LNG Canada has postponed the Final Investment Decision on the Kitimat project citing the “impact of global industry challenges.” The latest estimates said that the project would cost $40 billion.
The news release says that despite strong community support and regulatory approval, what LNG Canada called “the context of global industry challenges, including capital constraints” led to the decision. In other words, the continued low price of oil is constraining projects across the energy industry.
LNG Canada’s Joint Venture Participants Delay Timing of Final Investment Decision
Impact of global industry challenges, despite strong project fundamentals
Vancouver, British Columbia — Today, LNG Canada announces that its joint venture participants – Shell, PetroChina, Mitsubishi Corporation and Kogas – have decided to delay a final investment decision on LNG Canada that was planned for end 2016.
LNG Canada remains a promising opportunity – it has strong stakeholder and First Nations’ support, has achieved critical regulatory approvals, has important commercial and engineering contracts in place to design and build the project, and through its pipeline partner Coastal Gas Link, has received necessary environmental approvals and First Nations support along the pipeline right-of-way.
“Our project has benefitted from the overwhelming support of the BC Government, First Nations – in particular the Haisla, and the Kitimat community. We could not have advanced the project thus far without it. I can’t say enough about how valuable this support has been and how important it will be as we look at
a range of options to move the project forward towards a positive FID by the Joint Venture participants,” said Andy Calitz, CEO LNG Canada.
Through their efforts to build a strong LNG sector for Canada, and a critical, cleaner energy alternative for the world, the governments of British Columbia and Canada have developed sound fiscal and regulatory frameworks for success.
However, in the context of global industry challenges, including capital constraints, the LNG Canada Joint Venture participants have determined they need more time prior to taking a final investment decision. At this time, we cannot confirm when this decision will be made.
In the coming weeks, LNG Canada will continue key site preparation activities and work with its joint venture participants, partners, stakeholders and First Nations to define a revised path forward to FID.
LNG Canada Joint Venture Participants are Shell (50%), PetroChina (20%), Mitsubishi Corporation (15%)
and Kogas (15%).
Haisla Nation chief councillor Ellis Ross issued a statement that said:
Haisla Nation Council very firmly believes in the future of liquefied natural gas for the Kitimat Valley and Haisla territory. It is an industry which has the capacity to grow jobs, provide new training opportunities and provide a sustained quality of life for Haisla members. It’s worth remembering that LNG Canada is a relatively new project to the area, and decisions on major projects such as these can take a long time to reach.
Today’s decision was the second time the FID was postponed. Andy Caloz LNG Canada’s CEO was quoted by Bloomberg News as saying that the project hasn’t been canceled. It has all the necessary approvals from regulators in Canada and doesn’t require any more work in the country.
“The whole global LNG industry is in turmoil,” Calitz told a conference call, Bloomberg reported, adding that Western Canada still has advantages including its proximity to customers in Asia. “I’m confident that the Japanese market remains available to LNG Canada.”
The Shell-led LNG Canada project in Kitimat has received a facility permit from the B.C. Oil and Gas Commission (OGC), the company said Tuesday.
A news release from LNG Canada says the permit is one of the key permits required for the construction and operation of the proposed LNG Canada project.
LNG Canada is the first LNG project in British Columbia to receive this permit, which focuses on public and environmental safety, and specifies the requirements the project must comply with when designing, constructing and operating the proposed LNG export facility in Kitimat.
The news release warns “that while today’s announcement is an important step forward for LNG Canada, the project must ensure it is economically viable and meets several other significant milestones including finalizing engineering and cost estimates, supply of labour, and achieving other critical regulatory approvals before making a final investment decision.”
That means that Shell and its partners are still keeping a close eye on factors such as the continuing collapse of the price of oil on world markets, the volatile natural gas market in Asia and the slowdown in the economy in China.
