Confusion reigns over British Columbia natural gas pipeline

Gary Park

Petroleum News Calgary correspondent

Some say yes, some say no as the future of a natural gas pipeline project to Vancouver Island from the United States continues to negotiate regulatory hoops.

In the latest development, a Canadian government review panel said the Canadian portion of the C$322 million line could proceed so long as a power plant to be fed by the pipeline was also approved.

Three months ago, the British Columbia Utilities Commission rejected the pipeline application by government-owned British Columbia Hydro & Power Authority, arguing there was no proof the gas-delivery system would be a cost-effective means of serving the power plant.

A BC Hydro spokesman has since said the utility plans to sell its stake in the pipeline — a joint venture with Williams Gas Pipeline — as a non-core asset.

The pipeline was due to come on stream in October 2005 as part of the Georgia Strait Crossing Project, a new international pipeline designed to ship gas to markets in northwestern Washington state and Vancouver Island. The U.S. portion got regulatory clearance 15 months ago.

The Canadian section has generated strong opposition, ranging from concerns about the impact on marine life, earthquake risks and economic justification.

Even pulp and paper maker Norske Canada has told regulators it can provide the electricity it needs more cheaply through a combination of energy savings and co-generation at its existing pulp mills.