BCBusiness in partnership with BCEDA

Unlocking the Potential

With Site C under way and the prospect of LNG exports, the Northeastern economy is heating up fast

Northern energy plantThe Northeast, the only part of B.C. lying east of the Continental Divide, is, economically speaking, inescapably connected to energy. The region produces virtually all of B.C.’s natural gas output – second only to Alberta among the provinces – and could account for a great deal more were prices to support fuller development of the unconventional Montney, Horn River and Liard Basin gas deposits – the last believed to be one of the world’s largest shale gas discoveries. It’s also home to metallurgical coal mines that help fire steel mills in China, Japan and South Korea. Coal price increases in 2017 and 2018 led to the reopening of the Brule, Wolverine and Willow Creek mines in the area of Tumbler Ridge and Chetwynd, and there are more mines in development.

Northeast statsMuch of the conversation of late, however, has surrounded a renewable energy project, BC Hydro’s Site C hydroelectric dam, now under construction. Due to come into service in 2024, Site C will be the first major dam constructed in B.C. in 40 years and the third on the Peace River, located just seven kilometres southwest of Fort St. John. (The existing W.A.C. Bennett and Peace Canyon dams represent 29 percent of BC Hydro’s generating capacity.) The project is budgeted at $10.7 billion and will generate 1,100 megawatts of electricity. As of November 2018, there were 3,463 workers engaged in the project, 660 of them from the surrounding Peace River Regional District.

The go-ahead on LNG Canada should have an even bigger impact on the Northeast, but on a longer timeline. First, the Coastal GasLink pipeline designed to bring natural gas from a collection facility at Dawson Creek 680 kilometres west to Kitimat is a $4.8-billion undertaking in its own right, adding to the Project RAM and Townsend Complex gas transmission projects already under way in Peace Country.

Second, and more important over the long term, the demand from LNG Canada should stimulate exploration and production of natural gas in the Northeast on a scale hitherto unseen. Right now, B.C. gas is disadvantaged in the U.S. because it travels the greatest distance to market and so is subject to higher pipeline tolls than competing sources of supply. In serving Asian markets via LNG Canada, though, it will be in the opposite position, lying closest to market of all North American producing regions.

“Once operational, the LNG Canada facility will open new markets for northern B.C.’s natural gas reserves and reduce Canada’s reliance on the U.S. market,” the Northern Development Initiative Trust’s 2019 State of the North report noted. “The LNG Canada facility is expected to export an estimated 14 million tonnes of liquid natural gas per year, with the potential to expand should demand require it.

“Together these two projects [LNG Canada and Coastal GasLink] will allow B.C. gas producers to reduce their reliance on the U.S. market. This may also lead to increased exploration and drilling activity in the Northeast region and could provide more stability in oil and gas employment in the region,” the report concluded.

SERVICING THE BOOM

With this prospect of long-term job creation and resulting population growth, developer G8 Properties Inc. has started construction on The Station Town Centre, an 89-hectare, $500-million retail complex featuring big-box stores on the Alaska Highway in Fort St. John. Also planned are a hotel, truck centre and residential components.

Next to the energy investments, one could miss the fact that the Northeast has a steady agricultural base including more than 1,000 family farms, mostly engaged in growing grain and oilseeds. The forest industry is also active in the area, though the annual allowable cut is expected to decline with the removal of critical habitat of the endangered mountain caribou from the working forest.

Meanwhile, metals miner Centerra Gold Inc. is continuing to move toward the development of a new, $543-million underground mine near the Kemess Mine in the northern Rocky Mountains, which was retired in 2011. No firm decision has been made to proceed.

Natural gas plant

Chetwynd ▷ Fort St. John ▷ Taylor
Dawson Creek ▷ Hudson's Hope Slocan
▷ Fort Nelson ▷ Pouce Coupe ▷ Tumbler Ridge

Northeast population