Kitimat’s “Hospital Beach” on March 17, 2012, with the construction at the Rio Tinto Alcan plant in the background, before the area was closed to the public. (Robin Rowland)
The hottest issue in Kitimat this summer is water, not oil. For us, this summer can be summed up by saying: “Water, water everywhere, but you can’t get there from here.”
Even with David Black’s proposal for an oil refinery on a hill 25 kilometres north of Kitimat, residents here know that the Enbridge Northern Gateway debate has gone on for years and will go on for many years to come.
As environmentalists worldwide celebrate the beauty of Douglas Channel, and decry the dangers that tanker traffic could pose to the channel, many people in Kitimat are cut off from the waterfront.
At the District of Kitimat Council meeting on August 7, Coun. Mario Feldhoff introduced a motion calling for a study in an effort to find ways to launch kayaks into the ocean. Yes that’s right, according to members of council, you can’t even drop a kayak into the waters of Douglas Channel unless you pay the kind marina a launch fee usually charged for larger fishing boats. Kitimat is down to only one expensive boat launch.
In 2010, there were three marinas in Kitimat: one privately operated at a place called Moon Bay, a large marina owned by the Kitimat Stikine Regional District at MK Bay and a small marina at Minette Bay, also the site of a log export operation. There was also a boat launch on land known as “Alcan beach” or “Hospital Beach” on property owned by Rio Tinto Alcan (RTA) near the aluminum smelter. Hospital Beach is the only beach in Kitimat (named because it is on the site of the town’s original hospital in the 1950s). Moon Bay was located on land owned by RTA, and in April 2010, it ordered the marina shut down.
Some people who moored their boats at Moon Bay moved to MK Bay (if there was room). Others hauled their boats out of the water and parked them in their driveways. In the ensuing two years, there have been increasing stories about mismanagement at MK Bay and complaints about moorageand launching fees that are much higher than elsewhere in the province.
This spring, citing construction at the smelter, RTA closed public access to Hospital Beach for picnics, kids’ play and just looking at the water. That meant the boat launch was also off-limits. RTA spokesperson Nyce said:
The Rio Tinto Alcan site is now a full fledged construction zone with constant vehicular and heavy duty construction traffic. To that end, and as Rio Tinto Alcan representatives have always said, during construction we will take necessary steps to eliminate potential hazards to the general public on our road including access to Hospital Beach. Therefore, Hospital Beach will be closed to the public until construction is complete or until we believe it is more safe for public access.
Before access was closed, if a Kitimat resident was driving to Hospital Beach, they pass what was once a rough logging road that snaked its way along the shores of Douglas Channel toward Bish Cove. Now Bish Cove is the site of the Kitimat LNG project terminal. As part of the construction process, KM LNG upgraded the road. However, as the pace of construction increases KM LNG is now limiting access to the road and its views of the channel.
Why is there no access to the waterfront, or for that matter to the magnificent Kitimat River estuary?
It goes back to 1950 when the province of B.C., in a loosely worded agreement with what was then Alcan and in an equally non-specific Industrial Development Act, handed over the land where Kitimat is now to the company.
That included almost all the waterfront and the estuary. On the estuary, there is one small area of land that is a reserve for the Haisla Nation and one small area not in RTA domain owned by the District of Kitimat — but there is no right of way through a potential private development. Over the years, and especially since Rio Tinto took over Alcan, there have been more and more restrictions placed on access to Kitimat’s waterfront.
The fact that you can’t get to the waterfront and the estuary are a problem not only for community recreation; the inability for a resident or visitor to launch a kayak or small boat into the channel, much less larger fishing or recreational vessels, has put the brake on expansion of Kitimat’s already lucrative fishing, guiding and boating services.
There is already a lot of skepticism in Kitimat — due to the boom and bust of the industrial cycle — about all those promises of jobs and prosperity from industrial development. Restricted access to the ocean means that despite the growing number of jobs in Kitimat, corporate policy makes it hard to enjoy the benefits of living on the Douglas Channel.
It is the kind of externality that is always ignored by economists and is totally irrelevant to those business writers who claim to be experts in Kitimat but who have never been within 1,000 kilometres of the town.
You look out your window at the mountains and ocean of Douglas Channel and ask why can’t the residents and tourists go to the beach? That could be a key issue in the Enbridge Northern Gateway debate.
Members of the Northern Gateway Joint Review Panel, left to right, Kenneth Bateman, chair Sheila Leggett and Hans Matthews make notes at the June 25, 2012 hearings at the Haisla Recreation Centre, Kitamaat Village. A map of Douglas Channel can be seen behind the panel. (Robin Rowland/Northwest Coast Energy News)
“This will be the first project in Canadian history to have First Nations, environmentalists and, for a lack of a better term, rednecks standing together in protest,” that sentence from Katherina Ouwehand summed up the first day of public comment testimony Monday, June 25, 2012, as the Northern Gateway Joint Review Panel returned to the Haisla Recreation Centre at Kitamaat Village.
Ten minutes isn’t that long. Ten minutes is the time that the Northern Gateway Joint Review Panel gives a member of the public to express their opinion on the controversial Enbridge project that would pipe oil sands bitumen from Alberta through the port of Kitimat to Asia.
Ten minutes is sufficient if you know what you’re talking about, if you’ve done your homework and rehearsed presentation so it can comes in right on time.
