was soon a lot of traffic in those days people coming in from all over the world to find work. News reports at the time said the three-hour train journey from Kitimat to Terrace was so popular that there was often “standing room only” in the passenger cars.

An undated aerial shot of the Kitimat CN Station and the service centre. A train with six carriages is stopped at the station. (Max Patzelt Collection/Kitimat Museum & Archives)

The trains expanded from a single passenger car to three and later several as demand grew.

The station had a large interior large waiting area with washrooms, a “restroom” and later a small coffee and snack bar was added to the waiting room.

Along a corridor were the depot office and the combined telegraph office and what was called the “repeater room.” Off the corridor were also the station keeper room and conductors’ office. There was a typical bay window operator’s room in the waiting area that looked out onto the tracks.

On the freight side were the express office and the “on hand” (goods for pick up). The original plans had had one door in on the east wall and one door out by the tracks on the west side. Two doors on the north wall added later to meet demand.

A shot of the Kitimat station in the 1950s. (David Wade Collection/Kitimat Museum & Archives)

CBC Radio

On the blue prints for the station there is what is today a cryptic reference to the Telegraph-Repeater room which is the part of the building where we see the Canadian National Logo today. The role of the telegraph – more likely teletype by the 1950s—is obvious. The telegraph office operated for many years after passenger service ended.

It turns out the “repeater” was the first transmitter for CBC Radio in Kitimat. Canadian National Telegraphs operated most non-telephone communications in Canada along its railway lines.

CN had actually had some of the first radio stations in Canada, which were later taken over by the CBC when the Parliament created the public broadcaster.

So, in the Kitimat Station there was a LPRT or a Low Power Relay Transmitter. The  “radio” signal came into Kitimat via a CN landline for broadcast. The LPRT was designed to be sited in a location were there was no other coverage or before an actual transmitter was built.

The railway company domination of telecommunications continued in 1967 when CN and CP telegraph services merged to form CNCP telecommunications. That company was later sold to Rogers when the railways got out of the telecommunications business they had founded in the previous century.

Some smaller locations across Canada still have CBC LPRTs where it is not economic to build a transmitter. Today the signal is downlinked from satellite.

CN and the station were also the conduit for secure government communications, including the RCMP.  It also transmitted the Canadian Press wire service.   Later BC Tel (now Telus) took over many of those functions.

End of passenger service

CN stopped passenger rail service to Kitimat in November 1957 almost as soon as then Highway 25 to Terrace was completed, although the station was still used to coordinate freight and express operations for a few years after that.

In the 1960s, passenger traffic on railways across North America plummeted as the era of the car and air travel became more the normal way to go.

CN used the station for storage in the 1970s and let it deteriorate and at one point it was vandalized. It was briefly owned by the District of Kitimat, but ownership has since reverted to CN.

Today’s train stations were most often just glass and steel, if there were stations at all. Many new stations are glass covered platforms with perhaps a small ticket office (and if passengers are lucky, washrooms).

The Kitimat CN Station is a unique snap shot of Canadian railway architecture and construction from the mid 50s that wasn’t duplicated.

CN has boarded up the building and says it is an “eyesore” and has told the heritage group that it is not structurally sound and should be moved from the site or be demolished.

Architectural assessments

The two architects reported that the station is a one story 3500 square foot structure supported by 2 x 6 fir trusses and 2 x 4 stud walls set in concrete slab. The roof trusses appear to be made of red cedar. As far as both architects could tell (access was somewhat limited) both the fir and reds cedar have survived the previous 62 years largely intact.

The roof was made of aluminum shingles, which were popular at the time as part of what was called “machine age allure” of the “space age” Streamline Moderne and “Googie” forms of architecture. The aluminum shingles, as well as the flashing were well suited for Kitimat because aluminum aged well, and snow would slide off an aluminum roof easier than traditional asphalt shingles.

The problem with the roof is that the sheathing between the red cedar and the aluminum has warped over the decades and that has displaced or heaved most of the aluminum shingles. The fascia will also have to be replaced.
The station hasn’t been heated or properly maintained for many years. That means apart from the structural walls, the rest mostly plywood and plasterboard has deteriorated markedly.

Asbestos

The greatest mistake—in retrospect—and the greatest challenge is the widespread use of asbestos in the building.

It appears that the CN architects and structural engineers in 1955 who designed the station wanted to add to that “machine age allure” by using the “modern” asbestos cladding. Before that almost all the smaller Grand Trunk and CN stations in western Canada had stucco on the exterior walls. In retrospect if CN had stuck with stucco, the station would—allowing for the poor maintenance– probably be in better shape. There are houses in Kitimat with stucco walls that have survived the elements for 50 to 60 years. If the walls were stucco, there would not be today’s cost of removing asbestos.

The asbestos cladding or siding is seen on the CN station, March 6, 2019. (Robin Rowland)

The most obvious use of asbestos is in the cladding or siding on the walls of the station which was a popular material up until the 1980s when the cancer risk from asbestos was realized. In the parts of the station which had linoleum floor—the passenger and office areas—it is likely that linoleum from that era contained asbestos. There is bare concrete floor for baggage express storage and heater rooms, so those are areas where there is presumably no asbestos in the flooring.

Asbestos was also wrapped around many of the building’s mechanical infrastructure and heating ducts. The soffit under the eaves may also contain asbestos.

There is so much asbestos that even if CN wanted to demolish the station the company couldn’t just bring in a backhoe or bulldozer and pull it apart as is done some other cases were there is no asbestos.

Under BC law, the asbestos would have to be safely removed by an asbestos qualified removal company before a demolition permit can be issued.

Renovating also requires a BC qualified asbestos abatement contractor.
In both cases, there has to be a hazardous material survey prior to any work commences.  During the work—whether demolition or renovation—there has to be continuous hazardous material and air quality monitoring in the area. (Noting that the station is close to the Kitimat Hotel and service centre businesses)

It appears that CN hasn’t really bothered to undertake a detailed cost benefit analysis. The question is how much cost difference would there be in safely removing the asbestos prior to demolition and the cost of safely removing the asbestos prior to restoration?

