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.
Contrary 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.
Numerous 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.
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, theFinancial 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.
Enbridge Northern Gateway officials are loath (to put it mildly) to speak to the media but sometimes they let things slip. Earlier this summer, at a social event, I heard an Enbridge official (probably inadvertently) reveal that when the company’s engineers came before District of Kitimat Council earlier this year they were surprised and somewhat unprepared to fully answer the detailed technical questions from Councillor Phil Germuth on pipeline leak detection.
The results of the municipal election in Kitimat, and elsewhere across BC show one clear message; voters do want industrial development in their communities, but not at any price. Communities are no longer prepared to be drive by casualties for giant corporations on their road to shareholder value.
The federal Conservatives and the BC provincial Liberals have, up until now, successfully used the “all or nothing thinking” argument. That argument is: You either accept everything a project proponent wants, whether in the mining or energy sectors, or you are against all development. Psychologists will tell you that “all or nothing thinking” only leads to personal defeat and depression. In politics, especially in an age of attack ads and polarization, the all or nothing thinking strategy often works. Saturday’s results, however, show that at least at the municipal level, the all or nothing argument is a political loser. Where “all politics is local” the majority of people are aware of the details of the issues and reject black and white thinking.
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?
“I am pro-development,” Germuth proclaimed to reporters in Kitimat on Saturday night after his landslide victory in his campaign for mayor.
On the issue of leak detection, over a period of two years, Germuth did his homework, checked his facts and looked for the best technology on leak detection for pipelines. That’s a crucial issue here where pipelines cross hundreds of kilometres of wilderness and there just aren’t the people around to notice something is amiss (as the people of Marshall, Michigan wondered at the time of the Line 6B breach back in 2010). Enbridge should have been prepared; Germuth first raised public questions about leak detection at a public forum in August 2012. In February 2014, after another eighteen months of research, he was ready to cross-examine, as much as possible under council rules of procedure. Enbridge fumbled the answers.
So that’s the kind of politician that will be mayor of Kitimat for the next four years, technically astute, pro-development but skeptical of corporate promises and determined to protect the environment.
Across the province, despite obstacles to opposition set up by the federal and provincial governments, proponents are now in for a tougher time (something that some companies will actually welcome since it raises the standards for development).
We see similar results in key votes in British Columbia. In Vancouver, Gregor Roberston, despite some problems with policies in some neighborhoods, won re-election on his green and anti-tankers platform. In Burnaby, Derek Corrigan handily won re-election and has already repeated his determination to stop the twinning of the Kinder Morgan pipeline through his town. In Prince Rupert, Lee Brain defeated incumbent Jack Musselman. Brain, who has on the ground experience working at an oil refinery in India, supports LNG development but has also been vocal in his opposition to Northern Gateway.
The new mayor in Terrace Carol Leclerc is an unknown factor, a former candidate for the BC Liberal party, who campaigned mainly on local issues. In the Terrace debate she refused to be pinned down on whether or not she supported Northern Gateway, saying, “Do I see Enbridge going ahead? Not a hope,” but later adding, “I’d go with a pipeline before I’d go with a rail car.”
Kitimat’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.
The world’s business media are paying rapt attention to Glencore’s now stalled attempt to take over Rio Tinto.
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.
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.
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.
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.
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.
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
The 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.
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.
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.
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.
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.
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.
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.
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.
Alternatives to Kitimat?
Now the new premier of Alberta, Jim Prentice, who should know better if he’s going to lead that province, is hinting that Kitimat isn’t the only possible solution for the Northern Gateway.
Without specifying Prince Rupert, according to Gary Mason reporting in The Globe and Mail, Prentice was speculating about an alternative to Kitimat.
Asked whether he believes the Gateway terminus should be relocated to Prince Rupert or another destination, Mr. Prentice said, “Everything I’ve heard from the Haisla who live there is they don’t agree with the terminal being in Kitimat.” Is it possible to get First Nations approval if there is no support at the planned terminus site? “It’s pretty tough,” the Premier said.
Prince Rupert has a thriving local fishing industry that employs hundreds of people and is critically important to the local First Nations. He is convinced the community would not be willing to put that at risk.
“Overwhelmingly people in my community are much more comfortable with liquefied natural gas, with wood pellets, with coal, than any oil product,” he said.