Ten minutes can be eternity if you’re an Enbridge official sitting silently at a nearby table as people who do know what they’re saying tear apart your public presentations, your multi-million dollar ads and the thousands of pages the company has filed with the Joint Review Panel. Or perhaps, as some at the public comment hearings pointed out, those ten minutes mean little if Prime Minister Stephen Harper has already decided the pipeline will go ahead no matter what, and thus any recommendation from the JRP has little credibility.
The first witness to appear before the public comment hearings on Monday afternoon was someone who knows all about the role of human error in accidents, Manny Aruda, an Emergency Response Team leader at the Rio Tinto Alcan smelter.
Aruda began by commenting, “To be clear, I do not belong to any environmental or radical organization, although I do recycle and occasionally I do eat granola.” His responsibilities at RTA include overseeing anything related to an emergency response, including dealing with spills and reporting the spills. Before that he worked at Methanex first in operations as a field operator and then as an ammonia control room operator. He also volunteers as a Search Manager for Kitimat Search and Rescue.
Talking about his time in the control room at Methanex, Aruda said, “I worked in the state-of-the-art chemical plant which is constantly being updated with the newest instrumentation. No matter how many safety features are in place, human error could supersede. Incorrect wires were cut causing plants to shut down; drain lines were left open during start-up causing methanol to go into the effluent system and eventually into the ocean; pigs [robots that operate inside pipes] are used to clean pipelines that were supposed to be collected at the end of a line at the wharf, and over-pressurizing of the line and mental error, leaving a valve open and the next thing you know pigs really do fly right into the ocean.
“Enbridge has spoken many times about how they’ll use smart pigs. Perhaps their smart pigs will know when to put the brakes on and stop.
Humans weak link
“The bottom line is that no matter what state-of-the-art infrastructure, instrumentation, safety
Manny Aruda takes some water after testifying before the Northern Gateway Joint Review Panel at Kitamaat Village, June 25, 2012. (Robin Rowland/Northwest Coast Energy News)
measures are in place human decisions or lack of decisions will affect the outcome. Humans are the weak link.
“There is an enormous pressure from management to keep plants and pipelines running. Control room operators are most at risk on start-ups and shutdowns, when conditions are changing rapidly. When a suspected issue arises it requires interpretation and analytical skills. These skills are relative to the amount of knowledge and experience of the individual.
“When in the control room you can’t see, hear or smell what’s going on outside, this is why the field operator is so valuable and utilized to go out in the field to verify a level, check a pump status, a pressure reading, identify leaks, et cetera.
Despite what some people may believe, it’s not black and white. There’s not a red Staples easy button flashing indicating that a spill is happening.
“When in the control room you can’t see, hear or smell what’s going on outside, this is why the field operator is so valuable and utilized to go out in the field to verify a level, check a pump status, a pressure reading, identify leaks… Despite what some people may believe, it’s not black and white. There’s not a red Staples easy button flashing indicating that a spill is happening.”
Any deviation from normal operations is subject to interpretation by the control room operator, “a human, the weak link,” Aruda said. He added: “Industry can continue to make improvements and make things more and more idiot-proof. History has shown that better idiots will come along.”
He told the JRP that the long Northern Gateway pipeline through remote mountain passes would have no field operators available to check every kilometre of the line to verify what the control room operator thinks is happening.
Like other witnesses, Aruda pointed to the Enbridge spill at Marshall, Michigan, where four million litres were spilled into a river in a populated area. “The spill went unnoticed due to human error,
the weak link.”
He testified that he has spent “hundreds of hours looking at Enbridge’s risk assessment,
management of spills, emergency response,” and then he said from the point of view of an
emergency response team leader, “reading these documents has flabbergasted me.” He said Enbridge’s risk management was “seriously deficient and woefully lacking in substance. They do not take into consideration the rugged terrain, the climatic conditions and dangers of fast flowing moving water.”
He said Talmadge Creek that feeds the Kalamazoo River, the location of the spill in Michigan, flows at much slower rate than the Kitimat River. At Kalamazoo, he said, four million litre oil spill moved 39 miles downstream contaminating everything in its path and it was contained two days later.
“It took Enbridge two days to deal with a meandering Kalamazoo River spill. Enbridge has stated in their risk assessment and management of spills they can contain a spill in the Kitimat River within two to four hours. This is irresponsible and inaccurate statement with no associated details.
It rains a lot in Kitimat
“To be fair, the Marshall spill happened at the worst possible time when the Kalamazoo River flows were at flood stage, causing oil to be deposited high on marshes and banks. This caused widespread contamination in the area. The Kitimat area also has high periods of flows and flood stages. It’s called, May, June, September, October and November. I’m not sure if you’re aware, but it rains here, a lot.
“In a worst-case scenario for the Kitimat River, Aruda said, based on events of September 2011, “heavy rain caused a dramatic increase in river levels within 24 hours. This is a normal occurrence. And the river widens by 75 yards in some locations. I have personally witnessed tree after tree, including 100 foot trees with full root balls 20-feet in diameter barrelling down this river. The Kitimat River flow at that time, 72,000 cubic feet a second, [was] some 18 times more than the Kalamazoo River. There’s not one qualified incident commander that would even consider sending out emergency responders into that raging river.”
He said that even during a moderate rise of the river, booms are not effective because of all the debris floating down the river.
