licker of hope for northwest natural gas: Northwestern Ontario community's industrial push stalled by energy board decision.

• Author: Ross, Ian
• Position: NEWS

Sioux Lookout Mayor Doug Lawrance has fleeting hopes that his town's plan for a $65-million natural gas pipeline will reach his northwestern Ontario community.

Located 70 kilometres off the Trans-Canada Highway, his is one of 21 communities and numerous First Nations in the region that don't have direct access to piped natural gas.

A decision by the Ontario Energy Board (OEB) in November dictated that communities wanting to bring natural gas services to local homes and businesses will be saddled with the full costs of the expansion.

The energy regulator's ruling outraged regional chamber of commerce, policy and municipal groups who argue that those costs should be shared across the entire ratepayer base of the province.

The decision hasn't totally killed the gas project, said Lawrance, "but if we want it, we have to pay for it ourselves," an unaffordable scenario given the town of 5,000's limited the residential and business base.

Without being in "lockstep" with a committed industry partner, he said, there is faint hope "that we're going to get natural gas anytime soon."

The community has pinned its natural gas hopes that Rockex Mining's proposal for a hot briquetted iron (HBI) processing plant, creating hundreds of jobs on the town's outskirts, would create a business case to justify construction of the pipeline.

In attending last spring's OEB hearings, Lawrance thought Sioux Lookout delivered a compelling case, even further suggesting that a liquefied natural gas plant be established in town--once the pipeline was in place--to feed outlying communities to the north.

"We were disappointed when we heard this. When natural gas was originally put in the province, I'm sure there were subsidies that spread across many pockets."

He believes what ultimately influenced the OEB's decision was a lack of available provincial program funding.

In 2015, three ministries jointly introduced the $200-million Natural Gas Access Loan program in an attempt to encourage those communities, not serviced by natural gas, to bring forth expansion plans.

"It was pretty unlikely they were going to put a third of that into one pipeline to one community," said Lawrance.

Adding natural gas is critical to attracting private investment to expand the local economic base, he said. "It opens the door for many industries that might not consider it otherwise."

Pierre Gagne, chairman of Rockex Mining, said should his company advance its $3.8-billion open-pit iron ore mine and...