The Prince Rupert Port Authority also rejected the idea
A spokesman for the Prince Rupert Port Authority said Wednesday there is currently no room for Enbridge to build at the port even if it wanted to. “We are fully subscribed,” Michael Gurney said. There are two large vacant lots within the port authority’s jurisdiction, but both are locked by other energy companies, earmarked for LNG projects.
So not only is there no room on the road to Prince Rupert, there is no room in Prince Rupert.
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.
In February 2012, the largest anti-Enbridge demonstration outside of the Lower Mainland took place in Prince Rupert, with the elders of the Tsimshian First Nation welcoming the elders and members of the Gitga’at First Nation, at Hartley Bay, which had organized the protest.
When I say there isn’t room for a pipeline along the Skeena, it also means that there isn’t any room for the pipeline corridor right-of-way. Enbridge, in its submissions to the Joint Review Panel, said it requires a 25 metre wide right of way for the pipeline corridor. (For the record that’s just over 82 feet).
Along that highway, as you will see, there’s barely enough room for the CN mainline and Highway 16 (also known as the Yellowhead Highway) and on a lot of places both the highway and the railway roadbed are built on fill along the side of a cliff.
Albertans’ desperate desire to see the Northern Gateway go to anywhere to what they call “tide water” keeps coming up like the proverbial bad penny. The latest came when Jim Prentice speculated about a new route for the Northern Gateway.
I knew I had an appointment coming up in Prince Rupert on Monday, September 29. So I decided that only way to prove to people sitting in Calgary, Edmonton and Fort McMurray playing with Google Maps that the pipeline to Prince Rupert was a really dumb idea was to shoot photographs to show just why the Northern Gateway will never go to Prince Rupert—at least along the Skeena.
As you drive out of Terrace, you pass two large swing gates (also called by some “Checkpoint Charlie” gates after the Cold War era crossing in Berlin.) At the first rest stop west of Terrace, there are another set of gates at the Exstew. There’s a third set of gates just outside Prince Rupert.
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 drive along the Skeena from just west of Exchamsiks River Provincial Park all the way to Tyee where the highway turns inland to reach northwest to Prince Rupert on Kaien Island is one of the most spectacular drives on this planet. The highway snakes along a narrow strip of land with steep mountain cliffs on one side and the vast river on the other.
The problem is that apart from locals and tourists, none of the “experts” whether journalist, think tanker, bureaucrat or politician have, apparently ever driven from Prince Rupert to Terrace.
When both Opposition Leader Tom Mulcair and Liberal Leader Justin Trudeau were in the northwest earlier this summer to “engage” with the local people, apart from short boat trips down Douglas Channel, they flew everywhere. Scheduling you know. Stephen Harper has never visited northwest BC and probably never intends to. His cabinet members fly in for photo ops and then are on the next plane out of town.
Of all the visiting journalists who have come to the northwest only a couple have bothered to drive around the region. Most fly-in fly-out. These days, most often budget-strapped reporters never leave their offices, interviewing the same usual suspects by phone on every story.
On Monday, I took most of the photographs on my way back from Prince Rupert to Terrace after my appointment, so the sequence is from west to east. There are also very few places along the river where you can safely stop. There are concrete barricades on both sides of the highway to prevent vehicles either going into the river or onto the narrow CN right-of-way.
There are, however, two rest stops and a number of small turnoffs on the highway, the turnoffs mainly intended for use by BC Highways, but which are also used by tourists, fishers and photographers.
The first image was taken at one of those highway turnoffs just east of Aberdeen Creek. This is what the highway and rail corridor are like all along the Skeena, the highway, bounded by concrete barricades, the CN rail line and then the towering mountains. Note where the telegraph and telephone lines are—further up the cliffside.
A closer view of the highway and rail corridor just east of Aberdeen Creek.
Here is the view of the Skeena River from the Aberdeen Creek turnoff. You can see to the east, a mountain and the narrow strip of fill land that supports the highway and the rail line.
You see the broad width of the mighty Skeena, the Misty River, as it is called by the Tsimshian First Nation and by everyone else who lives in the northwest and on the right side of the image, the highway and rail corridor built on fill.
Any room for a pipeline?
