News coverage of GSX cancellation
Scott Simpson, Vancouver Sun, 21 Dec 2004
Andrew Duffy, Times-Colonist, 21 Dec 2004
Aubrey Cohen, Bellingham Herald, 21 Dec 2004
The Province, 21 Dec 2004
Globe and Mail, 21 Dec 2004
Steve Mertl, National Post, 21 Dec 2004
Robert Barron, Nanaimo Daily News, 21 Dec 2004
Editorial, Times-Colonist, 22 Dec 2004
Aaron Bichard, Cowichan News Leader, 22 Dec 2004
Andrea Rondeau, Cowichan Valley Citizen, 22 Dec 2004
Ladysmith Chronicle, 28 Dec 2004
Grant Warkentin, Campbell River Mirror, 29 Dec 2004
BC Hydro kills pipeline to Island
Despite $50 million spent, gas prices make project uneconomical
Scott Simpson
Vancouver Sun
21 Dec 2004
BC Hydro abandoned its plans for a $340-million gas pipeline to Vancouver Island on Monday, saying rising natural gas prices have made the controversial project uneconomic.
Hydro has already spent $50 million on preparations for the Georgia Strait Crossing (GSX) project, including a drawn-out hearing before the National Energy Board that attracted a swarm of community, environmental and aboriginal groups who were strongly opposed.
Abortive decisions associated with the foundering GSX megaproject have cost Hydro ratepayers -- and B.C. taxpayers -- $120 million this year.
Hydro generation executive vice-president Dawn Farrell said the Crown corporation now believes Vancouver Island energy needs are best served by adding new electrical transmission lines from the mainland, and by gas deliveries from an existing Terasen pipeline between the mainland and the Island.
The 16-kilometre marine crossing from Sumas, Wash., to Duncan, was conceived as part of a $760-million megaproject that included construction of a series of gas-fired thermal generating plants on Vancouver Island.
Hydro was developing GSX in partnership with Williams Co., an Oklahoma-based energy company, but Hydro will absorb all costs associated with the project.
"The original GSX project was anticipating that there would be a number of gas plants built on the Island to support the growth of loads on the Island, and that there would also be growth of [gas-fired] plants on the mainland side," Farrell said.
"In combination, all those gas plants would require a fairly big pipe. That demand has not materialized."
The price of natural gas has effectively tripled since the GSX project was announced in March 2000.
Farrell said the project "no longer made economic sense."
She said it was cheaper for Hydro to abandon the project than to carry it through.
"In the short run and the long run, stepping away from it -- even after paying the $50 million -- will be less expensive for ratepayers," Farrell said.
In November, Hydro announced it would absorb $70 million in costs associated with its failed bid to build a gas-fired generating plant at Duke Point near Nanaimo.
That project was rejected by the B.C. Utilities Commission after Hydro had already spent $120 million on studies and equipment.
The commission said Hydro, as a public institution, could not carry through with Duke Point and instead had to transfer the costs and risks of new electricity infrastructure projects to the private sector.
The Duke Point project has rematerialized as a private sector project supported by Hydro, but the Crown corporation is only getting back $50 million of its original expenditures.
Farrell said electricity rates will not be affected by the decision.
Energy lawyer David Austin called GSX a "financial boondoggle" that shows all Hydro projects should be subject to a detailed cost accounting before they proceed "and become a 120-car train wreck."
"BC Hydro should not be allowed to pursue any similar projects unless it does a full, public analysis before spending any more large sums of money," Austin said.
Members of a Vancouver Island residents' coalition that opposed the project are "jubilant" about Monday's decision.
"Our group certainly didn't want a pipeline going through its backyard, but having learned more about Hydro's broader electricity strategy, we also were not happy with the idea of simply committing the Island to a fossil-fuel electricity future," said Tom Hackney, president of the GSX Concerned Citizens Coalition.
"It looks as if gas prices and the price calculations have validated our concerns."
The coalition and other groups, including Hydro's major industrial customers, continue to argue against construction of the Duke Point plant, calling it too expensive.
