Wednesday, September 11, 2013

Grassy Point proposed LNG terminal location

One the proposed locations for LNG terminals in BC is at the north western most part of the Tsimpsean peninsula.  Four companies have responded to the provincial governments request for proposals for the site - Nexen, Woodside Petroleum of Australia, SK E&S of Korea and Imperial Oil.  I honestly have not understood why the interest in a site so far from the existing infrastructure.

The location for the proposed Grassy Point LNG terminals is only about 10-12 kilometers from Port Simpson but 40 to 45 kilometers from the end of the road in Prince Rupert.   To access the location at Grassy point about 30 kilometers of new road will have to built and 12 to 15 kilometers of the existing road to Port Simpson from the ferry terminal at the head of Tuck Inlet would have to be upgraded.  As well there will have to be a 500 to 600 metre long bridge over Fern Passage.

I do not know what it would cost to build this road but I am assuming the province will absorb that cost and not the LNG plants themselves.   Whatever the cost to the province, the road would have benefits beyond the LNG plants

The construction of the road will be of huge benefit to Lax Kw'alaams.  With close to 800 people in Port Simpson, they are amoderate sized community with no connection to the highway system of the province.  At the moment you need to take MV Nicola from Prince Rupert to get to Port Simpson.   The trip is too long for people to live at Port Simpson and work in Prince Rupert and consequently the on reserve population is not nearly as high as it could be.

One problem many remote First Nation communities have in BC is the difficulty in getting the membership that gets an education to move back.   There are simply not enough opportunities for people to be able to move home and make a living.   Connecting Port Simpson by road to Prince Rupert will have solve this problem for Lax Kw'alaams.

The construction of LNG terminals at Grassy Point would also lead to a demand for local services for the site and those services would most easily come from Port Simpson.   This would be an important source of jobs and economic activity for the community.   If Law Kw'alaams is willing to consider it, development of reserve lands could allow them to raise revenue from property taxes and get them some independence from Indian Affairs.

How far down the road to committing to building an LNG plant will a company have to go for the province to step in start the construction of the road?   I assume ideally the road would be complete before the construction of the LNG plant would begin.

Another cost is the construction of the powerline to Grassy Point.  Once again I assume the costs will be borne by the government of constructing a large enough transmission line.   The current power line running to Port Simpson is nowhere close to what would be needed for an LNG plant.

One major objection that will be raised against the use of Grassy Point is that the northwest tip of the Tsimpsean peninsula is unroaded wilderness.   Are there not better locations closer to Port Edward or have all the good spots been taken already?   In the environmental assessment process this issue will be the major hurdle the government and companies will have to overcome.   If there had been existing logging roads it would be a lot easier within the process.

I am still not convinced of the economics of LNG for the long term.  So far companies have not had to put much money down.  I am still afraid the provincial government is going to be on the hook for a lot of costs up front with no guarantees of success.  My skepticism will lessen when actual construction work begins on at least on LNG plant.
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