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INDUSTRY & TRADES | WINTER/SPRING 2022
Features
Mining giant eyes transition from coal to copper
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Newcrest acquires Brucejack Mine’s parent company
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B.C. may deep-six deep well credits for oil and gas
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B.C. feeling trades training decline seen across Canada
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Gold mining project in NW BC gets green light
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Old Growth controversy 14 Northern BC gas supplier inks renewable gas deal
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PG businesses facing labour shortage
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Local entrepreneur looking to build yatches in PG
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Pacific BioEnergy to close 23 Publisher | Peter Kvarnstrom Director of Advertising | Curtis Armstrong Editor | Neil Godbout
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MINING GIANT EYES TRANSITION FROM COAL TO COPPER
One of Teck’s metallurgical coal mines near Sparwood. The company may be seeking a buyer for its steelmaking coal interests as it increases its investments in copper mining (Teck handout photo) Nelson Bennett /Glacier Media
Metallurgical coal prices are at all-time highs, providing companies like Teck Resources – the world’s second-largest producer of steelmaking coal – with a potential big windfall.
www.TDB.ca
And with the long-term demand for steel expected to grow significantly over the next few decades – driven largely by global decarbonization efforts – there is perhaps no better time to be in the met-coal business. So why would Teck be considering getting out of the metallurgical coal mining business? Bloomberg recently reported that Teck is considering divesting itself of its steelmaking coal portfolio – estimated to be worth $8 billion.
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In an investor and analyst presentation last fall, Teck CEO Don Lindsay said he wouldn’t comment on speculation about the company’s plans, but went on to explain why it might make sense for Teck to either divest its met-coal assets altogether or at least shrink its coal portfolio
in comparison to its growing copper portfolio. “Conversations about the composition of our portfolio and the role of carbon in our portfolio are not new, nor are they news. We’ve been quite public that we were looking to reduce the proportion of coal in our portfolio over time.” That strategy is part of Teck’s goal of becoming carbon neutral by 2050 and reducing its emissions intensity 33 per cent by 2030. It may also have something to do with the growing reluctance of environmental, social and governance-minded investors to commit capital to anything that has the word “coal” in it and the difficulty in getting new projects approved. Teck is going all-in on copper. It plans to double its copper production by 2023, when its new QB2 mine in Chile goes into production. The expected increase in demand for, and value of, copper is being driven by energy transition initiatives, especially in the electric car market. INDUSTRY & TRADES | WINTER/SPRING 2022
“They are definitely focused on copper, and copper is very important, but arguably metcoal is just as important for the energy transition,” Anthony Knutson, metallurgical coal analyst for Wood Mackenzie, told BIV News. The energy transition will also require a lot of steel, as well as the metallurgical coal that is a critical component in making it. Though there are lowercarbon alternatives proposed for making steel – hydrogen being one of them – analysts expect it will be decades before those alternatives will replace steelmaking coal in blast furnaces, especially in places like China and India. “Hydrogen won’t become the dominant reducing agent for decades,” Knutson said. “Our base case has met-coal growing, as India and other regions, including Southeast Asia, urbanize. “We looked at some accelerated energy transitions for a 2.0
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They are definitely focused on copper, and copper is very important, but arguably met-coal is just as important for the energy transition
scenario, which is a two-degrees rise in temperature, and met-coal is required. We still need it.” Meanwhile, in the short term, if Teck is seriously considering its coal assets, now would be a good time to put its mines up for sale, because met-coal is suddenly a very hot commodity.
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Met-coal prices have gone through the roof, in part due to China’s ban on Australian coal imports. Seaborne met-coal is generally selling for around US$400 per tonne and US$570 per tonne in China. That’s more than double what the prices were a year ago, and US$100 per tonne above the record high of US$300 per tonne in 2008. But while long-term fundamentals for met-coal are good, Teck points to the difficulties producers face in getting new mines permitted and financed. Asked about new metcoal mines in the pipeline around the world, Lindsay said there aren’t many. “There isn’t much being announced, other than projects being turned down in both Australia and Canada and elsewhere in the market,” he said. In early August, federal Environment Minister Jonathan Wilkinson rejected the Grassy Mountain met-coal mine an Australian company hoped
to develop in Alberta. The year before that, Wilkinson determined that a planned Teck expansion for its Fording coal mine would need to undergo a full federal environmental review. The company had not expected the project to be subjected to a full environmental review, because it is an expansion of an existing mine operation. Despite being used for different purposes, the mere association met-coal has with thermal coal (burned to produce power) has tainted it in the minds of some investors and insurers, Knutson said, even though it will be critical for making the steel that will be needed for electric cars, wind turbines and transmission lines. He can therefore understand why a company like Teck might consider getting out of the metcoal business, and with prices where they are now, it would be a good time to try to find a buyer.
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Newcrest acquires Brucejack Mine’s parent company Pretium in a $3.5 billion deal
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The Red Chris open pit mine in northwest B.C., operated by Australian giant Newcrest Mining. In a $3.5 billion deal, Newcrest acquired Pretivm Resources, parent company of Brucejack. (Newcrest Mining handout photo)
Binny Paul Local Journalism Initiative Reporter
In a deal costing $3.5 billion, Australian mining giant Newcrest Mining acquired Vancouver-based Pretium Resources Inc. that operates northwest B.C.’s Brucejack Mine. The deal announced on Nov. 8 will see Newcrest buying the Canadian company for $18.50 per share, subject to proration. Pretium’s shareholders can opt to accept the offer in cash or as 0.8084 of a Newcrest share for each share held, said Pretium in a news release. The Board of Directors of Pretium have unanimously recommended that Pretium shareholders vote in favour of the transaction and have entered into voting support
agreements with respect to all of the Pretium shares they own or control. The transaction is expected to be completed by March. Newcrest already operates the Red Chris mine, located on Tahltan territory in northwest B.C., which it acquired (70 per cent) from Imperial Metals Corp. in 2017. The latest deal with Pretium makes Newcrest the major player in B.C.’s Golden Triangle as its Brucejack Mine is regarded as one of the highest-grade operating gold mines in the world. Brucejack is located approximately 140 km from Red Chris. Based on Pretium’s reports INDUSTRY & TRADES | WINTER/SPRING 2022
Newcrest said its concurrent operation of both Red Chris and Brucejack mines will provide enhanced opportunities for both workforces, allow for aligned and optimal engagement with the First Nations and the broader community, and will provide the foundation of ongoing future investment in the region.