The B.C. Utilities Commission is expected to stage a hearing in January at which those concerns will be aired.
"We're happy to see that GSX project cancelled," said Brian Battison, spokesman for the Mining Association of B.C.
"We think that's the right decision. The next decision they should make is to cancel the Duke Point project. That would be a wise decision to cancel that very questionable project."
Existing electrical transmission lines that run from Tsawwassen to the Island are expected to be at the end of their useful life by 2006 and will be replaced.
Terasen, meanwhile, has a proposal before the B.C. Utilities Commission to push more gas through its existing gas pipeline to the Island, rendering the GSX pipeline redundant.
© The Vancouver Sun 2004
Pipeline to Island scrapped
Andrew A. Duffy
Times Colonist; with files from Canadian Press
21 Dec 2004
B.C. Hydro and its U.S. partner, Williams Gas Pipelines, announced Monday they are scrapping the proposed $340 million Georgia Strait Crossing pipeline.
The GSX was to provide gas-fired electricity generation on Vancouver Island, but has been dropped because it's too expensive and no longer fits the Island's energy needs.
A coalition of opponents that had long argued the project didn't make economic or environmental sense is "thrilled beyond words," said Peter Ronald, director with the GSX Concerned Citizens Coalition.
"It's been nearly five years of unsupported hard work by the grass roots community."
Despite having spent $50 million over four years to get the GSX through regulatory hearings, Hydro officials said Monday the GSX is no longer a competitive supply option as the number of gas-fired plants needed on the Island never materialized.
"It's quite a large pipeline, and required a lot of gas plants being built in the future to have it make economic sense," said Dawn Farrell, Hydro's executive vice president for generation.
The project was designed on the assumption that Vancouver Island, with a population of about 640,000, would have three gas-fired generating stations, but so far only one has been built and a second has stumbled through the regulatory approval process.
Hydro is also exploring options with Terasen, which has existing facilities and a pipeline to the Island, for ways to deal with peak demand.
The GSX was a 136-kilometre pipeline that was to begin at the Huntington-Sumas trading hub, travel 53 kilometres across Washington state to Cherry Point, 67 kilometres across Georgia Strait and then 16 kilometres on Vancouver Island to connect with the existing Terasen Gas pipeline at Shawnigan Lake.
The gas was to be used to fuel a proposed $370 million 265-megawatt Vancouver Island Generation Project at Duke Point in Nanaimo and the existing 240-megawatt generation plant at Campbell River.
But the VIGP was killed by the B.C. Utilities Commission for being too large and expensive given the Island's energy needs.
That prompted Hydro to issue a call for tenders to find on-Island generation.
Last month Hydro announced Duke Point Power Ltd., a wholly owned subsidiary of Macquarie Essential Assets, Pristine Power and a group of private investors, was the successful bidder to provide Vancouver Island with a new source of electricity.
Their project is a 252 megawatt, gas-fired power plant to be built at Duke Point for $280 million. It will be reviewed by the BCUC next year.
How it will be fueled has yet to be determined.
Hydro has already said it would prefer to use a proposal from Terasen -- seen as much cheaper -- to increase gas supply to the Island as the means to fuels the plant.
And Farrell says that's one of the reasons the GSX was killed, despite the fact it provided a fall-back plan to bring fuel for the project.
"This takes the GSX off the table as an issue," she said of it being brought up and compared during Terasen's BCUC hearings.
Hydro hopes to sit down with Terasen over the next few months to discuss options.
"This is something that we think bodes well for the future, for ourselves, for B.C. Hydro and for our customers on Vancouver Island," Terasen spokesman Dean Pelkey told the Canadian Press
"We've said all along that we believe we can provide natural gas to B.C. Hydro for this project. I think what we're seeing now is they are coming around to agreeing with us.
© Times Colonist (Victoria) 2004
Aubrey Cohen
The Bellingham Herald
21 Dec 2004
BC Hydro to seek alternative to county line
A proposed natural-gas pipeline from Sumas to Vancouver Island will not be built, Williams Pipeline Co. and BC Hydro announced Monday.
