Resource tax-dollar potential huge

Proposed industrial projects would almost double regional tax base.

Franca Petrucci of Spectra Energy led a delegation to the Jan. 24 2013 board meeting of the Regional District of Bulkley Nechako (RDBN). His presentation concerned the recently announced joint proposal of Spectra Energy and the BG Group to build a liquid natural gas (LNG) pipeline from Northeast B.C. to Prince Rupert.

The proposed pipeline would be similar in capacity to the proposed Transcanada Coastal Gaslink project which is currently working on its provincial environmental assessment.

The pipeline would connect shale gas fields in the Fort Nelson and Fort St. John areas to proposed LNG terminals in Prince Rupert via a pipeline running westward more than 140 kms north of Burns Lake.

The Spectra BG Group proposal is the fourth proposed LNG pipeline that would cross RDBN areas.  A fifth pipeline, the Enbridge NorthernGateway pipeline has also been proposed to transport modified bitumen from Northern Alberta to Kitimat, B.C.

Any of these pipeline projects would contribute to the RDBN annual tax base.

The Mount Milligan Mine project, expected to be ready for production this year, will also contribute to the RDBN tax base.  If all four LNG pipelines and the Milligan Mine project were up and running, the estimated tax impact for the RDBN, the Stuart Nechako Regional Hospital District (SNRHD), and the North West Regional Hospital District (NWRHD) would total over $6.2 million.

If the Enbridge Northern Gateway Pipeline project were to come online, then an additional $2 million would drop into RDBN and hospital district coffers for a total of over $9.5 million per year.

These figures, provided to the board of directors of the RDBN by Hans Berndorff, Financial Administrator for the RDBN, are based on 2012 tax rates and do not include school taxes or other provincial property taxes.

Focussing on the Lakes District, the 2012 tax base for the RDBN and the SNRHD combined was $9 million.  The projected income from all proposed pipeline projects and the Milligan Mine would provide an additional $8.7 million to the tax base, according to 2012 tax rates.

As enticing as a near-doubling of the annual tax base sounds, Bill Miller, RDBN Chair and director of Region Area B, expressed a cautionary note regarding the likelihood of all projects moving forward.

Beyond vocal public resistance to the proposed Enbridge Northern Gateway project, supply and demand will govern which proposed natural gas pipelines get built.

“Realistically, we’re not going to see all those lines,” said Miller.

“All those players realize that there’s not going to be five pipelines.  We may end up with two, or one, or four, but not everybody is going to be there.”

Although the Milligan Mine is expected to begin limited operations later this year, off the proposed LNG pipelines, only the Apache Corp. Pacific Trails Pipeline (PTP) has completed all environmental assessments. Initial work has begun in the Terrace and Kitimat areas for PTP, but even that project has neither the long-term LNG contracts in place, nor the final engineering and design studies completed that will be required before a final investment decision is made by Apache and Chevron.

Pacific Trails Pipeline also faces strong opposition from the Wet’suwet’en, one of the First Nations whose traditional territories PTP is proposed to cross.

The other proposed LNG pipelines, Transcanada-Shell Coastal Gaslink Pipeline, Transcanada -Progress Energy Pipeline, and Spectra Energy Pipeline, are all at very preliminary stages and none have yet moved beyond pre-assessment to gain environmental or regulatory approvals.

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