Tag Archives: LNG

Canada’s Carbon Corridor Part 2: From the Sacred Headwaters to Kitimat LNG

September 30, 2012Energy and Resources, Fracking, Hydropower, Oil&Gas, Pipelines and Supertankers, WATER, Water and HydrocarbonsBC Oil Pipelines and Supertankers, fracking, LNG, Oil and gas, Site C Dam, Water and EnergyDamien Gillis

The following is the second half of the introduction to Damien Gillis’ multi-part series, “Canada’s Carbon Corridor” – read part 1 here.

In part 1 of this introduction to what my colleagues and I have termed “Canada’s Carbon Corridor” – an interconnected web of major oil, gas, coal, mining and hydroelectric projects across northern BC and Alberta – I traced the first half of a recent journey by the team producing the documentary Fractured Land, of which I am the co-director. We began our trip amidst proposed coal mines and Site C Dam on the Peace River and through the heart of natural gas “fracking” operations in northeast BC, winding up at Liard Hot Springs.

From there, after passing briefly into the Yukon via the Alaska Highway, we turned south and headed for Tahltan country in northwest BC. There, we spent four days investigating proposed mining projects and more unconventional gas – this time Shell’s plans to develop coal bed methane in the Sacred Headwaters, the birthplace of three vital arteries for the province, the Skeena, Nass and Stikine Rivers.

We spent one day with Wade Davis, National Geogrpahic Explorer-in-Residence and recent author of the book Sacred Headwaters, and the rest of our time with a number of First Nations who have put themselves on the line to block coal bed methane and mines like Imperial Metals’ proposed Red Chris.

This particular project would involve a massive mountaintop removal mine for gold and copper, amid the continent’s largest population of Stone’s Sheep. As such, it has ignited much local opposition. But we also learned that there are many members of the various Tahltan communities who are in favour of this and other mines for the jobs and economic opportunities they promise. This conflict will likely play out for some time to come in these communities, though the tide may be turning against Red Chris for a number of reasons, which I’ll get into in a future chapter of this series.

From the Sacred Headwaters, we travelled south to Kitimat, documenting along the way the construction of the Northwest Transmission Line. This $400 million project is designed to plug BC’s electrical grid into the region in order to power these mining projects – of which Red Chris is but one of many. (Which is why it’s odd that a significant portion of the line’s funding came by way of a federal “green energy” fund!). The transmission line is yet another connection between northwest BC and the proposed Site C Dam in the territory of our central character Caleb Behn – which our provincial government justifies with the contention it is needed to provide power to gas and mining operations.

We were all alarmed at the pace of development of the transmission corridor, with upwards of ten different crews working simultaneously to clear sections of the line – carving a 100 or so meter-wide swath through spectacular mountain valleys. Fifty-foot tall teepees of logged trees rim the highway for long stretches, waiting to be burned.

In Kitimat, we met with former Haisla elected chief and recent president of the Coastal First Nations, Gerald Amos, to get a look at the LNG plants proposed and under construction in his territory, along the Douglas Channel. Gerald and his wife graciously took us out on their boat to show us the three main proposed projects – one led by Shell, with partners Korea Gas Corporation, Mitsubishi Corporation and PetroChina Company Limited; another by a consortium of Encana, Apache Canada and Enron Oil and Gas (known as Kitimat LNG); and the third a joint venture in which the Haisla Nation itself is a partner. (It should be noted there are as many as eight LNG plans for Kitimat, but these three would appear to be the most serious and viable).

Only the Kitimat LNG project is under initial construction – clearing the banks of the channel of trees and brush – though its completion has been pushed back by a year, as the consortium has yet to sign any contracts for the product.

Meanwhile, the Haisla just signed a deal with the province to expedite their plant. While his elected leadership is moving quickly forward with its plans to welcome LNG into their territory, Gerald was eager to hear from Caleb about how these decisions will affect his people at the other end of the pipeline. This is some of the much-needed dialogue currently missing around these issues, which we hope our project will continue to foster.

While the Haisla have led the battle against the proposed Enbridge pipeline on their lands and supertankers in their waters, natural gas has proven a different story. Deals signed by the Haisla and the Carrier-Sekani Tribal Council, which provides political and technical support to eight member First Nations in the northern BC interior, appear to have been done with far less communication with other First Nations and the public than that which surrounded Enbridge.

We learned the Carrier-Sekani signed last year a 25-year deal estimated to be worth over $500 million in shared revenue and job training benefits with the proponents of the Pacific Trails Pipeline, which would carry fracked northeast BC gas from a junction point at Summit Lake, north of Prince George, to Kitimat, along virtually the identical right-of-way as the proposed Enbridge Pipeline.

On that note, during one of our final stops on the trip, we visited the grassroots resistance camp on the Morice River, southwest of Houston, where members of one clan of the Wetsu’et’en First Nations, the Unist’ot’en, have constructed and are occupying a cabin directly in the path of the proposed Pacific Trails Pipeline. But as they pointed out to us, they’re not opposed to just one pipeline, rather as many as eight different ones, each proposed to pass through essentially the same energy corridor:

Enbridge’s twin lines – one for diluted bitumen, the other for condensate
Kinder Morgan’s “Rearguard” bitumen pipeline to Kitimat – introduced last year to shareholders as a backup plan to the controversial Enbridge Northern Gateway line and to Kinder’s own plans to twin its existing Trans Mountain Pipeline to Vancouver (the Unist’ot’en camp is prepared for this line to include a twin condensate line as Enbridge is proposing)
Pembina Pipelines has a plan – temporarily shelved for “commercial uncertainties” – to run a condensate line from Kitimat to Summit Lake (the Unist’ot’en camp is bracing for this plan to come to the fore again should Enbridge be rejected, and for the possibility it too will include a bitumen line)
The Pacific Trails gas pipeline (already approved by the province, along with the related LNG plant in Kitimat)
Shell Canada and its Asian partners’ gas pipeline from northeast BC to their proposed LNG facility in Kitimat (Shell has already selected TransCanada Pipelines to build this line)

Moreover, Spectra Energy recently announced plans to run a gas line to Prince Rupert, north of Kitimat, to connect to their own proposed LNG plant and tankers there.