The news release goes on to say:
“We have made excellent progress in the past two years, achieving a number of critical milestones,” said Andy Calitz, CEO of LNG Canada. “Receiving our LNG Facility Permit could not have been achieved without the important input we received from the Haisla Nation and the local community of Kitimat. We continue to progress our project and appreciate the ongoing support from First Nations, the local community and other stakeholders.”
“The OGC identified several conditions that must be met by LNG Canada to design, construct and operate the project,” says Calitz. “We have reviewed these conditions and are confident that we will meet these conditions as they are aligned with LNG Canada’s core safety values and commitment to protect the environment, the community and our workers.”
LNG Canada continues to develop a number of important plans to address public safety and minimize the effects on the environment and local community. For example, LNG Canada is working closely with local emergency response organizations, as well as leading safety experts, in the development of an emergency response framework for the proposed project.
“Safety is our first priority. Safety as it relates to people and the environment is embedded into the design and planning of our proposed facility, and will carry into the construction and operation phases of our project should the project go ahead,” said Andy Calitz.
Social and economic benefits from the LNG Canada project include local employment and procurement opportunities, federal, provincial and municipal government revenue and community investments. Since 2012, LNG Canada has distributed more than $1 million to community initiatives, such as emergency services, trades scholarships and community services. LNG Canada has also contributed more than $1.5 million in programs to build awareness and help provide training for trades careers in all industries, and particularly the emerging LNG industry.
LNG Canada is a joint venture company comprised of Shell Canada Energy (50%), an affiliate of Royal Dutch Shell plc, and affiliates of PetroChina (20%), Korea Gas Corporation (15%) and Mitsubishi Corporation (15%). The joint venture is proposing to build an LNG export facility in Kitimat that initially consists of two LNG processing units referred to as “trains,” each with the capacity to produce 6.5 million tonnes per annum of LNG annually, with an option to expand the project in the future to four trains.
The headline on Thursday’s CBC.ca coverage of the sudden controversy over a boycott in British Columbia of Tim Horton’s over the Enbridge ads sums up everything that’s wrong about media coverage not only of the boycotts, but of northwest energy and environment issues overall.
“Tim Hortons yanks Enbridge ads, sparks Alberta backlash.” The anger at Tim Hortons across northwest British Columbia over those Enbridge ads, the calls for a boycott have been building for more than two weeks but no one in the media noticed despite widespread posts on Facebook and other social media.
As usual, the concerns of the northwest didn’t really become a story until Alberta got involved and the story has become the “Alberta backlash.” Now, there’s a backlash on social media to the Alberta backlash, with northwestern British Columbians tweeting and posting their displeasure, angry at the usual blinkered views of Alberta-centric coverage of energy issues.
Let’s make one thing clear– despite the outraged cries of the usual suspects like Defence Minister Jason Kenney, Conservative MP Michelle Rempel, who represents Calgary Centre-North and Kyle Harrietha, the Liberal candidate for Fort McMurray-Cold Lake that the boycott was aimed at Alberta’s entire energy industry and the province’s views of a manifest destiny as an energy super power, the doughnut boycott was really aimed specifically at Enbridge, and the company’s arrogance and incompetence.
Of course Jean, like most Albertans, isn’t looking at the bigger picture. The question that Jean should really be asking, is the continuing unquestioning support for Enbridge actually harming the rest of the Alberta energy industry by increasing the resistance in northwestern BC to other energy projects? When are Alberta politicians, whether federal or provincial, ever actually going to show even a Timbit of respect for the issues in northwestern British Columbia?
Look at what Enbridge is doing
There is strong support (with some reservations) for the liquified natural gas projects. There is a level of support for pipelines that would carry refined hydrocarbons to the coast, something that the new premier of Alberta, Rachel Notley is seriously considering. But it is so typical of Alberta, the Alberta media and most of the Canadian media, to believe that the boycott was an attack on the entire energy industry.
Ask any executive of an energy company that wants to do business in northwestern British Columbia and they’ll come up with the a joke that is now so old and so often repeated that it’s become a cliché, “We look at what Enbridge is doing and then do the exact opposite.”
