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WA Dept of Ecology sets conditions for GSX

FOR IMMEDIATE RELEASE - Sept. 29, 2004

04-182

Ecology Department sets conditions for Georgia Strait pipeline project

BELLEVUE - While not endorsing the project, the state Department of Ecology (Ecology) has set stringent conditions intended to protect water quality if a proposed pipeline project through Whatcom and San Juan counties advances to the construction phase.

The Georgia Strait Crossing Pipeline (GSX) project would pass through the two counties to deliver natural gas from Canada's mainland to Vancouver Island. Ecology's certification letter describes what project proponents would have to do to protect wetlands, streams, the Strait of Georgia and the bluff and eelgrass beds at Cherry Point during the construction and operation of the pipeline.

"We are not endorsing GSX," said Jeannie Summerhays, Ecology's regional shorelines manager. "This action ensures that the federal government will include state environmental standards and protections if this project does move forward. We're requiring significant protections for several sensitive areas."

Ecology's action is called a "water quality certification," which describes how a proposal can meet state water-quality standards. The GSX project requires a federal water-quality permit from the U.S. Army Corps of Engineers. If the Corps decides to issue the permit, it must incorporate the conditions in Ecology's certification.

The deadline for the state's action was today, one year after GSX filed its application.

The proposed pipeline would cross 33 miles on land between Sumas and Cherry Point and continue under water through the Strait of Georgia for 14 miles.

Its path would cross 87 rivers, streams and ditches. Construction would temporarily affect 59 acres of wetland, many of which are farmland, and permanently remove trees and shrubs from three-and-a-half acres of wetland habitat.

Ecology would require GSX to tunnel beneath 23 streams to avoid harming them. GSX also must restore and replant the wetlands along the route after trenching and placing the pipeline, and 16 acres of wetland must be improved to compensate for wetlands that would be damaged.

A one-mile tunnel would begin on land at Cherry Point to pass beneath the bluff, beach and offshore eelgrass beds. Cherry Point Eelgrass is a spawning ground for declining herring stocks, which are an important food for salmon, including threatened species.

The next five miles of underwater pipeline would have to be buried in a trench to reduce barriers to the movement of crabs. The rest of the line would rest on the bottom of the Georgia Strait and require a reinforced concrete coating for protection from trawling gear.

The certification can be appealed within 30 days to the state Pollution Control Hearings Board.

# # #

Contact: Larry Altose, public information officer, 425-649-7009; pager, 206-663-1785

Link to certification: www.ecy.wa.gov

Judge to rule on pipeline shoreline permit

Separate case to decide state, local authority goes before appeals court today

John Stark
The Bellingham Herald

Whatcom County Hearing Examiner Michael Bobbink said Tuesday that he would issue a ruling within 10 days on a shoreline permit for a $248 million natural gas pipeline that would cut across Whatcom County on its way to Vancouver Island.

Bobbink could choose to reject or accept the shoreline permit, or he could rule that the project needs to get a major development permit, which would require review by the Whatcom County Council. But Bobbink and attorneys on both sides of the issue agreed that the fate of the project could be settled in court.

Bobbink concluded the public hearing Tuesday on the shoreline permit after hearing attorneys' arguments. Steve Snarr, the attorney arguing the case for the Georgia Strait Crossing Project, said his clients believe they no longer need project permits from Whatcom County or the state of Washington. That's because the Federal Energy Regulatory Commission ruled last April that the Washington Department of Ecology had missed deadlines for reviewing the project, and thereby waived state and local authority.

The state and the county are now appealing FERC's ruling. Whatcom County Chief Civil Deputy Prosecutor Randy Watts said the 10th Circuit Court of Appeals in Denver will hear the matter today but is not expected to issue an immediate ruling.

During Tuesday's hearing, Watts debated the question of the pipeline's economic benefit to Whatcom County with Snarr and project manager Lynn Henrie.

Snarr and Henrie said the pipeline, which will cross 33 miles of the county from Sumas to Cherry Point before moving underwater, could eventually supply natural gas for industrial development at Cherry Point.

Watts argued that Williams Pipeline Co. and B.C. Hydro are proposing the project to fuel generating plants on Vancouver Island. Future benefits to Whatcom County are speculative, he said.

Henrie said that the pipeline would have to add a powerful compressor unit at Sumas to increase capacity to provide significant additional gas supplies for present or future Whatcom County industries.

Watts said doing that would mean changing the nature of the project and adding noise impacts in the Sumas area that have not yet undergone regulatory scrutiny.

The only certain benefit to the county, he added, would be tax revenue from the pipeline project, and he contended that was nowhere near enough to justify the negative environmental impacts to the shoreline and the rest of the county under state and local regulations.

During a brief question period, one audience member asked why Whatcom County should have to put up with a pipeline meant to get natural gas from one part of Canada to another. Henrie replied that nearly all of the natural gas used by Whatcom County comes from Canada, and pipelines cross Canadian territory to serve the United States.

Reach John Stark at 715-2274 or john.stark@bellinghamherald.com.

Knob Hill Wind Farm gets EA approval

The Knob Hill Wind Farm project has obtained an Environmental Assessment Certificate. Congratulations to the folks at Sea Breeze Power Corp. who have shepherded the project this far.

Now for the bigger challenges. Find a customer for the power. And find the capital to build it. No customer = no capital.

BC Hydro, the obvious customer, has been a consistent impediment to the development of BC's awesome wind potential. That attitude is unlikely to change, at least with the Neufeld/Campbell mindset that prevails in the provincial government.

