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Could The Black Liquor Credits Keep Kitimat Alive

By Ben Meisner

Monday, November 02, 2009 03:45 AM

The Union representing workers at Eurocan, the West Fraser operation in Kitimat which is closing its doors and shutting down the pulp mill in that community, has a reasonable argument when it says that if the federal government is about to hand out black liquor clean energy dollars, then a substantial portion of that money should have gone to the Kitimat mill in an effort to make it viable.

West Fraser is in line for $88 million dollars under the Federal program which says the  dollars can be used in any operation owned by the company collectring the credits.

It may be a solid argument, but West Fraser could be looking at propping up its operations in Alberta by putting the Black Liquor credits into a mill that has no union. It may in fact only be a thought,  but it gathers some weight when you look at the fact that the beetle is continuing  to chew its way into the Alberta pine forest , and that spells a lot of wood suddenly becoming available for chipping in that province.

West Fraser is looking at cutting costs and Kitimat is where the company has painted the bull’s eye.

The bigger picture is the heart break of watching what formerly was one of the most vibrant communities in all of the Pacific Northwest fading quickly away. Alcan, now Rio Tinto, has talked about expansion, but never has.

The community has had to sit back and watch as its neighbour, Terrace slowly picked away at its trade and commerce, and now with the closing of Eurocan, they will need an even stronger community base if they are to survive and survive they should.

Kitimat has all the trappings to be a very special place on the landscape of BC; all it needs is a renewed effort by everyone to see it get there.

I’m Meisner and that’s one man’s opinion.


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Comments

You want "vibrant communities"? Run all the anti-business tree huggers out of the province. Owls dont pay taxes.
Vibrant communities occur with sustainable employment gamblor. Tree hugging is NOT anti-business it is a business in its own right.
Economic development requires cooperation and a willing investor/ entrepreneur. Kitimat has huge potential, but unfortunately they have not diversified so are now feeling the pain.
I don't think the clean energy dollars would help that pulp mill. The big issue for that operation is raw material. Where do they get the fibre required to make their product at the right price?
No sawmill around anymore, so they would have to bring chips along ways or operate chippers to chip whole log, which is expensive and not the best use of our trees?
So I don't think the federal dollars can help this situation.
Kitimat has always been a 2 horse town. If it wasnt for Eurocan and Alcan there would be no community on the western side of the inlet.

Industry came, had a good 50 years plus run, now they are leaving.

That is how ghost towns are created, industry leaving.

Soon we can change the spelling back to Kitamaat.
The story in the news blamed low pricing due to the strong CDN $, and also lower priced competition in the markets that Eurocan were engaged in.
metalman.
I think Kitmat's fate for many decades was sealed when the container port was put into Rupert instead of Kitimat.

There is a short 50 km distance between Kitimat and Terrace. I think the long range opportunities for the development of the 50 km valley between Kitimat and Terrace are still far superior than any long term future development for Rupert.

The Kitimat port as well as the Kitimat-Terrace corridor have high potential for growth both for the right kind of light and even modern "clean" heavy industry as well as tourism.

I understand that of the 37,000 acres of industrial land available in Northern BC, 17,000 is available in the Kitimat=terrace Valley.

The question I have is what are the hurdles which have to be overcome in order to get some new, viable industry into that valley and is anyone seriously working on overcoming them or is it just a pipe dream because it is simply in the wrong place?
Kitimat is the typical primary industry town which is now a bind.

Raw material (bauxite) is shipped in and reduced in the smelter to aluminum. Then the aluminum ingots and slabs/round stock for extrusion are shipped out.

There is no secondary aluminum industry.

Next to the smelter there should be a casting facility for aluminum alloy wheels for cars. There should be a rolling mill that produces aluminum foil and an extrusion plant that makes aluminum extrusions which are used for window and door frames and thousands of other uses.

Employment in those plants could be triple or quadruple the number of people working in the smelter itself.

Eventually manufacturing plants that require these type of products would have located there to further add to the local economy.

There is a deep sea channel wharf. There are excellent rail and road connections. There is plenty of electricity and water.

The trouble is that all the primary products are simlpy shipped out, together with the jobs and the opportunities.

One would think that municipal, provincial and federal decision makers would have created incentives and put pressure on the owners of these primary industries in isolated towns to slowly build and make a committment to diversify with secondary manufacturing using the products of their primary industries - but, alas, the hand wringing always only begins when all the horses have already left the barn.

Too bad, because there are many towns from the demise of which clues were available to be gotten - ghost towns, that is.

They had fifty years to work on added value diversification and now this!



