LNG plan gives hope to Goldboro families10/29/2012
GOLDBORO — Jack Pietzsche wants a store, with a pot of coffee on and a few chairs circled round.
His son, Dennis, would like a job at the inevitable work camp if 1,500 tradespeople descend on the Eastern Shore to build the $5-billion natural gas liquefaction and export terminal proposed for their community of a few dozen souls Wednesday.
“A store would be nice; they’d need one, you know, and us old fellers could gather round a pot of coffee and tell each other all sorts of lies,” said the retired air force avionics technician.
For Goldboro, the Pieridae Energy Canada proposal isn’t about potential profit. It isn’t about a higher price for natural gas producers in the northeastern United States. It isn’t about a secure energy supply for Europe or India.
“It’s about jobs and communities and people being able to grow old surrounded by their children and grandchildren,” said Richard Cotton, who supports the project.
“So you can’t blame people for getting their hopes up. But we’ve seen a number of proposed megaprojects go down and people are cautious with their optimism. It’s like the boy who cried wolf.”
Richmond County, which neighbours Guysborough County, is the poster child for big promises.
Cotton, who served as either warden or councillor between 1993 and 2008 on Richmond County council, has seen hopes dashed in northern Nova Scotia.
There was Sable Petrochemical’s $600-million plan for a plant in the Strait of Canso area in 1998 that failed. Then there was Anadarko Petroleum Corp.’s $650-million proposal for a liquefied natural gas facility at Bear Head that failed.
Most recently, Keltic Petrochemicals of Halifax shelved its $4.5-billion plan for an liquefied natural gas import facility in Goldboro, along with a processing facility proposed by Maple LNG.
While some have failed, Cotton noted that others have provided steady long-term employment.
There’s the NuStar shipping terminal at Point Tupper, the large rock quarry and export facility at Mulgrave and, despite its recent slowdown, the pulp and paper mill that has employed hundreds for over half a century.
“The batting average of large-scale projects around the world is bad,” said Jim McNiven, a professor emeritus at Dalhousie University’s school of management.
“It’s not just a local thing. Seeking these big projects is like prospecting for gold. We should invite them, by all means, to make proposals and try, but we should avoid getting our hopes up.”
Megaprojects fall into two categories, said McNiven — those proposed by a big company with the capital to finish them and those proposed by a developer who will seek to attract interest and investment.
“A billion dollars is a thousand millions, so if you look at the scale of these projects, then a few million dollars is not much of a risk for the potential payoff,” McNiven said.
“You can do a lot of drawings and buy a lot of signs for a million dollars.”
Pieridae president Alfred Sorensen spearheaded development of a Kitimat, B.C., liquefied natural gas export terminal that he recently sold for about $300 million.
In an interview after his announcement Wednesday, Sorensen said he doesn’t have the $5-billion funding in place to build the Goldboro plant but is investing millions of his own to begin the environmental review process (expected to take 1 years) and is lining up customers.
Sorensen sounds like he’s bullish on Goldboro.
“To be honest, about a year ago, I was wondering when something like this would happen.”
While other megaprojects, particularly in the Strait of Canso region, have been hampered by distance from large American markets, high energy costs and the whimsy of world economics, Sorensen said Goldboro is different.
Pipelines are as cheap a form of transportation as seagoing freighters. So reversing the Maritimes and Northeast pipeline to carry natural gas to Goldboro, where it would be cooled to a liquid before shipping to world markets, doesn’t add a transportation cost burden.
Secondly, the sudden supply of cheap natural gas created by hydraulic fracturing extraction technology in the United States means prices there are dramatically lower (about $3.50 per gigajoule in New York trading) than in the rest of the world (about $10 per gigajoule in India). That creates a strong market desire for the ability to export, and Goldboro would be the first natural gas export facility in eastern North America.
Guysborough County Warden Lloyd Hines also doesn’t see the latest proposal fitting into the rubric of derailed projects. For him, it’s the result of decades of work to first lure the Sable Island pipeline to Guysborough County and then add revenue and employment streams to his municipality’s declining tax base.
Sable gas allowed the municipality to do the groundwork for a second-generation landfill that contains garbage from 16 surrounding municipalities and employs 15 people.
It also allowed the municipality to initiate and hold the controlling interest in a six-turbine wind farm about to be constructed near Canso that will provide two full-time jobs on top of those created during construction.
“Granted, there have been things that have happened here that didn’t turn out as hoped,” said Hines
“And we’ve been constantly attempting to support smaller local employers. But this is a much different facility than proposed by Keltic or Maple LNG, and the markets support it.”
In neighbouring Drum Head, with his lobster boat out of the water for the season, Glenn Langley had time to think about what a huge industrial project would mean for his quiet stretch of coast.
“I hope it goes because it would be good for the young people,” said Langley, who turned down a $650,000 offer for his boat, licences and gear last year so he can pass them on to his grandson.
“But I want them to show us that it can be done without disturbing the lobster grounds. I’m all for LNG coming and creating jobs, but the fishery was here before it came and I want it to be here for future generations after they leave.”
(The Chronicle Herald)