And with the Call for Tenders (results expected October 9) for power generated on Vancouver Island, BC Hydro probably will have as much on-island power as it intends to purchase, at least until 2007.

The EA Certificate is a milestone. But a lot more wind will blow over Knob Hill before any power is generated at the site.

Environmental Assessment Office Knob Hill Project Site (link)
Environmental Assessment Certificate (link)
Sea Breeze Power website (link)

Georgia Basin/Puget Sound Airshed

Characterization of the
Georgia Basin/Puget Sound Airshed

Executive Summary in Adobe Portable Document Format ( 297 kb)
Complete Report in Adobe Portable Document Format ( 2 897 kb)

Executive Summary

The Characterization of the Georgia Basin/Puget Sound Airshed study was undertaken to characterize the air quality within a rapidly growing, urbanized area of the Pacific Northwest, the Georgia Basin/Puget Sound air basin (the Basin). Growth within this region continues to put stress on the environment. Expansion of suburban development, increasing transportation demands and developments in the energy sector are just a few of the challenges faced in managing air quality in the area.

The Basin includes jurisdictions in both Canada and the United States, and both countries are currently implementing new air quality standards and guidelines. Thus, it was critical to characterize the nature of air pollution within the Georgia Basin/Puget Sound airshed at this time. The study will provide scientific information to assist in the development of an International Airshed Strategy and direction on specific policy issues related to particulate matter, ozone and visibility, the implementation of the Canada Wide Standards, the implementation of new US Environmental Protection Agency air quality standards for particulate matter and ozone, and the US Regional Haze Rule.

The goal of the study was to establish a common understanding of the current status of and trends in air quality in the Georgia Basin/Puget Sound airshed. Its specific objectives were to:

Determine the significance of the transboundary transport of air pollution within the Georgia Basin/Puget Sound airshed;

Identify and describe the key factors – natural and anthropogenic – affecting air quality in the region;

Establish a current benchmark against which changes in air quality over the next 10 years can be measured;

Identify the key gaps in our scientific understanding of air quality as it relates to particulate matter, ozone and visibility in the Basin, including gaps, if any, in monitoring, inventory and modeling approaches and systems;

Describe the anticipated consequences for air quality of specific air quality management actions; and

Provide the basis for the development of public education and communications materials designed to enhance citizen understanding of air quality in the region.

Although the area described and studied in this report is commonly known as the Georgia Basin/Puget Sound airshed, it is really two smaller airsheds: Georgia Basin and Puget Sound. The Georgia Basin airshed comprises the Canadian portion of the Basin, Whatcom County in Washington State and the southern coastline of the Strait of Juan de Fuca. It should be noted that the southern boundary of the Georgia Basin airshed extends to the higher terrain of the north Cascades. The Puget Sound air basin encompasses the counties to the south of Whatcom County.

The study focused on three air pollution issues: ground-level ozone (ozone), fine particulate matter (PM) and visibility. These issues are not only matters of public concern but are also significant factors in the development of international air quality standards and strategies.

The following sections outline the key areas of focus of the study, the major findings, and the implications for the development of strategies to improve air quality.

What Determines Air Quality?

In the Georgia Basin/Puget Sound, air quality is largely determined by the weather patterns that circulate air throughout the airshed, and these in turn are influenced by the topography of the region. The air moves and disperses airborne chemicals that are emitted from a variety of human and natural sources, both from within and outside the Basin.

Periods of stagnation occur primarily in the summer and winter. At these times, the windflow patterns do not allow air pollutants to flow between the two airsheds, effectively isolating them from one another and allowing air pollutants to build up within each airshed.

Not all pollutants that affect the Georgia Basin/Puget Sound air basin originate within the airshed. Airborne chemicals from Eurasia and California have been observed to add to the overall mixture of pollution within the Basin. Although these pollutants are usually well-dispersed by the time they arrive, they nevertheless add a small, but measurable, amount to the ozone and PM ambient concentrations. The most favourable time for air pollutants to enter the Basin from the Pacific Ocean is during the spring, particularly April and May. In addition, interactions between airborne pollutants can cause secondary air pollutants to form in the atmosphere.

Emissions

Emissions of air pollutants come from both natural and anthropogenic, or human-created, sources. These airborne pollutants may undergo chemical reactions in the atmosphere, creating new pollutants that can affect human and ecosystem health, and cause visibility problems. Emissions from anthropogenic sources can be controlled through regulation or the application of technology, but natural emissions are beyond human control.

Over the next decade, emissions of pollutants from the on-road vehicle sector are projected to decrease in both airsheds, but emissions from agricultural practices are projected to increase, as are emissions from the marine sector.

The table below summarizes predicted emission trends for several key air pollutants in the Georgia Basin and Puget Sound airsheds. Actual future emission levels will depend on population and economic growth as well as on policy decisions taken by Canada and the United States.

Table 4.2 Emission trends for the Puget Sound (Department of Ecology, 2001) and Georgia Basin (GVRD, 2003) airsheds

Pollutant	Emission Trend
	Puget Sound 1996-2018	Lower Fraser Valley 2000-2020
NOx	-43%	-25%
SO2	-61%	+23%
VOC	-11%	-13%
NH3	+20%	+31%
PM10 (Includes road dust)	+23%	+16%
PM2.5 (Includes road dust)	+19%	+ 10%

Ambient Air Quality

Airborne chemicals and the associated meteorology are measured at a number of sites to quantify air quality both in time and space. The ambient measurements indicate how successful various air quality management strategies are. With relation to the three key air quality issues, the research found:

Ozone

The amount of ground-level ozone in the ambient air is primarily the result of photochemical reactions. Ozone and its precursors can be transported great distances. As a result, the highest ozone concentrations are often observed downwind of urban centres at high elevations in rural areas.