Is this somehow a conspiracy theory? Hardly. I reported in The Common Sense Canadian over a year ago that Enbridge CEO Pat Daniel has publicly expressed interest in exploiting pipeline “right-of-way synergies”, in building both its twin pipelines and the Pacific Trails gas line together. Enbridge also bought Encana’s controlling stake in the Cabin Gas Plant in Northeast BC last year. And the proposed routes of the above pipelines essentially stack on top of each other for long stretches.

My concern is that while all this attention is being payed to Enbridge, virtually no one – amongst First Nations, the conservation community, or the political opposition (the NDP has publicly supported fracking, the Pacific Trails Pipeline and LNG projects in Kitimat and is at best on the fence about Site C Dam) – is talking about this larger energy corridor, of which Enbridge is merely one small piece.

The Pacific Trails line is approved and the companies are into pre-construction work already. Once the corridor is logged and cleared, it will be far more difficult to stop any one, let alone all of these pipelines and the development to which they connect.

From Site C Dam, powering gas and mining operations, to expanded fracking, which connects to the Alberta Tar Sands through natural gas and condensate, to oil and gas pipelines to our coast and the tankers that would transit our waters carrying these fossil fuels – bitumen, LNG, coal – to new markets in Asia, this is a big deal. The biggest, by far, that this province has ever seen in 150 years of colonial establishment.

It’s time we expand our horizons and broaden our discussion beyond Enbridge – and our team hopes our Fractured Land film project and subsequent columns in this series will act as a catalyst for that much-needed dialogue.

Thanks to Rivers Without Borders for their support with this portion of our recent filming tour for Fractured Land.

Watch for part 3 of the “Canada’s Carbon Corridor” series on this past week’s “Keepers of the Water” conference in Fort Nelson.

‘Canada’s Carbon Corridor’ Part 1: Connecting the Dots Across Northern BC

September 27, 2012Energy and Resources, Fracking, Hydropower, Mining, Oil&Gas, Water and HydrocarbonsEnbridge, fracking, LNG, Mining, Oil and gas, Site C DamDamien Gillis

I recently returned from a whirlwind tour across northern BC, one of many legs of filming for a documentary and multi-media project I’ve been co-directing for the past year and a half, called Fractured Land. The people we spoke to along the way, the sights we witnessed and documented finally brought into focus the real story about energy development in BC.

It is clear to me that the proposed Enbridge Pipeline, which has been the target of so much activism and media attention of late, is merely one piece of a much bigger puzzle that promises to transform this province like nothing since the days of colonial, railroad-driven “nation building.”

Our film and the multi-media series that will accompany it through our website, FracturedLand.com, and various social media tools, is the story the industrialization of northern BC – told through the eyes of a talented, eloquent young First Nations law student named Caleb Behn.

The two sides of Caleb’s family are rooted in the epicentres of both major natural gas hydraulic fracturing (or “fracking”) plays in northeast BC – West Moberly Territory near Hudson’s Hope, under which the Montney shale gas field extends; and Echo Dene Territory around Fort Nelson, home of the Horn River shale gas field. Taken together – along with the recently discovered neighbouring Liard Basin play – form one of the world’s meccas for “unconventional” gas (read: highly experimental and dangerous).

We began our film by focusing on fracking – a relatively new method of natural gas extraction that involves burrowing deep into shale formations and blasting them with a toxic mixture of high-pressure water, chemicals and sand to crack open the shale and release the gas. But throughout our adventure, we’ve come to see that fracking doesn’t exist in isolation. Neither does the proposed Site C Dam on the Peace River in the same region, nor gas and bitumen pipelines proposed to cut across BC’s wilderness en route to Kitimat and Prince Rupert, nor myriad, massive proposed Liquified Natural Gas (LNG) plants on BC’s coast, nor the dozen or more serious coal and metals mines proposed throughout the north, nor the Alberta Tar Sands.

It is a serious mistake to put any of these projects in a silo. They are all, in fact, systemically interconnected in what my colleagues and I have come to think of – at least until a more apt description emerges – as “Canada’s Carbon Corridor”. Before this article and its second part conclude, I will briefly illustrate this interconnected web of energy projects that extend from BC’s coast to the Alberta Tar Sands – covering virtually the entire top half of the two provinces. However, the real work of fleshing out the components of this carbon corridor and how each piece relates to the next will be accomplished through a subsequent series of stories over the next two months – each exploding a different piece of the big puzzle – all cross-published through The Common Sense Canadian and the blog for Fractured Land.

Both this film project and my colleagues at The Common Sense Canadian – which has made its mission to inform the public about the energy, environmental and public policies reshaping BC and Canada – will seek to lodge this big picture view, with all its socioeconomic and cultural implications, on the agenda of the public and media in the lead-up to a pivotal provincial election next May. This is a sorely needed conversation that so far has been lost in the simplistic rhetoric championing the project of opening Western Canadian oil and gas resources to new markets in Asia and the one-track chorus of opposition to the Enbridge proposal.

If that seems unfair, allow me to state my case herewith.

We began our recent two and a half week journey in northeast BC, before traveling along the Alaska Highway through Fort Nelson, Liard Hot Springs, Watson Lake just over the Yukon Border, then down Highway 37 through the Sacred Headwaters and Tahltan First Nations country, southwest to Kitimat, east to the Morice River near Houston, and finally to Prince George to deliver a presentation to faculty and students at UNBC, before heading home to Vancouver (an approximately 5,000 km journey, all told).

Over the past several years, I’ve made seven trips to northeast BC (I’m currently here again for the “Keepers of the Water” conference in Fort Nelson) and more than that to northwest BC and its coast, but this trip – as it tied together both sides and centres of development in the province – felt like the quintessential journey through BC’s proposed economic future. Through it, we traced the interconnections of this carbon corridor and met people on both sides of the arguments around these individual projects.