There’s another turnoff on the other side of the headland east of Aberdeen Creek, looking back the way we came.
The final small turnoff is just by the Kylex River. Again you can see how narrow the highway and rail corridor are.
A few kilometres further along—as I said the highway snakes and curves its way along the riverbank– you come to the Basalt Creek rest area. So this telephoto image shows a logging truck heading west, taken from Basalt Creek, looking back at the highway.
Again you can see both the highway and CN line are built on fill. Is there any room for a pipeline?
Any room for a 25 metre pipeline right-of-way?
Between Basalt Creek and Telegraph Point, a few kilometres to the east, again the highway and rail line hug the narrow strip between the river and mountains.
This shot, taken from Telegraph Point, in October 2013, shows a CN intermodal container train heading to Prince Rupert. The container trains and the coal trains usually have between 150 and 180 cars. If a winter avalanche took out a train, there would be environmental damage, but that damage would be insignificant from coal or containers compared to a train of railbit tankers carrying diluted bitumen.
At Telegraph Point, the second of the three rest stops between Prince Rupert and Terrace, again there is just a narrow strip between the mountain, the highway and the river.
Across the highway from the rest stop, you can again see the narrow corridor, the first shot looking west the rail line close to the cliff face, the second, east, with the waterfall, which you don’t see during the rest of the year, fed by the fall monsoon.
Two shots from the same location, Telegraph Point, taken in March, 2013, of a CN locomotive hauling empty coal cars back to the fields around Tumbler Ridge. (No waterfall in March)
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.
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)
There are existing rights of way for the major highway, the Yellowhead, and CN Rail line from Edmonton to the Port of Prince Rupert, so this eliminates the issue of transgressing First Nations lands.
Is also inaccurate.
I was told by First Nations leaders during the Idle No More demonstrations in the winter of 2013, that, a century ago, when the Grand Trunk built the railway along the Skeena , they did just that, built it without consulting the First Nations along the route, sometime digging up native cemeteries and sacred spots.
While apparently CN has worked in recent years to improve relations with the First Nations along the rail line, according to those leaders some issues of right-of-way remain to be resolved.
If there were any plans to build a diluted bitumen pipeline along that route, that would likely mean another court battle adding to those already before the Federal Court, a court battle that would cost Enbridge, CN, the federal government, environmental NGOs and the First Nations more millions in lawyers’ fees.
It’s doubtful if in the long gone (and perhaps mythical) days of “get it right” journalism that the Russell opinion piece would have passed the scrutiny of an old fashioned copy editor and fact checker.
In 2012, the Edmonton Journal (in a story no longer available on their website) also cited former Alberta Premier Peter Lougheed and former Bank of Canada governor David Dodge, as also favouring Prince Rupert.
Dodge, who was in Edmonton Tuesday to deliver a speech on the global economic outlook at MacEwan University, said Enbridge’s proposed Northern Gateway pipeline to Kitimat looks like even more of a long shot.
“I think the project to Kitimat looks, objectively, more risky. So why hasn’t much greater effort gone into looking at Prince Rupert and taking (bitumen) out that way? My guess is, the easiest place to get B.C. to buy into the project would be to go to Rupert.”
Dodge’s views echo those of former Alberta Premier Peter Lougheed, who also favours looking at an alternate pipeline route to Prince Rupert, where ocean-going supertankers can navigate more easily.
Back in 2012, I finished my piece for the Huffington Post by saying:
So why do people insist, despite the evidence, that the Northern Gateway go to Prince Rupert? It’s no longer an pipeline; it’s emotion and ideology. Ideology in that opposition to the Northern Gateway is seen by conservatives as heretical opposition to free enterprise itself. Emotion among those who see promoting the oil patch as an issue of “Alberta pride” and even Canadian patriotism.
For the promoters of the pipeline to Prince Rupert, ignoring the science of geology and the study of geography across all of northwestern B.C. is no different than repeatedly knocking your head against the Paleozoic metamorphic greenstone of the mountain cliffs along the Skeena. It only gives you a headache.
Things haven’t gotten much better in the past two years. In fact they’re getting worse as opposition to pipelines mounts.
