It was almost 20 years ago that Prince Rupert Mayor Jack Mussallem got the call informing him Repap British Columbia was shutting down its forestry operations after years of financial troubles.
“I sank in my chair, and today when I look at myself periodically I notice the odd grey hair, which I think was from that,” he recalled.
The Skeena Cellulose pulp mill on Prince Rupert's Watson Island fell under the province's control after Repap BC's collapse. It managed to hang on another five years before closing in 2001 and taking 700 jobs with it.
“It created a lot of economic as well as emotional upheaval here,” Mussallem said.
Prince Rupert's population plummeted 27% between 1996 and 2011, dropping from 17,000 to 12,500.
But the mayor said there's now room for optimism as energy companies examine the city's potential for liquefied natural gas (LNG) facilities and the Prince Rupert Port Authority (PRPA) undergoes massive growth to accommodate Asian shipping demands.
The PRPA reported a profit of $16.5 million in 2013, up from $13.8 million in 2012 and $10 million in 2011.
In all, profit at the port has jumped 450% since 2010, when it posted just $3 million.
Meanwhile, the port generates about 2,300 jobs directly, according to an economic impact study published in 2012. Nearly 50% of those jobs are linked to the rail or trucking industries as cargo is shipped in and out of the port facilities.
In March 2013, construction began on a $90 million rail and road system to increase capacity between the terminal on Ridley Island and the city's mainland as demand for coal continues to boom in Asian markets.
In 2013, coal accounted for 88% of Ridley Terminal Inc.'s (RTI) handling volume as the Crown corporation posted a net operating profit of $65 million.
The increased coal demand drove the 41% jump in profits compared with 2012, when the terminal generated $46 million in net profit.
Since 2009, annual RTI revenue has climbed to $131 million from $25 million – a 424% jump.
The terminal opened in 1983 and previously serviced coal mines in northern B.C.
It began receiving coal from southeastern B.C. in 2010, and U.S. markets began shipping coal to RTI the following year.
Representatives from Ridley declined to comment on the terminal's $200 million expansion plans following the federal government's December 2013 announcement that it was selling the Crown corporation.
The expansion aimed to more than double annual throughput to 25 million tonnes from 12 million by the end of 2014.
Angela Waterman, vice-president of environment at the Mining Association of BC, noted the port's massive growth rests mainly on the failures of U.S. port cities to maintain coal-exporting capacity.
The Los Angeles Export Terminal (LAXT) opened in 1997 at a time when the coal markets were dropping.
By 2006, LAXT had shut down operations. The facility has since been demolished to make way for a pipeline project.
“Now they're having to ship [coal] through the northwest of Canada.”
Waterman added that Prince Rupert will continue to grow even though the per-tonne price of metallurgical coal has dropped to approximately US$125 in 2014 from about US$300 in 2011.
“China has a huge population, the middle class is going to continue to grow. There will be ups and downs, but over the long term I believe the demand [for coal] will be sustained.”
Meanwhile, energy giant Petronas is proposing to build an LNG facility on PRPA land. The company has said it would invest $11 billion in the Pacific NorthWest LNG project, creating about 330 permanent jobs and as many as 4,500 construction jobs as it's built.
The BG Group is also negotiating with the PRPA to secure land where it could develop a $10 billion LNG facility that would generate 400 to 600 permanent and up to 6,000 construction-related jobs.
But the unrealized potential of the shuttered Skeena Cellulose plant on Watson Island still haunts the city.
The site is at the centre of a lawsuit between the city and a potential buyer, which has halted plans to develop a bulk cargo terminal and industrial park on the island.
It still sits vacant even after port facilities around the city have boomed.
While cruise ships, recreational fishing and increased shipping to Asia have helped Prince Rupert recover over the past 13 years, Mussallem said the local economy hasn't been the same since Skeena closed.
“On one hand, we have all this other activity, and we've had a hell of a time dealing with Watson Island.”