Aruda said, “I invite anyone who thinks this oil spill can be cleaned up effectively to drift down the river with me to see for themselves how impossible a task that would be.” He noted that Enbridge has spent $765 million in clean-up costs, and while some parts of the Kalamazoo River have recently been opend for recreational use, other parts remain closed for clean-up.
He repeated his belief that Enbridge’s response plans are insufficient and concluded by saying, “Other pipelines and transmission lines have succumbed to the forces of nature in this area without any long-term environmental impacts. Sadly, this will not be the case if oil spills here.”
A later witness was Terry Brown, a former project engineer at Eurocan. Brown began by describing his love for sailing the Douglas Channel for the past 28 years. In one instance, Brown said, “ One extra-special night was when the ocean waters were disturbed and the phosphorescence was a glow like fireworks. We were seldom alone on the water as we often saw, heard and smelled seals, sea lions, orcas, and humpback whales, just like a huge aquarium but all to our own and so secluded.
“We not only stayed on the surface but some of our family engaged in scuba diving. What a joy to see so much life, crabs, fish, and shrimp, sea anemones, sea lions and much more. What a gorgeous dive it was as our daughter Stacy and I went down deep on the wall at Coste Rocks to see many different life forms hanging in our view. Later, we circumnavigated the rock and were amazed to see the pure white forms of a large sea anemone.”
Katherina Ouwehand testifies at the Northern Gateway Joint Review hearings as Murray Minchin, the next witness listens, at the Haisla Recreation Centre, Kitamaat Village, June 25, 2012 (Robin Rowland/Northwest Coast Energy News)
Things failed
Like Aruda, he then turned to how things can go wrong. “No matter how hard we tried to do our best, things failed or as they often said, ‘shit happens’. Pipes, gaskets would fail; tanks would collapse; equipment would break. We even had SRBs in our stainless tanks. Many items would fail with such power that it would resemble an explosion.
“Lately, I have heard comments on how new gaskets are much better than old. Our experience was the opposite, as old gaskets contained asbestos they had a much better life span than the new synthetic ones.
“My largest project at Eurocan, a 300-tonne per day CMP pulp mill, actually had 10 — that’s it, 10 major failures within the first one to two years after start-up. During my working time, I was also involved in some of the projects to reduce the tainting of the local oohlican fish. This involves a highly cultural activity that the Haisla engaged in up until Eurocan start up in 1970.
“Over the 10 to 15 years spent looking for a solution, some $100 million was spent on related activities. If this much was spent with no success on a minor issue, if you call it that, how can anyone expect to clean up the beaches of a real nasty oil like dilbit?”
There was a third, highly technical presentation from Kelly Marsh, a millwright with the District of Kitimat (as well as Kitimat Search and Rescue volunteer) who presented his mathematical evidence, based on what he said we standard and accepted models that he said showed that Enbridge has vastly underestimated the chances of spill.
For the first time in public, some voiced in public what many in Kitimat have been saying in private, that if Stephen Harper pushes the project, there will be resistance from the residents of Northwestern British Columbia.
Katherina Ouwehand testified, “I am not a bully and I don’t lose my temper easily, but if this project is given the go-ahead by our Prime Minister, they had better be prepared for a huge fight. My thousands of like-minded friends and I will unite in force and do more than
speak up peacefully. There will be many blockades on the pathways of the pipeline and marine blockades in the channel.”
Murray Minchin, a member of Douglas Channel Watch (although everyone at the public comment hearings are testifying on their own behalf) said, “The original organizers of the Clayoquot Sound clear-cut logging blockades hoped that 500 to 600 people would turn out and help them protest. Over 10,000 showed up and almost 1,000 were arrested. Those numbers will be shattered if this project gets steamrolled through the regulatory process.”
Bill C-38
Many of the witnesses voiced their concerns about the Conservative omnibus Bill C-38 which they said would destroy many of the environmental safeguards in the Fisheries and Environmental Assessment Acts.
Margaret Ouwehand said. “I have a great fear. I am afraid of Enbridge because it represents much more than a pipeline; Enbridge is an enabler of all the things that make us ashamed to be Canadian. Do we want a Canada that endangers the whole world by contributing to global warming?
Do we want a Canada that muzzles scientists who don’t say what the oil companies want them to say? Do we feel proud when Canada puts up roadblocks to treaties with other countries so that oil companies can continue to pollute? Do we really want a Canada that prefers temporary foreign workers to be used and, in many cases, abused, just to provide oil companies with cheap labour? Wouldn’t it be more ethical to encourage immigrants to come to Canada to make permanent homes and actually contribute to the country?
“Once we were proud of Canada’s leadership in protecting the environment, both in Canada and world-wide. Now we have sold out to the highest bidders and by so doing we are jeopardizing our very sovereignty. We cannot enter into agreements to limit pollution because the big oil companies who own our resources won’t allow it.
“Once we were the world’s good guys, the peacekeepers, the ones who were caretakers of the environment and of endangered species. Now it’s all about money. Now we are at the bottom of the heap, along with other money-grubbers of the world.”
Mike Langegger, who has testified at previous National Energy Board and JRP hearings on behalf of the Kitimat Rod and Gun, testified, “Today I wish to speak to the implications of the Northern Gateway Project will have on my and many coastal families who call British Columbia home and the threat it poses to a generations of culture, lifestyle, relying on healthy and productive environment and ecosystems we currently have.