Rural areas are “NOx-limited” due to the relatively large amounts of naturally occurring VOC emissions and the small amounts of NOx emissions. Reducing ozone in rural areas may require large reductions in anthropogenic NOx emissions from urban areas.

Ozone concentrations of 40 to 50 ppb are often recorded at rural coastal locations during the spring and identified as “background” concentrations. These concentrations are caused by emissions from both natural and anthropogenic sources, including transport from outside the Basin. Thus, a portion of background ozone is anthropogenic and, therefore, controllable.

Particulate Matter

Fine particulate matter is dominated by carbonaceous material. In urban centres, nearly 50 per cent of the particle mass comes from combustion.

Natural emissions of volatile organic compounds represent from one-third to one-half of the total VOC emissions in the Basin. The magnitude of natural emissions poses limits on achievable reductions in total VOC emission levels and on the effectiveness of nitrogen oxide emissions controls in reducing ambient PM and ozone concentrations.

Visibility

SO2, organic carbon and NOx are the dominant pollutants responsible for degraded visibility in the Basin. SO2 and NOx are transformed in the atmosphere to sulphates and nitrates, which combine chemically with ammonia from agricultural sources and with sodium from natural marine emissions to form fine particulate matter.

Social and Economic Context

Air quality is integrally linked to all aspects of the sustainability of the Georgia Basin/Puget Sound region – a healthy environment, a vibrant economy and social well-being. However, air pollution is related to a number of social and economic trends in the region, including increases in population, transportation demands and energy consumption, and shifts in industry. This air pollution causes significant social, environmental and economic impacts. Examples include:

Health impacts from airborne pollutants range from eye, nose and throat irritation to decreased lung function and cancer.

Contaminants in the air can damage farm crops and vegetation, reducing yields of economically important crops. In the United States, agricultural losses due to ozone have been estimated to be between $1 billion and $3 billion annually.

The reduction in visibility caused by the buildup of airborne particles in the air can have detrimental effects on tourism. For a single extreme visibility event, computer models estimate losses in future tourist revenue to be $7.45 million in the Greater Vancouver area and $1.32 million in the Fraser Valley.

Increasing concentrations of heat-trapping gases are contributing to climate change, with far-reaching and unpredictable environmental, social and economic consequences.

State of Our Knowledge

Significant gaps still exist in our knowledge of how specific air pollutants react with each other and impact human and environmental health within the Basin. Methodologies used to compile emission inventories and to forecast emission trends rely on assumptions and computer modelling techniques that need further refinement. Air quality computer models applied to the Georgia Basin/Puget Sound airshed provide estimates of pollutant concentrations for days or weeks, but predictions of seasonal or annual concentrations are not available. The computer models being applied to the Basin need further evaluation, particularly for winter conditions. However, even with the gaps in knowledge and the shortcomings of different methodologies, the study confirmed that current levels of several air pollutants are reported to be causing impacts to human and environmental health, and must be addressed.

Significance of Transboundary Transport

The study found that there is sufficient transboundary airflow to transport airborne pollutants across the international boundary. In fact, windflow patterns move pollutants across the international border in both directions through all seasons of the year in the Georgia Basin airshed. Furthermore, the results of computer-modeled simulations confirm that there is a significant transboundary transport of air pollution in the southern portions of the Georgia Basin airshed. The main exchange of air and pollution between the Georgia Basin and Puget Sound airsheds is through the “portal” situated to the south of Haro Strait, extending from south of Bellingham westward to Port Angeles. Flow through the portal is strongest in the fall.

Implications

The study identified the following key implications for developing strategies to improve air quality in the Georgia Basin/Puget Sound air basin:

Because wind flow patterns move pollutants across the international border in both directions through all seasons of the year, the management of air pollution in the Georgia Basin/Puget Sound airshed will require coordinated attention by both Canada and the United States.

The stagnant weather associated with episodes of poor air quality usually impacts the Georgia Basin and Puget Sound airsheds simultaneously. During these episodic events, the movement of air pollutants between airsheds is extremely limited. However, strategies taken to address episodes of poor air quality will continue to require coordinated international action in the Georgia Basin airshed.

Interactions between airborne pollutants can cause secondary air pollutants to form in the atmosphere. Emission reduction strategies will be most effective when the synergistic effects of emission changes on air chemistry and subsequent air pollutants are considered.

The concentration of ambient air pollution is linked to social and economic trends including increasing population, transportation demands, energy consumption and shifts in industry. Although emissions of pollutants from the on-road vehicle sector are projected to decrease over the next decade in both airsheds, emissions from the marine sector are increasing, as are emissions from agricultural practices. Some of the programs and strategies to reduce emissions and improve air quality will also assist with strategies to reduce greenhouse gas emissions, and vice versa.

Ambient concentrations of air pollution, at present levels, have a negative impact on human health and the environment. These results support the need for continuous improvement of air quality while maintaining publicly acceptable concentrations in areas where air pollution levels are low.

Fine particulate matter is dominated by carbonaceous material. In urban centres, nearly 50 per cent of the particle mass is from combustion. The management of emissions from combustion sources should be a continuing priority to reduce fine particulate concentrations and related human health problems.

