Haisla Nation in tough waiting game as LNG delayed

oct-2-2014-haisla-haisla-chief-councillor-ellis-ross-w

Haisla chief councillor Ellis Ross with a view in the background of his community and Douglas Channel in the fall of 2014. At the time, community members had jobs to pick from as preliminary work for potential LNG projects was underway and Rio Tinto was in the midst of a major upgrade project on its aluminum smelter in Kitimat. Now, Haisla members are leaving town to look for work as LNG projects are in limbo and the aluminum plant project is complete. Gordon Hoekstra / Vancouver Sun

by Gordon Hoekstra, Vancouver Sun, May 27, 2016

The Haisla Nation, which supports two of the leading proposed major LNG projects in B.C., is in a tough waiting game as the projects remain in limbo.

Activity on both the $25-billion to $40-billion Shell-led LNG Canada project and the $12-billion Chevron-led Kitimat LNG project proposed for the Kitimat area in northwest B.C., where the Haisla claim traditional territory, have slowed to a crawl.

When, and if, the projects could go ahead is unclear.

Like other proposed liquefied natural gas projects in British Columbia, they are facing setbacks because of a glut of natural gas supplies, prices that have slumped significantly and a shaky global economy. The major energy players, including Shell and Chevron, have reduced their capital spending plans by tens of billions because of significantly diminished revenues from low oil prices. No players have made final investment decisions on the projects meant to tap into energy demand in Asia.

Premier Christy Clark, whose government continues to remain confident a major LNG project will be launched soon, is in Asia this week to promote trade, including in LNG.

However, energy industry analysts expect that major LNG projects in northwest B.C., if they happen at all, will be delayed into the next decade.

Haisla chief councillor Ellis Ross said community members who had high-paying LNG jobs during the ramp-up two years ago — including site clearing, road building, camp set-up and environmental work — have moved away to get jobs out of town.

They have no choice if they want to pay their mortgages, which they took on during the LNG ramp-up, he said.

“That’s what I was working on with natural gas, one of the reasons was to try to keep people home and bring people back home. So, it’s kind of bitter-sweet. It’s this waiting game,” Ross said in an interview on Wednesday.

The Haisla have about 1,700 members, 700 of whom live in the Haisla village, 11 kilometres south of Kitimat.

In the past few years, everything has hinged on LNG, including independent power projects, with few other economic options, noted Ross.

The prospective LNG projects brought the promise of not only jobs, but revenue streams, including from Chevron for the lease of Haisla land at Bish Cove on Douglas Channel.

But in 2015, Chevron announced it was “significantly” slowing spending on its Kitimat LNG project.

Earlier this year, Shell said it was putting off a final investment decision on its project until the end of 2016.

Also earlier this year, AltaGas shelved its $600-million Douglas Channel LNG project, of which Haisla had a land-lease deal.

A $4.8-billion modernization of Rio Tinto’s aluminum smelter in Kitimat also provided construction jobs, 3,200 at the peak in 2014. But that project is complete, and Haisla members are competing for fewer jobs at the upgraded facility, noted Ross.

For the first time, the Haisla are examining newspaper owner David Black’s $22-billion oil refinery proposal, of which industry analysts are skeptical. Analysts are skeptical because Asian markets typically want unrefined crude oil, and no new major refineries, particularly isolated from refining centres in Edmonton or the Gulf of Mexico, have been built in decades in North America.

Black’s plan proposes that molasses-like bitumen from Alberta will be supplied by rail to the refinery.

The Haisla are among First Nations adamantly opposed to Enbridge’s $7.9-billion Northern Gateway oil pipeline.

However, Ross said Black’s proposal seems to deal with their concerns, including the transport of heavy oil by tankers and the risk of a spill. Under Black’s proposal, tankers will ship refined products such as gas or diesel, claimed to have a lesser effect in a spill than heavy oil.

“It also answers the question of should we be sending a raw product to Asia and letting Asia get all the benefit of the jobs and the economics, or do we keep that here and then send out a value-added product,” noted Ross.

He said, however, they still do not have enough information on emissions and its effects.

http://vancouversun.com/business/energy/haisla-nation-in-tough-waiting-game-as-lng-delayed

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Posted on May 28, 2016, in Oil & Gas and tagged , , , , , , . Bookmark the permalink. 1 Comment.

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