“My family, along with many resident British Columbians have a strong connection to our natural environment and is as much part of us as we are of it. By nature we are hunters and gatherers who have sustainable harvest from our natural environment over the generations providing for our families. Abundant and healthy fish and wildlife populations in environment that sustained their existence is critical and must be guaranteed.
“Unfortunately, over my lifetime I’ve witnessed commercial and industrial exploitation come and go, each diminishing our areas natural environment and its ability to support wildlife and the many associated values. It is critical that not only negative implications of the Northern Gateway Project be considered but also the cumulative effects of current, proposed, and past exploitation that has or is likely to occur in our area. Often a single negative impact can be mitigated. However, when a series of impacts are allowed to compile, the end result has proven to be devastating.
“Today the Dungeness crab and our local estuary area are deemed as contaminated and not recommended for consumption. The oohlican populations have been wiped out on most of our local area streams. The Kitimat River has been negatively impacted by resource extractions rendering it reliant on hatchery augmentation. Trees on the west side of the valley have died off suspect to pollution; wildlife populations have been impacted and the list goes on.
“We have seen industries come and exploit our area and its resources, profit substantially and leave, only to pass on a legacy of toxic sites and compromised environment. What they have not left behind is any established fund for impacted First Nation’s area residents and stakeholders to manage and reinvest back into our environment for the benefit of habitat, fish, wildlife that has been impacted.
“Ultimately, industry in general has been allowed to exploit, profit, and leave without being held accountable for our forest to correct damage. That’s the history we currently witness here.
“For those of us that call coastal British Columbia home, the existing environment, fish, wildlife, and associated values are the foundation of who we are. It is those values that foster and nurture many family bonds and are the result of cherished memories with loved ones and friends. It is those values that provide a healthy lifestyle and food source. It is those values that support numerous traditions and are the base of revered culture. It is those values that the Northern Gateway Project ultimately threatens to extinguish.” Transcript Vol.58-Mon June 25, 2012 (pdf)
Updated with Rio Tinto Alcan statement and CAW negotiations bulletin
Rio Tinto Alcan and Bechtel are proposing to bring in temporary foreign workers for the Kitimat Modernization Project, because, according to a letter from Bechtel obtained by Northwest Coast Energy News, a “labour shortage” is “a possible risk to the project schedule.”
The letter was sent by Dawn Perry, Field Contracts Manager, to Bechtel/RTA contractors on April 30.
The key paragraph in the letter says
Over the past several months, Bechtel and RTA have been working with government agencies to understand and establish a process to bring Temporary Foreign Workers to the project in the event there is a shortage of qualified craft workers in British Columbia and Canada. The process will benefit Contractors on the KMP that may experience labour shortages.
The Bechtel letter does say the company is consulting with trades unions involved
It is imperative that we all work together to identify labour needs in advance to provide the Building Trades Unions sufficient time to provide qualified labour.
Bringing in temporary foreign workers, whether by RTA, Bechtel or a contractor, must be approved by Citizenship and Immigration Canada.
In past news conferences, RTA managers have said there are problems in getting skilled workers or contractors for the $3.3 billion project, due to high demand locally from the proposed liquified natural gas projects and labour shortage as far away as the bitumen sands at Fort McMurray. On the other hand, there are continuing complaints from contractors who say that even trying to bid on a KMP project is a bureaucratic nightmare. There are also complaints that people from the Kitimat region that they are still are on waiting lists for jobs at KMP.
Colleen Nyce, a spokesperson for Rio Tinto Alcan in Kitimat said, “We actually hope to not have to hire temporary foreign workers. We prefer to hire from the local area and BC. This will, among other things, keep our costs down to hire from this jurisdiction.
“As of the present time, we have 54 per cent local workforce on the Kitimat Modernization Project. We are very proud of this. However, we are now entering the stage where, within the next four months we will be seriously ramping up the construction schedule and will need to hire qualified craft on a quick turn around basis.
“Since Notice to Proceed was given to KMP on December 1st, 2011, our Project burn rate is $3.1 million/day. We therefore cannot risk the project with workforce shortage issues and delays.
“As a precautionary measure, and given the length of time to receive government approvals, we made application for Temporary Foreign Workers, from the United States only, back in January. Our application for this has been supported by the unions affiliated with our project. We routinely have labour studies and labour surveys completed, as do the unions, and all intelligence is advising us that we will most likely be facing a skilled labour shortage.
Nyce says RTA is looking at: “All craft – electricians, carpenters, pipefitters; operators to name a few. We must search across Canada first. We are partnered with 16 different building trades unions. All of these unions have connections and members across the province, country and some into the United States.”
The date of the letter is already causing concern in Kitimat, coming as it does at almost the same time as Rio Tinto Alcan presented Canadian Auto Workers Local 2301 with a series of tough initial contract proposals that would see all but the most core jobs at the aluminum smelter contracted out.
Nyce, however, says, “This has absolutely nothing to do with BC Operations negotiations with CAW Local 2301.”
RTA locked out 780 United Steelworker members at the Alma, Quebec, smelter on December 31. The USW says talks with RTA broke down over the use of subcontractors and contracting out. RTA says its over all aluminum production dropped 12 per cent to 520,000 tonnes in the first quarter of 2012, mainly due to the lockout in Quebec, where smelter production dropped by about two-thirds.
