COS Weekly Newsletter - Friday, 20 January 2023

The Prince Rupert Port Authority (PRPA) has reported that 24.6 million tonnes of cargo moved through the Port of Prince Rupert in 2022, two percent behind 2021 volumes. Growth at DP World's Fairview terminal saw a 2 percent decrease in its intermodal volumes due to congestion at inland ports that impacted operations and fluidity.

Demand for western Canadian energy products remained strong in 2022, with AltaGas’ Ridley Island Propane Export Terminal shipping 1.7 million tonnes, a 17 percent increase over 2021. Pembina’s Watson Island LPG Bulk Terminal entered its second year of operations, handling over 538,000 tonnes, a 45 percent jump year-over-year. Drax’s Westview Wood Pellet Terminal saw a 6 percent increase in volumes, with over 1.5 million tonnes sent to markets in Europe and Asia.

Saskatchewan, along with Manitoba, appeared virtually before the Federal Court on Wednesday to seek leave to intervene in a judicial review of the Vancouver Fraser Port Authority’s new gateway infrastructure fees. The fees range from eight to 40 cents per tonne for bulk, non-containerized cargo, including potash and grain, depending on the terminal through which the export is being processed. In response to this increase, a number of companies, including Viterra Canada Inc., are seeking a judicial review of the decision. Saskatchewan will provide a public interest perspective on the interpretation of what constitutes a fair and reasonable fee, based on a provision under the Canada Marine Act, which requires that the Vancouver Fraser Port Authority Board have representation from the prairie provinces, and the large amount of Saskatchewan exports processed through the Port of Vancouver.

The Port of Vancouver is critical for Saskatchewan exports. In 2020, approximately 44 percent of all Saskatchewan exports went through it, which represents a total value of $12.2 billion. This includes over $8 billion in agriculture and agri-food products and $2.9 billion in potash and potassium-based fertilizers. Approximately 22 percent of the collective metric tonnage of goods that went through the Port of Vancouver in 2020 were made up of Saskatchewan exports.

A coal company and a First Nation in British Columbia have struck a rare deal to give the community the power to veto a proposed mining project, which could set a precedent for how natural resources projects are developed in Canada. NWP Coal Canada and the Yaq̓it ʔa·knuqⱡi'it (YQT), also known as the Tobacco Plains Indian Band, describe the agreement as one of a kind and say it will give the First Nation the power to act as a "regulator and reviewer" of the company's proposed $400-million Crown Mountain coal mine near Elkford, in the southeast part of the province. The mine would produce coking coal, which is predominantly used for making steel. The project was first proposed in 2010, and construction could begin in 2025. Federal and provincial regulators are currently reviewing the possible environmental impacts of the project.  For the mine to proceed, the project will not only need federal and provincial approval, but it will now require the YQT's permission. Natural resources companies are required to consult Indigenous communities about large-scale development projects, but this deal could be ground-breaking as it gives the local community veto power to completely reject the proposal.

The British Columbia Ferry Services Board has announced that Nicolas Jimenez will be the next President and Chief Executive Officer of BC Ferries, effective March 6, 2023.  Mr. Jimenez, who is currently the President and CEO of the Insurance Corporation of B.C., was selected following an international executive search. Interim CEO Jill Sharland will return to her previous executive position as Vice President and Chief Financial Officer at BC Ferries.

Mr. Jimenez is a strong, strategic leader who led structural reforms at ICBC in recent years, returning the auto insurer to financial health and delivering more affordable insurance to customers. He has a Master's Degree in Public Administration from both Harvard University and the University of Victoria as well as a Bachelor's Degree in Political Science from Wilfrid Laurier University.  Over the last 20 years, Mr. Jimenez has held a number of senior roles at ICBC, taking over as President and CEO five years ago.

More than 100 jobs will resume at Paper Excellence’s Crofton Mill facility as the mill retools to manufacture new pulp products that reduce the need for single-use plastics. The Government of British Columbia and the Government of Canada are contributing a combined $18.8 million to join with Paper Excellence’s investment that will result in more than 100 people getting back to work at Crofton’s paper line. This funding supports a clean, innovative economy, while supporting jobs for people in the resource sector. It will aid in the production of water-resistant paper packaging to replace single-use plastics, increase the competitiveness of the Crofton mill, reduce waste from production, use fewer trees for the same volume of product, all while reducing greenhouse gas emissions.