If there’s one thing that has become abundantly clear to our production team, it’s that this is a conversation which defies easy polarities. The fracturing we reference in our title, taken literally from the process of fracking, serves as a metaphor for the conflict within individuals, families and communities torn between developing economic opportunities and protecting their core values and ancestral practices on the land.

Far from shying away from this tension, we are drilling deep into it.

After driving 15 hours north from Vancouver, we began our experience at Carbon Lake, near Hudson’s Hope – at a camp once owned by my great uncle, Penn Powell, who operated it as a fly-in fishing lodge for years. Today, it is owned and operated by the Saulteau First Nation – the people of our central character Caleb’s grandmother.

Caleb comes here in the summer to hunt moose and reconnect with his land. Unfortunately, the moose are slim pickings these days – likely partly related to all the roads for logging that bisect the onetime wilderness surrounding the lake. Now, a large open pit coal mine threatens to finish the job. Carbon Lake gets its name for a reason. One can pick up large blocks of metallurgical-grade coal from the bed of nearby Carbon Creek, the site of one of a number of proposed new coal mines throughout the Peace River Coalfield.

To get to the lake, we had to drive over Williston Reservoir and WAC Bennett Dam – the first major dam in the region, which helped set the stage for the resource boom that followed. Caleb and my families have much in common beyond this camp at Carbon Lake, as we’ve learned throughout the making of our film. Another thing we share is that both our families lost our land in the flooding of Williston Reservoir in 1968. My family’s land, upon which it settled in 1914, was known as Goldbar Ranch at 20 Mile. Today, many of my uncles who remain in the region work in the gas patch. As do many of Caleb’s relatives. Such are the complexities inherent in the sort of large-scale resource decisions being made today – mostly without the broad-based knowledge and will of the public.

That said, Bennett Dam was built to provide affordable, “clean” (or so we thought at the time) electricity and new economic opportunities for all British Columbians. I believe my family understood that, even as we watched our barns and hand-crafted cabins and grand old log home burned to the ground and drowned forevermore.

Today, two fracking companies – Talisman Energy and Canbriam Energy – have a 20-year license to suck 10 million litres a day of water from that same reservoir (before it’s converted to power for British Columbians!) for their nearby fracking operations.

Moreover, Site C – which would be the third dam in the Peace Valley, stretching 80 km east from Hudson’s Hope to Fort St. John and flooding some 13,000 acres of agricultural land and a comparable amount of Boreal Forest wildlife habitat – is not being proposed to power BC’s homes and businesses. We have access to plenty of electricity for those purposes. Rather, this power will go to the myriad proposed mining operations across the north and, according to Premier Christy Clark, compressing natural gas into liquid to sell to Asia. All of these industrial operations are enormously energy dependent – to the point we would need multiple Site C Dams to even begin powering them.

From Carbon Lake, our team traveled north to Fort Nelson, where we visited with the other side of Caleb’s family. Fort Nelson is the jumping off point for the Horn River shale gas operations, which have been slowing down of late, due to the cratering price of natural gas, but contain enormous development potential and have been wildly active in recent years. The Cabin Gas Plant, North America’s largest, is just nearing completion after several years of furious construction. The adjacent Liard Basin formation was recently touted by Apache Canada as “the best reservoir in North America” for gas fracking.

Yet little of this development will occur unless a higher price can be obtained for the resource. This relatively new method of fracking has flooded the North American market with supply, driving down the price for gas, which is why new markets are being sought in Asia, where gas prices are currently much higher.

Unlike the gas plays around Fort Nelson, the Montney play – in Caleb’s mother’s territory, where we began our journey – often produces what is considered as “wet gas”, meaning it contains other products, such as sulfur and condensate, both of which have considerable value on their own. Condensate is used to dilute bitumen from the Alberta Tar Sands, which is too viscous to pump through a pipeline on its own.

This is another way in which Canada’s Carbon Corridor is interconnected – both natural gas and condensate go from BC to Alberta to melt and extract bitumen and to dilute it for transport.

But the big idea, for now, is to open up new markets for northeast BC gas. If these LNG plants and the pipelines connecting northeast BC gas to northwest BC refineries proceed, you can bet Horn River activity will ramp up to new heights and the Liard Basin will be cracked wide open.

We drove near these proposed Liard operations en route to the northwest corner of the province and it is some of the most exquisite country any of us has seen. We passed through pristine valleys coursing with crystal-clear water from the Northern Rockies and by herds of majestic wild bison and various ungulate species. Our soak in the Liard Hot Springs was one the trip’s big highlights – I would highly recommend it to anyone who finds themselves in that neck of the woods.

Watch for Part 2 of this introduction to Damien Gillis’ “Canada’s Carbon Corridor” series Saturday – completing the journey across northern BC to the northwest, examining everything from mining and unconventional gas proposals in the Sacred Headwaters to the construction of the Northwest Transmission Line, the Pacific Trails gas pipeline to Kitimat and proposed LNG facilities there.

Canada Eyes 9 Billion Cubic ft/day of Natural Gas Exports to Asian Market, Tokyo Conference Hears

September 20, 2012Energy and Resources, Fracking, Oil&Gasfracking, LNG, Oil and gasCommon Sense Canadian

Read this story from CBC.ca on plans promoted at an energy conference in Tokyo this week for Canada to export up to 9 Billion cubic ft/day of natural gas to Asian markets. Natural Resources Minister Joe Oliver traveled to Asia this week to build support for Canadian gas exports. (Sept. 20, 2012)

Canada could some day export nine billion cubic feet per day of liquefied natural gas to Asia through five proposed plants on the West Coast, Natural Resources Minister Joe Oliver told a Japanese audience this week.

Those major energy projects come with little of the opposition from politicians and native groups that threaten the proposed Northern Gateway oilsands pipeline.

In a speech to the Liquefied Natural Gas Producer-Consumer Conference in Tokyo this week, Oliver trumpeted Canada’s status as a rising “global energy leader.”

