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Report on Business B.C. regulator ordered to broaden review of environmental impact caused by Delta jetty

Welders work on the inside of a liquefied natural gas storage tank under construction at FortisBC's Tilbury LNG facility as part of their $400-million expansion in Delta, B.C.

DARRYL DYCK/The Globe and Mail

Ottawa has ordered B.C.'s environmental regulator to broaden the scope of a provincial review into a jetty project to consider the impact of increased shipping traffic on waters well beyond the planned pier.

The B.C. Environmental Assessment Office is leading the review of California-based WesPac Midstream LLC’s plan to build a docking berth for vessels that would transport liquefied natural gas (LNG) from Delta, B.C., located 20 kilometres south of Vancouver.

The provincial regulator began scrutinizing WesPac’s jetty proposal in March, in collaboration with the Canadian Environmental Assessment Agency. But Ottawa recently expanded the geographic scope that the review must cover, prompting the B.C. regulator last week to suspend the review until new information is gathered about the potential adverse impact of increased shipping activity in the Salish Sea.

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Kevin Jardine, associate deputy minister for the B.C. regulator, said it is necessary to pause the environmental review to follow Ottawa’s directive.

In a July 9 letter to her B.C. counterpart George Heyman, federal Environment Minister Catherine McKenna said she is exercising her authority to expand the geographical area that the regulator must study, beyond the planned shipping route between the south arm of the Fraser River and the Sand Heads station near the river’s mouth.

The broadened environmental assessment will “consider effects from marine shipping activities beyond the Sand Heads pilot station into the Salish Sea,” Ms. McKenna wrote. She added that the B.C. regulator “is accepting of this approach and has expressed its confidence in its ability to conduct the additional work.”

WesPac is aiming to have a temporary pier in place next year at the Tilbury Island site in Delta. Plans call for WesPac’s Tilbury Pacific jetty project to have a permanent berth by 2022, located next to FortisBC’s LNG plant on Tilbury Island. FortisBC supports the jetty plan, but its LNG plant isn’t part of the environmental assessment.

WesPac, through its subsidiary WesPac Midstream Vancouver LLC, estimates construction costs could range from $154-million to $260-million, depending on the final jetty design. WesPac had expected the B.C. review to wrap up in September and hoped for provincial and federal approvals by the end of October.

But on Aug. 6 at the request of WesPac, the B.C. regulator halted its timetable 41 days before the end of the 180-day provincial review process. The assessment has been put on hold until WesPac submits its supplemental analysis into marine shipping. The provincial office must then determine whether WesPac’s response is satisfactory, including details on the direct and indirect effects of shipping on fish and marine mammals.

Ms. McKenna’s letter pointed out that in the case of the Trans Mountain oil pipeline expansion project, the Federal Court of Appeal ruled last year that Ottawa failed to properly consider the environmental impact from increased shipping traffic.

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In a letter to WesPac senior vice-president Peter Gallenberger, Mr. Jardine said WesPac will need to consult with an advisory group overseeing marine shipping issues, including input from Indigenous leaders.

Kim Walters, project assessment director for the B.C. regulator, said the shipping advisory group will include Indigenous representatives as well as government officials at the federal, provincial and local level.

She confirmed in a memo dated Aug. 6 that the scope of the environmental review has been expanded “to include an assessment of the effects of marine shipping activities from the project’s marine terminal to the 12-nautical-mile limit of Canada’s territorial sea.”

The B.C. regulator hasn’t set a deadline yet for fresh submissions on the effects of marine shipping arising from WesPac’s proposed jetty.

Under WesPac’s infrastructure design, the permanent berth’s two loading platforms could handle 69 LNG carriers a year for overseas markets and 68 LNG bunker barges a year for regional shipments of the fuel.

In 2014, there were more than 20 B.C. LNG proposals. So far, only one new terminal is under construction. Last October, the Royal Dutch Shell PLC-led LNG Canada consortium began to build an $18-billion terminal in Kitimat, B.C., to export the fuel to Asia.

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In 2015, the National Energy Board approved WesPac’s application to export up to 3.5 million tonnes a year of LNG.

Domestically, LNG has been trucked lengthy distances from FortisBC’s Tilbury Island site to places such as Yukon.

Internationally, FortisBC signed a two-year deal last month to export 53,000 tonnes a year of LNG to China. FortisBC recently completed a $400-million expansion of its LNG plant, which opened in 1971. But a much-larger expansion by FortisBC would be required to help WesPac fulfill its long-term goal to make full use of the planned jetty.

A small-scale B.C. energy venture, Woodfibre LNG, plans to export 2.1 million tonnes a year of the fuel from an industrial site near Squamish, located 65 kilometres north of Vancouver.

Last week, Woodfibre LNG said it ordered a major piece of equipment and hopes construction of the $1.6-billion project will start by the end of 2019.

Federal Finance Minister Bill Morneau confirmed on Friday that Ottawa will provide relief from Canadian duties that would otherwise be imposed on fabricated industrial steel components contained in imported modules to be built for LNG Canada and Woodfibre LNG.

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