There are already rumours in Kitimat that the temporary foreign workers would be used to keep the Kitimat Modernization Project on schedule in the case of a lockout or strike at the smelter itself.
UPDATE: CAW Local 2301 has issued its latest negotiation bulletin.In the bulletin, the local expresses its feelings of betrayal after negotiating a transition agreement with the company in 2007.The number of jobs at the new smelter will drop from a miniumum of 850 (although 1,000 jobs was the figure used most often) to 699.
The company’s position on the modernized smelter was an insult to the Union, tore away any sense of credibility that may have existed and has set the stage for a collision at this set of negotiations.
Rio Tinto Alcan has presented the union with a long list of jobs that would be contracted out but where those contractors would be working alongside union members in the new smelter and nearby locations.
CAW 2301 is now considering its response to RTA. There are membership meeting this week.
In an phone interview, Ken Lewenza, president of the CAW, said Tuesday, “I am not totally convinced that there is a shortage of worker problem with a little under 10 per cent unemployment. The real problem is where is the work and how do we fit the skills of our Canadian work force to meet those particular requirements and if for any reason we can’t do that based on knowledge, based on recognizing the kind of skills that are needed and how you prepare workers who are working in precarious situations who are unemployed, how we can better prepare for these kind of work opportunities, I think what government is doing, employers contractors, are seeing foreign workers as the first priority when it should be that absolute last.”
As for the rumours that temporary foreign workers could be used to keep the KMP going or even become possible replacement workers, Lewenza said, “If foreign workers were to replace our members at 2301 at a time we’re in labour negotiations, as replacement workers, then that would lead to a huge confrontation, at a time when quite frankly it’s not necessary. The whole idea of bringing in foreign workers is if there is a shortage of labour, a labour disruption isn’t a shortage of labor, it’s a shortage of getting a collective bargaining agreement.”
The RTA contract proposals were also on the table at Monday’s District of Kitimat Council meeting, where Councillor Phil Germuth led off the discussion by saying that he was disappointed by the RTA proposals, saying that over the past several years council has granted RTA every variance and development proposal it wanted and has agreed to forgo $7 million in tax revenue for the Kitimat Modernization Project, and, “We were promised there was going to be about 1000 jobs, now they are down to 700. I find it hard to believe that they would propose 300 job losses and not expect any problems at all, This council and previous councils have been working with them and now to have another 300 jobs cut that’s a big disappointment.”
Sources have told Northwest Coast Energy News that some members of middle and upper management at the Kitimat smelter are also not happy with the contract proposals, which together with the Alma lockout, are bringing back a corporate culture clash between the former Alcan management and the different attitudes brought to Canada by Rio Tinto, a London based multinational.
Olympic medals
A group calling itself Off the Podium, led by former Olympian Bruce Kidd, is asking the London 2012 Olympic committee (LOCOG) to drop RTA as the official supplier of gold, silver and bronze for athletes’ medals.
Signed by Steelworkers National Director Ken Neumann, the complaint asserts that Rio Tinto’s actions in Alma violate the Games’ ethical procurement standards because they consist of an illegally-declared lockout, serious and significant violations of the workers’ health and safety, shirking its obligations by sub-contracting out work to low paid workers, and paying wages and benefits below industry benchmark standards. Neumann’s complaint letter goes on to request that LOCOG follow its ethical guidelines to reject Rio Tinto as a supplier.
Bechtel’s April 30 letter to contractors about bringing in Foreign Temporary Workers
Jacynthe Côté,the CEO of Rio Tinto Alcan, briefs reporters on the progress of the Kitimat Modernization Project,March 8, 2011(Robin Rowland/Northwest Coast Energy News)
The Kitimat Modernization Project, the $3.3 billion upgrade of the Kitimat aluminum smelter will create capable and competitive contractors that can go on to work at the future energy developments in the region, Rio Tinto Alcan CEO Jacynthe Côté said Thursday, March 8.
Côté was in Kitimat to tour the region, a trip that was postponed in December, at the time of the “Notice to Proceed” on the modernization project, when her aircraft was diverted to Prince Rupert by a snow and sleet storm the day of the announcement.
During a dinner on Wednesday night, Côté met with leading contractors, the leaders of the Haisla First Nation, Mayor Joanne Monaghan and members of the District of Kitimat Council.
The prospect of future energy projects, three liquified natural gas terminals to be built by the KM LNG partners, by the BC LNG partnership and by Shell was one factor in Rio Tinto Alcan giving the go ahead for the modernization project, she told local reporters.
“We have seen the critical mass in other parts of the world, “she said. “One of the reason to do full speed in December was to aim that we will be ramping down as the others are ramping up. Of course, I cannot say for the other projects that will be their decision.” Given the current schedules, she said, “we should be out of the way when others pick up.” (Another key reason for the go ahead, according to RTA primary metal vice president Jean Simon, speaking at the launch last December was the growing market for aluminum in Asia)
Côté added that the contractors now have “great abilities that could be redeployed.”
Michel Lamarre, Director of KMP said that despite some delays due to the harsh winter, RTA is still aiming for first concrete at the new potlines on June 1. First new metal is scheduled for the second quarter of 2014. Peak employment, about 2,500 people, is expected to be in the first quarter of 2013.
