Tourism and Industry Can Co-exist

craig-mainBy Craig McConnell
Published: July 12, 2014

 

Can tourism and industry co-exist? As a Squamish resident I feel that the two are not mutually exclusive. North Vancouver is an example of healthy co-existence between industry and tourism. The waterfront is host to CN Rail yards, Seaspan, Neptune Bulk Terminals and Canexus Limited. Nearby is the Lonsdale Quay Market and further inland are the Capilano Suspension Bridge, Cleveland Dam, and Grouse Mountain.

I would argue that, to a less intense level, this similar coexistence can take place in Squamish as well.

The District of Squamish (DOS) via the OCP has strategically maintained, for economic growth and development, the “industrial” zoning of the Woodfibre site. No other proponent has stepped forward since the pulp mill closure in 2006 with a viable offer.  Aside from industry, who has the resources to take on remediation and the environmental liabilities in perpetuity?

This decaying industrial site is receiving $8,000,000 worth of remediation for a Certificate of Compliance from the BC Ministry of Environment. WLNG has taken on this financial burden to clean up the site with no guarantee of project permitting. Furthermore, they have engaged key tourism operators to discuss aesthetic enhancements. How better to define the intent of an emerging community partner than this commitment?

The site lends itself well to a LNG liquefaction and export facility, as it is a deep sea port with an existing pipeline and access to the hydro grid.  LNG is also much cleaner than a pulp mill – it is odourless and does not have associated smokestacks and plumes as some have suggested.

WLNG’s decision to run on electricity is also something that should not be overlooked and shows that community feedback is still relevant and not merely a box to be checked.

Merran Smith, Executive Director, Clean Energy Canada states, “WLNG intends to link its facility directly to the BC Hydro grid, which delivers 92% clean and renewable electricity. As a result, at least from a carbon-pollution perspective, its LNG would indeed beat the global gold standard for carbon pollution”. 

I’ve also heard opponents say that WLNG’s property tax contribution would be minimal. This is not true. I attended a recent small group meeting hosted by WLNG on June 16, where local taxation was raised. Councillor Doug Race indicated that the mill rate is $27,500 per $1,000,000 in valuation for heavy industrial users. He continued, if WLNG was assessed (by BC Assessment) at 1/17 of the estimated cost to build, the municipality can expect to collect $2,700,000 in taxes.  $2.7M is not a small amount, particularly to those that have seen double digit property tax increases since 2006. It has been a struggle for many to pay the bills for their homes and businesses.

Comments

  1. Wolfgang W says:

    Yes, industry and tourism can co-exist, if perhaps rather uneasily in many places, depending on the location and visibility of a particular industrial activity. No one can honestly state that the show case wind-turbine on top of Grouse Mountain is not also industrial in nature. Travel to many parts in Western Europe and you cannot avoid these euphemistically called ‘wind farms’, whether in a region visited by tourists or not. Just because they are ‘green’ does not prevent them from being an eyesore in the landscape. Back to Squamish: No one has so far suggested that the docks of our deep sea port would be incompatible with our eventual ‘Granville Island North’ on the Ocean Front Lands or that they are an eyesore when viewed from the Gondola.
    The argument between either tourism or industry for Squamish stems from a false dichotomy. The real question is whether it is sensible to seed Howe Sound anew with heavy industry, among them putting a LNG plant, with only paltry information as to its economics and net benefits, on the Woodfibre site.
    The marks of previous heavy industrial activity are still all too real in Howe Sound, whether from mining, pulp mills or chemical plants. Why else the multi million dollar clean-ups? While this is not to criticize previous generations, who only worked within then accepted parameters, it does not change the fact that we are now left with that legacy. Who is to guarantee that, once the LNG boom has run its course for BC, we will not be left with a new undesirable legacy after having blindly bought into it?
    We may talk all we want about industrial mill rates, but you noticed in the article that councillor Race hedged his statement about expected taxes with a big ‘if’. That is the key problem: It is all ‘cloak and dagger’ at this point, nobody, including Council, has any clear idea what benefits will actually be generated for Squamish from this project and whether it might really be worth trading off other assets we have in exchange. Such trade offs could also include the legacy of our decision makers becoming fixated with the past again instead of focussing their outlook on sustainable opportunities for the future.