The fact is that Enbridge has been dealing with northwestern British Columbia for more than ten years and they still can’t do anything right. Shell, Chevron, Petronas (and before them Apache) and even TransCanada make more efforts to listen to the people, First Nations and non-Aboriginal residents alike, than Enbridge ever has or ever will (despite their claims in their PR campaigns).
While these energy giants may not agree with what they hear, they are respectful and depending on their corporate culture are making genuine efforts to come up with ways to make their projects work. After a decade of blunders, however, Enbridge still hasn’t shown that much respect for anyone here. Those touchy feely ads that appear on television and at Tim Horton’s are just another example of how not to run a public relations campaign.
There are those who oppose any bitumen sands extraction who signed the online petition, but the core of opposition, as always, comes from northwestern BC and the issue is an ill-conceived pipeline.
Enbridge has been successful in one area of its public relations strategy. They’ve convinced Albertans that Enbridge and the Northern Gateway pipeline is an essential part of not only the Alberta economy but Alberta culture. Any attack on Enbridge becomes an attack on Alberta. Hence the unreasoned anger when after Tim Hortons pulled the ads.
The big blame America lie
The other Big Lie we keep hearing from the Harper Government, is that this all orchestrated by American NGOs and activists. Again this shows Alberta-centric contempt for British Columbia. It’s very easy and convenient to keep believing that everyone in northern British Columbia are dumb and stupid and are being led by the ear by those nasty green Americans who have it in for the efforts to make Canada an energy superpower. That idea, promoted by the more conservative Canadian media has always been animal waste. The battle to protect the environment of northwestern British Columbia while at the same time attracting resource projects that have recognized and obtained social licence to operate has always and will always in BC on a case by case, community by community basis.
The only media that so far has managed to get it half right is Jason Kirby writing in MacLean’s who notes that the trouble began on May 18 when Enbridge put up the Tim Hortons ad on their own website. (Did I mention that Enbridge is both incompetent and arrogant?) and it was immediately noticed by those individuals and activists that monitor the Enbridge website.
A morning shock with your morning coffee and Timbits
Social media across northwestern British Columbia, mostly Facebook, began spreading the news within hours of the ads appearing in the local Timmys. There were angry posts from individuals who had walked in Tim Hortons and saw the ads.
Post in the Kitimat Politics Facebook group.
Why didn’t the media get the story?
So why wasn’t the story covered by the media at least ten days ago?
That’s because in this age of tight budgets, it’s considered easy and economical to try to all of northern BC cover from either Vancouver or Calgary; that means covering from far away both the coast where the pipelines and tankers may or may not operate to the east near the Rockies where the natural gas extraction is on going
If you look at map of northern BC, and the two federal ridings Skeena Bulkley Valley and Prince George–Peace River–Northern Rockies, the population is about 200,000 spread over an area about half the size of Europe. Both ridings in this region are supposedly vital to the future of the Canadian economy, but you wouldn’t know it from most of the media. (The Globe and Mail is an exception, with more ongoing coverage of northern BC than you will find in either The Vancouver Sun or The Province).
Elections Canada map showing just how big the two northern BC ridings are. (Elections Canada)
As for CBC, there are just eight radio staff, two in Prince Rupert and six in Prince George to cover all the apparently vital issues across half the province. ( Almost all the staff work mostly for the Daybreak North morning show which dominates the regional rates but it looks like with the latest CBC cutbacks that at least one of those positions will be eliminated). CBC TV and Global cover the region from Vancouver.
At least the Vancouver based media make efforts to cover the north from time to time. The Alberta media, however, especially the Calgary Herald, is hopeless, and so biased against British Columbia and so dismissive of the issues here, that the coverage across Alberta is completely unreliable about 90 per cent of the time—it’s no wonder that the majority of Albertans have no understanding of British Columbia culture and issues.
Then there are the punditi, pontificating from their cubicles in Ottawa and Toronto without a clue, without doing the basic journalism of picking up the phone (or writing an e-mail) to actually find out what’s going on.
