All posts by Canadian Press

Clark govt signs LNG deals with two more First Nations

April 9, 2014Energy and Resources, First Nations, LNGfeaturedCanadian Press

Two more BC First Nations sign deals for LNG — photo: Tina Lovgreen / BCIT Commons

By Dirk Meissner, The Canadian Press

VICTORIA – The British Columbia government has moved to bring First Nations on board its much-anticipated multibillion-dollar liquefied natural gas boom.

Two north coast First Nations signed revenue-sharing agreements Wednesday with the government related to the development of a proposed liquefied natural gas export terminal on their traditional territories near Prince Rupert.

It’s a deal that could be worth up to $15 million for the Metlakatla and Lax Kw’alaams nations.
Related Stories

Premier Christy Clark and leaders from the First Nations who participated in formal signing ceremonies at the legislature called the agreements — the first such connected to LNG — historic.

Clark said the revenue-sharing agreements signal her government’s aims to include First Nations in the province’s LNG development plans, which she says represent a generational opportunity that will rival Alberta’s oilsands.

The First Nations’ leaders said the achievement indicates willingness among some aboriginal groups to embrace some forms of resource development.

A majority of First Nations have opposed the proposed Northern Gateway pipeline project that would move Alberta oil products to B.C.’s coast for export to Asia.

The LNG revenue-sharing agreements were negotiated with the First Nations because their communities, located north of Prince Rupert, are close to a proposed Aurora LNG development at Grassy Point.

Aurora LNG is a proposed joint venture by Nexen Energy ULC (TSX:NXY), a wholly owned subsidiary of CNOOC Limited, INPEX Corporation and JGC Corporation.

“Agreements like this plant the seed for prosperity that lasts for generations,” Clark said at the signing ceremony. “This kind of an opportunity, this kind of co-operation, the stability that this agreement represents today, between First Nations, between government and industry, is going to play a crucial role in creating the confidence that investors need to make sure that their final investments come to fruition.”

By signing the agreements, the First Nations give their support and co-operation for prospective LNG development on their territory, she said.

Metlakatla Chief Harold Leighton said the status quo is no longer acceptable for First Nations who want to be part of development efforts in northwest B.C.

“Revenue sharing agreements related to Grassy Point are a good example of how things can happen when we approach LNG and other types of development in the spirit of partnership and co-operation,” said Leighton. “We have an opportunity to build an economy and improve the social well-being of the Metlakatla and northwest.”

The agreements with Metlakatla and Lax Kw’alaams involve sharing portions of B.C. government revenues related to the Grassy Point lands.

Clark has said government revenues from prospective LNG developments in the northwest could erase the province’s debt, currently at more than $60 billion.

Earlier this year, the government unveiled a proposed LNG tax that could start at 1.5 per cent but rise to seven per cent.

The rate will rise once the plants recover the capital costs of building what are expected to be multibillion-dollar terminals that will super-cool natural gas into LNG for shipment to Asia. The first such plant could be in operation within four years.

There are about a dozen proposed LNG developments in B.C., but none has moved to the final investment-decision stage.

Can Ontario Liberals raise the green for public transit expansion?

April 7, 2014Urban & TransportfeaturedCanadian Press

Ontario Liberals to raise billions for public transit expansion — Photo: Wikimedia Commons

by Maria Babbage, The Canadian Press

TORONTO – With the prospect of an election growing more likely every day, the minority Liberals’ spring budget may turn out to be more campaign platform than peace treaty.

It will also need to lay out a plan to fund a massive expansion of public transit in the vote-rich Greater Toronto and Hamilton area — one of their key promises — without raising taxes for the middle class.

Premier Kathleen Wynne has promised that a new “revenue stream” to raise the estimated $2 billion a year that’s needed to fund public transit will be unveiled in the budget, expected May 1.

But she’s ruled out a hike in the HST, gas tax and personal income tax for middle-income families, which has been defined in finance documents as individuals earning between $25,000 to $75,000 a year.

Increased corporate taxes could help pay for transit

Wynne could raises taxes for businesses or higher-income earners — something the kingmaker New Democrats could support.

