'LNG plant? Bring it on,' folks say in town built by industry for industry
Don Cayo
Vancouver Sun
July 5, 2005
KITIMAT - The contour map on the wall outside Diane Hewlett's office confirms what she's saying -- the entire length of the B.C. coast has only two broad, flat valleys that start at deep-water ports and extend a long way inland.
One is the Fraser Valley, where land is crowded and expensive.
The other is here, where land is cheap and nearly empty. By the province's estimate, this is the largest tract of developable land left anywhere in western North America. The valley is flanked on one side by a good road, on the other by a utilities corridor that includes rail, hydro and gas lines. And the port, deeper than the one at nearby Prince Rupert, is a private one where an industry can develop its own facilities rather than be locked into what the port operator provides.
Hewlett is the District of Kitimat's economic development manager, and that unique location is point 1 in her energetic sales pitch to any industry thinking about a new home.
Point 2: "This is a town designed by industry for industry." Its big plants -- three of them -- are on tidewater 11 kilometres away, beyond seeing, hearing or smelling range. This was a planned community from its nascence in 1954, intended as a home to 50,000, although its actual population peaked at only about a quarter of that. And -- talk about a silk purse from a sow's ear -- recent industrial downsizing that shrank the town's workforce and stung its businesses has left a 40-per-cent vacancy rate in rental accommodations, so construction crews or permanent workers at any new industry will find ready housing.
"We could take in 1,200 or 1,500 new citizens in the bat of an eye."
A final point, if you're not convinced: People here have grown up with an aluminum smelter, a pulp and paper mill and a methanol plant in their backyard, so the prospect of a new heavy industry isn't daunting. "People say, 'An LNG [liquid natural gas] plant? Bring it on!' "
That mention of an LNG plant is no example picked at random -- she sees just such a plant as one of three strong possibilities for their near future. They are:
o A $500-million project by Kitimat/Galveston LNG Inc. to import and re-gassify liquid natural gas and ship it to southern markets by pipeline.
o A $60-million to $70-million project by Cascadia Materials Inc. to extract sand, rock and gravel and export it to California.
o A deep-water terminal and tank farm proposed by Enbridge at the end of a 1,200-kilometre, $2.5-billion pipeline from the tar sands at Fort McMurray.
These projects are in various stages of going through environmental and financial hoops, and Enbridge hasn't yet announced whether it's favoured location will be here or Prince Rupert. But the betting here is that Kitimat will get most of the projects, not all.
The town needs them. This decade has been rough so far.
The Alcan aluminum smelter, the reason the town was built here in the 1950s, has been downsizing for a decade. Its workforce is now 1,600, down about a third from its peak. The company is locked in an ugly legal fight with the district council over whether it can legally cut back production in order to have leftover hydro electricity to sell.
Even if that dispute is settled and the company announces "good news" for Kitimat, most people here will find it bad. It is likely to be a new or modernized smelter that produces more volume with fewer staff.
Meanwhile, the Eurocan pulp and paper mill, opened here in 1970, is providing employment for about 550 -- significant, but small by Alcan standards. And the 20-year-old Methanex plant, which was once the flagship for a Vancouver-based methanol company, is now uncompetitive thanks to natural gas prices that are sky-high here compared to places like Chile where there's no other gas buyer close at hand.
The result, says Pauline Maitland, vice-president of Kitimat's Chamber of Commerce and manager of the town's centrally located mall, has been a really tough time for business. The mall is Kitimat's only retail area, and it's 25-per-cent empty.
And with an estimated 60 cents of every shopping dollar earned here already spent 50 kilometres down the road in Terrace, the coming of planned new big-box stores there is likely to make the problem even worse.
Hewlett acknowledges this, but it doesn't worry her. In essence, she says, Kitimat's role is as the industrial park for Terrace, and Terrace is the shopping centre for Kitimat. So Kitimat's fate will always be tied to heavy industry.
"If a horse is a horse, you can't make it into a cow," she says with finality. "And Kitimat is a horse."
© The Vancouver Sun 2005