It seems that in 2014 the Alberta and the federal government policy in promoting pipelines Northern Gateway, KinderMorgan’s TransMountain, Keystone XL, Line 9 Reversal and Energy East (slick PR and smiling representatives at open houses, politicians at strictly controlled photo ops) is to ignore facts on the ground and to refuse to deal with the concerns of local people from coast to coast.
There could, perhaps, be a more inclusive and truly science-based pipeline planning process that could see pipelines go on optimum routes but that isn’t happening.
The policy for the oil patch and its politician supporters when it comes to pipelines is facts and geology don’t really matter. So they put on ruby slippers, knock their heels together three times and send pipelines down a yellow brick road to an Emerald City (while telling the locals to ignore the man behind the curtain)
The 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.
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.
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.
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].
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.
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.
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 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.
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.
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.”
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.
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.”
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.
District of Kitimat Council voted Monday night to hold a plebiscite on whether or not the community supports the controversial Enbridge Northern Gateway project.
District council and staff will decide the actual question for voters and the date for the plebiscite in the coming couple of weeks.
A staff report described a plebiscite as “a non-binding form of referendum,” as defined by the BC Local Government Act.
The council decision comes after the Northern Gateway Joint Review Panel released its decision on December 16, that approved the pipeline and tanker project along with 209 conditions.
After the release of the Joint Review decision, the District of Kitimat issued a news release saying, “Kitimat Council has taken a neutral stance with respect to Northern Gateway. Council will take the necessary time to review the report in order to understand the content and reasons for the decision.”
On January 16, 2012 the council adopted a resolution “that after the completion of the JRP process, the District of Kitimat survey the residents of Kitimat regarding their opinion on the Enbridge Northern Gateway project.” After the JRP decision, the District reaffrimed that it would “undertake a survey of Kitimat residents to determine their opinions of the project now that the JRP has concluded its process.”
District staff had recommended hiring an independent polling firm to conduct the survey, pointing to a pollster’s ability to craft the appropriate questions and provide quick results.
Council quickly shot down the idea. A motion by Councillor Mario Feldhoff to use a polling firm did not get a seconder.
Councillor Rob Goffinet, who made the motion for the plebiscite, noted that even as a politician he doesn’t answer phone calls from unknown numbers. He said, “People do not want a pollster to phone them and do a check list how do you feel on a project. How can we be assured if someone in or out of their home will answer a call from a pollster? I would give total responsibility to every adult citizen of Kitimat who has a point of view to express it in a yes or no ballot.”
Councillor Phil Germuth added, “Those are the same companies that went out prior to the last provincial election and said one party was going to wipe it out and we know what happened there.” Germuth was referring to BC Premier Christy Clark’s come from behind majority victory which was not predicted in the polls.
Germuth told the meeting he believed an unbiased question could be posed in the form of a referendum on the Northern Gateway project. “I have full confidence in our staff that they will be able, along with some assistance from council, to develop questions that are not going to appear biased. It should be very simple, yes means yes, no means no.”
Councillor Mario Feldhoff, who earlier in the evening had, for the first time, declared that he is in favour of the Northern Gateway project, told council that he preferred using a polling firm because it could come back with a “statistically significant” result.
Council voted six to one in favour of the plebiscite. The lone dissenter was Councillor Edwin Empinado who told his colleagues that a mail-in ballot, another of the options presented by staff, would be more inclusive. Empinado said he was concerned that a plebiscite would mean a low voter turnout.
Warren Waycheshen, the district’s deputy chief administrative officer, told council that the plebiscite would have to be held under the provisions of BC’s Local Government Act which covers elections and referenda, but with the plebiscite the council would have more flexibility in deciding how the vote would take place. The act would still cover such things as who was eligible to vote and the use of campaign signs.
The neutrality that council had maintained for at least the previous three years began to break down during Monday’s meeting meeting when Germuth proposed a motion that would have required Enbridge to install within Kitimat’s jurisdiction a detection system capable of locating small volumes of leakage from the pipeline, a measure that is likely beyond the recommendations of the JRP decision.
It was then that Feldhoff became the first Kitimat councillor to actually declare for or against the Northern Gateway, telling council, saying he agreed with the JRP, “The overall risk was manageable and the project was in Canada’s interest. On the whole I am in favour of the conditions and recommendations of the JRP… Not only am I a District of Kitimat Councillor, I am a Canadian. To my mind, opposition to the JRP Northern Gateway report at this stage is yet another case of NIMBY-ism, not in my backyard.”