Last December, a government-appointed panel recommended that the Liberals raise corporate taxes to 12 per cent, coupled with other measures such as hiking the gas tax and the Harmonized Sales Tax.

Metrolinx, the provincial transit authority, had proposed a 15 per cent increase in development charges for businesses, as well as an average 25 cents per day off-street parking levy, among other “revenue tools.”

However, the parking charge could be passed on to drivers who use those spaces in places like shopping malls. As well, both measures on their own won’t raise the billions of dollars annually that’s needed.

“Green bonds” offer alternate funding tool

Experts say there is another option: so-called “green bonds,” which the government plans to issue this year.

Green bonds are a relatively new financing tool, intended to raise money that’s used exclusively to support projects with specific environmental benefits.

It will require legislation and certification, but the Liberals say it won’t be a confidence vote that could topple the government.

Green bonds would be a part of Ontario’s regular borrowing program, but that portion will be dedicated to environmentally friendly transit projects, officials say.

They argue the bonds would capitalize on the province’s ability to raise funds at low interest rates and save money over the long term because there are many investors who are prepared to pay to invest in specific green initiatives.

Green bonds are more appealing to investors if they have a competitive return relative to regular bonds, experts say.

Investors want green options: TD economist

Many investors would go the green route, all things being equal, said senior TD economist Sonya Gulati.

But green bonds have additional administrative costs. They have to be certified and monitored to ensure the money is being spent appropriately.

Right now, the World Bank is the big issuer of green bonds, but it has the expertise so it doesn’t incur extra costs, said Gulati. There may be additional fees attached if a government or corporation issue green bonds.

When those costs are passed on to consumers, they tend to be received poorly and rarely reach maximum subscription.

But at the end of the day, green bonds are still debt, said Mike Moffatt, a professor of business, economics and public policy at the University of Western Ontario’s Richard Ivey School of Business.

Debt servicing now province’s third biggest budget item

Servicing Ontario’s estimated $272.8-billion net debt — which has doubled since the Liberals took office in 2003 — is the third-largest government expenditure after health care and education.

If the Liberals plan to issue green bonds to fund transit in addition to the regular bonds they issue each year, that could become a problem, said Moffatt.

“There’s already concerns that the Ontario government is getting itself into a little too much debt, so if they keep compounding that by issuing more and more debt, it’s going to make a problem the province has even worse,” he said.

Spending more on servicing the provincial debt means less money spent on public services and government programs. It could also mean they won’t hit their deficit-shrinking targets.

Gridlock costing Toronto $6 billion a year

The Liberals have argued that improving public transit can’t be put off, that gridlock in the Toronto region is already costing the economy $6 billion a year.

While green bonds may save the Liberals’ political hides by avoiding new taxes, it does come at a cost, said Moffatt.

[quote]There’s no free lunch here. The transit’s going to get paid for, one way or another.[/quote]

“Either it’s going to get paid for by higher taxes or it’s going to get paid for by a higher debt, which means either higher taxes or less spending in the future.”

Anadarko stock rises after $5.15 billion contamination settlement

April 4, 2014Energy and ResourcesfeaturedCanadian Press

by Eric Tucker and Dina Cappiello, The Associated Press

WASHINGTON — The federal government on Thursday reached a $5.15 billion settlement with Anadarko Petroleum Corp., the largest ever for environmental contamination, to settle claims related to the cleanup of thousands of sites tainted with hazardous chemicals for decades.

The bulk of the money — $4.4 billion — will pay for environmental cleanup and be used to settle claims stemming from the legacy contamination.

The settlement resolves a legal battle over Tronox Inc., a spinoff of Kerr-McGee Corp., a company Anadarko acquired in 2006.

The Justice Department said Kerr-McGee, founded in 1929, left behind a long legacy of environmental contamination: polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive waste piles throughout the territory of the Navajo Nation, and dumping carcinogenic creosote in communities throughout the East, Midwest and South at its wood-treating facilities.

The company, rather than pay for the environmental mess it created, decided to shift the liabilities between 2002 and 2006 into Tronox, the Justuce Department said, while Kerr-McGee kept its valuable oil and gas assets.