“[Canada is] already the third-largest producer of natural gas in the world,” Oliver told an audience that included Japan’s Economy, Trade and Industry Minister Yukio Edano.

Oliver is visiting Japan and South Korea on a mission to drum up business for Canada’s fledgling liquefied natural gas (LNG)industry and is travelling with business executives from AltaGas, Encana, TransCanada Corporation, Shell Canada and Nexen.

There is a global race to get LNG into the Asian market because demand — and therefore prices — are considerably higher there than in North America. In May of this year, its price was 10 times higher on the Asian market.

Adding five new LNG plants represents tens of billions of dollars in potential industrial development on B.C.’s north coast.

One plant is planned for Prince Rupert. Four would be in Kitimat, which is also the proposed terminus for Enbridge’s Northern Gateway oilsands pipeline. Two of the LNG projects in Kitimat already have National Energy Board-approved export licences.

By comparison, Gateway is a $6-billion project.

So, why all the fuss over Northern Gateway, which is tiny in comparison to all the LNG projects?

The difference is in the product each project brings to market.

Environment and Economic Arguments

“LNG is non-toxic, odourless, non-corrosive and less dense than water. It is a stable, low risk fuel. If it spills, LNG will warm, rise and dissipate,” said Rich Coleman, B.C.’s energy minister, in an interview.

“The risk to the natural environment is greater with [oilsands] bitumen than it is with natural gas,” said John Horgan, the B.C. NDP’s energy critic.

B.C. politicians of all stripes also see enormous economic potential in LNG.

Natural gas is a mature industry in B.C. and a major natural resource for the province. Horgan and Coleman both foresee jobs being created and royalty revenues pouring in, with the added bonus of minimal ecological hazard with LNG.

“No reward, high risk with one. And more reward, less risk with the other,” Horgan said.

B.C. native groups are also much less skeptical of LNG compared to oilsands projects.

The Haisla First Nation in Kitimat is equal partners in one of the NEB-approved projects and landlords for the other.

“It was one of our requests to Joe Oliver himself to actually start supporting natural gas at the higher levels and over in Asia. So we actually appreciate this initiative,” said Haisla Chief Councillor Ellis Ross.

The Haisla story, when it comes to natural gas, is similar to the rest of the province’s: they know the product, they’ve had experience with it, they’ve weighed the risks and benefits and they believe natural gas is the way to go.

“The safety record of natural gas overall over the last 30, 40 years is actually in direct contrast to the safety record of the crude oil industry,” argues Ross.

He adds that in the case of a spill, natural gas would evaporate into the air.

“Crude oil or diluant or bitumen stays in the environment for … I think the jury’s out on how long that actually crude oil or bitumen stays in the environment,” he said.

Read original story: http://www.cbc.ca/news/politics/story/2012/09/19/pol-natural-gas-exports-asia.html

Haisla First Nation Sign Deal with BC Government to Fast-Track LNG Plant in Kitimat

September 20, 2012Energy and Resources, Fracking, Oil&Gasfracking, LNG, Oil and gasCommon Sense Canadian

Read this story from CBC.ca on the deal recently signed by the Haisla First Nation of Kitimat with the BC Government to fast-track a proposed Liquified Natural Gas plant in the Douglas Channel near their community. The gas would largely come from “fracking” operations in northeast BC and would be converted to liquid in order to be shipped by tanker to new markets in Asia. (Sept. 14, 2012)

The B.C. government has signed an agreement with the Haisla Nation to help fast-track another major liquefied natural gas (LNG) port facility near Kitimat.

The deal allows the Haisla to either lease or buy 700 hectares of land on the west side of the Douglas Channel in the areas around Haisla Reserve #6 and to work independently with the industry to develop a LNG marine export terminal on the site.

“If we are able to do this, the Haisla people will benefit, as will all British Columbians and Canadians,” said Ellis Ross, the Chief Councillor of the Haisla Nation.

The agreement comes as the B.C. government moves to slash spending to make up for a $1-billion budget deficit brought on by plunging North American natural gas prices.

But in Asia, natural gas fetches four to five times more than it does on the North American market, and that’s why the government is aiming to have three LNG export operations up and running by 2020, according to the Minister of Aboriginal Relations and Reconciliation Ida Chong.

“Currently British Columbia can only sell its natural gas on the North American market where there is ample supply and the commodity price is low, but by opening up new Asian markets where there is greater demand, British Columbian natural gas producers will be able to get up to four times the value,” said Chong.

The terminals would allow the province to export natural gas to emerging Asian markets, particularly Japan, China, South Korea, and India. Already two terminals have received export licences from the National Energy Board – Kitimat LNG and BC LNG Douglas Channel.

Spectra Energy and BG Group also announced plans Monday to build a LNG pipeline across northern B.C.

Read original story and watch video of the announcement: http://www.cbc.ca/news/canada/british-columbia/story/2012/09/14/bc-natural-gas-haisla.html

BC NDP Must Come Clean on its Full Energy Policy

September 9, 2012Energy and Resources, Hydropower, Oil&Gas, Pipelines and Supertankers, WATER, Water and HydrocarbonsBC Oil Pipelines and Supertankers, Enbridge, KinderMorgan, LNG, Oil and gas, Site C Dam, Water and EnergyRafe Mair

The NDP are getting a free ride – at least they certainly are on the energy file.

I must ask again: Why are they not condemning the proposed twinning of Kinder Morgan’s Trans Mountain Pipeline from the Alberta Tar Sands to Vancouver? All the arguments that prevail against the Enbridge line apply to Kinder Morgan, so to say that you’re waiting for the Kinder Morgan applicationto be filed is a flimsy excuse which waters down their general position on energy.

Speaking of a program, just what is the NDP energy policy? We’d better find out soon or it will be too late.

Some questions.

The NDP is wholly supportive of multiple liquified natural gas (LNG) plants in Kitimat, so far as can be told without any real consultation with the public on either the plant itself or the pipeline that would cross the same mountains and forests that Enbridge does.