B.C. forestry majors invested $6B elsewhere in 2021
“Following this transaction, Newcrest will have exposure to six Tier 1 orebodies and a portfolio of organic growth options of unrivalled quality,” said Sandeep Biswas, Newcrest’s managing director and chief executive officer.
Meanwhile Pretium’s president and chief executive officer, Jacques Perron said Newcrest has the financial means and the intention of maximizing the long-term potential of the Brucejack Mine.
On Jan. 6 Canfor announced it is buying Millar Western Forest Products Ltd. solid wood operations and associated tenure in Alberta for $420 million. In June, Canfor announced it would invest $200 million in Louisiana to build a new sawmill there.
“The combination of Newcrest and Pretium will create the leading gold miner in British Columbia’s Golden Triangle, operating both the Brucejack and Red Chris mines,” he added.
“We believe our employees, First Nations partners and community partners will be very well-positioned to succeed and develop under Newcrest’s world-class stewardship,” said Perron.
from last year, Brucejack’s estimated gold production is at of 311 koz per annum at an all-in sustaining cost of $743 per ounce of gold over a projected 13-year mine life Acquiring Pretium would mean adding a Tier 1 largescale, long-life, low-cost mine to Newcrest’s portfolio of Tier 1 assets.
Nelson Bennett /Glacier Media
Canfor Corporation capped 2021 with another investment outside of B.C. – bringing the total investment of B.C.’s forestry majors outside of B.C. to roughly $6 billion this year alone.
B.C. forestry majors have been buying sawmills in the U.S., Europe and other parts of Canada in recent years, as the supply of timber in B.C. shrinks and the cost of operating here increases. Asked about a flight of capital earlier this week at an energy
forum hosted by the Greater Vancouver Board of Trade, B.C. Environment Minister George Heyman dismissed the notion that forestry companies were voting with their feet. “I don’t believe capital is fleeing in the province,” he said. But in 2021 alone, B.C.’s forestry majors invested $5.8 billion acquiring or building assets outside of B.C., according to corporate filings and news releases. In 2021, West Fraser Timber invested $4.6 billion acquiring forestry assets outside of B.C. Interfor spent $1 billion on assets outside of B.C. in 2021 and Tolko Industries announced that it and Hunt Forest Products would build a new sawmill in Louisiana for $240 million.
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B.C. may deep-six deep well credits for oil and gas
A Shell Canada fracking pad in the Groundbirch operations in B.C.’s Montney. (Business in Vancouver photo by Nelson Bennett) Nelson Bennett/Glacier Media
at the University of Calgary.
Royalties and tax credits for B.C.’s oil and gas industry are outdated, piecemeal, complex, and don’t provide the societal benefits that they should, according to an independent assessment by two public policy and energy experts commissioned by the B.C. government to review its oil and gas royalty structure. But rather than try to tinker with the system – simply eliminating B.C.’s controversial deep well credit, for example – the assessment suggests a complete overhaul of the way the natural gas industry is taxed, and points to Alberta’s revised system as an example worth considering.
Their assessment will form the foundation for a public review of B.C.’s royalty and tax structure oil and gas that B.C.’s ministry of Energy, Mines and Low Carbon Innovation has launched.
The assessment, released today, was conducted by two noted academics – Nancy Olewiler, a public policy professor at Simon Fraser University, and Jennifer Winter, associate professor of economics and scientific director of the energy and environmental policy research
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“The review process we are launching will allow the public to have their say on a new, modernized royalty system that meets our goals for sustainable economic development,” said Energy Minister Bruce Ralston. Anti-fossil fuel activists and the Green Party have long criticized B.C.’s “fracked gas” for being subsidized by the B.C. government. B.C.’s deep well credits have been particularly singled out, and have been blamed for the declines in revenue that the government has received from natural gas producers over the last decade. In fact, declining natural gas royalties have largely been the result of declining natural gas prices – which only recently have begun to soar – although INDUSTRY & TRADES | WINTER/SPRING 2022
the assessment does suggest that the B.C. government is not getting full value from its royalty structure. Olewiler’s and Winter’s assessment concludes B.C.’s royalty system for oil and gas is out-of-date and may be incentivizing “lower-value wells” that are not maximizing value, either for the companies or the government. “It may incentivize companies to drill to access the credit rather than to minimize costs and maximize revenue,” the assessment says. The deep well credit program was implemented in 2003, when horizontal drilling and hydraulic fracturing were still relatively new alternatives to conventional drilling. They were intended to offset costs of drilling and completion for wells that were very deep and, therefore, more capital intensive. “As of March 2021, the accumulated deep well credits total $7.325 billion,” the
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The review process we are launching will allow the public to have their say on a new, modernized royalty system... assessment finds. “Of that, $3.56 billion have been drawn down.” In other words, only half the credits approved have been claimed. The credits reduce the royalties the B.C. government receives by three per cent to six per cent. Whereas deep horizontal drilling was an “unconventional”
straddles the B.C.-Alberta border. The assessment suggests that, as part of a review of B.C.’s system, it could take a page from Alberta’s playbook.