“Kerr-McGee’s businesses all over this country left significant, lasting environmental damage in their wake,” Deputy Attorney General James Cole said. “It tried to shed its responsibility for this environmental damage and stick the United States with the huge cleanup bill.”

The settlement releases Anadarko from all claims against Kerr-McGee.

“This settlement … eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities,” said Anadarko CEO Al Walker.

The settlement funds will be paid into a trust that covers cleanup of contaminated sites across 22 states and the Navajo Nation.

Among the sites targeted for cleanup under the settlement are a former chemical manufacturing site in Nevada that has led to contamination of Lake Mead and a Superfund property in Gloucester, New Jersey, contaminated with thorium. About $1 billion will be directed to the Navajo Nation to address radioactive waste left behind by the region’s abandoned uranium mines.

The U.S. initially sought $25 billion to clean up decades of contamination at dozens of sites. A U.S. bankruptcy judge in New York in December found Kerr-McGee had improperly shifted its environmental liabilities to Tronox and should pay between $5.15 billion and $14.2 billion, plus attorney’s fees. Cole said at a news conference Thursday that the government decided that the $5.15 billion amount was more than enough to cover the damages.

“It provides us with recovery now as opposed to years and years down the road,” he said.

Tronox said in a statement that the settlement means environmental cleanup can begin and that people harmed by the pollution can be compensated.

After the settlement’s announcement, Anadarko’s stock rose 15 per cent, to $99.43.

Kinder Morgan review panel rejects 80% of applicants

April 2, 2014Energy and Resources, Pipelines and SupertankersfeaturedCanadian Press

Kinder Morgan review panel rejects 80 per cent of applicants — A Vancouver rally against Kinder Morgan’s proposed pipeline (Photo: Damien Gillis)

by Dene Moore, The Canadian Press

VANCOUVER – The National Energy Board hearings into Kinder Morgan’s proposed pipeline expansion through Alberta and British Columbia will begin in August and hear from more than a thousand people, groups and communities.

But only 400 of the more than 2,118 applicants who applied to be interveners in the hearings will be allowed to participate.

Those groups given approval will be allowed to question experts and company officials and present evidence at the hearings.

They include: dozens of First Nations, the Alberta Federation of Labour, B.C. Green MLA and climate scientist Andrew Weaver, BC Nature, the BC Wildlife Federation, BP Canada, BC Hydro, the Burnaby Teachers’ Association, the Canadian Association of Petroleum Producers, the Chamber of Shipping of British Columbia, and cities from Kamloops to Victoria.

Environment Canada, Aboriginal Affairs and the federal Fisheries and Oceans department will also have intervener status, as well as the B.C. and Alberta provincial governments and the conservation groups Living Oceans and Raincoast Foundation.

Additional 1,250 invited to submit letter

Another 1,250 individuals and groups will be allowed to submit a comment letter to the panel but won’t be able to participate directly in the hearings.

Of the applications received, 452 that requested intervener status were given commenter status.

Another 468 were denied participation.

They include: New Democrat MP Kennedy Stewart, the Business Council of British Columbia, Canadian Centre for Policy Alternatives, Canadian Natural Resource Alliance, the City of Fort St. John, Dogwood Initiative and the Okanagan Upcycling Resource Society.

Texas-based Kinder Morgan’s $5.4-billion pipeline expansion would have the capacity to transport up to 890,000 barrels per day from Alberta to the company’s Westridge terminal in Burnaby.

A “rigged” process

Changes to the National Energy Board Act that came into effect in July 2012 limit participation to those directly affected by a project or those with specific expertise or information.

Caitlyn Vernon of the Sierra Club BC said the decision to deny participation is “profoundly undemocratic.” Added Vernon in a statement:

[quote]This is a rigged process, deliberately designed to silence the legitimate voices of British Columbians on an issue that has profound implications for our province. All British Columbians are directly affected by the Kinder Morgan proposal, which threatens B.C. families, jobs, salmon and climate.[/quote]

Trans Mountain took no position on individual applicants.

But the company told the panel “the legislative change is meant to avoid parties that may be affected by a project from being ‘lost in the crowd’ of parties whose issues are unrelated to a specific project,” the board stated in the decision released Wednesday.