My feeling is that the NDP don’t want to appear to be against everything. Yet the party was much opposed to an LNG plant on Texada Island a few years ago, mainly on dangers it posed. There are not too many examples of plant failure in the past but when they do have one, the destruction of property and human life is extensive.

I don’t say that this project ought to be banned – I just ask when the public process took place. When was the public, including First Nations, consulted on both the need for such a plant and, if passed, what were the technical and environmental concerns, and, again, where was the public process?

John Horgan, the NDP Energy Critic, seems to favour, without reservations, the obtaining of natural gas through the process now called “fracking”, which is a technique whereby natural gas, trapped in shale beds within the earth’s crust is “mined” by forcing it out by the use of huge quantities of water and chemicals. British Columbia has lots of this natural gas and there’s a sort of “gold rush” mentality amongst those who want to get into the act.

There are huge environmental questions, not least of which is the chemical-laden water getting into the domestic water supply and ecosystems. Moreover, where is the water being taken from?

There are also very real worries for the security of the land under which the “fracking” takes place, namely earthquakes being caused by the controversial practice.

The concerns here are not just picky little matters brought up by traditional boo birds but very real worries.

There is a very big economic question involved: BC and Alberta are not the only places in the world where there are lots of potential fracking areas.

With a huge overabundance of natural gas available, can BC compete? Where are the markets? China, which itself has huge trapped natural gas resources?

Normally one might say, that’s the concern of the companies, not us.

But we know that’s not necessarily so, for corporations discount a good part of the downsides by expecting government bailouts if big trouble comes, for the same reason the US government bailed out the stockbrokers – the cost of not bailing out sinking corporate ships was higher than the subsidies. Moreover, the public is a shareholder in this resource and is receiving reduced dividends from it at these historically low market prices.

There is a further question that has been raised but not dealt with, either by the government or the opposition – why are we devoting energy from water resources, that belong to the public to create energy which then will be used by corporations to make new energy?

The nature of BC Hydro, since W.A.C. Bennett’s days, was to create cheap power for both the public and industry but not to be a partner in the industry, thus liable to losses concerned.

The proposed Site “C” Dam is not needed for domestic energy supply – as our resident economist Erik Andersen has amply demonstrated – but day by day looks more like a scheme to subsidize the untested abilities of fracking companies to do so without environmental damage, in questionable markets. And if not for fracking, then to subsidize comparably questionable new mining operations in northern BC – in any event, the power from Site “C” is patently not for the public that would be paying some $10 Billion to build it.

These are some of many questions being raised by everyone accept the Liberals, who are joined at the hip to industry, and the NDP who are not.

It’s bad enough to have a government of a gaggle of nincompoops, but without an Opposition to ask serious and penetrating questions because they fear the voters won’t like it is a potential tragedy which may well lead to an environmental and fiscal mess not only caused by an incompetent government but an incompetent Opposition as well.

LNG, Fracking and Site C Dam: BC’s Looming Energy Boondoggle

August 23, 2012Canada, Energy and Resources, Fracking, Hydropower, Oil&Gas, Politics, Water and Hydrocarbons, Western Canadafracking, LNG, Oil and gas, Politics, Site C DamDamien Gillis

The proposed Enbridge and Kinder Morgan bitumen pipelines through BC are finally receiving the attention they deserve – as is the much-needed corollary conversation on the Alberta Tar Sands and their true impact on Canada’s economic future, elevated to national prominence by Official Opposition leader Thomas Mulcair. Yet, as big of a game-changer as oil pipelines and tankers would be for BC, one could argue that the collection of proposed natural gas-related developments on the table is, taken together, at least as transformative for the province’s future – though you wouldn’t know it from the relative silence on the topic.

Until recently, that is. The past several months have seen a number of highly significant events related to this matter.

First, in mid-June, Apache Canada announced a massive new shale gas find in the Liard Basin, which stretches from northeast BC into the southeast corner of the Yukon. The Liard play, being touted as the “best shale gas reservoir in North America”, is west of the Horn River basin play, already one of the world’s largest. The find is undoubtedly a game-changer, elevating northeast BC to the world’s mecca for the relatively new, yet highly controversial process for breaking open shale gas formations deep underground, known as “fracking”.

The next big development came the day after Apache’s announcement, when the NDP, led by Energy Critic and likely future Energy Minister John Horgan, came out fully supporting an expanded natural gas industry in Northeast BC, downplaying environmental concerns about fracking. In the same breath, the Official Opposition showed clear support for the Liberal plan to build a number of Liquid Natural Gas (LNG) plants in Kitimat to export the resource to Asia.

The party’s position was solidified last week when the Georgia Straight reported it was fully backing a new pipeline from Summit Lake, north of Prince George – Encana, EOG and Apache Canada’s joint venture Pacific Trails Pipeline – to carry natural gas from northeast BC to three proposed LNG refineries in Kitimat.

Finally, Premier Christy Clark announced a week later that her government will be reclassifying previously dirty natural gas as “clean” – but only when it’s burned to power these proposed LNG plants in Kitimat. The Campbell/Clark Government previously banned the development of new gas-fired electrical plants, putting the emphasis on renewable or so-called “clean” energy alternatives – wind, solar, geothermal, biomass and hydro.

The premise for these new multi-billion dollar LNG plants is to access new markets in Asia which currently pay far more for gas than North American customers. Prices in China, Japan and Korea range up to $17 per thousand cubic feet versus a historic low of two to three dollars in North America today – largely thanks to the glut of natural gas flooding the domestic market as a result of new shale gas plays. The idea is to turn some of BC’s plentiful gas supply into liquid, put it on tankers and ship it to Asia to reap big profits. Without these prices, big finds like Apache’s in the Liard Basin simply don’t make sense to develop.

While the plan looks financially (though certainly not environmentally) promising on the surface, it’s fraught with complications:

1. The process of converting gas to liquid is enormously energy intensive. According to Christy Clark, all the the power from BC Hydro’s proposed new 1,100 Megawatt Site C Dam on the Peace River would be required for just Shell’s one proposed LNG plant in Kitimat. That may have changed, now that these plants are allowed to burn their own cheap gas for power, but, curiously, Site C Dam has not been taken off the table in the wake of that announcement. The otherwise energy self-sufficient BC has nowhere near enough electrical supply to power three new LNG plants and all the new mines the Clark Government is pushing forward.