Another question that has to be ironed out is who is responsible for the asbestos. CN owns the building and is currently responsible. If, as originally proposed, CN sold the building to the Kitimat Heritage for one dollar, the heritage group would then be responsible. If the heritage group gets to lease the building from CN, then CN, as the landlord, is likely still responsible for the upkeep of the building—a cost that CN apparently, at present, doesn’t want to undertake.

Worksafe BC must be notified of any project where asbestos is being removed (ws0303-pdf-en) PDF

Links
Province of British Columbia
Management of Waste Asbestos 
Worksafe BC Asbestos 

Stay or go? And if go, where?

Kitimat faces two choices with the station. To keep it on the current site or to move it elsewhere.

At present, according to the report by Kitimat Heritage presented to District of Kitimat Council, CN would like the building moved away from a potential revenue producing area along the right-of-way.

The Kitimat Heritage group wants the station to remain in place as the role as a train station is part of the Kitimat’s history. As the report says, “The building is not heritage without its provenance—the rail line.”

Both architect Alora Griffin and some building experts say it cannot be moved because the original design placed the load bearing trusses on the concrete pad foundation and therefore there is no floor that would support the station if it was to be moved.

That raises another question, which the far away CN executives have probably never considered because they appear to be clearly unfamiliar with Kitimat infrastructure is where would an intact station be moved to?

The bottle neck would be the Kitimat River/Haisla Boulevard bridge which was built back in 1954, a bridge that urgently requires a seismic upgrade at very least and should be replaced if it is to sustain loads of trucks heading the LNG Canada construction site.

The current District limits for crossing the bridge call for a height restriction of four metres. The maximum clearance on the bridge is 4.2 metres or 13 feet nine inches in height. The maximum weight is 65,000 kilograms or 143,000 pounds. The station is just over nine metres or 29 feet high, which means the station would never fit onto the Haisla Bridge. So why move the station from its current location?

The Haisla Boulevard Kitimat River Bridge seen on March 6, 2019. It is likely impossible to move the station via the bridge to the main Kitimat townsite. If a moving company did attempt the job, all those wires would have to be removed or moved. (Robin Rowland)

If a contractor found a way to move across the Haisla Bridge, however unlikely, by splitting up the building, costs of moving such a building are determined by the size of the building, what work has to be done to the building prior to moving, the distance moved and incidentals such as working with BC Hydro and telecom companies if overhead wires are in the way, cutting down trees if necessary, traffic control or traffic restrictions and other problems a moving company might run into.

So far, no company has been involved that specializes in moving large structures, including heritage structures.

The average minimum cost of moving a residential house in the United States can be $16 a square foot or more, so the minimum cost of moving the 3,500 square foot station—if the sound parts of the structure can actually be moved—would probably begin at least $60,000. Actual costs are usually much higher.

The bridge restrictions mean that the station would have to remain in the service centre anyway.

So why move it?

Another possibility that was raised by local contractors is dismantling the structure, numbering the salvageable parts such as trusses, beams and roof supports and reconstructing the building elsewhere. . One factor is how the trusses would be removed from the concrete base and rebuilt elsewhere in Kitimat.

That latter solution, however, is considered by many to be cost prohibitive. That evaluation would have to be made a qualified restoration architect. A check of available records shows that many–not all– of the  CN stations that have been moved are in the prairie provinces where logistics are much easier.

Restoring the station

Kitimat Heritage is asking that the funds CN would have to spend in any case to demolish the building instead be put toward restoration.

The aim of the heritage group is to convert it into a community meeting space, perhaps with a restaurant and a small museum or other guide to Kitimat Heritage.

The heritage group wants a land lease from CN, but the company says a lease at present is impossible due to liability issues. CN has told the heritage group that if was to lease the building it would want $5,000 per year in rent, a $50,000 letter of credit and $10 million in liability insurance.

CN, as the present owner of the station, is, of course, currently solely responsible for any current liability issues that may occur.

CN has told the heritage group that it doesn’t entertain land sales within 100 feet of its right-of-way which is why the railway wants the station moved if it is sold (but as noted above there is no where for the station to go). That is why the heritage group wants a lease.

There are dozens of heritage railway stations across Canada that are still owned by CN and thus have federal protection. (see Note Three below for the list of CN Stations).

It is unlikely that preserving the Kitimat Station would have any adverse effect on CN’s bottom line. In 2018, CN had revenues of $14.321 billion and an operating income of $5.493 billion. The annual report says the railway carried $250 billion worth of goods in 2018 over 20,000 route miles in Canada and the United States. CN buildings were worth $1.186 billion in 2018, according to the report.  The Kitimat Station is still on the CN books (and accounting for depreciation as reported in the annual report) and is a miniscule asset.

If an agreement is reached with CN, then the heritage group would have to embark on a fund-raising effort. The next step would be to hire an architect, either a local architect or one who specializes in heritage restoration.

The building would also have to be brought up to current seismic standards and meet the current British Columbia building code for public buildings.
To bring it up to code an architect would have to redesign building and coordinate with electrical, mechanical and structural engineers. Structural engineer would have to asses the condition of the trusses and other parts of the building for possible defects and possible needed upgrades.

To restore the building the customary procedure is to ask three local contractors for a realistic estimate of the cost (not a low bid bid). To be sure, the heritage group should also ask for a bid for a contractor who specializes in restoration. A restoration specialist would likely identify hidden costs or unexpected savings.

What’s next?

The heritage group wants to come to an agreement with CN before proceeding to ask the community for financial and volunteer support.

Although the discussion between the heritage group and CN have been fruitful so far, it appears from CN’s insistence that the station be moved that the company has not bothered to fully research either the heritage of the Kitimat Station nor the geography and geology of Kitimat.

If CN had done a thorough appraisal of the situation, they would know that it is unlikely that the station could cross the Haisla Bridge and thus should stay in situ.

The proposed Pacific Traverse Energy propane project would greatly add to the rail traffic in the area –and also add to CN’s revenue. There are two proposed sites for a rail staging yard, one about three kilometres north of the service centre on Crown Land and the second on Rio Tinto owned track close to the station location—which is probably what CN means when it says the site has “revenue potential.” The current estimate is that the project would require 60 tank cars each day to service an export terminal near Bish Cove.