Panel defends changes to Act

The panel said the changes to the National Energy Board Act were made to promote fairness and efficiency in the review process.

“If you are directly affected, you will be given an opportunity to present your concerns to the board, and the board will make its decision based on the application and all of the evidence before it,” the agency said.

The review panel will hear aboriginal evidence this August and September and hearings will begin next January.

The panel has until July 2, 2015, to complete its report and recommendation for the federal government.

CNRL pipeline leaks 70,000 litres near Slave Lake

April 2, 2014Energy and Resources, Pipelines and SupertankersfeaturedCanadian Press

CNRL pipeline leaks 70,000 litres near Slave Lake — An earlier CNRL leak in Cold Lake, Alberta (Chester Dawson / Wall Street Journal)

SLAVE LAKE, Alta. – A pipeline owned by Canadian Natural Resources Limited has spilled 70,000 litres of oil and processed water northwest of Slave Lake, Alta.

The Alberta Energy Regulator says the breach happened on Monday and was reported by CNRL (TSX:CNQ) the same day.

The regulator says the spill is not an emergency, the oil is not near any people, water or wildlife, and a cleanup is underway.

Low amounts of hydrogen sulphide gas were also detected.

Greenpeace Canada says CNRL has had almost twice as many pipeline incidents as other companies in Alberta.

Calgary-based CNRL could not immediately be reached for comment.

Read: CNRL faces charges over potentially deadly gas leak near First Nation

Taseko appeals Prosperity Mine rejection…again

March 26, 2014Metals and Minerals, MiningfeaturedCanadian Press

Taseko appeals Prosperity Mine rejection...again — The location of Taseko’s proposed New Prosperity Mine, west of Williams Lake

VANCOUVER – The company behind a proposed B.C. gold and copper mine that was rejected twice by the federal government is asking the Federal Court to quash the environment minister’s decision.

Taseko Mines Ltd. (TSX:TKO) says it’s filing a second application for judicial review of the decision against the New Prosperity mine, which is proposed near Williams Lake, B.C.

Taseko’s Brian Battison says the federal environmental review process was unfair and led Environment Minister Leona Aglukkaq to make the wrong decision when she said no to the mine.

Court documents to be filed in Federal Court claim changes made by the government to the Canadian Environmental Assessment Act two years ago are unconstitutional, because they go well beyond weighing the environmental impact of a project.

The B.C. government has approved the proposal, but Ottawa first rejected the proposed $1.5-billion mine in 2010, because the plan involved draining a lake of significance to local First Nations for use as a tailings pond.

The company says the revised plan will save the lake, but the environmental assessment found it would still cause significant adverse affects and cabinet rejected the proposal again last month.

BP spills oil into Lake Michigan

March 25, 2014Energy and Resources, Oil&Gas, Pipelines and SupertankersfeaturedCanadian Press

BP spills oil into Lake Michigan — BP’s Whiting Refinery on Lake Michigan

by The Associated Press

WHITING, Ind. – BP says it is assessing how much crude oil entered Lake Michigan following a malfunction at its northwestern Indiana refinery.

BP spokesman Scott Dean says crews have placed booms across a cove at the company’s Whiting refinery where workers discovered the oil spill Monday afternoon.

Dean says BP believes the oil released during an oil refining malfunction has been confined to that cove.

He says the oil entered the refinery’s cooling water system, which discharges into the lake about 20 miles southeast of downtown Chicago.

Indiana Department of Environmental Management spokesman Dan Goldblatt says an agency staffer reported seeing a large sheen on the lake about 2 a.m. Tuesday. Dean says that sheen was in the cove and was no longer visible several hours later.

Enbridge, Kinder Morgan opponents mark Exxon Valdez anniversary

March 24, 2014Energy and Resources, Pipelines and SupertankersfeaturedCanadian Press

Enbridge opponents mark 25th anniversary of Exxon oil spill — Art Sterritt and Coastal First Nations remain strongly opposed to Enbridge

VANCOUVER – Opponents of any increase in oil tankers off the B.C. coast are marking the 25th anniversary of the Exxon Valdez oil spill by launching a renewed campaign against two major pipeline projects.