Andrew Coyne, for example, made these rather silly two tongue-in-cheek tweets Thursday night. While Coyne’s tweets do often exhibit a sense of humour, his excellent coverage of the decline of our democratic parliament has to be compared with his blind, unchecked ideological assumptions about the issues of the northwest, which are simplistic, cubicle bound and far off the mark. The same can be said for Jeffrey Simpson in his occasional writing about this region. Neither the view from the Hill, where you can see as far as the Queensway, nor from Bloor Street, where you can see part of the Don Valley, are vantage points to understand what is going in northern British Columbia.
Update: Rex Murphy, writing in the National Post, has now joined the fray, no longer making a secret of his absolute disbelief in climate change and support for Enbridge. However, if you read his column, it is scathing in its contempt for the working men and women of British Columbia who want sustainable environmentally safe resource projects. It appears that to Murphy the only people in this country who actually work for a living in Canada are in Alberta and Newfoundland and no where else. Kitimat has been an industrial town since it was founded in the 1950s, Kitimat rejoiced when former Mayor Joanne Monaghan succeeded in bringing a Timmys to Kitimat and the majority of Kitimat residents voted in the plebiscite against Enbridge. But, of course, all those facts are irrelevant to Murphy and the other conservative pundits who never come within a thousand kilometres of northwestern BC, who believe we can’t think for ourselves and are easily misled by American environmentalists. No wonder journalism is in a death spiral.
Error checks
So let’s look at the specific errors in the media coverage of the Tim Horton’s story.
Both Shawn McCarthy in the Globe and Mail and Kyle Bakyx on CBC.ca seem to accept without question that SumofUs, was the instigator of the petition. Like many issues in northwestern BC, the Lower Mainland or US based activist groups follow the lead of northwestern BC and jump on the bandwagon, not the other way around. Jason Kirby in MacLean’s says the boycott movement began a week ago. Here in Kitimat, it began within hours of the ads appearing in the local Timmys and was picked up on activist social media groups before the SumofUs petition site.
McCarthy repeats the conventional wisdom: “The Conservatives and oil industry supporters have been waging a public relations war with the environmental groups that oppose expansion of the oil sands and construction of new pipelines.”
When is the media ever going to learn that opposition to Enbridge is widespread across most of northern British Columbia, from First Nations to city and regional councils to a plurality of residents? When is the media going to drop the stock phrase “First Nations and environmentalists”? Does anyone remember the vote in Kitimat last April against the Northern Gateway project?
CBC.ca quotes Alan Middleton of York University “Enbridge, of course, is not just pipelines and oilsands; they are a whole range of products including heating people’s homes. Tims should have thought about that.” Again a mistake. I lived in Toronto for many years. A company called Consumers Gas supplied natural gas to homes until it was taken over by Enbridge, so Enbridge does heat the homes in Toronto. But what has that got to do with northwestern British Columbia? Why didn’t CBC.ca call the University of Northern British Columbia? Easier to call York (which by the way is where I got both my BA and MA)
McCarthy quotes Rempel as saying, “One has to wonder whether head office talked to their franchise owners in Alberta before making the decision. I imagine those calls are being made this afternoon – certainly there are a lot of people voicing their displeasure.”
The question that should have been asked whether or not Tim Hortons consulted their franchise owners in British Columbia before ordering them to play the ads. People here were “voicing their displeasure” from the moment the first Kitimatian walked into the local Timmys for an early morning coffee and had to stand in line while being told how wonderful Enbridge is.
Of course, if Albertans force Tim Hortons into reinstating the ads, that will only trigger a bigger boycott in British Columbia. As Maclean’s asks, “what were they thinking?”
Jason Kenney, flying in, flying out
As for Jason Kenney, who is quoted by the CBC as tweeting: “I’m proud to represent thousands of constituents who work for Enbridge & other CDN energy companies,” if Kenney aspires to be Prime Minister one day, he had better start thinking about representing more Canadians than just those employed by the energy industry—a mistake that his boss Stephen Harper keeps making.