In the end, at Feldhoff’s urging, the council modified the original motion, so that it called on the District to meet with Enbridge to discuss an enhanced pipeline leak detection system where a leak could “impact the Kitimat watershed.”
It’s not clear what Council will do with the result of the plebiscite, since it is “non-binding.”
In the past two years, Terrace, Prince Rupert and Smithers councils, together with Kitimat Stikine Regional District and the Skeena Queen Charlotte Regional District, all voted to oppose Northern Gateway. Those were all council votes, taken without surveying local opinion.
Most of the decisions are in the hands of the federal government which has 180 days from the release of the JRP report to approve the project.
The possible effects of a bitumen spill on Pacific waters were not considered in the oil response preparedness report released last week by the Harper government, the background data study reveals.
The consulting firm that did the study for Transport Canada, Genivar Inc, had no reliable data on the effect of a bitumen tanker disaster—because, so far, there has been no major ocean disaster involving diluted bitumen.
Instead, Genivar, based its findings on potential hazards and response on existing data on crude oil spills.
The Genivar study, however, does warn, that if the Enbridge Northern Gateway project does go ahead, the spill risk from diluted bitumen carrying tankers in Douglas Channel and along the north Pacific coast will jump from “low” or “medium” to “very high.” If the twinning of the Kinder Morgan pipeline goes ahead, then the risk in Vancouver also jumps to “very high.”
The question of how bitumen might behave in the cold and choppy waters of the North Pacific was hotly debated during the Northern Gateway Joint Review hearings earlier this year. Enbridge Northern Gateway based its position on laboratory studies, studies that were challenged by environmental and First Nations intervenors, pointing both to the unknowns of the ocean environment and the continuing problems Enbridge has in cleaning up the spill in the Kalamazoo River in Michigan.
The Genivar report, Risk Assessment for Marine Spills in Canadian Waters Phase 1: Oil Spills South of 60th Parallel, was completed in November, then passed on to the “expert panel” that released their own report: A Review of Canada’s Ship-source Oil Spill Preparedness and Response Regime — Setting the Course for the Future. That second report was based not only on the data provided by Genivar but on the expertise of three panel members, their visits to some locations and input from government, industry, First Nations and municipalities.
The actual data report was not posted; it had to be requested through the Transport Canada website, which is how Northwest Coast Energy News obtained the background study.
High risk for Kitimat
The expert panel found “a very high risk” of oil spills in two areas of the Pacific Coast, in the north around the ports of Kitimat and Prince Rupert and in the heavy ocean traffic area of southern British Columbia, especially Port Metro Vancouver and into Washington State.
The expert panel made 45 recommendations that covered a wide range of issues including eliminating the present $161-million liability limit for each spill and replacing it with unlimited liability for polluters, annual spill training involving the Canadian Coast Guard, Environment Canada, provincial and local authorities and the private sector, increased and improved annual spill training exercises, basing risk assessment on local geography and conditions and faster emergency responses to spills.
The expert panel calls for greatly increased research on the ocean environment at a time that Harper government has been gutting environmental research across Canada, while spinning that its policies are “science based.”
The science and technology around both the movement of oil and spill response has advanced significantly over the past several decades. We feel that while some aspects of the Regime have kept pace with these developments, in some areas, Canada has fallen behind world-leading countries like Norway and France. This can be attributed to a general lack of investment in research and development as well as the lack of coordination between industry and government over research priorities.
The Government of Canada should work closely with industry to establish a national research and development program for oil spill preparedness and response. The program should be co-funded by industry and the Government, and the research priorities should be set through a collaborative process that involves academia, where possible. Like the Regime itself, we view this program as a partnership between industry and government.
We envision that this program would also seek to leverage the work being done internationally on oil spill preparedness and response. The program should seek to establish partnerships with other world-leading countries in order to stay current on international advances and new technologies.
The expert panel, however, does not say how the federal government is expected to pay for meeting BC Premier Christy Clark’s condition for a “world class” spill prevention and response system at a time that Finance Minister Jim Flaherty is determined to balance the budget and the Harper government is continuing to cut back government services.