2. The whole plan is contingent on this high price differential carrying forward – which is doubtful for a number of reasons. China’s economy is already showing signs of slowing down, while Japan is looking to restart its nuclear program; where will its energy demand be in 10 years when these plants are built and supplying the Asian market with LNG?

3. We’re not the only horse in the race. China has its own shale gas plays – which it is now starting to develop. Moreover, a number of other countries are thinking the same way we are – chief among them Australia, which is much further along and has already secured contracts to sell LNG to China.

4. The main method of supplying these plants – gas from fracking operations – is coming under increased scrutiny globally, with various moratoria having been instituted in other regions, relating to concerns over water use and contamination, earthquakes, and myriad human and animal health concerns. Fracking producers may well (and should) face increased regulation – meaning added costs and further reduced profits – or, worse, outright restrictions and shutting down of operations as awareness and evidence build against this controversial technique.

LNG and Mines Mean Site C

As befuddled and full of flip-flopery as the Liberals have been on this file, the NDP are in quite a pickle too. First, they give their environmental seal of approval to shale gas, while supporting the massively risky undertaking that is building and fueling multi-billion dollar plants on BC’s coast to turn this gas into liquid and ship it to new markets in Asia. But when the Liberals reclassify gas as “clean” (remember, the NDP just did as much themselves not a week previous) in order to allow these plants to use their own gas to power the enormously energy-intensive liquid compression process, the Opposition cries foul. Why? Because burning gas isn’t clean. So which is it, Mr. Dix?

I filmed a rally in Victoria two years ago led by First Nations and farmers from the Peace Valley in opposition to Site C Dam. NDP Energy Critic John Horgan, to his credit, attended the rally and spoke – but he stopped short of outright opposing the dam. He would only say that it required a full environmental assessment and that it should only proceed if the science supports it.

Then, in January, 2011, Horgan told the Georgia Straight that he didn’t think Site C was “necessary” at the time – though still leaving the door open to the project:

They want some peace in the valley, and as long as the spectre of Site C hangs over their head, there’s never going to be a comfort level in the community,” Horgan said. “They want a full-fledged, full-on environmental assessment, so that they can put on the table the science of the sloughing, the costs of dredging, and the total costs on ratepayers of a $6- to $7- to $8- or even $9-billion project.

Earlier this year, my colleague at the Common Sense Canadian, Rafe Mair put NDP leader Adrian Dix on the spot regarding Site C and got more of the same fence-sitting.

To my understanding, the NDP is on the fence or publicly committed to the above schemes – Site C, fracking, LNG – for three main reasons:

1. It is conscious of not allowing itself to be branded by its political opponents as “anti-progress” or “anti-industry”, especially after having taken a strong position against the Enbridge pipeline

2. It is wary of not stepping on the toes of First Nations who have signed onto to the LNG scheme – particularly the Haisla Nation of Kitimat, who have also been vocal opponents of the Enbridge pipeline.

3. It recognizes how much the province’s coffers have come to depend on royalties, licenses and other fees related to the natural gas industry and doesn’t want to disturb that flow, leading to big deficits that will play into its opponents’ hands.

While these are all politically understandable reasons for supporting this massive industrialization of northern BC, they do not excuse the arguments against this program.

In the very least, the environmental and health concerns associated with fracking and the loss of vital farmland and fish and wildlife habitat from Site C – not to mention the notion of massive public subsidies for an industry on less than solid ground going forward – should argue for a more mature position from the province’s government-in-waiting. They know this whole scheme is fraught with complications and this outright endorsement of it shows the NDP is ready to put short-term politics ahead of reasoned, long-term policy for the province.

Subsidizing Energy for Industry

Clearly, Site C, mining, fracking, LNG are all interrelated. Even if Site C isn’t used to power LNG, there are over a dozen proposed new mines in northern BC – each of which is hungry for taxpayer-subsidized electricity. This begs the question – one answered by economist Erik Andersen in a recent interview with Rafe Mair: should the public be subsidizing new industry at all, with skyrocketing power bills and new $10-plus billion dam projects like Site C?

One of the key bones of contention at this year’s failed Rio climate conference was the matter of ending subsidies for hydrocarbon production. Plainly, this is a no-brainer, if we are to get on with the necessary transition away from fossil fuels to more sustainable energy sources. Moreover, the wealthiest corporations in history are the last entities that should be receiving public subsidies. And yet, we learned through a leaked memo that the Harper Government was leading the charge against the move to end hydrocarbon subsidies. So much for the “free market” Stephen Harper and his fellow Milton Friedman disciples keep railing on about!

So in that regard, it makes abundant sense for the natural gas industry to use some of its own product to supply the enormous energy needs of these LNG plants. And yet, anyone should be able to recognize the environmental folly of reclassifying gas as “clean” to enable its burning, to ship more gas half way around the world to be…burned. And that’s ignoring the myriad environmental problems associated with the initial extraction of the gas through fracking.

A Looming Boondoggle

No matter the degree to which Site C or our public hydroelectric system are used to power this LNG program, the taxpayers of BC, as shareholders in our gas resource, are impacted by the choices the industry makes on numerous levels. We need to ask whether this LNG-Asian market vision is an economically viable, environmentally responsible idea, or an epic resource boondoggle in the making, as we have seen in the past with similar forays into the Asia market with our coal and timber.

These political parties and the industry are banking on achieving a higher price for their gas in Asian markets – particularly China and Japan. But China has its own shale gas potential and is only just beginning to develop it. On top of that, China’s economy – and thus energy demand – is showing real signs of faltering. It will take us 5-10 years to build all these LNG plants and the additional energy assets to power them. Will China still be paying premium prices for LNG a decade from now, given the volatility of the various factors which enable that pricing today?