Jason Kenney did visit Kitimat for a just a few hours in February 2014 for a tour of the Rio Tinto modernization project and an obligatory and brief meeting with the Haisla First Nation council. If Kenney had actually bothered to stick around a few more hours and talk to the community, everyone from the environmentalists to the industrial development advocates, he might not have been so quick on the trigger in the Twitter wars.
Not one of the major media who covered this story, not The Globe and Mail, not CBC.ca, not MacLean’s, no one else, once bothered to actually call or e-mail someone who lives along the Northern Gateway pipeline route in British Columbia, the area where the boycott movement actually began to ask about Enbridge’s track record in this region. The media still doesn’t get it. This morning’s stories are all about Alberta. As usual, my dear, the media doesn’t give a damn about northwestern British Columbia.
That is why the coverage of the Tim Hortons boycott is a double double failure of the Canadian media.
Where else the media is failing northwestern BC
Full disclosure. Since I took early retirement from CBC in 2010 and returned to Kitimat, I have worked as a freelancer for CBC radio and television, Global News, Canadian Press, The National Post, The Globe and Mail and other media.
However, largely due to budget cuts, freelance opportunities, not only for myself, but others across the region have dried up. The media seems to be concentrating more on the major urban areas where there is larger population base and at least more of the ever shrinking advertising dollar. I am now told more often than I was a couple of years ago that “we don’t have the budget.”
Now this isn’t just a freelancer who would like some more work (although it would be nice). If the media these days actually had environmental beats for reporters the boycott of Tim Hortons in northwest BC would have been flagged within a couple of days, not almost two and half weeks and later only when Alberta got hot under its oily collar.
So as well as the Tim Horton’s boycott here are two major ongoing stories from Kitimat that the media haven’t been covering.
100 day municipal strike
-Kitimat’s municipal workers, Unifor 2300, have been on strike since February 28. Three rounds of mediation have failed, the union has refused binding arbitration, the pool, gym and community meeting halls have been closed since February, the municipal parks and byways are now returning to the wilderness. Only essential services are being maintained (but residents still have to pay their property taxes by July 2, taxes that are skyrocketing due to increased assessments for home values based on LNG projects that haven’t started) By the time most people read this the strike will have been on for 100 days. There is no settlement in sight and both sides, despite a mediator ordered blackout, are fighting a press release war on social media. Can you imagine any other place that had a 100 day municipal workers strike with no coverage in the province’s main media outlets, whether newspaper or television? Local CBC radio has covered the strike, as has the local TV station CFTK. (Update: District of Kitimat says in a news release that the mediator has now approved the DoK news releases.)
Of course, in the bigger picture the media concentrates on business reporting. There haven’t been labour reporters for a generation.
Kitimat air shed hearings
-The environmental hearings on the Rio Tinto Alcan proposal to increase sulphur dioxide emissions in the Kitimat Terrace air shed, after two weeks in Victoria, where there was no media coverage, are now continuing in Kitimat, where again there is little media coverage. CFTK is covering the hearings; otherwise the main coverage comes from the activist group DeSmog, hardly a credible or unbiased source. I made the decision not to cover the hearings either. I can’t afford any longer to sit around for two weeks, unpaid, no matter how vital the hearings are to the community.
So if most Canadians were surprised that there was a boycott of the unofficial national symbol, Tim Hortons, it’s because of that double double media fail and as the media continues to decline, as budgets are cut, as “commodity news” disappears, expect more surprises in the future. Oh by the way Kitimat is vital to the national economy but we can cover it from a cubicle in Toronto.
Final disclosure: I am not a coffee drinker. When I go to Timmy’s I prefer a large steeped tea and an apple fritter.
The Shell-led LNG Canada project unveiled its commitments to Kitimat at a ceremony at the community information centre at the old Methanex site on October 7, 2014.
