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Liquefied natural gas plan in jeopardy

Rejigged provincial natural gas expansion program ‘stuns’ Superior north shore mayors
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Mayors of five communities on the north shore of Lake Superior say their affordable energy plan to roll out a regional liquefied natural gas (LNG) project has suddenly been thrown into disarray by the province.

The municipal leaders of Marathon, Schreiber, Manitouwadge, Terrace Bay and Wawa were responding to the province’s Jan. 30 launch of its new Natural Gas Grant Program, designed to extend natural access to rural, Northern and First Nation communities who aren’t connected by pipeline.

In a joint release, the municipalities expressed their profound disappointment in the government’s decision severely cut the available funding from a previous loan and grant program announced in last spring’s provincial budget from $230 million to just $100 million under a new program.

The communities said the province’s “stunning reversal” puts the LNG project’s viability in serious jeopardy.

"For years our dependence on expensive sources of energy like electricity, heating oil and propane has hindered our growth," said Daryl Skworchinski, CAO of the Town of Marathon. "It's even had serious health and environmental implications. Today's about-face by the government now puts in jeopardy the very kind of energy infrastructure we so desperately need. Fulfilment of the government promise was going to be the shot in the arm for the very economic viability of our community."

The communities had partnered with Northeast Midstream, a southern Ontario energy developer, over the past 27 months to work on the economics of tapping into the cross-Canada natural gas pipeline at Nipigon, freeze the gas, and then truck it on the Trans-Canada Highway to proposed distribution centres in each of the five communities.

The project was tentatively scheduled to start in 2018 and be carried over the next three years.

With funding support provided by the provincial Northern Ontario Heritage Fund to do an LNG feasibility study, the communities said the introduction of LNG would’ve saved homeowners, businesses and municipalities in these towns more than $6 million per year.

The mayors, who had been anxiously waiting for the official launch of Natural Gas Access Loan program to help finance the project, said soaring energy costs are making their small towns “unlivable and unsustainable,” and poise a barrier to these communities attracting business and investment.

“With ever-increasing costs, reducing energy costs for the North should be a priority for this government, and it appears that once again the North is not being considered,” said Manitouwadge Township Mayor Andy Major. “There are limited alternatives for communities in the north, and many homeowners and businesses struggle with energy cost. A solution to make a living in the North more affordable was presented to this government and is being ignored once again."

"We hope this new program will allow us to keep to the very aggressive timelines that have been put in place based on the program announced two years ago,” said Schreiber Township Mayor Mark Figliomeni “It is clear our residents and businesses are desperate to have an affordable alternative to oil and electric heat and have it now. We are anxious for the details, but this change appears to be a roadblock to implementation."

The government announced Jan. 30 that municipalities and First Nation communities can now work with utilities and natural gas providers to submit applications under a “competitive intake process” expected to be open up sometime this spring.

“The province has heard from people who have asked for service to be expanded to their communities to support greater consumer choice, economic growth and new jobs,” said the release.

"Ensuring affordable sources of energy are available to more rural and Northern communities is a key part of Ontario’s energy plan,” said Energy Minister Glenn Thibeault in a statement. “Today’s announcement is going to ensure more families and businesses across Ontario are able to choose a cheaper way to heat their homes and workplaces.”



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