SO2, organic carbon and NOx are the dominant pollutants responsible for degraded visibility. SO2 and NOx emissions are transformed in the atmosphere to sulphates and nitrates, which combine chemically with ammonia from agricultural sources and with sodium from natural marine emissions to form fine particulate matter. Improving visibility will require attention to SO2, organic carbon, NOx and ammonia sources.

The amount of ground-level ozone in the ambient air is primarily the result of photochemical reactions. Ozone and its precursors can be transported great distances. As a result, the highest ambient ozone concentrations are often observed downwind of urban centers and at high elevations in rural areas. The effectiveness of ozone control strategies needs to be evaluated by taking ambient measurements of ozone at appropriate locations, often downwind of urban centres and at high elevations in rural areas.

Natural emissions of volatile organic compounds represent from one-third to one-half of the total VOC emissions in the Basin. The magnitude of natural emissions poses limits on achievable reductions in total VOC emissions in the Basin. Natural VOC emission levels also limit the effectiveness of NOx emission controls in reducing ambient PM and ozone concentrations.

Ozone concentrations of 40 to 50 ppb are often recorded at rural coastal locations in the spring and identified as “background” concentrations. These concentrations are caused by emissions from both natural and anthropogenic sources, including transport from outside the Basin. Thus, a portion of background ozone is anthropogenic and, therefore, controllable.

The impact of the long-range transport of pollutants from the Pacific is more often noted in the spring. Air pollutants from sources outside the Basin are usually well dispersed, although the impact on ambient air quality in the Basin is measurable. Ambient air quality strategies within the Basin need to consider the addition of pollutant concentrations from distant sources.

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URL of this page:
http://www.pyr.ec.gc.ca/air/gb_ps_airshed/summary_e.htm
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Environmental & neighborhood groups say "NO TO GSX"

Contacts:
RE Sources for Sustainable Communities; Wendy Steffensen, (360) 733-8307
Fuel Safe Washington; Fred Felleman, (206)595.3825
Neighbors for Birch Point; Jo Slivinski, (360) 371-0301
Smart Growth Birch Bay; Alan and Elie Friedlob, (360) 371-3441
Friends of the San Juans; Tina Whitman, (360) 378-2319
GSX Concerned Citizen Coalition of BC; Arthur Caldicott (250) 370-9930 x22
Norhwest Ecosystem Alliance; Lisa McShane
North Cascades Audubon Society; Paul Woodcock

FOR IMMEDIATE RELEASE
September 24, 2003

A broad coalition from Canada, Whatcom and San Juan Counties will reiterate their opposition to the GSX pipeline before the Whatcom County Hearing Examiner on September 28th at 1:30 P.M. at the Whatcom County Courthouse Annex, 1000 North Forest St. in Bellingham.The proposed GSX project, a major natural gas transmission pipeline slated to deliver natural gas from the BC mainland to Vancouver Island, by way of Whatcom and San Juan Counties has been going through the regulatory permitting process since 2001.

The Hearing Examiner will hear the remaining arguments on the County permits needed for the GSX project on Tuesday and will make his decision within ten days of the closing comments. The public is invited to attend the hearing.

Opponents of the project contend that the route through the US is not necessary because feasible all-Canada routes exist for the pipeline, and, additionally, there are other simpler means to generate electricity for Vancouver Island. They maintain that pipeline construction and operation could harm the declining Cherry Point herring, as well as the biologically rich Cherry Point reach. Herring are a key species in the Puget Sound food chain, are a primary food source for endangered salmon, which are critical to the recovery of our endangered resident orca population.

County staff in both Whatcom and San Juan Counties have recommended against the GSX pipeline based on the potential harm the GSX pipeline could cause to marine resources and because it is an unnecessary project. Staff in both counties found that the GSX project did not meet guidelines under the Shoreline Management Act.

In San Juan County, the Hearing Examiner overruled County staff and approved the GSX project. Friends of the San Juans (FSJ) appealed that decision to the San Juan County Council. Spokesperson Tina Whitman says, "Our appeal is focused on project inconsistency with county and state shoreline management policy and concerns over the legal precedent set by allowing a new utility corridor along a Shoreline of Statewide Significance. The public benefit has not been demonstrated, while the risks to human safety and ecological systems are many."

In Whatcom County, RE Sources for Sustainable Communities, Neighbors for Birch Point, Smart Growth Birch Bay, and North Cascades Audubon Society have been working to thwart the GSX pipeline. "The GSX pipeline offers no benefit to Whatcom County or to the state of Washington, and could come at a great environmental cost. Placement of pipelines need to be part of a comprehensive energy plan; the GSX project could engender other new energy projects, creating an unplanned utility corridor and potentially even more environmental problems," said Wendy Steffensen, North Sound Baykeeper with RE Sources.

Jo Slivinski, whose grassroots group Neighbors for Birch Point gathered more than 200 Whatcom County signatures in a few days on a petition against GSX, commented, "What's at stake are tremendously adverse environmental impacts on marine wildlife and vegetation in an area of known seismic activity and along a designated 'Shoreline of Statewide Significance.' The area's fisheries could be impacted--environmentally and economically. Add to that Williams' [one of the pipeline co-developers] extremely poor pipeline safety record. How can what Williams is calling 'benefits' (possible tax revenues) to our counties be in any way worth such abysmally terrible trade-offs on our environment, safety, and economy?"