Coastal First Nations are running newspaper and radio ads about the impacts they fear from oil spills at sea from Enbridge’s (TSX:ENB) Northern Gateway and Kinder Morgan’s Trans Mountain pipelines.

The coalition of aboriginal communities along the B.C. coast are asking residents to support a ban on oil tankers in their traditional territories.

The Sierra Club says Prince William Sound on the Alaska coast has still not recovered from Exxon Valdez spill on March 24th, 1989.

The two projects proposed in B.C. would mean more than 600 additional tankers a year transporting diluted bitumen from the Pacific coast to Asia.

A federal review panel has recommended approval of the Northern Gateway after finding that a large oil spill would not cause permanent damage, and a decision is expected from the federal government in June.

Crews work to clean up Texas oil spill

March 24, 2014Energy and Resources, Oil&Gas, Pipelines and SupertankersfeaturedCanadian Press

by Michael Graczyk, The Associated Press

TEXAS CITY, Texas – The cleanup of an unknown amount of thick, sticky oil that spilled into the Galveston Bay blocked traffic Sunday between the Gulf of Mexico and one of the world’s busiest petrochemical transportation waterways, affecting all vessels, even cruise ships.

A barge carrying nearly a million gallons of marine fuel oil collided with a ship Saturday afternoon, springing a leak. Officials believe only one of the barge’s tanks — which holds 168,000 gallons, was breached, though Coast Guard Petty Officer Andy Kendrick said Sunday it wasn’t clear how much oil spilled.

Crews were skimming oil out of the water and containment booms were brought in to protect environmentally sensitive areas of the Houston ship channel, Kendrick said. The ship channel is closed from the mouth of the Houston ship channel, between Galveston Island and Bolivar Peninsula, Coast Guard Lt. Sam Danus said.

“Unified command is aware of the situation and is communicating with the cruise ship companies,” Danus said.

Area home to fish and wildlife

The area is home to popular bird habitats, especially during the approaching migratory shorebird season, but Kendrick said there have been no reports of wildlife being impacted.

The Texas City dike, a popular fishing spot that goes out into the Gulf for a few miles, is also closed. Lee Rilat, 58, owns Lee’s Bait and Tackle, the last store before the access road to the dike, which was blocked by a police car on a breezy, overcast Sunday. If it weren’t for the spill, Rilat’s business would be hopping.

[quote]This would be the first spring deal, the first real weekend for fishing.[/quote]

Rilat said. He says ships and barges have collided before, but this is the first time — at least this year — that someone has sprung a leak. His wife, Brenda Rilat, said sea fog was hanging over the bay Saturday.

Rilat, who’s lived in the area most of his life, doesn’t think the spill is too big of a deal.

“It’ll be fine. Everything’s going to be lovely. Mother Nature takes care of its own,” he said.

The collision was still being investigated, the Coast Guard said.

The captain of the 585-foot ship, Summer Wind, reported the spill just after noon Saturday. Six crew members from the tow vessel, which was going from Texas City to Bolivar, were injured, the Coast Guard said.

Kirby Inland Marine, which owns the tow vessel and barge, is working with the Texas General Land Office and many other federal, state and non-profit agencies to respond to the spill, The Coast Guard said. Tara Kilgore, an operations co-ordinator with Kirby Inland Marine, declined to comment Saturday.

“Sticky, gooey, thick, tarry stuff”

Jim Suydam, spokesman for the Texas’ General Land Office, described the type of oil the barge was carrying as “sticky, gooey, thick, tarry stuff.”

“That stuff is terrible to have to clean up,” he said.

Richard Gibbons, the conservation director of the Houston Audubon Society, said there is important shorebird habitat on both sides of the ship channel. One is the Bolivar Flats Shorebird Sanctuary just to the east, which Gibbons said attracts 50,000 to 70,000 shorebirds to shallow mud flats that are perfect foraging habitat.

“The timing really couldn’t be much worse since we’re approaching the peak shorebird migration season,” Gibbons said. He added that tens of thousands of wintering birds remain in the area.

Monday marks the 25th anniversary of the Exxon Valdez spill off the coast of Alaska. Suydam said that spill spurred the creation of the General Land Office’s Oil Spill and Prevention Division, which is funded by a tax on imported oil that the state legislature passed after the Valdez spill.