The two companies went public in 1999 with plans for a $209 million pipeline to serve three planned power plants on Vancouver Island. The line would have run 33 miles from Sumas to Cherry Point, then under the Georgia Strait.
One of those plants is unlikely to be built, and there are cheaper alternatives to serve the others, BC Hydro spokesman Stephen Bruyneel said. BC Hydro officials also thought the pipeline could serve another power plant on the British Columbia Lower Mainland, but that did not happen.
The decision to build the pipeline had been on hold since September 2003 pending a review of energy needs on Vancouver Island, Williams said in a statement. Bruyneel said the utility wrote off the $34 million spent on the project against last year's earnings.
Opponents of the pipeline, who had raised a variety of environmental concerns, celebrated Monday's news.
"Ding dong the witch is dead," said Fred Felleman, president of Fuel Safe Washington.
It was obvious from the start that there were cheaper and less damaging alternatives, such as pressurizing an existing pipeline, Felleman said. "Why were we put through this process in the first place?"
North Sound Baykeeper Wendy Steffensen agreed.
"There were several alternatives that appeared cheaper and less environmentally degrading and they all went through Canada," she said.
Point Whitehorn resident Eliana Steele-Friedlob said she also was pleased.
"It's not that we're against energy. We all need gas and oil," she said. "It's just that we have to be careful about how these projects are designed and who they benefit."
Steele-Friedlob worried that Williams might try to pursue some sort of pipeline within the United States and noted that the company had bought rights-of-way through the county. Williams spokeswoman Beverly Chipman said BC Hydro owns the rights-of-way, and Bruyneel said BC Hydro officials did not yet know what they would do with them.
The pipeline had federal approvals in the United States and Canada. Federal courts were considering an appeal of a U.S. Federal Energy Regulatory Commission ruling, which said that Washington state and Whatcom County waived jurisdiction in the matter by missing review deadlines.
Reach Aubrey Cohen at aubrey.cohen@bellinghamherald.com or 715-2289.
Hydro pulls the plug on Georgia Strait Crossing project
The Province
21 Dec 2004
Gas demand pipeline designed to satisfy just not there, say project partners
B.C. Hydro and its U.S. partner Williams Gas Pipelines have scrapped a $340-million line to Vancouver Island after concluding the customer base wasn't there.
The Georgia Strait Crossing, or GSX, project, proposed in 2000, was to bolster supply for Williams' customers in northwestern Washington and feed gas-fired electricity generation facilities on Vancouver Island.
But Hydro concluded the large gas requirements that GSX was supposed to feed have not materialized, said Dawn Farrell, the Crown corporation's executive vice-president for generation.
The pipeline would have stretched about 60 kilometres from a point on the Canada-U.S. border to an existing pipeline south of Duncan, on Vancouver Island.
The project was designed on the assumption that Vancouver Island, with a population of about 640,000, would have three gas-fired generating stations. But so far only one has been built and a second has stumbled through the regulatory approval process.
Hydro's share of the pipeline's planning costs was $50 million, which it wrote off its books last year. Farrell said Hydro is pursuing alternatives to supplying Vancouver Island to help cover peak winter demand.
They include boosting power transmission from the B.C. mainland and working with Terasen Inc. to supply Hydro's proposed Duke Point power project near Nanaimo through Terasen's existing line to the island.
But the B.C. Utilities Commission rejected Hydro's initial proposal for Duke Point in September 2003, telling it to look for a cheaper alternative. Hydro put out a call for private-sector proposals and last month settled on one by a consortium of investors led by Pristine Power Inc. of Calgary.
The $280-million proposal for a smaller plant now must go through another commission hearing, scheduled to begin next month.
