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Originally Posted by jawagord
There are something like 45 FN groups along the NG route and to expect all of them to agree to the pipeline is unrealistic when many are using their opposition to the pipeline as a tool to leverage the Federal and BC governments on land claims. Enbridge claims they have equity agreements with more than 60% of the groups. This is business as usual, at the end of the day (after next years elections) the Federal government will need to decide if they are going to intervene to get the line built as some FN groups will never agree.
On the other hand The BC governments (provincial and local) went from being early supporters (city of kitimat lobbied for the NG pipeline) to interveners opposed to the pipeline due in large part To Christie Clarkes 5 conditions election scheme. Since then BC government lawyers have opposed the NG pipeline at NEB hearings and have elevated the fear-mongering to unprecedented levels that has created a poisoned environment for all oil pipelines.
Now we have the city of Burnaby filing court injunctions to stop KM survey crews. The idiot mayor of Vancouver publicly opposes KM expansion, the town of Kitimat has voted against NG, job well done BC. Now the province is screwing up the LNG side with tax demands and changing environmental rules - the window to get these big projects built is starting to close and BC's advantages won't matter if the LNG market is locked up by other countries. http://www.globallnginfo.com/world%2...0terminals.pdf |
Again. Gotta disagree. And in that vein, AB politics (both FN and otherwise) is different from BC. And again, both AB and BC have different sub-regional political groupings in that regard.
Firstly, to re-iterate, NGP in AB passes through Treaty 8 lands dating back to circa 1899. Apparently, most, if not all, FNs in AB have signed agreements with Enbridge. Treaty 8 also extends into NE BC covering all over BC`s Peace River country where BC`s natural gas basins are situate.
West of there in BC, none of the FNs are covered by treaty. Furthermore, NOT ONE FN has signed onto NGP - unlike AB FNs from Bruderheim westward.
And those FNs are not attempting to leverage land claims as you suggest. In that vein, most (if not all) BC FNs along the same route are on board for the numerous NG pipelines to the west coast along with the westcoast LNG terminals. Ergo, your hypothesis fails there.
Again, FNs have an emotional fear of a bitumen spill along the numerous thousands of NGP river crossings with the potential for bitumen spills along same with salmon habitat. And more importantly, west coast FN fisheries and tourism may potentially be impacted by an Exxon Valdez-type disaster. That`s not my opinion. That`s their viewpoint.
Enbridge, when they commenced their process, viewed BC as akin to AB politically and that was an improper approach dealing with these FN and BC political sensitivities.
Jim Prentice himself said the same to the media this past week. He fully understands the FN problems with NGP moving forward. And I will also suggest that he will be a great preem for AB having that analytical knowledge - unlike his predecessors.
Remember, it was the same Jim Prentice, as federal environment minister, that rejected the large proposed Prosperity Mine west of Williams Lake (in BC`s Chilcotin region) to the consternation of local authorities, local Con MPs, residents and the BC government. In fact, BC had already provided the environmental assessment certificate for the proposed Prosperity Mine. That matter, today, is subject to a Judicial Review.
And the feds will not step in on behalf of Enbridge at the end of the day either. Forget about it. Too much political heat for them.
BTW, I personally support the NGP. As for BC`s `5 conditions`, I support them as well. In fact, when one reviews same individually, not that much to ask for considering the inherent risk - both risk-wise and political. And they can be easily satisfied. It`s the FN condition that needs to be met. And Enbridge screwed up same royally at the get-go, based upon previous interviews with former Enbridge employees in the media.
Even AB preem Jim Prentice `get`s that`. In fact, wouldn`t put too much weight on the BC gov`t acting as an intervenor in the NGP hearings either. Trends toward the political angle and the `5 conditions` more than anything else.
Also remember that BC has the lowest personal and corp. tax regime in the country aside from AB. And it also has the most pro-economic and resource development gov`t in the country along-side both AB and SK.
As for Kinder Morgan`s proposed tunnel under Burnaby Mountain, the NEB has given them approval for surveying same. They are legally entitled to that.
Problem was that they cut down some old-growth trees while undertaking same. And that was in contravention of the City of Burnaby`s by-laws. More importantly, the mature trees were within the Burnaby Mountain Conservation Area. KM should have been more sensitive to same. But they are still green-lighted to be `less intrusive` in surveying same.
As for Kitimat and its non-binding plebiscite, doesn`t mean much. Kitimat is currently undergoing a boom with the $3 billion+ Alcan aluminum smelter expansion, Chevron LNG work camp, Shell LNG, etc. Housing prices rising through the roof, zero vacancy, etc. probably caused some to vote no as too much development already on their plate.
Again, AB Premier Jim Prentice last week told the media that, based upon his FN discussions, Kitimat was the wrong locale for the NGP terminus. It is what it is.