The considerable dangers posed by this pipeline, especially in light of the Williams Company's pipeline safety record, concerns more than a few opposing groups. Arthur Caldicott of GSX Concerned Citizens Coalition of BC has written extensively on this issue. For example, the company's Northwest Pipeline, which runs from Canadian border to southern Oregon, ruptured twice in 2003, in one case releasing gas for 3 hours before it could be stopped. At least 8 other failures or safety incidents with Williams' various pipelines in the Pacific Northwest have been documented between 1992 and 1999. Following the 1999 Olympic Pipeline explosion (not one of Williams' pipelines) in Bellingham, the Washington State Utilities and Transportation
Commission launched an investigation into pipeline inspection and testing records of companies operating in the state. Williams came out at nearly the bottom of the list, having inspected only 17% of its system and tested a mere 11%.

Elie Friedlob, representing Smart Growth Birch Bay, a group interested in monitoring development in the Birch Bay area stated, "Should this pipeline be approved and built by overriding the known concerns of the County and Washington State, it will seriously weaken the ability of these governments to control and monitor the type and quality of development along our critical shorelines and our vulnerable farmlands."

The Federal Energy Regulatory Commission (FERC) has already given the GSX project conditional approval. FERC also maintains that the County and State do not have jurisdiction in the GSX case. The Department of Ecology is challenging FERC's contention that they do not have standing in the case. DOE has not decided whether to grant permits for this project or not, and at this point the question of their jurisdiction has not been resolved.

In another legal twist, the jurisdiction of FERC itself is being challenged by Fuel Safe Washington (FSW). "FSW is challenging FERC's jurisdictional authority since this is not an interstate pipeline. This proposed gas transmission line should be reviewed by the State's Energy Facility Site Evaluation Council (EFSEC), not an agent of the Bush Administration which supports anything that smells like oil and gas infrastructure. Furthermore, given the dire straits of our orca, salmon and herring populations they have done an incredibly poor job of assessing the environmental impacts of such an unnecessary project" said Fred Felleman, President of FSW. That hearing is scheduled for September 29th in Denver before the 10th
Circuit Court of Appeals.

In Canada, opposition to the GSX Pipeline project has been intense, resulting in one of the longest hearings in Canadian pipeline history. The pipeline cannot be built unless BC Hydro also builds a gas fired generation plant in Nanaimo, on Vancouver Island. Last September, however, the BC Utilities Commission denied BC Hydro's application for the Nanaimo plant. In any event, Terasen, the owner of the existing
all-Canadian pipeline to Vancouver Island, has demonstrated in evidence that they can provide all the gas needed on Vancouver Island with modest upgrades to their existing system.

The odds of this pipeline being built are very low", says Arthur Caldicott, a director of the GSX Concerned Citizens Coalition, "but if it does get built, it would be senseless for Americans to accept all the environmental impacts when they stand to get no benefit from it." Caldicott adds, "What was FERC thinking when they determined that GSX would be in the public interest and convenience of citizens of Whatcom and San Juan counties? It's an absurd conclusion." Caldicott's group wrote an amicus brief in support of the Fuel Safe case going to Court on Wednesday.

-30-

Panel OKs power plant at refinery

Generator will do double duty
John Stark, The Bellingham Herald
September 25, 2004

The 720-megawatt BP Cherry Point Cogeneration Project got a unanimous endorsement Friday from the Washington State Energy Facility Site Evaluation Council, sending the project to the desk of Gov. Gary Locke for final approval.

Assuming that the project clears that final step in 3 1/2 years of regulatory scrutiny, the two-year construction project could begin in the first half of 2005, company officials said.

COGENERATION POWER PLANT

What: Natural gas-fired electric-power plant

Where: BP Cherry Point Refinery

Maximum output: 720 megawatts, enough power for more than 700,000 average homes.

Jobs: 30 permanent positions, temporary jobs peaking at 706 during two-year construction; two-year construction payroll estimated at $30 million.

Tax impact: $4 million in one-time sales tax revenue to Whatcom County; annual property tax of $1.6 million to Blaine school district, $720,000 to Whatcom County.

Sources: BP; Whatcom County Assessor's Office

---

COMMENT: The business logic that underlies a project like this, in the face of evidence that North American natural gas production has peaked, must be underpinned by articles of faith that the empirical evidence can't be true and/or that other sources of supply, such as LNG, will come into play in time.

Note that at least one proposal for an LNG terminal at Cherry Point is being floated.

Although GSX tried to enjoin the BP project as a supporter of the GSX-US pipeline, the EFSEC approval is based on the understanding that the gas for the BP Cherry Point Co-generation facility will all come from an existing pipeline.

"The sole fuel source for the facility will be natural gas, except for diesel oil used in the emergency generator and the firewater pumps. The Project will be supplied by a connection to the existing 16- inch Ferndale pipeline that runs from the U.S.-Canada border near Sumas, Washington, to the BP Refinery." (link)

---

"It's a big relief," said Mike Torpey, BP's environmental manager for the project.

Steve Koch, president of the Northwest Washington Building and Construction Trades Council, was also pleased. He said he expected the construction of the generating plant to provide some good jobs for some of the 6,000 union members he represents.

BP has estimated peak construction employment on the project at 700, with a total construction payroll of about $30 million. Permanent employment at the generating plant will be about 30.

Site council members praised the project.

Council Chairman Jim Luce said it was consistent with the state policy goal of meeting the growing demand for electric power while causing minimal environmental impact. The BP project is more efficient than a stand-alone power plant because the fuel burned will do double duty, generating power while providing steam for refinery operations, Luce said.