B.C. Hydro puts clamp on natural gas pipeline
Globe and Mail
21 Dec 2004
Vancouver -- British Columbia Hydro and Power Authority and Williams Gas Pipelines, a unit of Williams Cos. Inc., announced yesterday they are cancelling a $340-million natural gas pipeline to Vancouver Island. The Georgia Strait Crossing (GSX) project, proposed in 2000, was to bolster supply for Williams' U.S. customers and feed gas-fired electricity generation facilities on Vancouver Island. "A large capacity pipeline like GSX is no longer a competitive supply option because the large gas supply requirements it was designed to meet have not materialized," B.C. Hydro spokeswoman Dawn Farrell said in a release. The line was predicated on the building of three thermal-electric plants on Vancouver Island. Only one, ICP, has been built so far and a second, the Duke Point facility near Nanaimo, is working its way through the regulatory process. WMB (NYSE) rose 12 cents to $16.37. CP
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B.C. Hydro, Williams cancel $340-million GSX gas pipeline to Vancouver Island
Steve Mertl
Canadian Press
12 Dec 2004
VANCOUVER (CP) - B.C. Hydro and its U.S. partner Williams Gas Pipelines have scrapped a $340-million line to Vancouver Island after concluding the customer base wasn't there.
The Georgia Strait Crossing, or GSX, project, proposed in 2000, was to bolster supply for Williams' customers in northwestern Washington and feed gas-fired electricity generation facilities on Vancouver Island. But Hydro concluded the large gas requirements that GSX was supposed to feed have not materialized, said Dawn Farrell, the Crown corporation's executive vice-president for generation.
The pipeline would have stretched about 60 kilometres from a point on the Canada-United States border, east of Saturna Island, B.C., to an existing pipeline south of Duncan, on Vancouver Island.
The project was designed on the assumption that Vancouver Island, with a population of about 640,000, would have three gas-fired generating stations, Farrell said in an interview.
But so far only one has been built and a second has stumbled through the regulatory approval process.
"In order for the pipeline to be required, you'd have to have a third plant on the island, plus some more requirements for gas supply here on the Lower Mainland," said Farrell.
"We don't foresee that in the short term. So what we've determined is the pipeline is no longer a competitive supply option for getting gas to those plants."
Williams spokeswoman Beverly Chipman said the cancellation poses no problems for the company. Williams did not have any customers signed up for the proposed line and will look at alternatives to meet future demand in northwestern Washington.
Farrell said Hydro is pursuing alternatives to supplying Vancouver Island to help cover peak winter demand.
They include boosting power transmission from the B.C. mainland and working with Terasen Inc. (TSX:TER) to supply Hydro's proposed Duke Point power project near Nanaimo through Terasen's existing line to the island.
"This is something that we think bodes well for the future, for ourselves, for B.C. Hydro and for our customers on Vancouver Island," Terasen spokesman Dean Pelkey said in an interview.
"We've said all along that we believe we can provide natural gas to B.C. Hydro for this project. I think what we're seeing now is they are coming around to agreeing with us."
Farrell said concerns about economic growth were not behind the GSX project's cancellation.
"In fact economic growth is taking place in B.C.," she said. "Our loads are growing quite well. It's more, what is the lowest-cost way to serve those loads?
"Right now with gas prices being higher, we're looking at a number of other supply options."
The issue of supplying gas and electricity to Vancouver Island has been problematic for years.
Hydro's Island Cogeneration Plant was built in Campbell River after residents of Port Alberni opposed it for environmental reasons.
Terasen now is locating a liquified natural gas storage facility at Port Alberni to supply fuel to meet cold-weather demand.
Pelkey said it could also play a role in supplying the Duke Point power project, if it is built. Terasen would also add compressor stations to its existing line to the island to ensure an adequate supply, he said.
"Now it's a question of us and them sitting down together and coming to some kind of agreement," he said.
Farrell said discussions on Terasen's proposed options should take place over the next couple of months.
But the Duke Point project has had problems of its own.
The B.C. Utilities Commission rejected Hydro's initial proposal in September 2003, telling it to look for a cheaper alternative.
Hydro put out a call for private-sector proposals and last month settled on one by a consortium of investors led by Pristine Power Inc. of Calgary.
The $280-million proposal for a 252-megawatt plant - down from Hydro's 265-megawatt project - now must go through another commission hearing, scheduled to begin next month.