The Honourable Jonathan Wilkinson, Minister of Natural Resources, concluded a trade mission which sought to position Canada as a key partner to Japan on energy security in the context of the global energy transition. The Minister highlighted opportunities for enhanced cooperation on hydrogen and critical minerals, while highlighting the progress on LNG Canada and underscoring the $30B in bilateral trade between the two countries in 2021. The Minister also commended Japanese leaders for their ongoing efforts to establish hydrogen and ammonia supply chains and infrastructure, as both countries work towards becoming carbon neutral by 2050. The trade mission featured 16 Canadian companies and organizations, including Indigenous businesses and representatives seeking to pursue commercial opportunities in the natural resource sector with a focus on clean energy. It also provided an opportunity to promote the mutual benefits that can be realized through strong partnerships between Japanese industry and Indigenous communities on major resource development projects.

On Thursday, Jan. 19, Port of Los Angeles Executive Director Gene Seroka gave his 2023 State of the Port speech to a live audience with more than 500 in attendance at the Los Angeles World Cruise Center. The annual event was presented by the Port of Los Angeles and Pacific Merchant Shipping Association. He announced cargo volumes of nearly 10 million TEUs for 2022, the second highest in the Port’s 115-year history. The achievement marks the 23rd consecutive year the Port of Los Angeles has been ranked the busiest container port in the nation. Seroka outlined priorities for 2023, pledging to focus on economic growth and job creation, improving the quality of life for surrounding Port communities, and furthering sustainable, zero-emission business operations.

BNSF Railway Company has revealed its plan to invest $3.96 billion this year to improve its operations. The largest component of this year's capital plan, $2.85 billion, is devoted to maintaining BNSF's core network and related assets. Investing in BNSF's existing infrastructure ensures the railroad is in top condition, which results in less unscheduled service outages that can slow down the rail network and reduce capacity. In the Pacific Northwest, BNSF will begin a multi-year project to add double track near Spokane, Washington, including over the Spokane River and by constructing a siding near Pasco, Washington.

India's government is preparing to impose a remarkable set of vessel age restrictions on all ships handling Indian cargo.  The restrictions would prevent Indian owners from buying and registering any ship over 20 years of age and would require deregistration after 25 years. Similar restrictions would be applied to foreign-flag tonnage when engaged in handling "EXIM/coastal cargo" at Indian ports or providing maritime services in the Indian EEZ. In addition, any foreign ship competing for Indian cargo would have to be less than 20 years old. This could have a serious impact on coastal and feeder services as some of the domestic shortsea or coastal service providers and feeder lines recently invested in second-hand vessels to capitalize on India's liberalized cabotage regime. Passenger vessels would be exempt.

Major coal producers are in talks with the government of New South Wales, Australia's most populous state, over its surprise plan to have miners reserve up to 10% of production for domestic supply, as part of efforts to curb soaring energy costs. Australia is seeking to drive down costs for households by capping gas and coal prices, which soared last year partly due to the Ukraine war and domestic factors. The New South Wales government is trying to boost the effort on the coal front by beefing up domestic supply of coal, most of which gets exported.

A ceremony for the naming and delivery of the Cypress Sun, a dual-fuel methanol carrier that can run on either methanol or conventional heavy fuel oil, was held at Hyundai Mipo Dockyard on Tuesday (17 January). The 49,999 DWT vessel will be chartered by MOL from Osaka Shipping Co. and Waterfront Shipping Company will charter the vessel from MOL under a long-term contract.

The Cypress Sun is a sister ship to the Capilano Sun, which was delivered in 2021 and also chartered by MOL to Waterfront Shipping Company.  The delivery of Cypress Sun brings the number of methanol carriers in MOL’s fleet to 19. MOL has been expanding the number of dual-fuel vessels, which can run on methanol, since 2016. The company currently operates five of the 23 methanol dual-fuel tankers in service worldwide, including the Cypress Sun.

It is estimated that methanol fuel can reduce sulphur oxide (SOx) emissions by up to 99%, particulate matter (PM) emissions by up to 95%, nitrogen oxide (NOx) emissions by up to 80%, and carbon dioxide (CO2) emissions by up to 15% in comparison to burning conventional marine fuel.