approach to natural gas extraction when the credits were introduced, it is now a standard approach in B.C., which raises the question of whether the incentives are even needed any longer. But deep well credits aren’t the only tax incentives offered, and the assessment suggests the whole system could benefit from a do-over. “All of the royalty deduction programs are out of date,” the assessment notes. “They were introduced at a time with more favourable product prices, and do not take into account changing extraction technology and shift to natural gas liquids in the product mix and investment profile.” “The system is characterized by piecemeal changes over time with programs that have led to compounding effects that substantially reduced royalty payments as a share of net value of the resource.” The most productive region in B.C. for oil and gas is the Montney formation, which
“Alberta undertook a major reform of its oil and gas royalty system, phasing in its new system in 2017,” the assessment notes. “Given the Montney’s shale deposits straddle the BC-Alberta border, moving to a system such as Alberta’s would better align production, reduce any incentive to shift production from one province to the other to minimize royalty payments, and overall promote a more efficient and equitable system.” The Olewiler-Winter assessment will form the basis of a discussion paper that Ralston’s ministry plans to release in November, which will then be opened to a public consultation process. The government plans to release the findings of its review in February.
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‘More pressure’: B.C. feeling trades training decline seen across Canada
In B.C. total apprenticeship registrations were down 23.9 per cent in 2020. (Glacier Media file photo) Graeme Wood/Glacier Media
New apprenticeships are down across the country due to the COVID-19 pandemic, according to a Statistics Canada report released. This spells trouble for economic production in the
near term, as employers and trades schools scramble to make up for lost time, says Guy Ellis, CEO of Trades Training BC. “It means higher wages and less production, if you will, whether it’s building or mechanics or anything else.
So, there’s more pressure for sure on the companies trying to provide goods and services,” says Ellis.
educators and assistants (-44.4 per cent), and food services (-43.4 per cent),” noted the report.
The report shows an overall decline in new apprenticeship registrations of 28.5 per cent in 2020, in addition to a 32.7 per cent decline in certifications. In B.C., total apprenticeship registrations were down 23.9 per cent.
“The severity of the impact on these trade groups was partially attributable to the forced closures of businesses deemed non-essential, combined with the fact that many other businesses operated at limited capacity, such as restaurants that remained open but had limited dining capacity or provided only delivery services.”
Ellis is also the dean of the BCIT School of Transportation, which trains mechanics for planes, trains and automobiles. He tells Glacier Media his school fared relatively well with only an estimated 15% decline in head count last year. Construction-related certifications also fared fine in B.C., he says. “At the start of the pandemic, there was a halt of several industry sectors, including construction. In B.C., the government reacted and came out with a list of essential services... construction was on that list. So the slowdown in the construction sector and transportation sector was not as big as in other parts of the country,” explains Ellis. Echoing the report, he says it was the more social trades — ones more popular among women — that were hurt the most.
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“Among the major trade groups, the largest percentage declines in certifications were for community and social service workers (-62.7 per cent), hairstylists and estheticians (-48.1 per cent), electronics and instrumentation (-45.3 per cent), early childhood
Apprentices are typically sent to schools by employers; upon completion of coursework, they become certified skilled workers, says Ellis, adding many employers are taking a wait-and-see approach as public health rules shift. “The declines in new registrations and certifications among women were proportionately larger than those among men, as new registrations declined by 3,447 (-32.9 per cent) and certifications fell by 2,460 (-38.5 per cent)” as compared to 27.8 per cent and 31.9 per cent respectively,” according to the report. Ellis says schools are back to full capacity but the hiccup left by the pandemic will be felt in years ahead. He notes the provincial government may need to spend more money on increasing capacity to make up for the shortfall. “Now the demand is there but there’s still lots of safety protocols in place that constrains productivity,” he says.
INDUSTRY & TRADES | WINTER/SPRING 2022
Gold mining project in northwestern B.C. gets green light from Mines Act Glacier Media
A gold mining venture in northwestern B.C. is moving ahead after receiving a Mines Act permit. The Ascot Resources Ltd. project has received a Mines Act permit for the construction and operation of the Premier Gold Project. It’s located in the “Golden Triangle” of northwestern British Columbia. The Golden Triangle is a 500 km belt of mineralization stretching south from Atlin near the border with the Yukon to Kitsault just southeast of Stewart. The area has long been known as a mineral-rich region with gold and copper deposits and is also home to silver, nickel and zinc deposits. The Ascot Resources project is expected to create jobs for as many as 140 people during construction and approximately 280 people during operations. “This project will be a welcome source of employment for hundreds of people who live in the northwest,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation in a news release. “Ascot Resources Ltd. is working with the Nisga’a Nation to bring good-paying jobs to the community and those who live around Stewart.” With the receipt of their Mines Act permit, Ascot Resources Ltd. can move forward with full-scale construction of the Premier Gold Project. WINTER/SPRING 2022 | INDUSTRY & TRADES
The province notes that once built, Ascot Resources anticipates Premier will be one of B.C.’s lowest carbon-intensive gold mines, connected to BC Hydro’s clean, hydroelectric grid power. Beyond the hundreds of jobs in construction and operation, the mine will create work opportunities for sub-contractors, suppliers and additional service providers within the region. Ascot Resources is set to begin underground development at the “Big Missouri” deposit in the coming months with project construction expected to take one year. The mine is expected to be in operation for an initial term of eight years. “Receiving the Mines Act Permit for PGP is a momentous milestone for Ascot, and the culmination of extensive collaboration and consultation with Nisga’a Nation and the provincial regulators,” said Derek White, president and CEO, Ascot Resources Ltd. “We are grateful that our community-centred approach to responsible mine development and environmental stewardship was a vision shared by all parties involved in the permitting process. We would like to thank our shareholders, Nisga’a Nation and the local towns of Stewart, B.C. and Hyder, Alaska for their support as we progressed through the permitting process and are looking forward to the next chapter as we advance
Canada’s next gold mine toward production.” Eva Clayton, president, Nisga’a Lisims Government said they are very pleased to see that the Mines Act Permit for the construction and operation of the Premier Gold Project has been issued.