Arctic offshore drilling preparations concern communities

March 23, 2014Oil&GasfeaturedCanadian Press

by Bob Weber, The Canadian Press

Growing industry interest in the offshore oil resources of Canada’s Arctic is forcing northerners from east to west to confront hard questions about development.

No actual drilling is likely to happen for years.

But major decisions are being taken now as projects enter the regulatory system.

Governments, aboriginal groups and Arctic communities are considering issues such as how to plug possible blowouts, who benefits from development and whether some waters should remain closed.

“The first time this process goes forward, it’s going to set a template for others to follow,” said Louie Porta, science and policy adviser with Oceans North, part of the Pew Environmental Trust.

Plans for the eastern and western Arctic

In the western Arctic, an aboriginal regulator is setting up hearings into a plan led by Imperial Oil (TSX:IMO) to drill exploratory wells in the Beaufort Sea in 2020. The wells would be about 175 kilometres offshore from Tuktoyaktuk, N.W.T., in water up to 850 metres deep, and are so complex and difficult to drill that the company estimates it would take at least two seasons to complete one.

In the eastern Arctic, the National Energy Board is considering a proposal for seismic tests off Baffin Island that has sparked fierce community opposition. In response to that proposal, the federal government has begun a strategic environmental assessment to consider which parts of a huge swath of ocean all the way down the island’s eastern coast could be opened up for exploration and which might stay closed.

The Beaufort project is being carefully examined by the Inuvialuit, the aboriginal group that has a land claim and self-government agreement in Canada’s northwest corner.

The group has long experience with the oilpatch on land. But this project is different, said Nellie Cournoyea, head of the Inuvialuit Regional Corp.

“When it’s onshore the benefits are much easier to grab ahold of, and the risks are less,” she said. “When you go offshore you have higher risks and less benefits because of the high infrastructure investment you have to get involved.

[quote]Plus, people are still concerned about the risks of oilspills or having a blowout.[/quote]

Relief wells

The National Energy Board has said companies working offshore in the Arctic must have the capability to drill a relief well in the same season to release pressure and stop oil flow in case of a blowout such as the one that happened with BP in the Gulf of Mexico. But the board said other equally effective methods would be considered.

Imperial has said it’s simply not possible to drill a same-season relief well in that region.

Cournoyea said the Inuvialuit are waiting for more information on how the company would respond to a blowout.

“We’re dealing with that right now, to see if we can get more information on what that option might be,” said Cournoyea, who added that Inuvialuit representatives have travelled to the Gulf of Mexico.

Regulatory decisions on Imperial’s plans to stop a blowout and limit the release of oil will be crucial for subsequent proposals, said Porta.

[quote]There’s this ideology that we can prevent our way out of spills.[/quote]

“But there’s a logical miscue to suggest that prevention technologies equal meaningful response when things go wrong. I think it establishes a dangerous precedent as Canada continues to figure out how to drill safely in an Arctic context.”

The effects on animal activity

“The proposed seismic testing and the resulting oil and gas drilling it would bring are not balanced development,” the hamlet wrote to the energy board. “The (hunters and trappers organization) and hamlet council are firmly opposed to seismic testing in Davis Strait and Baffin Bay.”

Aboriginal Affairs says no decisions have been made about whether those waters ultimately will be opened to oil and gas drilling, even if the energy board approves seismic testing.”The strategic environmental assessment for potential offshore oil and gas exploration in Baffin Bay/Davis Strait will recommend to the minister if, where and when the region should be opened for exploration activities,” say government documents.

Porta praises Ottawa for the attempt to get out in front of potential industry activity in the eastern Arctic.

“It’s a great way to look at a broad question and understand and deal with some of the big-picture issues,” he said. “To deal with those up front — things like what areas should be open for rights, what does a meaningful royalty package look like for Inuit — it’s the best way to make big, important decisions.”

It will be years before northerners see offshore drill rigs, if ever. But now is when the decisions about how that return will be managed are being made, said Porta.

“You don’t go from something to nothing quickly with Arctic oil and gas. The decisions happen now.”

The Common Sense Canadian

Critical discussion of key issues shaping our economy and environment.