Diplomat nails it. Also,
Alcan- Rio Tinto exists in Kitimat B.C. for two reasons; WATER, and WATER
Water one: cheap hydroelectric power
Water two: a deep water port.
If not for the sweet heart deals cut by the government of the day, Alcan would not have located in what became the town of Kitimat. On the other side of the coin, if not for the sweetheart deals cut by the government of the day, B.C. would probably not have enjoyed the billions of dollars spent in this province since the early fifties. Now, I think the main challenge for the government is to ensure that the smelter is kept in operation, because I think that Rio Tinto would probably rather sell electricity from Kemano into the U.S. market than to operate a smelter in Kitimat.
metalman.
Why do people always think of areas like Prince Rupert, Kitimat, etc; in terms of growth.

There has been no growth in these areas in the past 60 to 100 years. The Port of Prince Rupert has been up and down forever. When we were shipping coal from Tumbler Ridge to Rupert this was the big story of the day. 15 years later the coal dried up, and we started to ship Containers, however there are far less Container (tonnes) that there were coal. In addition container traffic could very well start dropping off because of the world recession, the increased competition from American Ports, the upgrading and building of new Ports in Mexico., and last but not least the widening of the Panama Canal, which should be finished in the next 5/6 years. The chance of Prince Rupert growing beyond where it is to-day in not very good.

The smelter was built in Kitimat because of the cheap power available. The bauxite was brought in from Ghana, or some other far off place because that is where it is mined. The Aluminum Ingots are shipped all over the world to various plants and made into finished products.

To suggest that plants should be built where the aluminum is produced sounds good, except that you would have bring in one hell of a lot of industry to produce these goods, and then you would have to ship the finished product all over the world to customers in highly populated areas.

Production costs, and transportation costs, for the finished product are the main reasons why this is not done.

Dont think for a minute that if building these plants in the Kitimat area was a feasible idea it wouldnt have already been done. These companies are not stupid. If they could make a dollar establishing in Kitimat they would be there. After all there is nothing stopping them.

So dont expect any big changes in either Prince Rupert, Kitimat, Terrace, or Prince George, because it is not going to happen.

You might get some big mines, and maybe a huge pulp mill on Highway 37 and the Stewart area, however that will be about it for this part of the Country.

Eurocan Pulp and Paper mills time has come. The production costs of their products are to high. The prices paid for them are to low. Transporation rates are to high, and the Canadian dollar is to high. These are just some of the problems facing not only them, but all other mills and mines in this area.

When you put to-gether the high cost of Transportation, Labour, Raw Materials, and Government, you have a recipe for disaster.
"Why do people always think of areas like Prince Rupert, Kitimat, etc; in terms of growth."

Because growth is what makes little towns into big towns. If you work there your children would find jobs in the newly added businesses and growing service industry, they would be able to get an education without leaving town. There would be an expanded base to support better healthcare facilities and so forth.
You could plan to retire in the home you worked for in the same town where your children and grandchildren live.

What's wrong with that?

Kitimat's original townsite was designed for a community of 75.000 with room to grow.

Of course, that did not happen.

Alcan used to ship a lot of its primary production (by rail) to Alcan plants in Eastern Canada where its own foil and extrusion plants did secondary manufacturing for the Canadian and the US markets.

The manufacturing could have been done just as easily in Kitimat because instead of shipping billets and huge slabs of primary aluminum the finished products could have been shipped south and east.

Of course, one's limits are set by one's own aspirations and creative thinking and planning and if everything is seen as impossible or impractible then nothing will ever happen, guaranteed.

Welcome to the missed opportunities of days gone by.

Diplomat. You make my point although you obviously missed it yourself,. The Ingots were shipped to Eastern Canada (Mainly Quebec) for secondary manufacturing for the Canadian and US Markets.

Its much cheaper to ship a finished product from back East to a huge populated area in the Eastern US than to ship it from Kitimat.

If one were to go along with your line of thinking we should build houses in Prince George and ship them to the US and Eastern Canada. This supposedly would be cheaper than shipping the lumber there, and then building the house. (Not bloody likely)

As far as growth in concerned, every little two bit town in North Central BC has the same plans for growth. ie; Tourism, Lumber, Pulp and Paper, Mines, etc; etc; etc;. Problem is we are not all going to grow, and in fact all towns in North Central BC have been decreasing in population for a number of years and will continue to do so.

People will have to move to the biggar Cities for jobs etc;, that is just a fact of life. Look at the US States like Conn. New Hampshire, Vermont, Maine, Mass. practically no growth in the last 30 years with mills closing etc; People have to move, or commute to continue to work.
I have to disagree with you. I don't think I missed anything and I certainly did not contradict myself.

Alcan shipped primary aluminum ingots from Kitimat to its own plants in Ontario.

Filling a boxcar with ingots isn't any different then filling an identical boxcar with aluminum extrusions. Both products are easily handled and do not spoil.

Kitimat would count its blessings if everyone had worked tirelessly over the last few decades to establish an Alcan know-how sponsored secondary aluminum manufacturing base there!

By everyone I mean the union, the city, the business community, the MLAs, etc.

I don't want this discussion to go off on a tangent and end up on a sour note, so I will just hang on to my positive opinions and let you handle the task of trying to find the predictable negativity worm in the apple!