So far,  only pure rumour and speculation have said that the propane project is an impediment to saving the station.

At some point the company should be invited to join the discussion. Since Pacific Traverse Energy has said in its presentation to council that the company is going to embark on a “rigorous program of community engagement” this year and that it is committed to “economic, social, cultural and economical sustainability.” Emphasizing the word cultural means that the company could prove its commitment to the community of Kitimat by taking into consideration the future of the CN Station in any planning and decisions on land use or by helping to pay for station restoration of out a budget of $400 million while ensuring the safety of the station area if the project proceeds.

The cost of restoring the station is likely to be substantial and not only government but corporate funding as well as in kind contributions from local contractors and businesses will be needed to fully restore the station and make it operational as a community centre.

One factor is that the railway line from Terrace and the train station were built by CN on behalf of the then Aluminum Company of Canada, a company that promised CN back in the 50s at least a million dollars a year in revenue. (According to the Bank of Canada inflation calculator one million dollars in 1950 would be 11 million dollars in 2019—which may nor may not reflect how much Rio Tinto actually pays CN). It’s clear that both CN and Rio Tinto have profited from the rail line for the past almost 70 years and it’s time that some of those profits were applied to preserving Kitimat’s heritage.

Kitimat factory town or more?

Most railway heritage buildings and heritage railways around the world are maintained and operated by volunteers usually railway buffs, heritage activists and retired railway employees.  There are few, if any, railway employees retired in Kitimat (although there may be some in Terrace or Prince Rupert). This could prove a problem in Kitimat where the same small group of volunteers are engaged in multiple efforts while others in the community seldom contribute. On the other hand, the restoration of the station and its operation as a community meeting place could bring out new volunteers.

The old CN Station on March 6, 2019. (Robin Rowland)

The bigger picture that Kitimat has to decide on is what kind of town will this be in the future?

Back in the nineteenth century, when those iconic railway stations were built across North America, many mining, smelting and logging towns built equally impressive “opera houses” or other culture landmarks that are still preserved today.

While Kitimat never had a grand opera house, there is the station that marks the town’s early settler history.

The LNG Canada final investment decision approval and the growth of Asian markets for hydrocarbon energy (at least for the next few decades) and quality aluminum, means that the industrial base of Kitimat is assured.

Tourism has always been a low priority and culture has been an almost a zero priority.

So, is Kitimat going to be just an industrial town or is it Kitimat going to be more than that with cultural amenities for its residents and to be more than a tourist draw for mostly aging recreational fishers?

Whatever decision is made on the CN station will help decide the road to that future.

LINK

Kitimat Museum & Archives contact page.

Note 1.

A small boy is seen in the photograph of the station wearing a “coonskin cap.”  The Disney TV series Davy Crockett was broadcast from December 1954 to February 1955.  Two follow up movies starring Fess Parker were Davy Crockett, King of the Wild Frontier, 1955, and Davy Crockett and the River Pirates, 1956. Disney heavily marketed the coonskin cap to small boys, selling at one point 5,000 a day in the United States. Most were made of faux fur.   Although Kitimat did not have television until years later, the cap likely dates the photo to the summer or fall of 1955, the height of the coonskin cap craze.  Wikipedia.

Note 2

CP 2-8-0 3716 at Kettle Valley. (Canadian Model Railroads/Wikipedia)

You can see a Canadian Pacific 2-8-0 steam locomotive similar to the CN loco that made the first trip to Kitimat at the Kettle Valley Steam Railway in Summerland.

Note 3

A list of Canadian National (or affiliate) heritage railway stations protected by the federal government. This list does not include stations owned by VIA Rail, Canadian Pacific or smaller Canadian Railways.  There should be no reason that Kitimat’s station cannot join this list. (The George Little House station in Terrace was not originally a railway station but a heritage house that was moved to the trackside as a VIA station)


British Columbia
Kamloops
Kelowna
McBride
Prince Rupert
Smithers
Vancouver
Alberta
Jasper
Saskatchewan
Biggar
Humboldt
Melville
Moose Jaw
North Battleford
Manitoba
Churchill
Dauphin
Gillam
McCreary
Neepewa
Portage la Prairie
Rivers
Roblin
The Pas
Ontario
Alexandria
Barrie
Auroa
Belleville
Brampton
Brantford
Casselman
Chatham
Cobourg
Comber
Ernestown
Fort Frances
Galt/Cambridge
Georgetown
Guelph
Hamilton
Hornepayne
Kingston
Kitchener
Leamington
Maple
Markham
Nakina
Newmarket
Niagara Falls
North Bay
Orillia
Owen Sound
Parry Sound
Port Hope
Prescott
Sioux Lookout
St. Thomas
Stratford
Toronto Union Station
Woodstock
Quebec
Amqui
Clova
Joliette
Macamic
Matapédia
Mont-Joli
Montréal
New Carlisle
Port Daniel
Saint-Hyacinthe
Saint-Pascal
Sainte-Anne-de-la-Pérade
Sayabec
Senneterre
Shawinigan
Sherbrooke
New Brunswick
Edmunston
Grand Falls
Sackville
Sussex
Nova Scotia
Amherst

Petronas “will not proceed” with Prince Rupert LNG project

Petronas Tuesday issued the following news release:

PETRONAS AND PARTNERS WILL NOT PROCEED WITH PACIFIC NORTHWEST LNG PROJECT

Malaysia’s energy company remains committed to developing its gas assets in Canada

KUALA LUMPUR, 26 July 2017 – PETRONAS and its partners have decided not to proceed with the Pacific NorthWest LNG project at Port Edward in British Columbia, Canada.

The decision was made after a careful and total review of the project amid changes in market conditions.

PETRONAS’ Executive Vice President & Chief Executive Officer Upstream, Anuar Taib said, “We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision.”

“We, along with our North Montney Joint Venture partners, remain committed to developing our significant natural gas assets in Canada and will continue to explore all options as part of our long-term investment strategy moving forward,” added Anuar.