“We have the ambition to make the project a real showcase, for us, for British Columbia, for Canada,” Côté said. “So we’re pretty proud that 62 per cent of the work done so far has been done by the community in the area., 95 per cent of them in British Columbia, which is absolutely spectacular for a project of that complexity and magnitude.
“It requires a lot of skills, a lot of organization.”
Côté said she stressed RTA’s safety priorities when she met with the local contractors (a point the company made both at the Notice to Proceed gathering in December and at a local meeting for contractors last month). The contractors are very enthusiastic, Côté said. “I’ve seen in other regions as contractor and employees moved to that level of safety performance, it becomes a competitive edge, there’s going to be other projects coming in the region, there’s a lot of discussion around LNG, and it will be an advantage for contractors who have demonstrated superior performance and safety. We’re here to support that. I think they’re going to be more compelling and competitive, I mean it’s good business.”
She says that RTA is spending $3.1 million each day on the modernization project.
Asked about both the prospective LNG projects and the fact that accommodation in Kitimat is now at a premium, she said that “crowding” was a significant part of her discussions with both the Haisla and the District of Kitimat.
Rio Tinto has worked on what she called “disproportionately big” projects at sites compared to local communities around the world. “So we adjust, my message was we adjust.[There are] Different formulas in different parts of the world, depending on the conditions. The model is to bring in as many people from the community as we can.”
Rio Tinto Alcan transfered sixty three district lots totalling just over 11,000 acres or 4,4500 hectares of land to the Cheslatta Carrier Nation in British Columbia on Monday, Jan. 30. 2012.
The transfer took place at a ceremony at the community hall at Grassy Plains, BC, near Burns Lake.
A news release from Rio Tinto Alcan quotes Jean Simon, president and chief executive officer, Primary Metal, Rio Tinto Alcan, as saying. “This important event is the culmination of over ten years of discussions between us and the community to return these traditional lands to the Cheslatta Carrier Nation. Today is an important milestone and represents how we can move forward cooperatively,”
“I am honoured to be the one, on behalf of our company, to bring this long standing issue to conclusion for the benefit of the Cheslatta Carrier Nation people.”
The release quotes Cheslatta Chief Richard Peters: “Today we get back what we lost 60 years ago. Land is the backbone of any community and this land is truly the foundation for our future. We are most grateful for the hard work and dedication of former Cheslatta leaders and we also thank Rio Tinto Alcan for being a modern and progressive corporation that understands the significance of the land to the Cheslatta people. We are fully committed to continue working together.”
The RTA release also quotes Paul Henning, vice president, Strategic Projects, Western Canada for Rio Tinto Alcan a saying: “I am proud of the respectful and effective relationship that we have developed with the Cheslatta Carrier Nation. I am also proud that both parties demonstrated great patience, support and commitment to this process that allows us to recognize the past while opening a new door to a brighter future.”
The Cheslatta Nation says the land will be held as fee simple, private property. It will not be an Indian reservation, and not subject to the Indian Act. The Cheslatta have no immediate plans for the 64 lots sitting on the Cheslatta and Ootsa Lakes. The Cheslatta also presented a 40-acre, 17 hectare, parcel of shoreline property on Ootsa Lake to several non-native residents of the area, with hopes that a recreation complex might be established there one day.
How Alcan obtained the traditional Cheslatta territory when the company was building the Kenney Dam in preparation for the Kitimat project has been controversial ever since the events began 60 years ago in 1952.
According to John Kendrick’s history, People of the Snow, the History of Kitimat, Alcan worked through the then Department of Indian Affairs at the time the company built a temporary dam on Murray Lake. Building that dam flooded the then Cheslatta reserve and traditional hunting, fishing and logging lands in the Ootsa Lake area.
According to Kendrick, Indian Affairs gave the Cheslatta Nation just one week to move from the existing reserve to the current location at Grassy Plains. The history says that while many members of the Cheslatta Nation were out on traplines, those remaining in the settlement were pressured by Indian Affairs to vote in favour of “surrender” of the land. Due to misunderstandings, Kendrick says, what the Cheslatta Nation thought was compensation for just the move was actually the “surrender payment” and the new settlement had to be paid for out of that money. There was no compensation for loss of other traditional lands or traplines.
The Cheslatta did reach a settlement with Alcan in the late 1980s.
Aluminum Rio Tinto Alcan president primary metals, Jean Simon, announces the go-ahead for the Kitimat Modernization Project at ceremony at the plant in Kitimat, Dec. 1, 2011. (Robin Rowland/Northwest Coast Energy News)
“It’s a go.”
The “go” meant that the Rio Tinto Alcan board had finally approved spending $2.7 billion for the long awaited Kitimat modernization project that would update the 60-year old aluminum smelter, increasing production capacity by 48 per cent to 420,000 tonnes a year.
Rio Tinto Alcan primary metal president Jean Simon made the announcement Thursday, Dec. 1, 2011 to cheers at a theatre (converted from the dining hall) at the new construction camp at the Kitimat smelter.
That money is in addition to expenditures already approved, bringing the total investment in the modernization project to $3.3 billion US.
“This will help us put Kitimat and Canada at the forefront of the 21st century global aluminum industry,” Simon said. “It is a truly transformational project.” He said it was in line with RTA’s long term strategic objective of long life, large scale, low cost assets. The project, Simon said, will take advantage of Rio Tinto Alcan’s competitive advantages: clean self generated hydro power and leading edge technology.
