Glory days in the North as resources drive growth
- Glory days in the North as resources drive growth
Dawson Creek, Kitimat brace for a busy future filled with challenges and rewards
By SCOTT SIMPSON, Vancouver Sun
June 29, 2012
From left: Roughneck Mike Zazvlak, Mike Griffiths of Hill's Casing Services, derrick hadnd Sol Ronaghan, and Darryl St. Martin, rig manager, work on the drilling floor of Precision Drilling rig # 521, contracted by Encana Corp. The $12-million rig is drilling its second hole in the Fort St. John area. Natural gas from the deep unconventional wells has created a boom in the North.
Photograph by: Stuart Davis, Vancouver Sun
Dawson Creek is showing the symptoms of a classic boom cycle in the resource sector - and it's just beginning.
The city in northeast British Columbia, with a population at least 15 per cent greater than the 2011 census estimate of 11,585, is straining to provide accommodation for all the people who are moving into the area to take advantage of a surge of economic activity caused by natural gas production in the region.
Home and rental accommodation prices are rising, local services such as health care are overburdened, and there's at least a decade's worth of growth ahead.
Shell Canada and TransCanada have a $4-billion plan to build a natural gas pipeline originating near Dawson Creek, to carry gas across the province to the central coast town of Kitimat. And BC Hydro appears likely to carry through with its $8-billion Site C dam project, which is located about a half-hour's drive away, at Fort St. John. Hydro is also targeting Dawson Creek as the anchor for an expansion of its transmission grid.
None of those projects has commenced, but as far as Mayor Mike Bernier is concerned, the boom has already begun - and Dawson Creek's leaders hope to use it as a catalyst for long-term economic benefits. "The last three years for Dawson Creek have been the biggest years on record for our community for economic growth, with no end in sight," Bernier says. "We've had over $150-million worth of private development within the city. That's not talking oil and gas work - that's investors, new hotels, houses, stores.
"You have people renting out a bedroom in a basement for $1,500 a month."Bernier, originally from Vancouver, says he never would have thought he'd start seeing houses being built and sold for $500,000 to $700,000. "Our smaller homes - starter homes - are around $250,000 now," he says.
Even upper-middle income earners are struggling to gain a foothold. "I was talking [recently] to one of the gals who works for the local media," the mayor says. "She was renting a basement suite with three other people [including] herself, an engineer and a veterinarian. In all fairness, I think one of those people is in the process of building a new home and couldn't find anywhere else to live while his house was being built."
Council has passed a bylaw that forbids work camps within city limits in hopes that at least some of those who are coming to work here will find local accommodation, bring their families, and settle here instead of living in a work camp and sending all their money back home.
The city is investing in amenities to support that vision. Dawson Creek in recent years has developed everything from a major community arena to sports and activity fields and, this summer, a $10-million, 45,000-square-foot arts centre.
The city also needs health care professionals. Bernier says an immense "shadow population" is overtaxing existing care services.
"A lot of these people don't have doctors or dentists because they're truly not residents. So what do they use? Our emergency room. You can wait six or seven hours. Just two months ago, finally, one doctor opened up a walk-in clinic in our mall. He was telling me in the first two weeks he saw 500 people. They're living in basement suites, living in hotels - our trailer parks are full. They don't get captured in the census but they are using the water, the sewer, the amenities, the roads, but they are not taxpayers."
Despite the challenges, Bernier is a strong supporter of natural gas development in the northeast and the creation of liquefied natural gas (LNG) export facilities on the other side of the province, at Kitimat.
"When you look at the Asian markets, when you see Mitsubishi, when you look at PetroChina investing billions of dollars around Dawson Creek with Encana and Shell, they are putting their money there for a reason. They're looking not at today but a couple of years down the road when we get these LNG projects up and running. Those LNG projects on the other side of the province are going to be an amazing economic driver for our region."
Meanwhile, on the "other side" of B.C. at Kitimat, where an estimated $40 billion of proposed construction to support LNG exports are under active consideration, a key stakeholder is also taking the long view.The Haisla First Nation was part of the first wave of supporters of LNG development. They control the shoreline properties where the terminals and shipping facilities will be located.
In 2009, the Haisla announced a deal with proponents of what is now known as the KMLNG project, which will see them collect more than $20 million per year in property taxes and lease payments in exchange for their support of an LNG processing and shipping facility on their property at Kitimat's deepsea port.
The Haisla subsequently entered into a deal with LNG Partners LLC of Houston, Texas on a second, and smaller, LNG export facility that was approved by the National Energy Board in February 2012 and could be operational in two years. Shell Canada, which last month announced a $12-billion project, is knocking on the Haisla's door. Amid all of this, Rio Tinto Alcan is modernizing its aluminum smelter at Kitimat.
Haisla First Nation has a total population of 1,500, half of whom live on reserve. According to Chief Ellis Ross, a "broad spectrum" of members are taking advantage of opportunities for employment.
Younger members in particular are looking to build long-term skills and the first nation has a corporate entity, Haisla Business Operations, which pursues contracts that lead to jobs in the new enterprises.
"We're not giving jobs outright," Ross says. "If you really want a job and you're really pushing and working hard for it, there is an opportunity for you and there will be opportunities in the future. It all depends on your enthusiasm to work. It depends on the individual Haisla member to go after these opportunities. It's not going to be given on a silver platter."
A few years ago, the first nation purchased a private post-secondary training institute to prepare residents of the region, both aboriginal and non-aboriginal, for the job opportunities that are emerging. And Haisla Business Operations manages business opportunities on territorial lands.
The Haisla are well-advanced in negotiations with the provincial and federal governments on a treaty to resolve their long-standing land claims, but Ross notes that those talks are getting sidetracked by the paperwork and reviews associated with LNG development. The Haisla are determined to keep the LNG projects moving, he says.
"We're going full tilt. Basically all of our people that are available to work on these different projects are working eight hours a day, including our politicians and our councillors. It's not that treaty is not a priority, it is that we've got to deal with the immediate requests right now. That request is for proponents and government to get answers on some of the projects that are proposed for Haisla territory right at this minute."
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Haisla First Nation Chief Ellis Ross says the Haisla are taking advantage of energy-related job opportunities.
Photograph by: Ward Perrin, Vancouver Sun
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