“The rights under our Treaty and our commitment to stewardship of the Nass Valley and Nisga’a citizens have helped to set the Premier Gold Project to be a safe, prosperous and responsible mining operation. We have developed a strong working relationship with Ascot and we wish to congratulate them on this important milestone. We look forward to our continued collaboration with Ascot in the full-scale construction and operation phases of the project.”
“The Nisga’a Nation has worked in extensive collaboration with Ascot throughout the permitting process, including through the Mine Review Committee process leading up to the granting of the permit,” added Clayton.
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Barking up the wrong tree in old-growth controversy? The value of young forests compared with old growth is understated, say some experts. (stockstudioX/iStock/Getty Images Plus stock photo)
Nelson Bennett/Glacier Media
In the lead-up to last fall’s announcement that the B.C. government will defer logging on 2.6 million hectares of old-growth forest, the conversation was sometimes muddied with invocations of “deforestation” and climate change as reasons to halt logging of old-growth forests in B.C. Whereas the argument 20 years ago was that West Coast old-growth and primary boreal forests in Eastern Canada should be spared from logging for biodiversity reasons, climate change and the role forests play as carbon sinks has increasingly been cited
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by environmentalists as a reason to make old-growth and primary forests off limits to logging. While there are good scientifically grounded arguments for preserving as much old growth as possible (keeping carbon in the bank), there are equally sound arguments that younger, sustainably managed working forests are better carbon sinks over the longer term. Bigger concerns from a climate change perspective are forest fires, which can turn a forest from a carbon sink to a carbon source overnight, and the amount of wood debris that is wasted in logging operations.
When Canada last week signed a pledge to end deforestation by 2030 at COP26, environmental groups like Stand.earth were quick to point to the pledge in demanding that B.C. deliver on its promise to halt old-growth logging. But cutting down trees to make wood products and replanting the trees that were cut is not deforestation. Quite the opposite: sustainable forestry has the potential to increase forest carbon sinks, according to the Intergovernmental Panel on Climate Change (IPCC). “A sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an
annual sustained yield of timber, fibre or energy from the forest, will generate the largest sustained mitigation benefit,” the IPCC Working Group 3 said in its section on forests. Deforestation is the permanent removal of trees – either through illegal logging or to clear land for development or agriculture – the consequences of which are the permanent loss of carbon sinks. But logging per se is not deforestation if the trees that are cut down are replanted, which is what happens in Canada’s managed forests. One of the benefits of forestry, from a climate change perspective, is that INDUSTRY & TRADES | WINTER/SPRING 2022
when trees are turned into products like lumber, furniture and engineered wood products, the carbon is sequestered for decades. And as a building material, wood has much lower emissions intensity than concrete and steel. Fuels or products (bioplastics, for example) that are made from wood waste have a much lower carbon intensity than those made from fossil fuels. When it comes to the sequestration of carbon in living trees, there are good arguments to be made that old-growth forests already contain massive stores of carbon, are more resistant to the forest fires and therefore should be left alone. But there are also good arguments to be made in favour of working forests – forests managed to actively generate revenue from multiple sources – because younger, faster-growing
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Even managing a small portion of B.C.’s forests (less than 10 per cent) more intensively could greatly enhance forest sinks and remove more carbon from the atmosphere.
trees can do a better job of soaking up CO2. Like a retiree who has money in the bank but is no
longer earning an income, an old-growth tree has a lot of carbon in the bank but may no longer be absorbing as much CO2 as younger, faster-growing trees. “The fundamental scientific finding that the uptake of carbon in old forests is much lower than in young and middle-aged forests is not disputed,” said Werner Kurz, one of Canada’s leading authorities on forestry carbon accounting and eight-time contributor to IPCC assessments. He is quick to point out, however, that that isn’t an argument for converting all older forests to secondary forests. Old and younger forests each have a role to play in natural climate solutions. “Young forests have less carbon stock,” Kurz said. “So, they are smaller trees, there’s less carbon in them,
but the trees are growing much faster than old forests. So young forests are much larger carbon sinks than old forests. But it is also true that if you cut an old forest, you may be releasing some carbon into the atmosphere.” One genuine concern about forestry from a carbon accounting perspective is the amount of wood that is wasted, which means squandered sequestration potential. This is forestry’s equivalent of the natural gas sector’s fugitive methane problem. Hadi Dowlatabadi, a University of British Columbia physicist specializing in climate change statistical modelling and an IPCC contributor, said about half of the carbon stored in a tree is above ground. The rest is stored in the soil and roots, some of which is lost when trees are cut down. It takes several
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years before regrowing trees make up the deficit. Dowlatabadi said as much as 25 per cent of the carbon in a tree may be wasted in the form of leaves, branches, bark and stumps left on the forest floor after logging, where it either decays or is burned. “In North America, the leaves and branches are left at the harvest site, and that is 50% of the harvest itself,” Dowlatabadi said. “So we only use 25 per cent of the carbon in whatever use we have for it. “The rest, depending on moisture conditions and slash-burning regimes, turns to methane and has a really high GHG-forcing effect, and then to CO2 or to CO2 directly. Tree-cutting is a major source of carbon release.” Better management practices aimed at recovering more of that wood debris for use in pulp mills or bioenergy would reduce the amount of sequestered carbon that is wasted. “That’s one of the biggest areas of opportunity.… Can we collect that forest residue and put it to a better use instead of burning it in a slash pile?” said Kate Lindsay, senior vice-president of the Forest Products Association of Canada. Done right, sustainable forestry may do a better job of carbon sequestration than conservation. “Nordic countries such as Sweden or Finland, where forests have been managed intensively for decades, have demonstrated that management can increase their forest carbon stocks while at the same time harvesting large volumes of wood to support a bioeconomy,” Kurz said. “Even managing a small 16
portion of B.C.’s forests (less than 10 per cent) more intensively could greatly enhance forest sinks and remove more carbon from the atmosphere.” According to updated estimates by B.C.’s Old Growth Technical Advisory Panel, 31.5 per cent of old growth in B.C. is already protected. Of the 7.7 million hectares of old growth containing big, ancient and rare trees, 2.6 million hectares (34 per cent) is protected. Deferrals announced last week would double the amount of old tree, big tree and ancient tree old growth that would be protected. Ideally, a natural climate solutions plan for forests and forestry would see as much old-growth forest preserved as possible (keeping carbon in the bank), with forestry occurring mostly in secondgrowth forests. The reality is that there’s not enough second growth in the coastal forest sector to support the forest industry as it is currently constituted. About half of the annual allowable cut for the coastal forest sector is old growth. So doubling the amount of old-growth protection will have huge economic costs for B.C., especially coastal communities dependent on forestry. Ultimately, how much old growth is made off-limits to logging in B.C. may depend on what First Nations have to say about it. Some, like the Huu-ay-aht, are involved in forestry and are invoking treaty rights and the United Nations Declaration on the Rights of Indigenous Peoples in asserting their authority within their territories when it comes to land management and environmental stewardship.