As for Burnaby mayor Derek Corrigan, he is a hard-core NDP-type and so is his 8-member NDP slate of BCA councillors who all oppose the KM twinning to boot. Don`t fret over them. They are inconsequential. They still, however, will be re-elected this November due to the low-20% municipal turnout in Burnaby muni elections.
Frankly, don`t concern yourself with the Van City mayor Gregor Robertson publicly opposing the KM expansion either. The pipeline does not run through Van City. Even the the KM terminus is not extant at Van City`s border. Gregor, who is basically a green liberal, has been mocked in the media about discussing that matter and other matters outta his jurisdiction. KM, at Burrard Inlet, is within the jurisdiction of the federal Port of Vancouver. Different entity completely.
And frankly, based upon a myriad of other reasons, it appears that Gregor will be ousted in this November`s muni election to the centre-right`s NPA mayoral candidate Kirk LaPointe.
Bottom line - NGP is likely dead in its present configuration BUT KM is likely a go at the end of the day.
Now back to LNG. BC has roughly 18 LNG proposals on the books. Many of those are from promoters with no LNG expertise, no deep financial pockets, etc. and they are dead from the get-go.
However, most other BC LNG proposals have global LNG majors as proponents with their expertise, buyer contacts, and deep pockets.
Also remember that roughly 150 million tons per annum of un-contracted LNG demand in Asia exists by 2025. And LNG purchasers are also risk averse. To wit:
1. Qatar is the world`s current largest LNG producer (and will not expand capacity), very reliable, yet most of its LNG product traverses the narrow Strait of Hormuz neighbouring Iran. Geo-political risk is in the background thereto esp. when one considers that Japan, for example, only has 2 - 3 days of LNG on hand at any given time;
2. Australia will now surpass Qatar as the world`s largest LNG producer yet its capex cost per million tons per annum of installed LNG capacity has skyrocketed beyond current economic viability. Is it any wonder why major Australian LNG producer Woodside Petroleum seems to have abandoned Australia for future greenfield LNG such as their proposed Aussie Browse LNG? And now has selected a NW BC site for an LNG terminal?
Or why future `brownfield` LNG in Australia - that is, addition of liquefaction trains to existing Aussie LNG terminals - has also been abandoned by all other LNG global players in Australia?
3. Africa is an LNG producer yet much of Africa does not have any infrastructure, regulatory and legal framework (Tanzania and Mozambique), unskilled workforce, and is quite corrupt frankly. $Billions must be spent within unstable African regimes. Would you?
BG Group now does not have the NG feed-stock for its Egyptian LNG terminal. They are losing their shirts on that project.
Other global LNG giants in Africa continuously declare
force majeure due to pipeline bombings, etc. Another witnessed an embargo of LNG tankers due to basically blackmail, for a week, for roughly $1 billion by a Nigerian Port Authority even when the national gov`t oil company was part of the LNG consortium and that payment was not required.
Another recently opened LNG terminal in Africa now needs to be shut-down for one year due to shoddy workmanship through-out its entire system.
And that leaves us with the U.S Gulf Coast. Over one year ago, the head of Petronas told the Globe and Mail newspaper that LNG sourced from BC would be much cheaper. Seems he was right. Many Asian LNG purchasers, inclusive of the Japanese, of U.S Gulf coast LNG supplies seem to have now come to the same conclusion as Petronas. They are now backing off and attempting to sub-contract thier long-term LNG supplies to third parties.
Why? Well they also initially thought that U.S. Gulf Coast LNG supplies were the cheapest in the world and would be the proverbial `Cat`s Meow`. Not so now. Unlike the BC and Australian integrated LNG model with global LNG giants, U.S. Gulf Coast LNG terminals are not operated by global LNG giants, have expensive hedge fund financing, and utilize the `tolling` LNG model.
The tolling LNG model, from an LNG purchaser`s veiwpoint, can be quite risky. Why? Because they are tied to the Henry Hub NG price and Henry Hub spiked last winter to roughly $6+ MMBTu. Much more above that and U.S. Gulf Coast begins to become cost uncompetitive v BC. BTW, Henry Hub spiked to $13 MMBtu during Hurricane Katrina.
Add on to that, LNG purchaser`s requirement to charter LNG tankers to pick-up same from the U.S. Gulf Coast, a large Panama Canal fee, new Panama Canal unable to handle larger Q-Flex and Q-Max LNG tankers, 10 days+ additional sailing time and cost to Asia compared to BC, 5% LNG burn-off during said transit... and you get the picture.
Also remember that LNG purchasers prefer the most stable and risk-free LNG seller at the end of the day. They also want diversity of supply to further reduce risk. So, jawagord, based upon the foregoing, as a potential risk-averse Asian LNG purchaser, would you purchase from Qatar? Australia? Africa? U.S Gulf Coast? or BC? (Might as well forget about Russia for a whole host of other reasons altogether)
PS. By the looks of it, the global LNG majors seem to have placed their bets on BC.
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