  2. Eric Andersen says:

    Wolfgang: REGARDING your comment: “No one has so far suggested that the docks of our deep sea port would be incompatible with our eventual ‘Granville Island North’ on the Ocean Front Lands”. This is incorrect. Both Squamish Terminals Ltd. and forest industry spokespersons have consistently and publicly raised concerns about neighbourhood interface risks arising from proposed housing development on the former Nexen lands. In addition to neighbouring commercial transportation and industry pointing out these interface risks, numerous people and interest groups in the community — including environmental groups — have voiced a variety of concerns about proposed land uses for the peninsula, over the past decade.

  3. Wolfgang W says:

    Thanks for the correction. So it comes down again to ‘location’, doesn’t it?

  4. Adam says:

    “LNG is also much cleaner than a pulp mill – it is odourless and does not have associated smokestacks and plumes as some have suggested.”

    Craig, there are any number of odourless gases that will kill you within seconds. So I don’t see ‘odourless’ as a selling point. The proposed WLNG facility does have a flarestack that will burnoff byproduct and release a range of nasty chemicals into the airshed and eventually into the watershed as acid rain.

    “This decaying industrial site is receiving $8,000,000 worth of remediation for a Certificate of Compliance from the BC Ministry of Environment. WLNG has taken on this financial burden to clean up the site with no guarantee of project permitting. ”

    The ‘financial burden’ you describe is being undertaken in a bid to strip billions of dollars of gas out of Canada for resale. They’re not doing this because they’re saints.

    “WLNG’s decision to run on electricity is also something that should not be overlooked and shows that community feedback is still relevant and not merely a box to be checked.”

    WLNG always planned to run off electricity. They proposed the gas fired turbine option in original documentation as they knew it would gain them credibility when they offered to switch.

    As taxpayers, we’re the ones that are going to be subsidizing their electricity usage. Ever heard of the Site C dam? You’re going to be paying for it shortly and it’s coming online to provide the likes of WLNG with electricity.

    • Craig D. McConnell says:

      Hello Adam,

      Please familiarize yourself with the Clean Energy Canada (CEC) report, “Lock In Jobs Not Pollution, How British Columbia’s Proposed Liquefied Natural Gas Industry Can Create a Lasting Renewable Energy Legacy – And Why It Should” by James Glave and Jeremy Moorhouse, P.Eng. I suspect you are familair with CEC and Jeremy’s report, given that advocates from My Sea To Sky invited him as a guest expert panelist at the Quest University event, April 8, 2014.

      Although the CEC report defines an energy supply model primarily for the large NW coast LNG projects of Kitimat and Prince Rupert with wind turbine farms installed locally to supplement the BC Hydro grid, it also acknowledges Woodfibre LNG’s option to use E-Drives (electrical drives) powered by BC Hydro as CEC’s favoured approach.

      CEC’s previous report,”The Cleanest LNG In The World” concluded that BC’s petroleum industry will not be able to credibly produce the cleanest LNG in the world unless and until it powers its plant with E-Drives that in turn run on a combination of renewable power, existing BC Hydro grid electricity, and efficient combined -cycle natural gas generators. That assessment concluded that E-Drives would reduce emissions by the equivalent of 0.11 tonnes of CO2 per tonne of LNG produced. CEC’s model is an exceptional “vision” for the BC LNG industry to consider, including the senior management of BC Hydro.

      There is little reason to keep your self awake at night worrying about the planned Site C Dam. BC Hydro has been pushing the flawed economic model of that plan for 25+ years. Now they have the added burdens to contend with of recent Supreme Court recognition in First Nations Land Title, environmental permitting with cumulative effects consideration, and current practice in Corporate Social Responsibility. It will take 10-15 years for Site C Dam to complete the legal challenges and permitting process. Site C is not relevant to the successful completion and operation of Woodfibre LNG.