First Nation wins partial victory in Rio Tinto dam dispute
A juvenile Nechako white sturgeon, which is considered critically endangered under the federal Species at Risk Act. (Carrier Sekani Tribal Council handout image) Nelson Bennett/Glacier Media
The Saik’uz First Nation are welcoming a partial victory in its fight against Rio Tinto’s Kenney Dam on the Nechako River. The dam provides hydro power to the Rio Tinto aluminum smelter in Kitimat, which employs 1,000 people. It has dramatically lowered river flows since it was built in the 1950s, which has had a deleterious impact on salmon and sturgeon in the river. On Jan. 8, the BC Supreme Court released a decision acknowledging the dam’s negative impacts on the Nechako River and, as a consequence, on the aboriginal rights of the Stellat’en and Saik’uz First Nations. But the court stopped short of assigning blame to the dam’s owner, Rio Tinto, since it was authorized by the B.C. and federal governments. In launching a nuisance suit against Rio Tinto – formerly known as Rio Tinto Alcan -- the Stellat’en and Saik’uz had hoped for an order that at least would order the company to address river flow levels. Their suit was supported by a resolution of the Regional District of BulkleyNechako. In March 2021, Stellat’en Chief Robert Michell told BIV News that one hoped-for remedy was an order that Rio Tinto reduce the amount of water it uses to power its Kitimat aluminum smelter, since about 20 per cent of the power generated is surplus power that is sold to BC Hydro.
The court declined to go that far, but did find that senior governments have a duty to protect aboriginal fishing rights and take “appropriate steps” to protect the river and its fish.
“While we are disappointed that Alcan has not been directly required today to restore the flow of the river, we are glad that the court has recognized that the Crown has a duty to take positive action to protect the fish and our rights as First Nations people,” Saik’uz Chief Priscilla Mueller said in a press release. The Kenney dam was built in the 1950s to create the Nechako Reservoir, which powers the Kemano generating station 75 kilometres southeast of Kitimat. It’s estimated that river flow in the upper Nechako River is 36 per cent of what it was before the dam was built. Lower river flows are believed to be behind a dramatic decline in fish, notably sturgeon. Nechako white sturgeon are considered endangered by the Committee on the Status of Endangered Wildlife in Canada. Efforts have been underway over the years to rebuild declining stocks through a hatchery. When the case went to the BC Supreme Court last year, Rio Tinto acknowledged the harm caused by damming the Nechako and said it was committed to “maintaining an open dialogue with local First Nations and the Regional District of Bulkley-Nechako to find solutions.” INDUSTRY & TRADES | WINTER/SPRING 2022
Northern B.C. gas supplier inks renewable gas deal
ATCO’s Two Hills RNG plant in Alberta produces renewable natural gas from agricultural and municipal organic waste. (ATCO handout photo) Nelson Bennett/Glacier Media
Pacific Northern Gas, which supplies natural gas to homes and businesses in northern B.C., has inked a deal with ATCO in Alberta to supply it with renewable natural gas (RNG). Chemically, RNG is no different than fossil natural gas – it’s basically methane - except that it is made from organic sources, making it renewable. It is the home heating equivalent of the biofuels added to gasoline and diesel to lower its carbon content. Customers of FortisBC already can opt to pay a premium to buy RNG, and the utility’s plan is to achieve a 30 per cent reduction in its customers’ greenhouse gas profile by 2030, mostly by increasing the amount of RNG injected into its system. Last year, FortisBC announced three new projects that will add to FortisBC’s RNG supply by 800,000 gigajoules. The three new sources will be from food waste from EverGen’s Net Zero Waste Project in Abbotsford, agricultural waste from Faromor CNG Corp., in Ontario and wastewater operations collected from Shell Energy North America in Iowa. WINTER/SPRING 2022 | INDUSTRY & TRADES
Now Pacific Northern Gas (PNG) also plans to inject RNG into its system. It has signed a 15-year supply agreement with ATCO Future Fuel RNG Limited Partnership to supply up to 230,000 gigajoules per year of RNG from ATCO’s new Two Hills RNG plant near Vegreville, Alberta. The plant makes RNG from agricultural and municipal organic waste. The annual RNG supply is enough to provide space and water heating for 2,300 homes, PNG said in a press release. The company estimates that would reduce the CO2 emissions intensity of its gas by 20,000 tonnes of CO2 per year.