On bitumen, the Genivar data study says:
Modified bitumen products represent the majority of the “crude carried as cargo” in
Pacific sub-sector 5. They are not modelled as a separate category in this spill behaviour analysis but are represented as “persistent crude”.
Changes in spill behaviour depend to some extent on the environmental conditions at the time of the spill, as described in greater detail below. However, over the range of wind and sea conditions typically experienced in the Canadian marine environment, changes in oil properties are not overly sensitive to variations in climatic values, so a single set of wind and sea conditions will be used in the analysis.
The idea that “changes in oil properties” not being sensitive to variations in climate was also frequently challenged before the Joint Review Panel.
On the increase in traffic volume if the Northern Gateway project goes ahead, the Genivar report says.
Enbridge Inc. has proposed to construct a marine terminal at Kitimat, B.C. and a dual pipeline from the terminal to oil sands production in northern Alberta. The terminal would handle up to 193,000 barrels/day of imported diluents (i.e., low-gravity condensate) that would be piped to Alberta and used to dilute bitumen to enhance its flow properties. The diluted bitumen would then be piped to Kitimat at rates up to 525,000 barrels/day that would be shipped by tanker to export to markets in Asia and California.
At full capacity, the import of diluent and export of diluted bitumen would total up to 35 Mt/year. This amount is comparable to the currently-shipped volume in the Pacific sector related to volumes being exported from Vancouver and related to volumes being exported from the Alaskan to Washington State trade.
It goes on to say that the current tanker traffic on the north Pacific coast “has negligible risk in the near shore and intermediate zones, but significant potential spill frequency in the deep-sea zone related to the Alaskan trade.” Similarly, according to Genivar the environmental risk in the region “currently ranges from ‘medium’ to “very low” from near shore to deep-sea zones, respectively…. mainly driven by a combination of physical and biological features.”
The increase in traffic from Northern Gateway would likely increase the environmental risks. The the near shore risk from would jump from “very low” to “very high.” For the largest spill category, deep-sea risk would likely increase from “low” to “medium.”
No data on recreational or traditional First Nations fishery
To study the effect on an oil spill on the fishery, Genivar used data from the Department of Fisheries and Oceans as the provinces to gauge “the port value of commercial fishing and the value of the fish, shellfish and aquaculture” in each zone it studied and then compared it to the the national averages for commercial fishery. Those figures included any commercial fishery by First Nations.
But Genivar noted, there is no reliable data on either the recreational fishery or the First Nations traditional, food, social and ceremonial fishery, saying:
It is important to highlight that this indicator does not consider recreational or traditional fishing. The importance of this industry is notable and an oil spill could damage the recreational fishing stock as well. However, the absence of comparable data and the fact that this study is restricted to federal and international data, and some provincial data from Quebec and Ontario for commercial fisheries, limits the ability to include recreational fishing… Nevertheless, as an absolute index, it will provide an overall vulnerability in the event of an oil spill.
The ongoing impact of cutbacks at Fisheries and Oceans has had a continuing impact on the northwest, especially in the controversial halibut recreational fishery, where DFO has admitted that it is basically guessing the size of each year’s recreational halibut catch.
Genivar also notes that lack of reliable data on the effect on a oil spill on tourism. The consultants go so far as to say one of the indicators they will use to measure the effect of any oil spill on tourism would come from “data extracted from the 2011 National Household Survey at the census division level and the accommodation and food services data will be used.”
The “National Household Survey” is also known as the long form census and it is the National Household Survey that the Harper government made voluntary rather mandatory, decreasing the reliability of the data. Global News recently analyzed those who had contributed to the survey and found that it poor people, the very rich and people in low population areas were least likely to fill out the voluntary census—which means the data for northwest BC is likely highly unreliable from the 2011 survey even though “The census divisions in coastal regions will be selected for each of the sub-sectors. This method will express the economic vulnerability of each sub-sector to a potential collapse in tourism following a spill.”
Despite the importance of cruise ship traffic on the west coast, Genivar notes, “In Canada, data for passenger vessels were unavailable.”
It also notes that “this study does not specifically take into account national parks and other landmarks, since their influence on tourism is indirectly included in the tourism employment
intensity index” so that Genivar could create what it calls the Human-Use Resource Index (HRI), even though that index appears to be based on incomplete data.