PETRONAS’ commitment in Canada continues through Progress Energy Canada Ltd and its world-class inventory of natural gas resources where the subsidiary plays a key role in supporting PETRONAS’ growth strategy in North America.

PETRONAS and the project’s partners are thankful for the support received from everyone involved, especially the area First Nations, the District of Port Edward, the City of Prince Rupert and their communities for their invaluable involvement and efforts in the project.

 

Kitimat chemo clinic closes for up to a year, staff shortages across the Northwest hampering cancer treatment

The Kitimat General Hospital Chemotherapy Clinic will be closed for the next nine to twelve months due to staff shortages and a proposed restructuring of cancer care across the northwest, Northern Health tells Northwest Coast Energy News.

northernhealth100Contrary to local rumour that the complete oncology clinic had closed, other aspects of the cancer clinic will continue to operate, according to Dr. Jaco Fourie, the Terrace-based medical lead for Northern Health oncology. Other cancer care procedures including blood work and other tests and local care by trained general partictioners will continue in Kitimat for the next year.

Dr. Fourie said that the chemotherapy clinic at Kitimat General actually closed about three months ago when the oncology nurse left due to health reasons. Kitimat patients are generally treated in Terrace or Prince George and sometimes in Prince Rupert or Smithers. Sources in Kitimat’s medical community says that in the spring a nurse would drive to Kitimat from Terrace for some chemotherapy procedures but that nurse is now not available.

Dr. Fourie said that staff shortages are a chronic problem in cancer care across Northwestern BC. Last week chemo procedures in Terrace had to be postponed or transferred due to a staffing problem at Mills Memorial Hospital.

Two sources on District of Kitimat Council confirmed to Northwest Coast Energy News that council has been discussing the problem of the chemotherapy clinic privately for the last couple of weeks and have requested a meeting with Northern Health in early September.

In the Northwest, the problem is that with just one oncology nurse in many locations qualified to administer chemotherapy, there is no back up in case that nurse is not available. As well, to maintain qualifications the nurses have to administer a minimum number of procedures and in some cases re-qualify as procedures are changed and updated.

The work pressure due to staff shortages is also intense across the northwest and many staff leave the northwest due to burn out, Dr. Fourie said.

Northern Health is now working on a new system where there would be at least three nurses in each location, one full time, one part time and one casual who could be on call. Some of those nurses would likely also have to work in other fields of medicine.

District of Kitimat and local medical sources say that the call for two nurses to be available is part of a province wide plan to upgrade cancer care and bring the northwest practices closer to the system used in the Lower Mainland and across Canada.

Dr. Fourie said that Northern Health is studying the cancer care situation in the northwest and will issue a report in the coming months.

At least one Kitimat medical source questioned the need for two nurses, especially given the problem of attracting staff to the region, noting that using one nurse has worked well for years (when staff was available). The source added that one oncology nurse in Kitimat would be better than none if the province insisted on having two or none at all.

The source also questioned the safety of sending chemotherapy patients to Terrace, especially during the winter months, given that for those without access to drivers, public transportation is not always an option to get to appointments in Terrace and back to Kitimat.

Dr. Fourie noted that Northern Health is concerned about the situation in Kitimat with a possible growing population if industrial development goes ahead and is looking at expansion of services in the District to meet those growing needs.

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

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

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

An initial report came from Bloomberg, which said:

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

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

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

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

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

 

 

 

 

 

 

Phil Germuth, Enbridge’s “What the….” moment and what it means for British Columbia

Phil Germuth
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.

In January, 2015, Phil Germuth will take the centre chair as mayor at the Kitimat Council Chambers.

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.

Ray Philpenko
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.”

 

election signs
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.

Glencore: The great white shark stalking Rio Tinto

The world’s business media are paying rapt attention to Glencore’s  now stalled attempt to take over Rio Tinto.
glencore_logo_11652

Late Tuesday, the company issued a news release which says

Glencore announces that in July 2014 it made an informal enquiry by telephone call to Rio Tinto, seeking to gauge whether there might be any interest at Rio Tinto in investigating some form of merger between the two companies. Rio Tinto responded that it was not interested in pursuing these discussions.

Glencore confirms that it is no longer actively considering any possible merger transaction with, or offer for the shares of, Rio Tinto.

As a consequence of this announcement, the Panel Executive has determined that Glencore is for a period of 6 months from the date of this announcement subject to Rule 2.8 of the City Code on Takeovers and Mergers in relation to Rio Tinto. Glencore however reserves its rights to make an offer in the future with the consent of the Takeover Panel, either with the recommendation of the Board of Rio Tinto, in the event of a third party offer for Rio Tinto, or in the event of a material change in circumstances.

Rio Tinto released its own statement saying:

The board of Rio Tinto notes the recent press speculation regarding a possible combination of Rio Tinto and Glencore.
The Rio Tinto board confirms that no discussions are taking place with Glencore.
In July 2014, Glencore contacted Rio Tinto regarding a potential merger of Rio Tinto and Glencore.
The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders.
The board’s rejection was communicated to Glencore in early August and there has been no further contact between the companies on this matter.

According to Bloomberg,  Glencore’s secretive CEO  Ivan Glasenberg made a verbal stock offer to Rio Chairman Jan Du Plessis in July. The Rio Tinto board rejected the offer in August, which means under that UK law, Glencore must wait six months before making another bid.

Glasenberg’s informal July bid carried no significant premium, said the person, who asked not to be identified as the information is private.

Bloomberg’s television arm reports that the Glasenberg’s offer was in stock, an attempt, apparently,  to get Rio Tinto “on the cheap.” Earlier Forbes reported that there were rumours of an offer  from Glencore to Rio Tinto of  a “share-swap merger”

Bloomberg goes on to report that.

After being rebuffed by the board, Glencore has reached out to Rio’s biggest investor, Aluminum Corp. of China, to gauge its interest in a potential deal in the next year, according to people familiar with the matter.

After the initial report on the takeover Monday, business writers used epic analogies.

Forbes says of Glencore “Patient Stalking Of A Target Is A Glencore Hallmark” while the Globe and Mail reports Glencore  “The great white shark of the global commodities industry” is looking for a blockbuster deal.