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“Our goal is to shrink our environmental footprint while continuing to deliver safe, reliable energy,” PNG president Leigh Ann Shoji-Lee said in a news release. “Our new, renewable energy option is part of our commitment to operating sustainably for the benefit of the environment and the communities where our customers and employees live
It’s not clear whether PNG will also charge a premium.
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Prince George businesses are facing a labour shortage, according to the Prince George Chamber of Commerce. (Glacier media file photo) Arthur Williams/ Glacier Media
The Prince George Chamber of Commerce is working on a trio of projects to help local businesses find the workers they need to keep their doors open. The chamber is preparing a report on the “war on talent,” chamber CEO Todd Corrigall said – the rising competition between employers for increasingly-scarce skilled workers. In addition, the chamber is hoping to identify what positions are most in demand in the city and, in partnership with WorkBC, create tools to help local businesses in their recruitment efforts. “Skilled trades have been challenged for a number of years now. Trades are still at a premium,” Corrigall said. “Professional services are being strained… (But) the largest sector being challenged is small business, food services. Small businesses are being leveraged out of the labour market.” At the end of 2020, the city’s unemployment rate stood at ?? per cent, Statistics Canada reported earlier this month. However, those numbers don’t tell the whole story, Corrigall said.
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There has been a significant growth in government positions, which are drawing workers away from the private sector, he said. In addition, changing technology means local businesses aren’t just in competition with each other for workers. “People are being recruited to work remotely,” Corrigall said. “There always seems to be a greener pasture.” As of December 2020, the city’s labour force participation rate – the number of working-age people employed or actively seeking work – stood at ?? per cent, Statistics Canada reported. COVID fatigue could be a factor keeping some people out of the workforce, and while the pandemic has put a stop to hiring temporary foreign workers, he said. Staffing challenges are putting pressure on businesses to offer higher wages, in some cases between one and nine per cent higher year-over-year, just to attract and keep employees, he said. “That’s a significant number,” he said. “This is a perfect storm.”
Prince George businesses facing labour shortage LABOUR SHORTAGE A B.C., CANADA-WIDE ISSUE Prince George isn’t the only community feeling a labour pinch. In December, the Canadian Federation of Independent Business released a report saying 55 per cent of small businesses cannot get all the staff they need for their current operations or to meet new demand. Another 16 per cent were able to fill their positions, but at significantly higher cost. “Businesses across B.C. have been finding it very challenging to get the help and staff they need,” CFIB senior policy analyst Seth Scott said in a press release. “Labour shortages are especially acute in B.C., over half (59 per cent) of B.C. small businesses report experiencing labour shortages, the fourth highest in Canada.” Almost two-thirds (63 per cent) of businesses affected by labour shortages couldn’t find applicants with the right skills or experience, while 52 per cent reported a total of lack of candidates, the CFIB reported. Nearly a quarter of small businesses reported employees switching industries due to the COVID-
19 pandemic. Businesses in the social service and hospitality sectors were especially hard-hit, with 37 to 48 of businesses reporting people leaving the sector. Increasing wages hasn’t always helped businesses find workers, the CFIB reported. While 82 per cent of businesses suffering staffing shortages increased the wages they offered, only 31 per cent were successful in finding candidates at the higher rate of pay. On average, small businesses facing labour shortages were expected to increase wages by 3.7 per cent over the next 12 months, above the national average of 3.1 per cent, CFIB reported. “Small businesses were already experiencing a very significant shortage of labour at the beginning of 2020, and the pandemic has made the situation only more complex,” CFIB vice-president of national research Simon Gaudreault said in a press release. “Industries that were locked down for long periods of time, like hospitality, have seen a mass exodus as workers upskilled or switched to other jobs, and virtually all sectors are facing major demographic upheavals with not enough new workers coming in to replace those who are retiring.” INDUSTRY & TRADES | WINTER/SPRING 2022
British Columbians have natural gas, clean energy misconceptions, BC Hydro says
Many British Columbians, especially in northern B.C., have misconceptions about how clean natural gas is as a heating source, according to a report released by BC Hydro. (Getty Images stock photo) Jeremy Hainsworth Glacier Media
BC Hydro’s new finding that many British Columbians believe natural gas is a clean fuel is a welcome switch from the B.C.’s government’s narrative that the fossil fuel industry should be supported, Sierra Club BC says. In October, BC Hydro released a report offering British Columbians suggestions on how to stay warm while avoiding excess household greenhouse gas emissions. However, it came with the added message that British Columbians have some misconceptions about natural gas and its climate change effects. “With natural gas home heating on the rise in recent years, its popularity may be bolstered by the perception that it is clean,” said a new report. “Electricity, on the other hand, is a much cleaner option in B.C. where 98 per cent of the electricity BC Hydro generates comes from clean or renewable resources that are mostly powered by water.” The report found gas is not the greenest option for home fuel, with the popularity of natural gas being bolstered by the perception that it is clean. “Over one-third of British Columbians list natural gas as the most environmentally WINTER/SPRING 2022 | INDUSTRY & TRADES
friendly way to heat a home. This number is even higher in northern B.C., where almost half said natural gas is good for the environment. While burning natural gas for energy results in fewer emissions than burning coal or petroleum products to produce an equal amount of energy, natural gas production still produces GHG emissions.” B.C.’s government under former premier Christy Clark redefined natural gas as a clean energy source – but only if that gas was used to generate power for liquefied natural gas production in B.C.’s north. That, said Sierra Club B.C.’s senior forests and climate campaigner, contributed to people’s misconceptions about natural gas. Jens Wieting said the current NDP government has not helped dispel that misconception with its supports of natural gas infrastructure projects such as the LNG Canada and TC Energy’s Coastal GasLink pipeline. The pipeline is being built to supply gas from northeastern B.C.’s gas fields 670 kilometres to the Kitimat LNG Canada plant, which has passed 50 per cent in construction work. Wieting called BC Hydro’s report notable “because we don’t hear such messages from the provincial government. We really need strong leadership
and less wishful thinking about fossil fuels,” he said.