Council member Tony Ifie, representing the state Department of Natural Resources, said he had studied the air-quality data provided by the company and was convinced that the plant would not hurt air quality in the region. Using the generator to provide steam for the refinery will result in the shutdown of older, dirtier steam boilers and result in the reduction of some emissions, Ifie said.

Hedia Adelsman, the council member representing the state Department of Ecology, said the project would eliminate about 30 acres of wetlands, but the company would compensate for that loss by restoring another 110 acres of wetlands.

Whatcom County Council member Dan McShane, also a site council member, said construction traffic will be significant in the area, but would be comparable to what nearby residents already experience when Cherry Point refineries are doing major maintenance work. He said the company has agreed to shoulder the cost of road improvements to help handle the traffic impact.

Reach John Stark at 715-2274 or john.stark@bellinghamherald.com.

The Bellingham Herald

EFSEC Project Site

Garbage in, garbage out

What do a folk singer and a potato farmer have in common? How about a dodgy investment scheme in power generation at Gold River that might actually see tons of Los Angelinos garbage pile up in Nootka Sound

The Republic
Vancouver's Opinionated Newspaper
September 2 to 15, 2004, No 96

A strange tale involving an alleged American stock fraudster, a popular Alaskan folk singer, a huge Japanese conglomerate, a dying mill town, and desperate government officials is unfolding in the northern Vancouver Island village of Gold River, population 1,400, and falling.

Five years ago, owners of the Bowater Pulp Mill at Gold River shut the plant down, permanently laying off all 400 employees. The employees were mostly residents of the village of Gold River, then bustling and prosperous with a population of 2,400 and growing. Gold River was originally planned and built by the owners of the mill in the 1960s. The abandoned mill continues to sit on land leased to it from the Muchalat Indian band. The village now continues to die a slow death as remaining residents grasp at whatever hope comes along.

As though by saving grace, one such hope has appeared on the horizon—but it may come with a high price. BC Hydro is a state-owned electric utility company. The current British Columbia provincial government is trying to privatize the utility. To tart up its prospectus for a future initial public offering on the stock markets, BC Hydro announced that it would shut down its under-water cables that supply electricity from generating plants on the BC mainland to Vancouver Island. To make up for the electricity shortfall on the island, the utility proposed to build a natural gas pipeline connecting to the North American gas grid, and to construct a natural gas-fired electricity generating plant near the Vancouver Island city of Nanaimo.

But last year, the government regulator, the BC Utilities Commission, turned down the bid and insisted instead that BC Hydro should first seek applications from potential private generators of electricity on Vancouver Island.

One of the more intriguing proposals that have come forth from the resulting tendering process the utility launched last year involves the moth-balled Bowater Pulp Mill at Gold River. The proposal comes from an unlikely duo: a potato farmer from Idaho by the name of David O Kingston, and a folk singer from Alaska by the name of Jewel Kilcher. Kingston owns a set of companies that wholesales and distributes potatoes from Idaho, pineapples from Costa Rica, and other farm food from Peru, Florida and California, mostly by truck to huge California markets. Kilcher is better known by her stage name, Jewel, currently one of the world’s most popular singer-songwriters.

With proceeds from her successful entertainment career, Jewel funds a foundation called Clearwater Project that aims to provide potable water to third world villages. The chief corporate strategist at Clearwater is Lenedra Carroll, Jewel’s mother, herself once half of a formerly popular folk music duet in Alaska, the other member being Jewel’s father, Atz Kilcher. The two divorced when Jewel was eight years old. Her father continues to play and record music.

Carroll, on the other hand, authors self-help books and manages her daughter’s career. In a suit launched by Jewel’s original manager a few years ago, Inga Vainshtein alleged that Jewel was required to consult her mother’s supposedly channeled entity, known as “Z”, prior to making any decisions regarding Vainshtein’s business advice.

Kingston and members of his family own and operate the Kingston Companies LLC with headquarters in Idaho Falls, Idaho, and offices around the US, and also in San Jose, Costa Rica, Lima, Peru and, oddly enough for a fruit and vegetable-growing concern, Gold River, British Columbia, according to published corporate information. The company owns farms that grow and distribute potatoes, onions, broccoli, lettuce, and pineapple.

Kingston and Carroll, through the Clearwater Project, were named in the BC Legislature in Victoria by North Island MLA Rod Visser as chief investors in the new plan for the Bowater mill. Carroll, in her capacity as chief corporate strategist at Clearwater, launched a private company, in collaboration with Kingston and other investors, called Green Island Energy. Sean Ebnet, Executive Director of Jewel’s Clearwater Project foundation, has taken up part-time residence in Gold River to head up Green Island Energy. Kingston’s company began this year to list Gold River as a site of one of its far-flung global offices.

Green Island Energy has a proposal before BC Hydro and various BC government regulators to transform the abandoned Bowater mill into an electricity generating station that would produce and sell electricity to BC Hydro. The Green Island Energy proposal is to take advantage of existing transmission lines that connect the mill to the electrical grid at nearby Campbell River, lines formerly used to supply the mill with electricity. Existing boilers at the mill can be used, the proposal states, to burn waste wood particles from nearby mills in sufficient volume to create, with steam turbines, 49 megawatts of electricity—roughly the equivalent of what is used by 24,000 homes in one year. Ultimately, Green Island Energy proposes to generate 250 megawatts at the former Bowater plant.

