Untangling the pipeline debate:What does LNG mean for BC?

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Untangling the pipeline debate:What does LNG mean for BC?

👤Amanda Follett Hosgood 🕔Apr 04, 2014

Proposed liquefied natural gas (LNG) projects would run pipelines clear across the North.  However, wrapping our minds around the implications of LNG is anything but straightforward.

For starters, “LNG pipeline” is a bit of a misnomer. What would be transported is natural gas in gaseous form; pipelines like this already exist in the North. What’s new to the region, besides the sheer number of pipelines, are the proposed liquefaction facilities, which would freeze the gas to -160 C, reducing it to a liquid 1/600th of its original volume. From there, it would be shipped in tankers to Asia.

Concerns about LNG are complex and far-reaching: In northeastern BC, hydraulic fracturing (fracking)—injecting water and other materials into bedrock under pressure to release trapped gas—has been blamed for everything from earthquakes to water contamination.

Each pipeline would carve its own route between the Northeast and the coast, where multiple liquefaction plants are proposed. The liquefying process is energy-intensive, using either the gas itself (roughly 10 percent of what comes into the plant) or other forms of electricity. According to the Northwest Institute, the power used by one plant would be more than what the proposed Site C dam would produce.

Despite concerns, the provincial government is billing LNG as “BC’s once-in-a-generation opportunity to develop our reserves of natural gas, create thousands of new jobs, and pay off our provincial debt.” In a telephone townhall on Jan. 30, BC deputy premier and minister of natural gas development Rich Coleman said BC has “so much gas that we could supply everybody and still have gas in 150 years, including a substantial amount of supply to Asia.”

He added that five LNG plants would mean a cumulative gross domestic product of $1 trillion and more than 100,000 jobs over 30 years. As of mid-January, a dozen projects were proposed for the province—a number that fluctuates regularly. But what is being presented as a gold rush for BC could be a double-edged sword for the North.

BC’s got gas: Now what?

Kitimat has seen its fair share of boom-and-bust. In 2010, its unemployment rate was 12 percent and its pulp-and-paper mill was closing, costing 550 jobs.

“It was a pretty gloomy place in 2010. Many people left,” Kitimat economic development officer Rose Klucas remembers.

Since then, Alcan’s Kitimat Modernization Project combined with several proposed LNG facilities have caused the unemployment rate to drop to about seven percent. The reason for the remaining unemployment, Klucas says, is demand for skilled labour.

As a mother of three teenagers, Klucas celebrates the local opportunities that come with economic development: “For the first time in their lifetime there’s opportunities for them to stay here and work in their chosen profession.” But the same born-and-raised Kitimat residents will need to adjust to the changing face of their community.  

In 2007, the town had a 44-percent vacancy rate. Today, housing is so tight that a cruise ship was brought in from Estonia to house 500 workers for Alcan, which already operates a 1,800-bed camp.

It’s projected that LNG development will create 10,000 construction jobs in Kitimat, more than doubling its currently estimated population of 9,000. In preparation, speculators have been buying apartment buildings and houses, renovating them and increasing rents.

BC Assessment’s 2013 housing assessments, released in January, showed Kitimat leading the province with more than a 26 percent price increase: The average single-family residence had jumped from $180,000 to $228,000.

When asked how the province will help communities adapt to this kind of pressure on services and infrastructure, the Ministry of Natural Gas Development only said,

“The Province will ensure communities remain healthy and are equipped to deal with economic growth.”

Meanwhile, just up valley…

If a windfall of jobs is being promised, it’s not clear to whom those jobs will tumble. Helicopter pilot Craig Roy was born and raised in the Northwest and has 15 years’ experience flying in the Terrace area. He’s been turned down for LNG work in his backyard and instead spends seven months of the year—two to six weeks at a stretch—working away from his wife and three children.

“It’s not much of a life. If there’s local work it should go to local people,” he says. “I’ve got 10 times more experience than the guys they’re bringing in.”

Instead, he says, local helicopter jobs are going to pilots from Alberta, Eastern Canada and even the US: “Basically, anywhere but Terrace,” he says, adding that he can list about 20 local pilots who are not working locally. “How’s that creating jobs?”

The 667-km Coastal GasLink Pipeline, proposed by TransCanada Pipelines, is just one of half-a-dozen proposed for the Northwest. According to planning and execution director Bruce Wells, “Contractors are encouraged to look locally for workers but will need to broaden this search to accommodate the amount of workers necessary to complete the project on schedule.

“As part of our bidding process, contractors will be asked to provide information on their plans for resourcing qualified local and aboriginal BC residents.”

Existing economies

In January, energy and mines minister Bill Bennett told CBC the province is already challenged to fill mining positions with skilled workers.

“If we were to train up every single high-school graduate in British Columbia over the next few years, we still wouldn’t have anywhere near enough people,” he said. “There will be a need for immigration and probably temporary foreign workers.”

Skeena Watershed Conservation Coalition (SWCC) executive director Shannon McPhail wonders why, with so many non-pipeline-related jobs in the North (Northwest Transmission Line, Forrest Kerr and Kitimat Modernization, to name a few), there’s a push toward LNG: “Why not slow down and have 100-percent employment in BC for 500 years?” she says.

When put to the Ministry of Natural Gas Development, an emailed response cited competitive edge: “A large number of countries are looking to compete for a share of Asia’s LNG market, including Australia, Russia and the United States. These are the countries BC is competing with for LNG investment and growth, and the reason why the development is being pursued now,” it said.

“Taking action now could result in thousands of long-term jobs for British Columbians.”

But Dana Hibbard, SWCC’s LNG outreach and education coordinator, worries the pace of development could jeopardize existing jobs. She says SWCC has heard complaints from guide outfitters in the Upper Skeena (an industry that contributes $28 million annually to the local economy) that LNG surveyors are given free reign over where they fly, often scaring away goat populations.

“One concern we have is that LNG is really being favoured,” she says.

There’s also concern that two liquefaction facilities proposed for the Skeena estuary could put the watershed’s $110-million salmon industry at risk. Hibbard points to a 1973 biological assessment by the Ministry of Fisheries and Oceans naming Flora Bank and De Horsey Bank near Port Edward as having “habitats of critical importance for the rearing of juvenile salmon.”

A once-considered port was nixed over these concerns, yet two LNG plants have been proposed in its place.

Suggesting sober second thought

Rather than outright opposing LNG, Smithers-based Northwest Institute is pressing the provincial government for a strategic economic and environmental assessment that would examine proposals comprehensively rather than individually.

In October, the organization received a response from BC environment minister Mary Polak, declining the request and expressing confidence that the existing environmental assessment process “is not only appropriate but highly effective.”

Nadia Nowak, northern LNG facilitator with the Northwest Institute, says they’ll continue to rally support for a strategic assessment.

“What we’re hearing from communities, including First Nations and municipalities, is they’re finding it challenging to not only participate in the separate environmental assessment processes, but also to plan for what this industry means for their communities,” Nowak said.

At a recent townhall in Smithers hosted by MP Nathan Cullen, questions abounded—but answers were few. The Canadian Association of Petroleum Producers backed out days before and Coleman’s office flat-out declined, Cullen said.

For now, northern communities continue to untangle the LNG process: what it will mean for residents and economies, and whether this promised bonanza represents more prosperity or pitfalls for the North.