      Craig D. McConnell
      Geoscience Analysis Technology
      Envir0-Guard Technology

  5. Delena Angrignon says:

    There are a few problems with the property tax argument in Mr. McConnell’s analysis. Briefly:

    – The statement “WLNG has taken on this financial burden to clean up the site with no guarantee of project permitting” is somewhat at odds with notes in Western Forest Product’s 2013 annual report, stating that it has received an option to purchase the site, conditional on WFP’s receiving the certificate of compliance. It is WFP – not Woodfibre – spending the money to remediate, as it has always been required to do in winding up its operations on the site. The exact wording (see P. 62 of http://www.westernforest.com/wp-content/uploads/2011/09/2013-WFP-Annual-Report.pdf) is “In January 2013, Western announced that it had entered into a conditional agreement for the sale of its former Woodfibre Pulp Mill site for a gross purchase price of $25.5 million. Closing is subject to certain conditions, and Western will be responsible for the satisfactory remediation of the property to applicable environmental standards prior to closing the sale. During 2013, both parties agreed to a specific remediation plan, and a deposit of $5.5 million was placed in trust by the purchaser and is non-refundable provided that Western completes the remediation in accordance with the terms of the sale agreement. After incurring the estimated required remediation costs, Western now anticipates receiving net proceeds from the sale and remediation of approximately $18 million”.

    – According to MLA Sturdy (in the LNG video on his website- see http://jordansturdymla.ca/bcltv_videos/mla-sturdys-statement-lng-development/ ), the Woodfibre site paid DoS $2M in property taxes in 2007. Scaled up to property values today – 7 years later – the site should be paying (so some DoS Councillors think) about $5M annually to DoS.

    – The BC Government has given itself the power to cap whatever taxes are levied on Oil & Gas properties by local municipalities. MLA Sturdy has stated (at a meeting with two constituents in his Horseshoe Bay office in late May) that this power may be exercised if DoS “gets greedy”.
    – Property assessments do not include the value of machinery and equipment. Whether/not an on-land liquefaction plant and floating storage tankers would be excluded from a BCAA valuation remains to be seen.

    – In a July 14th letter to DoS (attached, viewable at https://squamish.civicweb.net/FileStorage/FAC7CC15250B4269A78EC79D7B489316-Woodfibre%20Tax%20Agreement.pdf), Woodfibre has proposed that it pay no more than the $2M 2007 taxes to DoS, that increases over $2M be capped at 2.5% per annum for 25 years, and that the taxes never exceed $3m. If the true 2014 valuation were to yield DoS $5M in 2015, the Woodfibre proposal amounts to a shortfall, over 25 years, of some $109M, assuming increases are indeed capped at 2.5% p.a.

    • Craig D. McConnell says:

      Hello Delana,
      I am surprised that my column is yet generating commentary.

      The conditional sale of the Woodfibre site between Western Forest Products (vendor) and Woodfibre LNG (purchaser) is based upon the vendor receiving a Certificate of Compliance from the BC Ministry of Environment. Since the 2006 closure of the pulp mill, the vendor has been unable to complete remediation work necessary to acquire the Certificate due to longer term financial stress. The non-refundable deposit of $5.5 miilion provided by Woodfibre LNG and allocated to the long overdue remediation work would have been deemed adequate in 2013 to initiate the mutually agreed upon plan. If $25.5 million is the sale price, and $18 million net proceeds is anticipated by Western Forest Products following remediation work for the expected Certificate of Compliance, then I calculate that $7.5 million will have been spent (regret that I rounded up to $8 million, but the work is not yet complete). The remediation plan would not have been undertaken within the current timeframe without prospective purchaser Woodfibre LNG financing the effort to sale completion.

      Concerning DOS annual taxes on Woodfibre LNG, Councillor Doug Race had publically commented on a figure of $2.7 million based on the known municipal mill rate, previous tax history of the site, and even in consideration of taxable marine water leases for anchored moorings and related floating infrastructure. Other DOS Councillors have casually thrown out hoped-for annual tax figures of $5 million and even $10 million. I recall that 2014 is an election year and may account for their enthusism. Regardless, BC Assessment will make the final decision, and the DOS will apply their mill rate to that figure.

      The July 14 letter to DOS from Woodfibre LNG’s financial controller, proposing to annually pay municipal taxes of $2 million, increasing by a 2.5% cap annually, not exceeding $3 million annually over the 25 year term, is a first round negotiating iniative by the company. There is certainly no harm in them placing the DOS and Province on notice of an initial tax formula, and creating some transparency on what the company interprets as a key issue within the community.