Some good news in the north - The Orca

Some good news in the north

Maclean Kay

An intriguing new project represents some good economic news in the North.

While it may not be an existential threat such as towns like 100 Mile House face, B.C.’s forestry crisis has still hit the “northern capital” hard, with unemployment in Prince George reaching 5.9%.

But just as job losses are bad news in any community, job creation is welcome. Enter West Coast Olefins, which is developing a $5.5 billion project in the city.

“You’ve got this other opportunity that’s suddenly been presented at exactly the right time,” says Kenneth James, president and CEO.

The idea is to convert ethane into ethylene, which is widely used in plastics but also a natural plant hormone used to promote ripening in fruit. Already in widespread use, demand for ethylene and propylene is expected to skyrocket in the short term. In 2018, the global market was valued in the hundreds of billions of dollars, and growing. It’s something like a modern-day gold rush, with companies like Exxon Mobil Corporation, Saudi Basic Industries Corporation, Royal Dutch Shell Plc, China Petroleum & Chemical Corporation, Chevron Phillips Chemical Company LLC, Total S.A., LyondellBasell Industries N.V., National Petrochemical Company, INEOS Group and Dow Inc., all moving into the market.

Back in Prince George, James estimates the facility will create 800 to 1,000 permanent high-skilled jobs once operational – on top of hundreds of construction jobs building the plant.

For the recently laid off, the skills involved are fairly transferable. James estimates 80% of the skills workers in forestry are immediately transferable in a petrochemical facility.

“There’s some training on [things like] welding of high alloy steels, pressure vessels, pressure piping, that we need to get welders re-qualified,” says James, “but that’s fairly straightforward if they know the jobs are there.”

“It takes advantage of a lot of the infrastructure that was developed for a forest industry on the decline.”

Many of the jobs will be quite lucrative. James estimates most will be “just sub-$100,000” but with many positions paying six figures – 25% more than the average household income in the city.

“These plants are sophisticated operations, so you need educated people, from engineering and accounting and all the professional services with it,” says James.

Pipeline construction – or lack thereof – dominates the news, and one of the advantages of Prince George is there’s no need to build a new pipeline. WCO plans to draw from the existing Enbridge pipe that already runs south from the Montney shale formation in B.C.’s northeast.

For a project that’s still mostly conceptual, WCO has attracted a fair amount of media attention – partly due to the job factor, but also because of a frankly astonishing claim. The facility will not just be carbon neutral, but carbon negative.

That’s down to a few things, including the advantage of being new – it will be built with modern, energy-efficient designs – and design features such as choosing an electric turbine, and using excess heat to power a greenhouse for tree seedlings. Those are interesting, but the most significant impact will come from the actual byproduct.

After removing the ethane to make ethylene, the “lean” gas put back into the pipeline is substantially cleaner, reducing GHG emissions by an estimated million tonnes per year. Most significantly, ethylene produced in Prince George will help replace ethylene production in China, which relies on coal.

WCO would share the site with a partner to convert ethylene into polyethylene pellets for export to Asia.

After a grim summer that saw more than 20 sawmills either close or curtail production, leaving more than 6,000 people without work, new investment – and jobs – is welcome news.

Maclean Kay is Editor-in-Chief of The Orca