Meanwhile, behind its premium paywall Lex, the Financial Times is comparing the Glencore bid for Rio Tinto to the Game of Thrones.

The analysts are saying there are two main factors, Rio Tinto’s balance sheet has been weakened by a downturn in the iron ore market while at the same time Glencore aims to overtake Rio Tinto rival BHP Billiton. If it acquires RT, then Glencore will become the world’s largest mining and resource company.

The business media all say Glencore is already the world’s biggest trader in commodities.

The Guardian has called Glencore, the Biggest Company You Never Heard of.

China is  a major force behind this corporate Game of Thrones. China  wants more access to world resources for its increasingly hungry industry and population,while at the same time it has apparently all the iron ore it needs and iron ore is Rio Tinto’s biggest asset.  The key player is a giant Chinese aluminum company now under investigation as part of the country’s corruption crack down.

Glencore is already huge, listed as Number 10 on the Fortune Global 500 list . Rio Tinto is far down at number 201. (Walmart is number one. Companies involved with Kitimat are Shell in second place, Sinopec in third and the China National Petroleum Corporation in fourth. Chevron is in 12th spot.)

Glencore is a major player in the aluminum business with assets around the world, some in partnership with the Russian giant aluminum group Rusal . According to Wikipedia, Glencore owns 8.8 per cent of  a joint venture with Rusal, and the Sual Group (Siberian-Urals Aluminium Company) . That joint venture, Wikipedia says, has created  the “World’s largest aluminium and alumina producer with 110,000 employees in 17 countries.”

Glencore along with Rusal has an undisclosed interest in Rusal’s Windalco alumina operation in Jamaica. Glencore also has an undisclosed interest in the Alumina Partners of Jamaica. It owns 44 per cent of Century Aluminum in Monterey California. Glencore has also undisclosed interests in idle aluminum smelters in Washington State and Montana.  It has an undisclosed interest in Kubikenborg Aluminium AB in Sweden, Aughinish Alumina in Ireland and Eurallumina in Sardinia.

Glencore Brochure Canadian Operations  (pdf)

In the northwest, Glencore, through its agricultural subsidiary Vittera, is a partner, along with Cargill Ltd. and Richardson International in the Prince Rupert Grain Terminal. In Vancouver, Glencore owns  Vittera’s Cascadia grain terminal in Vancouver.

 located on the south shore of Burrard Inlet. Vittera Inc. owns and operates Canada’s largest grain handling network. The terminal handles wheat, durum, feed barley, malting barley, canola seed and specialty products, with storage capacity of 282,830 tonnes of product, handling loading from its 244 metre berth with a depth of 14.6 metres. –

Glencore is also developing a metallurgical coal mine near Chetwynd.

A Glencore stock photo of  lag tapping at the Sudbury Smelter. (Glencore)
A Glencore stock photo of slag tapping at the Sudbury Smelter. (Glencore)

 

Glencore, through the earlier 2013 take over the mining company Xstrata owns the famous Kidd  copper and zinc mine near Timmins, Ontario. The operation has 1300 employees. (Xstrata earlier took over the well-known Canadian mining company Falconbridge). It also operates the Horne copper Smelter in Rouyn-Noranda, Québec, which employees 700 and the CCR copper Refinery in Montreal, Québec which employees 650.

In Sudbury, Glencore is reviving the Errington-Vermillion Project, two deposits were that were previously mined in the 1920s and 1950s. It says the project has potential for approximately nine million tonnes, polymetallic- zinc, lead,copper, silver, gold or a rate of  2,900 tonnes per day.

The other factor for Kitimat with Glencore is that, unlike Rio Tinto, which is mostly a mining and smelting company, Glencore has interests in natural gas, oil and shipping and it is reported that the company wants to expand its hydrocarbon business from extraction to shipping.

According to Forbes, many Rio Tinto shareholders are not happy about the costs of the takeover of Alcan

Rio_Tinto_LogoThe chairman of Rio Tinto, Jan du Plessis said the board was happy with the leadership of managing director, Sam Walsh, and finance director, Chris Lynch.
Interestingly, that might not be a view shared by all Rio Tinto shareholders who are still smarting from the $40 billion written off after the ill-timed acquisition of the Alcan aluminium business, followed by a $3 billion write-off after an equally poorly executed coal asset deal in Africa.

(It should be noted that Walsh was not the CEO at the time of both acquisitions, but was brought in to put Rio Tinto back on track after those huge losses)

The Rio Tinto news release says it’s business as usual:

Rio Tinto remains focused on the successful execution of its strategy, which the board of Rio Tinto is confident will continue to deliver significant and sustainable value for shareholders….

The board believes that the continued successful execution of Rio Tinto’s strategy will allow Rio Tinto to increase free cash flow significantly in the near term and materially increase returns to shareholders. Rio Tinto’s shareholders stand to benefit from the very considerable value that this will generate.

The Guardian says, echoing Forbes’s talk of a patient stalking.

RBC Capital Markets analyst Timothy Huff said: “A potential merger with Rio would enable Glencore to get hold of the lowest-cost iron ore business in Australia. This is likely just a shot across the bow from Glencore and we expect Glencore to play the long game with any highly desired acquisition target. While asset divestments may have to play a larger part in a Glencore/Rio tie-up, we think the broader strategy for an enlarged group makes sense.”

The Globe and Mail Report on Business says

It is an open secret that Mr. Glasenberg, a multibillionaire South African, has every intention of using mergers and takeovers to greatly extend Glencore’s reach along the commodities value chain. Glencore’s strategy is to control the mines, the warehouses, the ports, the ships and the trading networks that produce and distribute commodities.
The question is whether Rio’s management and shareholders would endorse a deal that could come with no takeover premium. Some analysts think not.

One problem with Glencore’s approach to Chinalco is that the company is part of the wider probe by the Chinese government of corruption. As Reuters reported 

Aluminum Corp of China general manager Sun Zhaoxue is suspected of “serious violations” of the law, a euphemism for corruption, according to a notice published by China’s Central Commission for Discipline Inspection.
Sun is also the vice chairman of Chinalco’s listed subsidiary, Aluminum Corp Of China Ltd. He is the former president of China National Gold Group Corp, the country’s biggest gold producer.