If all goes as expected, the first new metal will be poured in the first of half of 2014.
The new smelter will use a RTA proprietary smelting technology that reduce carbon dioxide emissions by 50 per cent.
The long planned project had been put on hold in 2008 as the world weathered the financial meltdown.
Kitimat mayor Joanne Monaghan said at the ceremony, “This is something our community has been waiting a very long, long time for….Kitimat has suffered through some very had economic times over the last several years and this announcement means we have the certainty that the aluminum business will be here for the next 35 to 50 years… We’ve seen a lot of industry disappear from Kitimat over the past few year and its been hard on our community. In fact, with Methanex leaving, with Eurocan leaving I felt like the mayor of doom. And then, all of a sudden, all of these things are happening. And I feel like the mayor of boom.
“We know the importance of that first initial investment to show that Kitimat is the strategic place to invest. And when RTA began its expansion, and its construction camp, then all of a sudden three LNG plants came on stream. We had a biomass plant ready to come in. So thank you Alcan for starting that whole trend for people coming into our community.”
It is Asia is fueling Kitimat’s new boom, and not just in natural gas, but also in aluminum. When Kitimat was planned and built 60 and more years ago, Asia, China, Japan, Korea were in ruins, devastated by the Second World War. Now it is Asia, and the short great circle route from Kitimat harbour to the market ports, that is one reason that the Kitimat modernization project was approved.
“Most of the aluminum is going into Asia. Korea, Japan and other countries,” Simon said in a post-ceremony news conference. “We’ve been producing here for 60 years and Kitimat has always been recognized as a very solid, reliable and good quality producer of aluminum so our customers from Asia are demanding the metal from Kitimat. So this is good news for them too.”
Paul Henning, RTA vice president of BC operations, is not only a corporate manager. He was the very entertaining master of ceremonies for the announcement. (Robin Rowland/Northwest Coast Energy News).
Paul Henning, VP BC Operations and strategic projects Western Canada, was asked if Kitimat can handle the demand and possible bottle necks with, as well as Kitimat modernization, three LNG projects, possibly the Enbridge Northern Gateway pipeline and perhaps other projects in the coming couple of years.
“The good news is that we’re first,” Henning said. “The folks who grab the ball usually have a chance. We’re working with those folks. People availability will be the key. I think there’s a lot of common sense going on, these are mega projects. Mega projects need lots of people. I wouldn’t call it coordination, but there is an understanding. They understand our timing, we understand their timing.
“All being equal we’re not competitors. It’s going to be an extended boom for the region. And of course, the projects are stacked, all trying to happen at the same time.
“It’s challenging, just for resources and infrastructure. If they can be spread, it’s a win, win, win. At the end of the day Our business drives what we do in the timing. Their business care drives their timing. At the end of the day, we’re first in.”
Thursday wasn’t the best day to show Kitimat off to the world, with a cold wind driving sleet, snow and rain all at the same time. BC Premier Christy Clark’s plane was turned back from Terrace Kitimat airport and a second aircraft with RTA CEO Jacynthe Cote was redirected to Prince Rupert.
RTA employees and guests watch a slideshow of historic photos of the early days of Kitimat before the official ceremony announcing the go-ahead for the Kitimat modernization project. (Robin Rowland/Northwest Coast Energy News)
As the audience and guests waited for the arrivals that were not to come, there was a slideshow of historic photos on giant LED screens, showing the early days of Kitimat, the construction of the dam, transmission lines, townsite and the potlines.
Then the elaborate ceremony began, with Paul Henning acting as master of ceremonies, introducing the Haisla Spirit of the Kitlope drummers before Simon made the “go” announcement.
It was good community relations that helped the RTA board give the go-head, Simon said.
“We will also honour the landmark Haisla Nation, Rio Tinto Alcan Legacy Agreement and are proud of this partnership to provide opportunities and training and that is resulting in increasing numbers of Haisla Nation members working on the project,” said Simon.
Haisla chief councillor Ellis Ross had been flying up with Christy Clark, so Councillors Henry Amos, Alex Grant and Keith Nyce were at the ceremony on behalf of the Haisla. “On behalf of the Haisla Nation, we offer you a warm welcome to our Traditional Territory. The Haisla Nation has worked very closely with RTA and supported the reality of this important and exciting decision. Together with RTA, our Nation is very proud of the legacy agreement we have reached.” Nyce said.
The Haisla are not only our closest neighbours but our best friends,” Henning said at the news conference. “It hasn’t always been like that. I think leadership from the Haisla, starting with Steve Wilson, transferring to Ellis Ross. Ellis has taken it to another level. The recognition of wanting to engage in the future was the key. We had to recognize and respect that past, to learn how to work together and build for the future.
“It’s actually a cohesive joint approach to economic development and sustainability within the Haisla First Nation and the plant. It actually betters the plant because we have employees that live here, work here, there are 120 Haisla folks who are working within the operation. That to me is sustainability in real time.”
Henning is also confident that the company will successfully negotiate a new contract with the Canadian Auto Workers local. Henning said that 2007 contract was designed to get the company through to first hot metal but then the financial crisis struck.”The good news gives us certainty.”Henning said. “We know what we have to drive for. We’ll get a contract, we’ll get a contract, we always do. Some are prettier than others. The confidence from this is a great start. The union were here today, I am confident that we will get through and get a contract that really fits this program.”
