THE MAKICHUK REPORT

Dave Makichuk

Welcome to the world of REEF

Most Canadians, know who Connor McDavid is.

Most Canadians, know who Connor Bedard is.

And, well … most Canadians know who Howie Mandel is, right?

Household words.

But do any Canadians, know what REEF is? Probably not.

The Ridley Island Energy Export Facility project, a large-scale terminal near Prince Rupert, B.C., being built by AltaGas to export liquefied petroleum gas (LPG) and other bulk liquids to global markets.

Did you know it is providing valuable propane to Japan? No, not for barbecues, but for crucial energy demands in the Asian nation.

Japan uses propane (LP gas) for a wide range of purposes, including household use for cooking, water heating, and room heating, as well as for a majority of taxis, industrial applications, and as a raw material for town gas production.

Construction is progressing, with a target startup around the end of 2026. The project involves building significant infrastructure, including large storage tanks.

And it just so happens that Resource Works CEO Stewart Muir, paid a visit this past week to get a close-up look at a part of Canada’s export story that almost nobody talks about: a brand-new accumulator tank built to hold chilled propane and butane.

“It’s the largest of its kind anywhere. Two more are on the way, and together they’ll form a critical piece of the AltaGas Ltd. REEF project,” Muir said in a report.

”What stood out to me is the larger pattern: projects like this only happen because of the crown jewel of the B.C. economy — the Montney Formation.”

“It’s the triple-word-score of Canadian resource development: LNG, valuable natural gas liquids like propane, and the diluent streams that help unlock Canada’s single biggest export category, crude oil.”

Like the oilsands, the industry has long known about the Montney formation, which stretches 130,000 square kilometres in a football-shaped diagonal from northeast British Columbia into northwest Alberta.

According to CBC News, underneath this huge tract of land, the National Energy Board (NEB) estimates there’s 90 billion barrels of oil equivalent (boe), most of it natural gas. That’s more than half the size of the oilsands, yet the Montney has received only a fraction of the attention, at least from the public at large.

For oil and gas types, the gold rush is on.

Without question, and despite the ire of green groups who seem to be against any kind of resource development in Canada, the Montney is the quiet force multiplier behind local jobs, municipal tax bases, and the national balance of trade.

And it’s all being done at the highest environmental standard, with producers like Tourmaline Oil Corp already posting a 41% reduction in CO2 emission intensity and a target of 55% less methane emission intensity.

”Congrats to AltaGas for pushing this project forward, and a nod as well to other major employers on the North Coast — Trigon, CN and Pembina, writes Muir.

“Quietly and steadily, they’re building the future prosperity of Canadians. And thanks to Mayor Herb Pond, who took the time to walk us through the regional dynamics that make this corridor such a strategic asset.”

Muir was gobsmacked by the size of the project.

Sources say Alberta’s midstream bottleneck and rapid growth of Shale oil and gas exploration and production, has created an absolute glut in ethane, propane and butane. Ridley Island takes this glut and transports it to the Prince Rupert region by railcar and exports to Asian markets.

Ridley Island’s current export capacity of 92,000 bpd is undergoing aggressive expansion to growth by another 115,000 bpd over the next few years in two more phases of construction.

Recent images detail active construction efforts of the storage, jetty and rail infrastructure.

Alas, every issue that threatens to derail the ambitions of Canada’s oil and gas industry — access to market, First Nations land rights, public acceptance of infrastructure projects and, especially, the climate consequences of burning fossil fuels — is writ large in the Montney.

There are now seven separate lawsuits, and threats of further escalation, centred on claims by the Lax Kw’alaams and Metlakatla First Nations (collectively the Coast Tsimshian) that they were misled and lied to by the Crown when they agreed to developments on their traditional lands at Prince Rupert, John Ivison at the National Post reported.

The dispute over a future propane export facility at the port has spread to other resource projects, and the two First Nations have launched lawsuits against the Ksi Lisims LNG project that was one of the Liberal government’s major projects announced by the prime minister last week.

Further, the conflict threatens to negatively impact any plans Ottawa and the province of Alberta have to build an oil pipeline to the port.

Prime Minister Mark Carney’s recent announcements giving the green light to Alberta’s oil & gas industry has stirred the energy pot to new levels.

B.C. Premier David Eby — who prides himself on Indigenous virtue signalling — is pissed off. It appears he was largely left out of the loop and he is digging in.

Eby said the B.C. government needs to make sure this pipeline project doesn’t become an “energy vampire.”

“With all of the variables that have yet to be fulfilled — no proponent, no route, no money, no First Nations support — that it cannot draw limited federal resources, limited Indigenous governance resources, limited provincial resources away from the real projects that will employ people,” Eby added.

B.C.’s Coastal First Nations also say they will use “every tool in their toolbox” to keep oil tankers out of the northern coastal waters.

It is now apparent that all roads, or, shall we say, pipelines, lead to Prince Rupert.

The feds now face an imposing uphill battle, to leverage their standing as a regulator and resolve a dispute that threatens Canada’s crucial growth agenda.

— with files from CBC News, National Post