According to companies that already burn waste wood to produce electricity, each megawatt produced requires about 20,000 tons of wood waste products. The initial phase at Green Island Energy would require one million tons of wood waste per year. The ultimate plan would require five million tons per year.

Of course, there isn’t nearly that much wood waste produced at mills throughout British Columbia, not anymore, anyway, since many, like Bowater, have shut down. The Green Island Energy proposal, however, does not specify that wood waste only would be burned at the old mill site in Gold River in future phases. Instead, the proposal is to burn “biomass.”

According the US National Renewable Energy Laboratory , biomass has this official definition, for the purposes of US regulators: "Biomass: Organic matter available on a renewable basis. Biomass includes forest and mill residues, agricultural crops and wastes, wood and wood wastes, animal wastes, livestock operation residues, aquatic plants, fast-growing trees and plants, and municipal and industrial wastes." With the right boilers, any of this material can be burned to produce steam for electricity.

Only one kind of biomass listed above is in great enough abundance and cheap enough to source for anyone to consider basing a 250 megawatt electricity generating plant on it: municipal and industrial solid waste. In fact, producers of municipal waste up and down the west coast of North America are anxious to pay anyone willing to take their biomass—human household waste, mostly—away because landfills are full, new ones are impossible to get permits for, and dumping waste in the ocean is no longer acceptable. City of Vancouver residents generate about 300,000 tons of household garbage and waste a year. The west coast of North America generates about 50 million tons—all of it with not much room left to stash it.

Biomass-burning electricity plants constructed recently in Pennsylvania and other eastern seaboard states at first proposed to burn “clean” wood chips, but nearby residents soon learned that the term “biomass” has a wider definition than they thought when municipal and state governments granted companies permits to burn it. They now see municipal waste from afar brought to their impoverished towns, where it is burned at their former “clean wood chip” fired electricity plants.

David O Kingston, one of the principles behind the Green Island Energy proposal, is currently in the courts in Idaho facing lawsuits stemming from fraud in an alleged stock market swindle with a company he headed up called Collabware. Collabware promised investors it had special access to certain Lougheed Martin Company inventions, but all came to naught and the company wound up operations soon after new capital stopped flowing in.

The company Green Island Energy proposes to sub-contract out the actual operation of the plant at Gold River is North American Energy Services, a wholly-owned subsidiary of Itochu Corp., a sprawling Japanese conglomerate with revenues from global operations totaling over $120 billion last year.

Other business ventures by Jewel and her mother have included a yet-to-be made film called Wave, co-produced by the two about a mother re-uniting 25 years later with her son in a remote west coast Canadian town. Jewel is to be cast as the son’s love interest. It is writer David Rothmiller’s first writing credit. Production has been stalled for two years.

Gold River is not Lenedra Carroll’s first foray into electricity entrepreneurship. Two years ago she led a consortium interested in taking over the mothballed Anyox hydroelectric dam and generating plant at Alice Arm, BC, located nearby Prince Rupert. The status of this project is unknown; the purchasing agreement with BC Hydro was expected a year ago, but has not yet materialized.

Earlier this year, the mayor of Gold River, the local MLA, and Gordon Campbell, premier of the province, were introduced to the principles of Green Island Energy, and also treated to a song or two by Jewel in person. Sources close to The Republic say Green Island Energy recently received government approval to begin shipping municipal waste to the Bowater mill site, but this could not be confirmed by press time.

****

Jewel meets with Premier to discuss plans for a new power generation facility

from the Premier's media gallery (link)

Clean Air Summit, Thur, Sept 16, Duncan

The Clean Air Summit goes this Thursday, Sept 16, at the Silver
Bridge Travelodge in Duncan, 140 Trans-Canada Highway, 9:30 to 3:30.

Speakers include:

June Yoo Rifkin, BC Lung Association
Dave Stevens, CHOKED
Delores Broten, Reach For Unbleached
Thomas Marek, Carbon Monoxide Information Network
Paul Hundal and Carole Christopher, SPEC - Society Promoting Environmental
Conservation
Karen Cooling, CEP -- Communications, Energy and Paperworkers Union of Canada
Peter Ronald, Georgia Strait Alliance & GSX Concerned Citizens Coalition
Chris Tollefson, University of Victoria Faculty of Law
Chris Rolfe, West Coast Environmental Law
Stuart Blundell, PPWC -- Pulp, Paper and Woodworkers Union of Canada Bernadette Wyton, Citizens Stewardship Coalition, Port Alberni

CACG - Clean Air Citizens Group

Terasen applies to BCUC for LNG facility on Vancouver Island

Pursuant to Section 45 of the Utilities Commission Act, TGVI hereby files with the British Columbia Utilities Commission ("Commission") twenty (20) copies of an Application for a CPCN to construct and subsequently operate a new LNG Storage Facility. This LNG facility is to be constructed at a location referred to as Mount Hayes, in the Cowichan Valley Regional District near Ladysmith. TGVI will post the Application on the TGVI website at www.terasengas.com under Publications, Vancouver Island, and then BCUC.