LNG Canada has forged the commitments in a sheet of aluminum that is bolted to the wall of the community information centre. Kitimat Mayor Joanne Monaghan unveiled the aluminum sheet, assisted by Kitimat Fire Chief Trent Bossence. Afterward, Susannah Pierce, Director, External Affairs, LNG Canada, signed the sheet, followed by Mayor Mongahan, Chief Bossence, other LNG Canada officials and members of the community.
Guests at the unveiling of LNG Canada’s commitment to the Kitimat community watch a video prior to the unveiling ceremony. (Robin Rowland/Northwest Coast Energy News)
LNG Canada’s Community Commitments
LNG Canada is proud to outline its commitments to the community, created through a collaborative effort with local residents. In April, June and September 2014, LNG Canada met with the Kitimat community to develop and refine the commitments our company will meet to ensure we are a valued member of the community throughout the lifetime of our project. We are grateful to the many individuals who took part and shared their wisdom and experience.
Our Commitments to the Community
1) LNG Canada respects the importance residents place on companies being trusted members of their community. We aspire to gain this trust by proactively engaging with the community in an honest, open and timely manner; by listening and being responsive and accessible; and by operating in a safe, ethical and trustworthy way.
2) LNG Canada understands that the ongoing well being of the community and the environment are of paramount importance. LNG Canada will consider the health and safety of local residents, employees, and contractors in every decision it makes.
3) LNG Canada recognizes that the environment and natural surroundings are vital to the community. We will be dedicated to working independently and with the community to identify and carry out ways to reduce and mitigate the impact of our facility footprint on the natural surroundings – in the Kitimat Valley, the Kitimat watershed and the Kitimat airshed.
4) LNG Canada is aware of the importance to the community of maintaining and improving access to outdoor recreational opportunities. We will work with the local community to facilitate the creation of new projects that protect or enhance the natural environment and that provide access to the outdoors and the water.
5) LNG Canada recognizes it will be one company among other industrial companies operating in the community. We will work with other local industry leaders to manage and mitigate cumulative social and environmental impacts, and create opportunities to enhance local benefits associated with industrial growth.
6) LNG Canada acknowledges that the commitments we make are for the long term. We will work with the community to develop an environmental, social and health monitoring and mitigation program that meets regulatory requirements and we will share information on the program with the public for the life of our project.
7) LNG Canada understands the need for the community to benefit from our project and values the contributions all members of the community make to the region. We will work with the community to ensure that social and economic benefits from our project are realized and shared locally.
8) LNG Canada acknowledges the importance the community places on our company being an excellent corporate citizen and neighbour that contributes to the community. In addition to providing training, jobs and economic benefits, we will make social investments important to the community to positively impact community needs and priorities.
Kitimat mayor Joanne Monaghan, Susannah Pierce, Director, External Affairs, LNG Canada and Fire Chief Trent Bossence after the ceremony unveiling the community commitment. (Robin Rowland/Northwest Coast Energy News)
LNG Canada has called a news conference in Vancouver early Wednesday morning to “announce a project milestone.”
BC Premier Christy Clark, BC LNG Minister Rich Coleman, LNG Canada executives and delegations from the joint venture partners, Shell Canada Energy, Diamond LNG Canada, an (“affiliate” of Mitsubishi), Korea Gas Corporation and Phoenix Energy (an “affiliate” of PetroChina) will be present at a downtown hotel.
Royal Dutch Shell has said it will deploy more Chinese equipment at its struggling US shale business – becoming the latest natural resources company to try to reduce costs by switching to cheaper Asian suppliers.
Miners such as Rio Tinto and Antofagasta have already been encouraged by improvements in the reliability of Chinese machinery, which they say can now be integrated into their existing operations without compromising efficiency or safety standards….
Shell’s move comes as oil and mining companies – which ramped up capital expenditure in recent years amid a huge commodities boom – are being pressed by shareholders to curb spending and improve returns….