The revamped Duke Point project is still opposed by major B.C. industrial power users who say it's little different from Hydro's original plan and will boost electricity rates to all B.C. customers by three per cent.
"We're glad (the GSX pipeline) was cancelled," said Brian Battison of the Joint Industry Electricity Steering Committee. "This project should also be cancelled."
Duke Point essentially would provide expensive power for peak-load periods, demand that could be met using existing transmission lines from the mainland and through industrial load management, he said.
Hydro's new lines to Vancouver Island are scheduled to go into service in 2008, one year after Duke Point is supposed to come on stream, said Battison.
"So this is an expensive project for a one-year gap when you can fill that gap through other means," he said.
© The Canadian Press 2004
Editorial
Times-Colonist
22 Dec 2004
Five years after the initial announcement stirred the waters, the controversial Georgia Strait Crossing pipeline has died — officially, at least with barely a sound.
B.C. Hydro and Williams Gas Pipelines of Salt Lake City said this week that they were scrapping their plan for a $340-million line linking the mainland to Vancouver Island. The customer base wasn’t there, they said.
The project, known as GSX, was unveiled in September 1999. The theory was that GSX would provide the raw material for two co-generation power plants on the Island, and help to ensure that our supply of electricity would remain stable for decades.
The initial plan called for the pipeline to be in operation by 2002, but that proved to be optimistic. The last scheduled completion date was in October 2005, but there was no way the companies could have made it they had already missed several interim targets this year.
Only one gas-fired power plant has been built on the Island, and another has faced major hurdles getting through the regulatory process.
Those plants will rely on gas provided by Terasen Inc., which owns the natural gas pipeline built at the north end of the strait 14 years ago.
The GSX pipeline would have stretched from the Sumas area in Washington State to the strait, passed the Gulf and San Juan islands and connected with the existing pipeline near Duncan.
The cancellation is good news for many residents in the Cobble Hill area, who would have been directly affected by the construction work on the Island, and by the risk of something going wrong.
In the long term, though, we shouldn’t be surprised if we hear of other proposals that could be just as controversial. The population of the Island continues to rise, and the increased use of technology means our demand for electricity is rising faster than people are moving here.
Even after the Duke Point plant starts producing power, and after the new hydro lines from the mainland are completed in 2008, it will just be a matter of time before there are calls for more sources of energy.
So while GSX is dead, don’t kid yourself — the debate over new power sources is only sleeping.
This editorial triggered a letter to the editor from GSX Concerned Citizens Coalition director Peter Ronald: Heroic efforts stopped GSX Pipeline
Robert Barron
Daily News
21 Dec 2004
The proposal for a $340-million Georgia Strait Crossing natural gas pipeline proposal was taken off the table Monday after B.C. Hydro determined there are now lower cost options available.
Ted Olynyk, a Hydro spokesman, said the large supplies of natural gas that were originally thought to be required to meet Vancouver Island’s growing energy needs “never materialized.”
“One reason for this is Campbell River’s Island Cogeneration Plant has switched from using only natural gas and now has the capability of switching back and forth with diesel,” he said.
“As well, Terasen Gas’ Resource Plan lessens the need for the GSX pipeline.”
Terasen has plans for a natural gas storage facility, which would be fed with its own cross-strait gas lines, in south Nanaimo which would help supply the proposed gas-fired electrical generation plant at Duke Point and other needs,
The 136-kilometre GSX gas line project proposal, by B.C. Hydro and Utah-based Williams Gas Pipeline, from Sumas, Washington, to Vancouver Island was intended to help meet the gas requirements of the Island Cogeneration Plant, the proposed Duke Point power plant and a possible third plant on the Island.
Olynyk said about $50-million has already been spent on the GSX project in research, regulatory work, environmental studies and other costs, and Hydro intends to take a provision against its 2004 fiscal income to cover the amount.
B.C. Hydro’s proposal for a $370-million 265-megawatt gas-fired electrical generation plant Duke Point was not given the green light by the B.C. Utilities Commission last year after the BCUC determined Hydro had failed to prove it was the least costly means to fill the Island’s energy needs.