Sun resigned the next day . Other company executives had resigned earlier.

Some business analysts say even if Rio Tinto shareholders are not happy with current management they may not want their holdings affected by a possibly corrupt Chinese company.

On the other hand, as the Telegraph points out, it is really the Chinese government that will make the decision, not the company itself.

China’s government holds the key to a deal despite Rio Tinto’s public rejection of Glencore’s interest. State-owned Aluminum Corporation of China is the largest shareholder with around 10 per cent and Glencore reportedly started talking to the Chinese in the summer to sound out their interest in an exit. Although China is the world’s largest consumer of iron ore and owning such a significant stake in one of the world’s biggest mining groups is strategic now could be a good time to exit. The world is flooded with iron ore and securing supplies for steel mills is no longer an issue for the Chinese government. Now is a good time to cash in.

The man behind the so-far  failed deal, who is likely “patiently stalking” Rio Tinto is the highly secretive and private Ivan Glasenberg.

The Telegraph described his role in the Rio Tinto takeover as a “dark art.”

Pounce, leak and wait.
It is a classic strategy in the shadowy world of mergers and acquisitions and Ivan Glasenberg, the chief executive of Glencore, is a master of this dark art.
Although a potential $160 billion mega takeover of the world’s largest shipper of seaborne iron ore, Rio Tinto, was flatly rejected in August, don’t bet on Glasenberg walking away for good

Glasenberg was born in South Africa in 1957, and apparently now holds four passports, South Africa, Australia, Israel and as of 2011, Switzerland.

When Glencore  went public on the London Exchange in 2011, which the Guardian called “the biggest stock exchange float in British history,” the British media received a letter from a London law firm warning the normally aggressive media not to probe into the private lives of the company executives.

Glencore executives, the letter said, “are extremely private individuals”, who expected scrutiny of their business activities, but not their personal lives. A warning followed about the “security risk” that could be posed by any reports about their homes or private lives.

It appears that for the British media the royal family and missing school girls are fair game but not Glencore’s executives.

Should Glencore ever takeover Rio Tinto, the Wall Street Journal says Glasenberg told the paper Glasenberg: We Don’t Do Work-Life Balance  may be a indication of the future, especially for management.

Although he was referring mainly to the company’s main business, commodity trading, the interview is enlightening.

Asked in an interview with The Wall Street Journal if the company has a work-life balance, the 57-year-old billionaire, a former coal trader, says: “No. We work. You don’t come here to take life easy. And we all got rich from it, so, you know, there’s a benefit from it.”

This competitiveness, he says, is smart business. “If I’m not pulling my weight and setting an example” and “traveling 80% of the time”, his charges would complain to the board and try to get him fired….

Mr. Glasenberg says the phenomenon is still at play. “I see it happening. Some guy suddenly decides: ‘I want to take it easier, I want to spend more time with the family’… an attack will come.”

Mr. Glasenberg, who had been CEO of Glencore since 2002, says he is insistent on instilling this culture at Xstrata, a mining company. Glencore had amassed a portfolio of mines over the past decade. “I thought if we could put our hard-working culture as traders into the asset management it will be a great combination and we did do that,” he says.

But according to the Huffington Post, an employee who wants to be a traders is welcome to try.

One area where Glasenberg does get soft however is on worker mobility, noting that blue collar miners can work their way up to earning the eight-figure salaries enjoyed by his squadron of commodities traders. Just try him.

“You want to be a trader, come be a trader,” he told Wall Street Journal. “You want to travel six days a week, you want to travel the world, the door’s open. I earn more than you. Come be a trader. Please, the door’s open.”

If the Glencore news release is correct, that means in six months, on April 7, 2015,  the next move in the future of Rio Tinto will come, unless, as the Glencore news release states “if there is a material change in circumstances”

One thing is clear, Kitimat can now add Rio Tinto and Rio Tinto Alcan to the mix of uncertainty along with Shell, Chevron, Enbridge, Apache and the rest of the corporate movers. In other words, we are all extras in the corporate Game of Thrones.

Sending the Northern Gateway Pipeline to Prince Rupert: A dumb, dumb, dumb idea—and here are the photos to prove it.

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)
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)
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.

A couple of days ago, the Prince Rupert’s Mayor Jack Mussallem told The Globe and Mail in Mayor, port authority say no room for Northern Gateway pipeline in Prince Rupert

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)
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.

While Kitimat Council long stood neutral on the issue, the councils at Prince Rupert, Terrace, Smithers as well as the Kitimat Stikine Regional District and the Skeena Queen Charlotte Regional District had voted to oppose the Northern Gateway.

Audio Slideshow; No to Tankers Rally, Prince Rupert, February 4, 2012

The Skeena Route

The Skeena is one of the greatest salmon rivers on the planet. The Petronas LNG project has already run into problems because its planned terminal at Lelu Island would also impact the crucial eel-grass which is the nursery for young salmon leaving the Skeena and preparing to enter the ocean. Note that northern BC is generally in favour of LNG terminals, if the terminals are in the right place, so expect huge protests against any bitumen terminal at the mouth of the Skeena.

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.

Now I’ve said this all before, two years ago, in a piece for the Huffington Post, Get Over it! A Pipeline to Prince Rupert Is Bust

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)
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 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.

aberdeencreek1

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.

aberdeencreek4

A closer view of the highway and rail corridor just east of Aberdeen Creek.

aberdeencreek3

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.

 

aberdeencreek2
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?

aberdeencreek5

There’s another turnoff on the other side of the headland east of Aberdeen Creek, looking back the way we came.

khyex1

The final small turnoff is just by the Kylex River. Again you can see how narrow the highway and rail corridor are.

basalt

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.

Rowland_CN_container_Skeena

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.

telegraph1

telegraph2

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.

 

telegraphmarch2013Two 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)

telegraphmarch2013_1

 

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 

Proposed natural gas pipeline. (TransCanada)
Proposed natural gas pipeline. (TransCanada)

The BG Group and Spectra Energy are also contemplating a pipeline…although details on the website are rather sparse.