A BC Hydro survey found onethird of British Columbians mistakenly think natural gas is the most environmentally friendly way to heat a home.
“We must not build new fossil fuel infrastructure, Wieting said. “It’s irresponsible to subsidize LNG and fund fossil fuel infrastructure.”
At the same time, many British Columbians believe driving their fossil-fuelled car is a much larger contributor of greenhouse emissions than home heating.
The report said about 11 per cent of B.C.’s greenhouse gas emissions – or about 6.9 million tonnes are from buildings and homes. It said fossil fuel-based home heating and appliances such as gas stoves can silently contribute to greenhouse gas emissions. The report said most homes still run on multiple fuels with electricity used to power the lights, appliances and electronics and natural gas is used to heat more than half of British Columbians homes.
But, the report said, heating a typical single-family home entirely with natural gas each year could emit about two tonnes of carbon dioxide, about the same carbon footprint as driving a fossil-fuelled car for 8,000 kilometres. Further, the report said, while many British Columbians heat their homes with electricity, more than 50 per cent are using natural gas – and this number jumps even higher when looking at detached homes —two-thirds use natural gas. The Canadian Gas Association did not respond to a request for comment.
“Over the past few years, natural gas heating in B.C. homes has gone up four per cent, while electric heating as a primary source has gone down by three per cent during the same time period,” the report said.
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Local entrepreneur looking to build yachts in Prince George
Prince George entrepreneur Simon Angus is looking to manufacture his all-electric catamaran design in the city. (Open Waters Design and Manufacturing handout photos)
Ted ClarkeGlacier Media
It’s rather strange to consider land-locked Prince George to be at the heart of an innovative seaworthy boatbuilding industry, but that is what Simon Angus envisions as he develops what he says is the world’s first fullysustainable electric-drive sailing catamaran. After 15 years as a mechanical engineer in the pulp mill and oil refining industries, Angus decided to branch out on his own as founder of Open Waters Design and Manufacturing. For two years he’s been applying his knowledge of advanced composite manufacturing techniques to build a sturdy and lightweight
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high-performance catamaran built to comfortably carry four adults and two children, using sails and an electric motor for propulsion. Unlike most sailboats, which are not easily transported, the 40-foot x 23-foot boat Angus has designed can be disassembled to uniquely fit in a 40-foot shipping container. It also runs on electric power from batteries charged by the motion of a propeller turning while the sailboat is in motion. “I’m a sailor and windsurfed all my life in England, I just could never afford a sailboat over there,” he said. “At the age of 43, I just decided to combine my passion for sailing with the skills I’ve developed as an engineer and put them together to
generate something new. I’ve not invented anything. I’ve just put a bunch of stuff together in a unique format that seems to work really well. “Really, nobody in Canada is doing what we do.” Angus is from England and moved to Prince George 17 years ago, putting his engineering skills to work for Deltech Automation, and a year later moved to Kitimat as an engineer for Eurocan Pulp and Paper. He returned to Prince George in 2012 to become project manager at the Husky Energy refinery and held that position for eight years until he started his boat business in November 2019. The vacuum infusion process
Open Waters uses to make the hull and boat panels is innovative. Layers of composite fibre are laid down over a recycled foam core material and a vacuum sucks the air out from between the layers so they form ultra-tight bonds as they cure in the mold, minimizing the amount of material needed. “Once we have a full vacuum and there’s zero atoms between the carbon fibres, only then do we introduce the resin,” said Angus. “The resin fills those voids of nothing, and it creates an incredibly light part that’s incredibly strong.” Angus has had his ESC40 catamaran moored in a marina between New Westminster and Richmond INDUSTRY & TRADES | WINTER/SPRING 2022
“ since the summer and he sailed the prototype for 1,800 kilometres in the Strait of Georgia with Bowen Island as his base for two weeks. He had to modify the rudder design slightly after testing but he’s got his boat nearly ready for shipping and he will have it trucked on a flatbed trailer to Florida early In January. Angus had hoped to put it in a cargo container and have it moved by sea from Vancouver to Tampa, but the global container traffic gridlock forced him to find an overland trucking route, which tripled the shipping cost. “We’ve had it sailing and we’ve done up to 12.5 knots and then the rudder brackets started to break, so we’ve redesigned the rudder system,” said Angus. “At 12.5 knots it wanted to keep going, but the rudder was about to fall off. That’s ridiculously fast for a sailboat.” The carbon-fibre composite boat weighs about 4,500 kilograms, about half the weight of a comparable boat. The pontoon design of a catamaran maximizes stability in the water, and the lighter weight makes it faster and more responsive and minimizes battery drain to increase the range between charges under electrical power. Solar panels generate power for lights, refrigeration, WINTER/SPRING 2022 | INDUSTRY & TRADES
and other creature comforts, while the hydro regenerative system stores power to turn the folding propellers of the twin 10-kilowatt electric motors. Unlike an electric car that needs large heavy batteries to provide long-range capabilities, the four lithiumion batteries used in the ESC40 weigh just 36 kg each, much lighter than a diesel engine. Long range is not needed because they are constantly being charged as the boat sails. A fully-charged system with no wind or wave resistance will take the boat 160 km. “Being light means we need little propulsion power, so we’re not using huge amounts of energy to push us through water when we’re not under sail, and that means we can go electric,” said Angus. “Being very fast means we can generate lots of electricity through the hydro generation system with the propellers of the motors spinning as we are hurled through the water with the sails. That is generating all the energy we need to be a fully sustainable sailing boat.” The hull of Angus’s fast cat is designed to handle speeds in excess of 20 knots, two to three times faster than most catamarans made using conventional processes and materials. It has curved retractable daggerboards
Being light means we need little propulsion power, so we’re not using huge amounts of energy to push us through water when we’re not under sail, and that means we can go electric...