However, the BCUC encouraged Hydro to seek proposals from the private sector.
Last month, after a Call for Tender process, Hydro announced it intends to enter into a purchase agreement with Alberta’s Pristine Power, who intend to privately build a 252-megawatt plant at the same location, if BCUC approval is given.
Terasen Gas and storage facility
Plans by Terasen Gas to build a $100-million liquefied natural gas storage facility, capable of holding one-billion cubic feet of natural gas, near Timberlands Road are also before the BCUC.
Hearings into Terasen’s proposal are expected to reconvene when the BCUC makes a final decision on the Duke Point plant.
If the BCUC denies the Duke Point power plant proposal a certificate of public convenience and necessity, the justification for Terasen’s project would then be challenged as the Duke Point plant is part of the mix in its resource plan.
Locals rejoice as Hydro finally crosses out GSX
Aaron Bichard
Cowichan News Leader
22 Dec 2004
Steve Miller, vice-president of the GSX Concerned Citizens Coalition, received an early Christmas present Monday when BC Hydro announced the official scrapping of the $340-million plan to pipe natural gas across the water.
The company said due to the failure of anticipated supply requirements to materialize, the Georgia Strait Crossing pipeline is no longer the most cost-effective way to deliver energy to Vancouver Island.
"When I heard, I felt like jumping up and down for joy, but then I realized we are not out of the woods yet," Miller said. "They are backing out on their massive gas strategy but it does not mean they are not going to still use gas to produce energy.
"We are now going to fight the Duke Point plant."
BC Hydro had been moving ahead with the GSX since 2000, spending $50 million on engineering studies, plans and research to get the project going.
"We need a firm supply by 2007 and natural gas is a firm, dependable supply," Hydro spokesperson Ted Olynyk said. "But as soon as we realized there were alternative solutions at lower costs we cancelled this project and will go with Terasen's alternatives."
Part of the solution is to rely on Campbell River's duel fuel Island Co-generation Plant, as well as to utilize the proposed Duke Point Power Project and Terasen's Ladysmith storage facility. A possible third site is also being considered on Vancouver Island.
"The cost savings come in the alternative ways to provide the gas," Olynyk said. "Our goal is to provide services for low costs."
Miller said the four-year fight was a good example of concerned citizens forcing change.
"We, the people, were able to delay them long enough for the cavalry to arrive and in this case the cavalry was time," he said. "It was long enough for them to realize the demands they were basing their plans on weren't going to become a reality.
"Now local farmers can rest easy."
The GSXCCC opposed the pipeline because members didn't want it buried in their neighbourhood.
Miller and his group also believe there are more environmentally sound and cost-effective alternatives to natural gas and are going to continue trying to stop the Nanaimo project from moving forward.
Hydro is aiming to have new cables laid across the Strait as early as 2008 but is going to continue pursuing natural gas as a means to deliver low cost energy.
Hydro cancels GSX
Andrea Rondeau
Cowichan Valley Citizen
22 Dec 2004
Ladysmith Chronicle
28 December 2004
Terasen's proposal to build a liquified natural gas storage tank north of Ladysmith is one step closer to regulatory approval, with BC Hydro and its American partner, Williams Gas Pipelines, announcing last week they are scrapping the Georgia Strait Crossing (GSX) pipeline.
The pipeline was a complicating factor in ongoing hearings into Terasen's project by the BC Utilities Commission (BCUC), which must approve the storage facility before construction can go ahead.
Key to the commission's decision is who would supply gas for a proposed 252-megawatt, gas-fired power plant at Duke Point, awarded to Duke Point Power Ltd. last month in Nanaimo.
The BCUC is expected to approve or reject the plant next year. The GSX pipeline project, worth an estimated $340 million, was to begin at Sumas, Washington and run 67 kilometres under the Strait of Georgia to connect with the existing Terasen pipeline at Shawnigan Lake. The gas was to help fuel the existing 240-megawatt generation plant at Campbell River, as well as the proposed $370 million, 265-megawatt Vancouver Island Generation Project at Duke Point. The latter was rejected last year by the BCUC for being too large and too costly.