Application to BCUC for a CPCN

_________________________________________________

Terasen Gas (Vancouver Island) Inc. Application for Approval of the 2004 Resource Plan -- and -- Terasen Gas (Vancouver Island) Inc. Application for a Certificate of Public Convenience and Necessity for a Liquified Natural Gas facility

Timetable
Intervenor/Interested Party Registration - September 8, 2004
Pre-hearing Conference - September 13, 2004
Information Requests to TGVI - September 20, 2004
TGVI Responses to Information Requests - October 4, 2004

--------------------------------------------------------------------------------
Hearing Location
Pre-hearing Conference @ 1:00 pm September 13, 2004 1:00:00 PM
Fourth Floor Hearing Room
855 Homer Street
Vancouver BC

--------------------------------------------------------------------------------
Hearing Documents
Exhibit List Submitted: 11/08/2004 8:45:00 AM
Updated August 18, 2004

--------------------------------------------------------------------------------
Exhibits
"A" Exhibits - Commission Documents
A-1 Submitted: 18/08/2004 12:49:00 PM
Commission Order No. G-79-04 and Notice of Pre-Hearing Conference combining the reviews of the 2004 Resource Plan and the Certificate of Public Convenience and Necessity Application for a Liquefied Natural Gas (LNG) Storage Project

A-2 Submitted: 26/08/2004 9:31:00 AM
Commission letter dated August 23, 2004 regarding July 2004 Update Report dated August 16, 2004

"B" Exhibits - Applicant Documents
B-1 Submitted: 11/08/2004 8:35:00 AM
Terasen Gas (Vancouver Island) Inc. letter and Application dated June 18, 2004 for Approval of the 2004 Resource Plan

B-2 Submitted: 18/08/2004 12:45:00 PM
Terasen Gas (Vancouver Island) Inc. Application for a Certificate of Public Convenience and Necessity - LNG Storage Project

"C" Exhibits - Intervenor Documents
C1-1 Submitted: 11/08/2004 9:08:00 AM
WestPac Terminals - Notice of Intervention dated August 3, 2004

C2-1 Submitted: 24/08/2004 2:34:00 PM
Ministry of Energy and Mines - Notice of Intervention dated August 19, 2004

C3-1 Submitted: 26/08/2004 11:30:00 AM
Karl E. Gustafson, Lang Michener – Notice of Intervention dated August 24, 2004

"E" Exhibits - Letters of Comment
E-1 Submitted: 24/08/2004 3:37:00 PM
Ministry of Energy and Mines – Response to Commission Letter No. L-35-04 dated June 30, 2004 requesting comments on, and preference for, either a joint process or separate processes for reviewing the Resource Plan and the LNG CPCN Application

E-2 Submitted: 24/08/2004 3:38:00 PM
Vancouver Island Gas Joint Venture – Response to Commission Letter No. L-35-04 dated June 30, 2004 requesting comments on, and preference for, either a joint process or separate processes for reviewing the Resource Plan and the LNG CPCN Application

E-3 Submitted: 24/08/2004 3:39:00 PM
British Columbia Hydro and Power Authority – Response to Commission Letter No. L-35-04 dated June 30, 2004 requesting comments on, and preference for, either a joint process or separate processes for reviewing the Resource Plan and the LNG CPCN Application

E-4 Submitted: 24/08/2004 3:39:00 PM
Terasen Gas (Vancouver Island) Inc. – Response to Commission Letter No. L-35-04 and interested party letters providing comments on, and preference for, either a joint process or separate processes for reviewing the Resource Plan and the LNG CPCN Application


Copyright © BCUC, 2004.

http://www.bcuc.com/ApplicationView.aspx?ApplicationId=58

Norske Canada Demand Management Proposal

September 2, 2004

By E-mail and Courier
British Columbia Utilities Commission
Box 250
600-900 Howe Street
Vancouver, B.C. V6Z 2N3

Attention: Robert J. Pellatt,
Commission Secretary

Dear Sirs/Mesdames:

Re: Project No. 3698376
British Columbia Transmission Corporation
2004 Transmission System Capital Plan

NorskeCanada herewith submits its proposal for Demand Management in response to BCTC’s Capital Plan submission. We believe that this proposal will allow the most cost effective, reliable and flexible solution to be implemented for the capacity issues to and on Vancouver Island.

Our proposal is based on Demand Management at our Elk Falls Mill (Campbell River) with an option for DM at our Crofton Mill. We understand that the Crofton location will help resolve a North-South backbone constraint until the new 230 kV transmission system is in service.

The Demand Management Service that we are proposing is more reliable than generation and can be contracted for “bridging” or for longer terms to meet the needs of on-going single-contingency conditions. Once installed, generation will not offer “real” choices for variable capacity and contract duration, as the pricing structure will be mainly based on the capital cost. As explained further in the proposal, this package is not bound by capital cost recovery and therefore offers true flexibility in variable capacity and contract duration; a great advantage to suit the users’ needs.

With this submission, we specifically request that the Commission direct BCTC and BC Hydro to engage in discussions to review the NorskeCanada proposal and report back, either endorsing the proposal or not, by November 1, 2004.

We are supportive of the 230 kV transmission option outlined in BCTC’s application, as reliability of service is an important issue for all Vancouver Island residents. We encourage as fast a review and approval as possible as we also believe this project is the most cost effective solution.

We wish to thank BCTC for their assistance to date in developing this proposal and for the time and effort they made in helping us formulate a useful Demand Management package. We believe this proposal addresses their criteria. We would welcome the opportunity to talk to other parties such as BC Hydro about alternative conditions or configurations for our Demand Management that may provide benefit to their systems or plants.

Thank you for the opportunity to submit this proposal and for the opportunity to be involved with BCTC’s Transmission System Capital Plan review.

Yours truly,

NORSKE SKOG CANADA LIMITED
Jess M. Beaman
Sr. Vice-President, Operations

Copy:
BCTC
Interested Parties

Norske Canada Demand Management Proposal