There are other players, such as Korea and Southeast Asia who might. Petronas Energy of Malaysia recently scooped up Candian gas company Progress Energy for over $5 Billion.

But this raises another question: how will this benefit the BC and Canadian economy – especially in light of new labour laws from the Harper Government that allow companies like Petronas to import foreign workers and pay them 15% less than Canadian employees. So under this system, we could see many jobs going to foreigners (excepting those that are too technical to be done by cheap, imported workers), while these new profits flow out of Canada, along with the energy resource.

This LNG scheme – as with plans to export Alberta bitumen to Asia – should be viewed as a hail mary pass to try and get the Canadian oil and gas industry out of the financial pit into which it is presently sinking. With prices where they are, there is a real danger that BC’s once-thriving industry could collapse, without a North American market willing to pay a reasonable price for its product. And yet, Site C, LNG and fracking, taken together – as they should be – constitute a massive gamble for the citizens of Birtish Columbia, both environmentally and economically. As such it’s time we have a frank conversation about the issue before rushing headlong into a potential boondoggle of unprecedented proportions for our province.

Perhaps what needs to happen here – from both an environmental and economic perspective – is a planned ramping down of the North American natural gas supply, until prices begin to stabilize again. As energy economists like Jeff Rubin argue, the most effective way to regulate energy consumption is through price. Clearly, at $2-3/unit of energy, there is no incentive for the North American public or industry to conserve natural gas. Nor does this price point benefit the gas industry or the public, who are partners in the resource through the royalties and tax dollars we receive from its sale – all of which are significantly diminished in this climate. And yet, reducing supply in the North American market would be a tremendous undertaking that requires a level of collusion – and may not be practical, regardless, with hundreds of companies looking out for their own short-term interests.

In any event, while the public reaction and much-needed discussion around these issues have been delayed, there are signs they are now developing quickly. The political discussion surrounding the issue is intensifying, as is the media’s coverage of it. Already, the bubble shows signs of bursting, as Kitimat LNG – the joint venture between Encana, EOG and Apache – was recently delayed by another year as the consortium has yet to sign the contracts it needs with Asian buyers to finance the project. Meanwhile, some First Nations and environmentalists are beginning to organize protests against the consortium’s Pacific Trails Pipeline – the primary connector between fracked gas of northeast BC and this and other proposed LNG plants on the coast. Opposition to Site C Dam has been steadily growing as well, as I documented at this year’s record-setting ‘Paddle for the Peace’.

It’s high time this issue generated some of the intensity that the Enbridge project has received – as it would likely have as big, if not an even greater cumulative impact on the future of this province, environmentally and socioeconomically.

Audio: Damien Gillis Discusses Energy and BC’s Economy on Co-op Radio

August 18, 2012Canada, Energy and Resources, Fracking, Pipelines and Supertankers, Politics, Tar Sands, Western CanadaAlberta Tar Sands, Audio, BC Oil Pipelines and Supertankers, Enbridge, fracking, KinderMorgan, LNG, PoliticsDamien Gillis

Check out this interview from Aug. 15 on Vancouver Co-op Radio’s “Discussion”, with host Charles Boylan. Guest Damien Gillis and Boylan cover a wide range of topics relating to energy and the future of the BC and Canadian economy. The pair discuss the myriad alternatives popping up of late to the embattled Enbridge pipeline, including Kinder Morgan’s planned twinning of its Trans Mountain Pipeline to Vancouver, and shipping bitumen by rail. They also cover natural gas development in northern BC – including controversial hydraulic fracturing and the building of a new pipeline to carry this gas to Kitimat and covert it to Liquified Natural Gas to sell in Asian markets – plus an alternative economic vision for BC that doesn’t depend on becoming a major fossil fuel corridor to the world. (Aug. 15 – 1 hr)

Shell, Partners Apply to Export 24 Million Tonnes of LNG per Year from Kitimat

August 2, 2012Energy and Resources, Fracking, Oil&Gasfracking, LNG, Oil and gasCommon Sense Canadian

Read this story form Reuters on Royal Dutch Shell and its partners’ application for a license to export up to 24 million tonnes of Liquified Natural Gas, connected to the group’s proposed LNG plant in Kitimat. (July 27, 2012)

Royal Dutch Shell Plc and its partners in a planned Canadian liquefied natural gas project have applied for a license to export up to 24 million tonnes of the fuel over 24 years, the company said on Friday.

The gas would be exported from a liquefaction plant Shell has proposed to build at Kitimat, British Columbia, on the Pacific Coast to take advantage of lucrative Asian markets. It would initially have to LNG processing units with capacity of 6 million tonnes each.

Shell and its partners, PetroChina, Kogas and Mitsubishi Corp, revealed the details of the proposal in May.

They said the plant could be in service around the end of the decade, pending regulatory approvals.

The proposal follows others being considered for Kitimat, which looks set to become a major Pacific Rim export hub for gas produced from the massive Horn River and Montney shale gas formations in British Columbia.

Read original posting: http://www.reuters.com/article/2012/07/27/shell-canada-lng-idUSL2E8IRCC720120727

Enbridge Flip-Flops, LNG Pipeline, New Salmon Farm in Clayoquot Perplexing

July 31, 2012Energy and Resources, Oil&Gas, Pipelines and SupertankersBC Oil Pipelines and Supertankers, Enbridge, KinderMorgan, LNG, Oil and gas, SalmonRafe Mair

Today is a day of perplexity.

I’m perplexed at a notice I received asking me to join a protest against a proposed Liquefied Natural Gas (LNG) pipeline near Smithers. This line is designed to transport northeast BC natural gas from a junction point at Summit Lake, north of Prince George, to Kitimat for processing into LNG so it can be shipped to Asian markets. It has flown largely beneath the radar, perhaps because the NDP Opposition haven’t opposed it.

What are the risks posed? Are we talking wildlife migration paths? Do spills pose a threat? Who is doing it and what sort of approvals do they require? When was the application? Were there public meetings, and if so where and what was the reaction?