After he took the podium, Michel Lamarre, director of the Kitimat Modernization Project joked. “We often say that when we get married, and it’s raining, the marriage is very strong and I think this is going to be the case for the KMP project.” He said Kitimat management had made a very solid case for a very solid project to the RTA board.
Michel Lamarre, director of the Kitimat modernization project, talks about the challenges of the next two years until first metal in 2014. (Robin Rowland/Northwest Coast Energy News)
“We are building a state of the art facility which will be a jewel. This is something we can all be proud of… The next two years will be very busy and very exciting. Let’s build the project with zero harm, zero harm to the people who are building it and zero harm to the environment.”
The weather was just too nasty for an official ground breaking ceremony at the construction site, so it was moved indoors, with RTA executives and employees, the Haisla representatives and Mayor Monaghan turning the shovels into a ceremonial pile of dirt.
The indoor groundbreaking ceremony marking the approval of the Kitimat modernization project. Left to right Michel Lamarre, director KMP, RTA operations employee Ron Leibach, Brent Hegger, VP major projects, Kitimat mayor Joanne Monaghan, Jean Simon, RTA president primary metals, Paul Henning, VP BC operations and Henry Amos, Councillor, Haisla Nation. (Dwight Magee/RTA)
Rio Tinto Alcan has called a news conference for Thursday, December 1 in Kitimat “to make an announcement regarding
the company’s multi-billion dollar growth plans.”
BC Premier Christy Clark, Rio Tinto CEO Jacynthe Cote, Jean Simon, president, RTA Primary Metal North America, Paul Henning, RTA vice president, British Columbia Operations & Strategic Projects, Western Canada and key regional stakeholders and First Nations representatives will be at the announcement at the Kitimat Modernization site during the noon hour.
The RTA news release says the announcement will be a significant event for Kitimat, the northwest region of the province, and all of British Columbia. It is likely, especially with the BC premier in attendance, the RTA is giving the go ahead for the long planned $2.5 billion smelter modernization project.
Updates
Sources have told Northwest Coast Energy News that applicants for jobs at the Kitimat Modernization Project, where the prime contractor is Bechtel, were told during the past month to wait until the end of November and that time, the applicants were told, there would probably be between 500 and 550 jobs available.
Rio Tinto Alcan is pushing ahead with construction of a $3.3-billion (U.S.) smelter in Kitimat, B.C., even as stagnant prices have spurred a selloff of other aluminum assets.
London-based Rio Tinto PLC, which acquired Montreal-based aluminum giant Alcan for $38.1-billion in 2007, is expected to announce Thursday it has final approval to modernize the 57-year-old smelter to double its capacity
Approval will see Rio spend another $2.7-billion on Kitimat, after already setting aside $650-million towards the upgrade, raising the construction price tag more than 30 per cent from $2.5-billion. The plan includes demolishing a building and clearing space for a new plant.
Rio Tinto Alcan has announced that it is “streamling” its aluminum assets after a “strategic review.”
The company says: “The move will allow Rio Tinto Alcan to concentrate on its strategy to
grow the value of its high quality, tier one assets and improve the
product group’s financial performance.”
Six assets in Australia and New Zealand will be spun off into a new company for sale, while a second group of seven assets in France, Germany, the United States and the United Kingdom will continue to be managed by RTA while the company considers divestment options.
Rio Tinto’s interests in six Australian and New Zealand assets will transfer into a new business unit, to be called Pacific Aluminium, and be managed and reported separately from the Rio Tinto Alcan product group prior to divestment. These are:
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Australia: Gove bauxite mine and alumina refinery, Boyne Smelters and the associated Gladstone Power Station, the Tomago smelter and the Bell Bay smelter
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New Zealand: New Zealand Aluminium Smelters
A second group of seven non-core assets will continue to be managed by Rio Tinto Alcan while it further investigates divestment options.
These assets include:
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France and Germany: Three Specialty Alumina plants and the Gardanne refinery
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United States: Sebree smelter
United Kingdom: Lynemouth smelter and associated power station, for which potential options include closure
The news release quotes Rio Tinto chief executive Tom Albanese as saying: “The assets identified for divestment are sound businesses that are well-managed with productive workforces. But they are no longer aligned with our strategy and we believe they have a bright future under new ownership. The strength of our balance sheet means that we can choose the most opportune method and timing to divest these assets, which may not occur until the economic climate improves. In the meantime, we will continue to run these operations safely and efficiently.
“This move is a further significant step towards achieving our performance targets in the Aluminium product group. We have already made good progress, with plans in place to generate sustainable performance improvement, and we are investing at a number of our core assets.”
Rio Tinto Alcan chief executive Jacynthe Cote said “We are already well on our way to building a truly outstanding aluminum business. Streamlining the product group allows Rio Tinto Alcan to concentrate its efforts even more on driving performance improvements and investing in growth to increase shareholder value.”
Rio Tinto says it has consultations with affected stakeholders and the workforces involved.
Paul Henning, RTA vice president of BC operations, is not only a corporate manager. He was the very entertaining master of ceremonies for the announcement. (Robin Rowland/Northwest Coast Energy News).
Michel Lamarre, director of the Kitimat modernization project, talks about the challenges of the next two years until first metal in 2014. (Robin Rowland/Northwest Coast Energy News)