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)

Related links

The Save Our Salmon website has a different view, arguing that federal government and the energy companies have a plan to create an energy corridor for bitumen pipelines to Prince Rupert.

Ocean acidification growing risk to west coast fishery, including crab and salmon, US studies show

The United States says acidification of the oceans means there is an already growing risk to the northwest coast fishery, including crab and salmon, according to studies released by the National Oceanic and Atmospheric Administration.

As more carbon dioxide is released into the atmosphere and absorbed by the oceans, the water is becoming more acidic and that affects many species, especially shellfish, dissolving the shells.

A NOAA study released today of environmental and economic risks to the Alaska fishery says:

Many of Alaska’s nutritionally and economically valuable marine fisheries are located in waters that are already experiencing ocean acidification, and will see more in the near future…. Communities in southeast and southwest Alaska face the highest risk from ocean acidification because they rely heavily on fisheries that are expected to be most affected by ocean acidification…

An earlier NOAA study, released in April, identified a long term threat to the salmon fishery as small ocean snails called pteropods which are a prime food source for pink salmon are already being affected by the acidification of the ocean.

Pteropod
This photograph from NOAA of a pteropod, important in the ocean diet of pink salmon, shows the first evidence of marine snails from the natural environment along the U.S. West Coast with signs that shells are dissolving. (NOAA)

NOAA says:

The term “ocean acidification” describes the process of ocean water becoming more acidic as a result of absorbing nearly a third of the carbon dioxide released into the atmosphere from human sources. This change in ocean chemistry is affecting marine life, particularly the ability of shellfish, corals and small creatures in the early stages of the food chain to build skeletons or shells.

Today’s NOAA study is the first published research by the Synthesis of Arctic Research (SOAR) program, which is supported by an US inter-agency agreement between NOAA’s Office of Oceanic and Atmospheric Research and the Bureau of Ocean Energy Management (BOEM) Alaska Region.

Canada’s Department of Fisheries and Oceans says it has ongoing studies on oceanic acidification including the role of petropods in the lifecycle of the salmon.

Des Nobles, President of Local #37 Fish [UFAWU-UNIFOR] told Northwest Coast Energy News that the fisheries union and other fisheries groups in Prince Rupert have asked both the Canadian federal and the BC provincial governments for action on ocean acidification. Nobles says so far those requests have been ignored,

Threat to crabs

The studies show that red king crab and tanner crab grow more slowly and don’t survive as well in more acidic waters. Alaska’s coastal waters are particularly vulnerable to ocean acidification because of cold water that can absorb more carbon dioxide and unique ocean circulation patterns which bring naturally acidic deep ocean waters to the surface.

“We went beyond the traditional approach of looking at dollars lost or species impacted; we know these fisheries are lifelines for native communities and what we’ve learned will help them adapt to a changing ocean environment,” said Jeremy Mathis, Ph.D., co-lead author of the study, an oceanographer at NOAA’s Pacific Marine Environmental Laboratory in Seattle, and the director of the University of Alaska Fairbanks School of Fisheries and Ocean Sciences Ocean Acidification Research Center.

As for Dungeness crab, Sarah Cooley,  a  co-author of the Alaska study, who was with the Woods Hole Oceanographic Institution at the time, told Northwest Coast Energy News, “The studies have not been done for Dungeness crab that have been done for king and tanner crab, that’s something we’re keenly aware of. There’s a big knowledge gap at this point.” She says NOAA may soon be looking at pilot study on Dungeness crab.

Healthy pteropod
A healthy pteropod collected during the U.S. West Coast survey cruise. (NOAA)

Risk to Salmon, Mackerel and Herring

In a 2011-2013 survey, a NOAA-led research team found the first evidence: “that acidity of continental shelf waters off the West Coast is dissolving the shells of tiny free-swimming marine snails, called pteropods, which provide food for pink salmon, mackerel and herring.”

The survey estimated that the percentage of pteropods along the west coast with dissolving shells due to ocean acidification had “doubled in the near shore habitat since the pre-industrial era and is on track to triple by 2050 when coastal waters become 70 percent more corrosive than in the pre-industrial era due to human-caused ocean acidification.”

That study documented the movement of corrosive waters onto the continental shelf from April to September during the upwelling season, when winds bring water rich in carbon dioxide up from depths of about 120 to  180 metres to the surface and onto the continental shelf.

“We haven’t done the extensive amount of studies yet on the young salmon fry,” Cooley said. “I would love to see those studies done. I think there is a real need for that information. Salmon are just so so important for the entire Pacific Northwest and up to Alaska.”

In Prince Rupert, Barb Faggetter, an independent oceanographer whose company Ocean Ecology has consulted for the fisherman’s union and NGOs, who was not part of the study, spoke generally about the threat of acidification to the region.

She is currently studying the impact of the proposed Liquified Natural Gas terminals that could be built at Prince Rupert near the Skeena River estuary. Faggetter said that acidification could affect the species eaten by juvenile salmon. “As young juveniles they eat a lot of zooplankton including crustaceans and shell fish larvae.”

She added, “Any of the shell fish in the fishery,  including probably things like sea urchins are all organisms that are susceptible to ocean acidification because of the loss of their capacity to actually incorporate calcium carbonate into their shells.”

Faggetter said her  studies have concentrated on potential habitat loss near Prince Rupert as a result of dredging and other activities for liquified natural gas development,  She adds that ocean acidification “has been a consideration that climate change will further worsen any potential damage that we’re currently looking at.”

Her studies of the Skeena estuary are concentrating on “rating” areas based on the food supply available to juvenile salmon, as well as predation and what habitat is available and the quality of that habitat to identify areas that “are most important for the juvenile salmon coming out of the Skeena River estuary and which are less important.”

She said that climate change and ocean acidification could impact the Skeena estuary and “probably reduce some of the environments that are currently good because they have a good food supply. If ocean acidification reduces that food supply that will no longer be good habitat for them” [juvenile salmon].