Hydro spokesperson Dawn Farrell said the large gas requirements the GSX pipeline was designed to meet have not materialized, thus defeating the rationalization for the project.
"There are lower cost alternatives to meet these gas requirements which, together with the fuel switching capability [from gas to diesel] now available at the Island Cogeneration Plant in Campbell River, means there can be enough reliable gas supply on the Island to meet required demands without GSX," Farrell said in a release.
The decision to kill the pipeline eliminates a potential roadblock in the approvals process for both the Terasen and the Duke Point projects, said Farrell.
"Cancelling the project now will stop all further expenditures on the project and also eliminates it as an issue," she said. Hydro had spent an estimated $50 million on the GSX project in research, environmental studies and other related costs.
A Terasen Gas spokesman told Canadian Press last week the cancellation of GSX bodes well for the company's future, its customers on Vancouver Island, and BC Hydro.
"We've said all along that we believe we can provide natural gas to BC Hydro for this project," said Dean Pelkey. "I think what we're seeing now is they are coming around to agreeing with us."
Hydro plans to meet with Terasen over the next few months to discuss options.
Grant Warkentin
Campbell River Mirror
29 December 2004
Campbell River's Island Cogeneration plant was a major factor in BC Hydro's decision last week to scrap a $340 million natural gas pipeline to Vancouver Island.
"The Island cogeneration plant now has dual fuel-switching capabilities which lessened the load for natural gas supply during peak demand for natural gas supply on Vancouver Island. That was a big help," said Ted Olynyk, BC Hydro's spokesperson in Nanaimo. "That obviously had a big play in consideration for cancelling GSX (the Georgia Strait Crossing pipeline). That, coupled with Terasen's proposal, made GSX no longer competitive as a supply of natural gas on Vancouver Island."
Curtis Mahoney, manager of the cogen plant located next to NorskeCanada's Elk Falls mill, said the plant added its capability last year to burn two types of fuel to produce electricity. "Last summer we had a major overhaul and after that we had the commissioning of that process," he said.
The plant primarily burns natural gas to generate up to 250 megawatts of electricity. It can also burn distillate, a form of diesel fuel, as a backup during peak demand for natural gas. Dawn Farrell, executive vice-president of generation for BC Hydro, said there was not enough demand to justify building the pipeline, which would have connected Vancouver Island with Washington State. The project was a partnership between BC Hydro and Williams Gas Pipelines.
"A large-capacity pipeline like GSX is no longer a competitive supply option because the large gas supply requirements it was designed to meet have not materialized," she said. "There are other, low-cost alternatives to meet these gas requirements which, together with the fuel-switching capability now available at the Island Cogeneration plant in Campbell River, means there can be enough reliable natural gas supply on the island to meet required demands without GSX."
BC Hydro's original plan was to construct three natural gas-fired power plants on Vancouver Island and connect them with the natural gas pipeline. Only one cogen plant was ever built, located in Campbell River as a second choice because Port Alberni residents opposed the plant for environmental reasons.
The Georgia Strait Crossing pipeline has been opposed since it was first proposed in 2000. The GSX Concerned Citizens Coalition celebrated BC Hydro's decision and said they would now like to see the utility halt its plans to build a natural gas-fired power plant at Duke Point in Nanaimo.
"Over-sized and over-priced, GSX was doomed from the start," said Arthur Caldicott, director of the citizens' coalition. "So many people on Vancouver Island, the Gulf Islands, the Lower Mainland and Washington State have fought long and hard against the pipeline project and they all deserve credit for this great victory today."
Dodie Miller, a director with the citizens' coalition, said BC Hydro has always overestimated Vancouver Island's power needs.
"Now that Hydro has acknowledged the pipeline was misguided, it is time to re-examine the need for Duke Point," Miller said. "This project is not the least-cost option because gas-generated electricity is no longer cheap, and it is time BC Hydro recognized this."
Posted by Arthur Caldicott on 21 Dec 2004