I’m perplexed at the provincial government’s apparent imminent approval of a new fish farm in Clayoquot Sound. How can this possibly be done before the Cohen Commission report comes out? Has no one in that catastrophic government in Victoria read the recent and growing evidence of serious disease endemic to fish farms? It strikes me that approving a fish farm before Mr Justice Cohen issues his report is like Israel building houses on conquered land – an effort to create faits accompli on the theory that once approved, it will be difficult to dismantle them.

This government is not only incompetent – we can recover from that – but without a conscience or a soul, without the ability to know right from wrong.

I’m perplexed at the flip in the recent opinion column by the Vancouver Sun’s Barbara Yaffe on the proposed Enbridge pipeline. Several weeks ago, after months of approving the proposition, Barbara concluded, on the evidence that had recently come out on the company’s disastrous spill in the Kalamazoo River, that it was unsafe to build the line.

Today (July 31) she’s talking about the parties sitting down and negotiating about money to be paid to BC.

In the Vancouver Sun, same edition, Craig McInnes, who’s bringing some common sense to that paper, makes the obvious but little stated observation that with the Enbridge pipeline: “A, there is a risk and B, we are willing to accept the risk of a catastrophic spill if we get paid enough.”

He goes on to say, “As a Canadian who treasures our physical environment regardless of where the political boundaries lie, I find that equation to be unacceptable.”

Amen.

Then I’m perplexed with former federal Environment Minister David Anderson’s approval of Premier Clark demanding more money for a project Anderson has just stated his unchangeable opposition to.

Mr. Anderson, I know you don’t like me from another movie, but please take my advice and read Mr. McInnes’ column referred to above.

I’m perplexed that no one seems to care about Kinder Morgan’s proposed massive increase to pipeline volumes and tanker traffic through Vancouver in environmental terms.

I’m also perplexed that Premier Clark isn’t also claiming a greater share of the revenue from the Kinder Morgan lines, existing and, if approved, future lines.

I will be dealing with Clark’s position in next Monday’s TheTyee.ca but suffice it to say that in Canada we have free passage of goods and resources through neighbouring provinces. Ms. Clark evidently, to add to the sum of her massive ignorance, doesn’t understand that and fails to put herself in Alberta Premier Redford’s shoes and fails to ask what she, Clark, would do if Alberta demanded a share of BC royalties and stumpage on our resources in exchange for passage through Alberta.

In the non-perplexed department I commend Grand Chief Stewart Phillip’s clear and unequivocal stand against Enbridge and his statement that First Nations will, if the project is approved, blockade it.

Frankly, I’m perplexed that we’re still debating these issues and that our governments haven’t put an end to them, once and for all.

BC NDP Confirm Support for Fracking, LNG

June 21, 2012Canada, Energy and Resources, Fracking, Oil&Gas, Politics, Water and Hydrocarbons, Western CanadaAdrian Dix, fracking, LNG, Oil and gas, PoliticsCommon Sense Canadian

Read this story from the Vancouver Sun, reporting on the BC NDP’s support for natural gas and LNG development in BC integral to BC’s future, dismissing the mounting environmental concerns about fracking and LNG in the process. (June 14, 2012)

Opposition energy critic John Horgan sounded almost as happy as the B.C. Liberals recently when Shell Canada announced that it was moving forward on a $4-billion pipeline to transport natural gas from northeastern B.C. to a proposed liquefaction plant at Kitimat.

“Very good news,” Horgan said. “I’m pretty excited about it. Shell’s a big deal. They’ve got gas that they want to get out of the ground, and they want to get it to a market where they can get a better return than they do in North America.”

Natural gas, not oil, be it noted. Still his enthusiasm for LNG development stands in marked contrast to the national NDP’s recent doomsaying about resource exports, hydrocarbons, pipelines and tanker traffic.

When Horgan was reaffirmed as energy critic by new leader Adrian Dix last year – a position that is likely to translate into a term as energy minister if the New Democrats form government in 2013 – he made it clear that the party’s green proclivities on oil would have limited application to development of the provincial natural gas resource.

“A natural-gas proposal makes sense,” Horgan said, “because it’s a product from British Columbia, so the royalties would stay here, the jobs would be created here. And gas vents; it doesn’t stick.”

His made-in-B.C. stance even extends to the most controversial aspect of natural gas development, namely the means of extracting it.

Fracking, to use the unflattering short-hand term for the process of hydraulically fracturing shale rock to release the gas trapped within, has generated concerns about excessive water use, subsurface pollution, and seismic activity.

But would Horgan “call for a moratorium on hydraulic fracturing until British Columbians know more?” The question was put to the would-be energy minister by would-be NDP candidate George Heyman of the Sierra Club during Horgan’s recent appearance on Voice of B.C. on Shaw TV.

“No,” was the clear implication of his more lengthy reply.

“People within the NDP predisposed to green, environmental concerns were troubled that you heard from other jurisdictions where people were lighting their taps on fire because the gas had seeped into aquifers and into the water tables.

“That’s not the case in B.C. Our deposits are three and four kilometres under the ground. In Pennsylvania, the Marcellus play, which is providing gas now to much of Eastern Canada – that’s very shallow, relative to our deposits.”

He’s impressed with the B.C. industry’s experience and expertise. “We’ve been fracking in B.C. for decades and we do it fairly well. I’ve been to a number of frack sites, and I’m comfortable with the technology.”

As for water use, he maintains the provincial party has already addressed those concerns. “We’ve put in place what we consider to be a scientific panel that would review and ensure that water is disposed of appropriately, and that we reduce the amount of fresh water that’s involved in fracking.”

Seismic activity? “Not significant issues when you’re that deep in the ground. You wouldn’t want to necessarily be fracking along the Juan de Fuca fault, but in the Peace country it’s relatively safe – at least, that’s what I’m advised, and I’ve not heard of any seismic activity in the Peace.”

So green New Democrats like Hey-man should relax. But even as Horgan and his colleagues support fracking, pipelines, terminals and the tanker traffic necessary to transport the product overseas, there’s another big challenge to LNG development.