NOAA expediton
Bongo nets are deployed up to 200 meters deep to catch marine snails (pteropods), which are indicators of the progress of ocean acidification. The pteropod samples were collected during the U.S. West Coast survey cruises in 2011 and 2013. Unlike the US, Canada’s DFO is using models to track what’s happening to pteropods. (NOAA)

The  August 2011 NOAA survey of the pteropods was done at sea using “bongo nets” to retrieve the small snails at depths up to 200 metres. The research drew upon a West Coast survey by the NOAA Ocean Acidification Program in that was conducted on board the R/V Wecoma, owned by the National Science Foundation and operated by Oregon State University.

The DFO study, according to the agency website is “being examined in the context of model predictions.

Nina Bednarsek, Ph.D., of NOAA’s Pacific Marine Environmental Laboratory in Seattle, the lead author of the  April pteropod paper said, “Our findings are the first evidence that a large fraction of the West Coast pteropod population is being affected by ocean acidification.

“Dissolving coastal pteropod shells point to the need to study how acidification may be affecting the larger marine ecosystem. These near shore waters provide essential habitat to a great diversity of marine species, including many economically important fish that support coastal economies and provide us with food.”

Ecology and economy

Today’s study on the effects of acidification on the Alaska fishery study examined the potential effects on a state where the fishing industry supports over 100,000 jobs and generates more than $5 billion in annual revenue. Fishery-related tourism also brings in $300 million annually to the state.

Map of Alaska
A map of Alaska shows the economic and ecological risks to parts of the state from ocean acidification. (NOAA)

The study also shows that approximately 120,000 people or roughly 17 percent of Alaskans rely on subsistence fisheries for most, if not all of their dietary protein. The Alaska subsistence fishery is open to all residents of the state who need it, although a majority of those who participate in the subsistence fishery are Alaska’s First Nations. In that way it is somewhat parallel to Canada’s Food, Ceremonial and Social program for First Nations.

“Ocean acidification is not just an ecological problem—it’s an economic problem,” said Steve Colt, Ph.D., co-author of the study and an economist at the University of Alaska Anchorage. “The people of coastal Alaska, who have always looked to the sea for sustenance and prosperity, will be most affected. But all Alaskans need to understand how and where ocean acidification threatens our marine resources so that we can work together to address the challenges and maintain healthy and productive coastal communities.”

The Alaska study recommends that residents and stakeholders in vulnerable regions prepare for environmental challenge and develop response strategies that incorporate community values and needs.

“This research allows planners to think creatively about ways to help coastal communities withstand environmental change,” said Cooley, who is now science outreach manager at Ocean Conservancy, in Washington, D.C.  “Adaptations can be tailored to address specific social and environmental weak points that exist in a community.

“This is really the first time that we’ve been able to go under the hood and really look at the factors that make a particular community in a borough or census are less or more vulnerable from changing conditions resulting from acidification. It gives us a lot of power so that we don’t just look at environmental issues but also look at the social story behind that risk.”

As for the southern part of the Alaska panhandle nearest British Columbia, Cooley said, “What we found is that there is a high relative risk compared to some of the other areas of Alaska and that is because the communities there undertake a lot of subsistence fishing, There tend not be a whole lot of commercial harvests in the fisheries there but they are very very important from a subsistence stand point… And they’re tied to species that we expect to be on the front line of acidification, many of the clam species that are harvested in that area and some of the crab species.”

Long term effects

Libby Jewett, Director of the NOAA Ocean Acidification Program  and author of  the pteropod study said,  “Acidification of our oceans may impact marine ecosystems in a way that threatens the sustainability of the marine resources we depend on.

“Research on the progression and impacts of ocean acidification is vital to understanding the consequences of our burning of fossil fuels.”

“Acidification is happening now,” Cooley said. “We have not yet observed major declines in Alaskan harvested species. In Washington and Oregon they have seen widespread oyster mortality from acidification.

“We don’t have the documentation for what’s happening in Alaska right now but there are a lot of studies staring up right now that will just keep an eye out for that sort of thing,  Acidification is going to be continuing progressively over the next decades into the future indefinitely until we really curb carbon dioxide emissions. There’s enough momentum in the system that is going to keep acidification advancing for quite some time.

“What we need to be doing as we cut the carbon dioxide, we need to find ways to strength communities that depend on resources and this study allows us to think differently about that and too really look at how we can strengthen those communities.

Faggetter said. “It’s one more blow to an already complex situation here, My study has been working particularly on eel grass on Flora Bank (pdf) which is a very critical habitat, which is going to be impacted by these potential industrial developments and that impact will affect our juvenile salmon and our salmon fishery very dramatically, that could be further worsened by ocean acidification.”

She said that acidification could also be a long term threat to plans in Prince Rupert to establish a geoduck fishery (pronounced gooey-duck).

The popular large 15 to 20 centimetre clam is harvested in Washington State and southern BC, but so far hasn’t been  subject to commercial fishing in the north.

NOAA said today’s study shows that by examining all the factors that contribute to risk, more opportunities can be found to prevent harm to human communities at a local level. Decision-makers can address socioeconomic factors that lower the ability of people and communities to adapt to environmental change, such as low incomes, poor nutrition, lack of educational attainment and lack of diverse employment opportunities.

NOAA’s Ocean Acidification Program and the state of Alaska are also developing tools to help industry adapt to increasing acidity.

The new NOAA study is the first published research by the Synthesis of Arctic Research (SOAR) program. which is supported by an inter-agency agreement between NOAA’s Office of Oceanic and Atmospheric Research and the Bureau of Ocean Energy Management (BOEM) Alaska Region.

The pteropod study was published in April in Proceedings of the Royal Society B. The ecological and economic study is published in Progress in Oceanography.

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

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

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

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

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

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

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

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

Air shed

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

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

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

Russia crisis

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

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

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

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

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

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

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

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

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

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

 

Temporary foreign workers

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

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

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

Projects on the go

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

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

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

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

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

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

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

 

Ottawa announces upgrades to Douglas Channel, Kitimat, navigation systems

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

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

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

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

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

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

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

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

The news release places special emphasis on Kitimat saying:

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

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

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

 It adds:

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

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

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