that improve handling and performance at speed. Its rudders also retract to allow the boat to cruise in shallow waters. The boat’s two-foot draft allows it to float in knee-deep water and it can be beached safely on the bow or the stern. The ESC40 is not an allseason boat; it’s designed for fair-weather months. For owners who live in colder climates, they will have the option of having it dissembled and shipped south in a container to a warm-weather winter dock. Angus plans to sail his catamaran from Florida, where it will be assembled, to the Caribbean. He’s entering it in the Heineken Cup yacht race in early March in St. Maarten. Four-time Olympic sailor Ross McDonald of Victoria, a two-time medalist in the Star category, will be at the helm. “That’s really going to get us competitive, and once we’ve done a couple months of testing out there we’re really going to push it to its max in
that regatta and see what she can do,” sad Angus. “It’s a fun race that’s part of our marketing campaign to get the boat out there, and that’s the big reason to go to the Caribbean. We can fly a drone in crystal-clear waters to really show off the boat and we’ll have potential buyers and potential investors on board.” Established boat-builders are making 60- or 68-foot carbon fibre sailboats that cost several million dollars, but no other manufacturer Angus knows of makes 40foot models. Going green and utilizing electric power in the design was an easy choice. “It’s something that everybody has to do at some point in the future, and what I’m trying to do is to develop that and make it happen a little sooner for some people who can have a pleasure yacht that’s fully electric,” he said. “It’s a luxury item for sure, it’s a very highperformance sailboat that’s not for everybody. It’s an ocean-going boat you sail very quickly and very safely and go wherever you want in low-sea conditions.” The unique qualities of the design and its potential to create a new industry for north central B.C. has attracted funding from the National Research Council of Canada, through its Industrial Research Assistance Program (IRAP). Open Waters also received a tax credit from Revenue Canada’s Scientific Research and Experimental Development (SHRED) program, and Prince George-based Northern Development Initiatives Trust gave the company a $50,000 grant. The prototype is 40 per cent funded by grant money. The rest has come through a loan arranged through Community Futures, and from shareholders and Angus’s own savings.
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“
Prince George has a real good skillset and it has people who actually want to work. We can put the boat in a container in Prince George and it’s gone on the rail to Rupert. There’s a huge advantage to having that Prince Rupert port
The father of three loves the outdoors, snowboarding and mountain biking and the natural beauty of the forests, lakes and mountains in and around Prince George. He intends to base his business permanently in the city and take advantage of its location as an industrial hub to provide Open Waters what it needs to grow while he creates a local boat-building industry. “It’s where my kids are and it’s where I’ll always call home,” said Angus. “Prince George has a real good skillset and it has
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people who actually want to work. We can put the boat in a container in Prince George and it’s gone on the rail to Rupert. There’s a huge advantage to having that Prince Rupert port.” It’s taken two years to build the prototype, but now that he has the molds and the know-how, once he gets into the production stage at his shop in downtown Prince George Angus figures it will take seven people four months to build one boat. He plans to have two more catamarans finished by the fall and every year he expects to double his output from the previous year.
“Within five years we’ll have 50 people employed,” he predicts, “The nice thing for Prince George and one reason IRAP and Northern Development was interested in us, is because it’s unique economic diversity. We’re very reliant on the forest industry, and we always will be, but economic diversification is important and I’m bringing advanced manufacturing to the area. “Ninety per cent of these boats are going to be exported. It’s new business into Canada and new jobs into Prince George.”
Design and Manufacturing knowing there’s a good chance he will branch off and start making other things using the vacuum infusion carbon-fibre composite process. “Our first product is a boat, that’s where my passion is, but if someone wants something lightweight and very strong, then we can build it for them,” he said. Visit openwatersyachts.com to see updates.
Angus purposely called his company Open Waters INDUSTRY & TRADES | WINTER/SPRING 2022
Pacific BioEnergy to close permanently this year
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Pacific BioEnergy announced it will permanently close its Prince George pellet plant in 2022. (Pacific BioEnergy handout image) Glacier Media
In December, Pacific BioEnergy Corporation (PacBio) announced that it will close permanently in 2022. “Our Company has been battling several challenges for the past few years. Sawmill closures in the region have reduced the volume of available raw materials and increased their cost significantly,” said PacBio CEO John Stirling stated. “Forest fires, landslides, and floods have severely impacted our ability to transport our product by rail to the export terminal in North Vancouver. The impact has been a significant increase in operating costs. Our sales contracts have been sold to Pinnacle to mitigate the impact on our customers.” It is intended that the PacBio wood pellet plant at Prince George will be permanently WINTER/SPRING 2022 | INDUSTRY & TRADES
closed in 2022 once the assets are assigned. This decision will mean the loss of 55 direct jobs. The shutdown date will be finalized in early 2022. PacBio said it has reached an agreement to assign some of its assets, including the wood pellet long-term sales contracts, to the Drax Group.
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The company says after satisfying certain closing conditions, which is expected by the end of 2021, certain assets owned by PacBio will be assigned to Pinnacle Renewable Energy Inc., which is part of the Drax Group. “PacBio is proud to have been a part of the Prince George community for over 25 years and we want to thank the community for its support. Our employees have been dedicated to our business and we want to thank them and their families for their contributions,” stated the company.
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