No slam dunks when ti comes to ec-dev

After years of bad news - the Methanex and Eurocan closures - conventional wisdom is that Kitimat is about to bounce back...

After years of bad news – the Methanex and Eurocan closures – conventional wisdom is that Kitimat is about to bounce back thanks to it being selected by the gas industry as the preferred location for liquefied natural gas export plants.

On its face, it’s a gimme.

Advances in technology have unlocked vast shale gas supplies in northeastern BC and across the border in Alberta to the extent that proven and potential reserves are estimated to be close to 100 trillion cubic feet.

That’s way more than Canada needs and, with the shale gas fields in the US, way more than our southern neighbours are interested in taking.

Add the hunger of Asian countries for natural gas and we’re sitting pretty.

So let the good times roll, right?

After all, the Apache/EOG/Encana KM LNG project has all its environmental permits, a 20-year gas export permit and the project is a red-hot certainty to get the go-ahead from those three companies once the front end engineering and design study is completed and contracts with Asian buyers are signed.

Not necessarily.

In recent weeks two potential flies in the anointment have appeared.

The LNG plant will be supplied with natural gas via a new pipeline called the Pacific Trail Pipeline (PTP).

Originally that was to be built by Pacific Northern Gas and Galveston, the company that at that time was planning to build an LNG plant here.

And that project got the blessing of 15 First Nations along the route, the First Nations Limited Partnership (FNLP).

But PNG and Galveston subsequently sold their interests in the PTP to the KM LNG partnership.

Now, the FNLP essentially wants to renegotiate the original deal, arguing the existing agreements relating to the pipeline component of the Kitimat LNG project were negotiated with the previous proponents (Sentinel, November 2).

And last week two houses of the Wet’suwet’en nation suddenly jumped into the fray by blockading preliminary work on the PTP route, saying they don’t recognize any rights of PTP to do work in their area.

Quite how those will play out, only time will tell.

But it suggests that a lack of certainty will continue to plague economic development efforts in the Northwest.

 

Malcolm Baxter.