Rio Tinto, the Anglo-Australian miner, has also been on a spending spree in China. The company, which is slashing its capital spending after disappointing investors with cost overruns, says it made close to $2bn-worth of equipment purchases in China last year, and around $1bn-worth in India.
Rio Tinto Alcan has said that much of the building materials and equipment for the Kitimat Modernization Project has come from China, often in huge modules which are then inserted into the new buildings as part of the aluminum smelter upgrades.
At the moment the site redirects to the web designer site, as that company continues to build the site.
Full operation of the website is expected to begin in the next few days.
Douglas Channel Watch is playing catchup. Enbridge Northern Gateway launched a plebiscite vote yes website YesforKitimat, a couple of weeks ago.
Skeena Bulkley Valley MP Nathan Cullen and the New Democratic Party also have a campaign website, largely aimed at the rest of the province, Take Back Our Coast promoting rallies in Campbell River, Powell River, Courtney, Duncan, Victoria and Vancouver.
The two major Kitimat LNG projects are also about to launch new websites. Shell’s LNG Canada held focus groups and discussions in Kitimat a few weeks ago as part of the company’s planning for its new website, which LNG Canada public relations staff said would be more engaging for the residents of the region. At the recent open house, Chevron, which is building the KM LNG project at Bish Cove also said they were redesigning their website.
The Coastal Gaslink pipeline proposal to bring natural gas to Kitimat for the Shell LNG Canada project is now entering the 45 day public comment environmental assessment period. It opens on March 21, 2014 and closes May 5, 2014.
Coastal GasLink Pipeline is a wholly-owned subsidiary of TransCanada Pipelines. The company is proposing to develop an approximately 650 kilometre pipeline to deliver natural gas from the area near the community of Groundbirch, B.C., to the LNG Canada gas liquefaction facility proposed to be developed by Shell Canada Ltd. and its partners in Kitimat.
An electronic copy of the Application and information regarding the British Columbia environmental assessment process are available at www.eao.gov.bc.ca.
The British Columbia Environmental Assessment Office, with the support of Coastal GasLink, will host four open houses in northern B.C. communities during the comment period.
The proposed Project would have an initial capacity of about two to three billion cubic feet (bcf) of natural gas per day with the potential for expansion up to about five billion cubic feet per day. The company says the expansion scenario assessed in the application does not involve the construction of additional pipeline; the number of potential future compressor stations would change.
The proposed pipeline is subject to review under British Columbia’s Environmental Assessment Act.
Starting on March 21, there are 45 days for the submission of comments by the public in relation to the Application. All comments received during this comment period will be considered. The intention of seeking public comments is to ensure that all potential adverse effects – environmental, economic, social, heritage and health – that might result from the proposed Project are identified for consideration as part of the assessment process.
A map provided by LNG Canada shows the potential footprint of the liquifaction facility and marine terminal next to the Rio Tinto Alcan aluminum smelter. The map was part of LNG Canada’s filing for a BC environmental assessment and shows that the old Eurocan dock would be part of the facility.(LNG Canada)
Rio Tinto has signed an option agreement with the LNG Canada project “to acquire or lease a wharf and associated land at its port facility” in Kitimat.
Since LNG Canada, a joint venture of Shell Canada Energy, Phoenix Energy Holdings Limited (an affiliate of Petro-China Investment (Hong Kong) Limited), Kogas Canada LNG Ltd. (an affiliate of Korea Gas Corporation) and Diamond LNG Canada Ltd. (an affiliate of Mitsubishi Corporation) has not yet made a Final Investment Decision on the project, the option will likely be triggered if that decision is made. There is currently uncertainty about Royal Dutch Shell projects worldwide due to management restructuring at the parent company.
The news release quotes Sam Walsh, chief executive, Rio Tinto as saying: “This is an excellent example of how we can generate meaningful value from our existing assets by selling options on port facilities to LNG Canada enabling it to share one of the best deep water ports on the western seaboard of the country. This innovative approach will provide an expanded gateway for Canadian resources to worldwide markets which has the potential to benefit the communities and economy of British Columbia.”
Andy Calitz, vice president, LNG Canada commented in the news release: “We are pleased to confirm the finalization of this agreement. We believe the LNG Canada project represents the best opportunity to bring the liquefied natural gas industry and its benefits to the people and
communities of British Columbia.”
The deal between Rio Tinto, parent company of Rio Tinto Alcan, for the old Eurocan dock, has been in the works for some time. When LNG Canada filed for its environmental assessment with the province of British Columbia a few weeks ago, the map showed the footprint of the project extended from the old Methanex plant site, where LNG Canada will be located through RTA lands on the Kitimat river estuary to the dock, long before Wednesday’s deal was signed.
The list of participants in the oil spill preparedness and response study released last week by the federal government shows two glaring no shows, the District of Kitimat and Rio Tinto Alcan.
The Haisla Nation and the Gitga’at Nation did provide written submissions to the panel.
The expert panel was set up by the federal government to review “oil handling facilities and ship-source oil spill preparedness and response.” The expert panel was to review the “structure, functionality and the overall efficiency and effectiveness of the system, as well as analyzing the requirements for hazardous and noxious substances, including liquefied natural gas.”
The panel also invited any interested groups to submit documents or their own views to be taken into consideration.
Among the stakeholders interviewed by the panel were companies and organizations very familiar to Kitimat; Chevron and Shell, main partners in two of the LNG projects; Enbridge, which has proposed the Northern Gateway Pipeline and Kinder Morgan which has proposed expanding the dilbit pipeline on the Lower Mainland. Other stakeholders included Coastal First Nations, the Prince Rupert Port Authority, SMIT Marine and the Vancouver Port Authority.
As well as the Haisla and the Gitga’at, five west coast municipalities submitted their own reports to the tanker panel, both the city and districts of North Vancouver, the city of Richmond, the District of Ucluelet and the District of West Vancouver. San Juan County in Washington State also made a submission to the panel. So did the Prince Rupert and Vancouver Port authorities.
Chevron, Enbridge, Imperial Oil, Kinder Morgan, Pacific Northwest LNG, Seaspan Marine, and the Union of BC Municipalities, among others also submitted their views to the panel.
So why didn’t the District of Kitimat participate? When it came to the Enbridge Northern Gateway Joint Review, the mayor and council always maintained their neutrality motion meant that the District would not be an active participant. That was always a short sighted viewpoint. The District should have participated actively in the JRP in such a way as to protect the region’s interests where necessary while remaining neutral. If the District of Kitimat sat out the tanker panel because of the Northern Gateway neutrality policy, that was no excuse, because the expert panel’s mandate specifically included LNG.
Tanker traffic is a potential threat to the San Juan Islands (the Gulf Islands on the American side of the border). It is astounding that San Juan County would think that the Canadian tanker panel was important enough to make a submission and the District of Kitimat did not.
What about Rio Tinto Alcan? Kitimat has been a private port for 60 years, run first by Alcan and then by Rio Tinto Alcan. Why wasn’t RTA asked to participate as a stakeholder? Why didn’t RTA make a submission? Those who are pushing the Northern Gateway terminal always like to say that tankers have been calling at Kitimat for those 60 years. That is true. Of course, none of those tankers have been the Very Large Crude Carriers proposed by Northern Gateway. However, those 60 years means that RTA has the expertise on the Port of Kitimat and Douglas Channel. RTA probably has important data that could have helped both the expert panel and Genivar (which pointed out the paucity of data on small and medium sized tankers). In not participating in the tanker panel submissions and possibly not providing valuable data on Douglas Channel, RTA neglected its social responsibility both to the community of Kitimat and the rest of the province of British Columbia.
However, in the context of global industry challenges, including capital constraints, the LNG Canada Joint Venture participants have determined they need more time prior to taking a final investment decision. At this time, we cannot confirm when this decision will be made.
