All posts by Common Sense Canadian

Fortis, US mull massive Similkameen dam; Where is BC govt?

July 2, 2014Hydropower, WATERfeaturedCommon Sense Canadian

US, Canadian dams threaten Similkameen Valley-BC govt doesn't care — A popular recreation site, the Similkameen Valley is threatened by dams (Photo: SimilkameenValley.com)

By Ken Farquharson

The Similkameen River valley provides one of the most popular and scenic travel routes in BC. The campsites strung along the river, swimming at Bromley Rock, the old mining town of Hedley, the fruit stands of Keremeos, the wineries of Cawston, and the transition to the sage brush of the Okanagan, make for a varied and memorable BC travel experience. The river provides kayak and canoe runs for both the expert and the novice, and is one of only two free flowing transboundary rivers in southern BC that is not either managed for hydropower or in protected status of some sort.

However all is not serene in the Similkameen Valley, and the cause of this is the curious lack of interest of the BC government to protect the public interest in proposals to change the Similkameen River, the heart of the Valley.

BC govt sitting on sidelines of proposed US dam

The story starts in 2007 when the Okanogan Public Utility District, the small utility serving Okanogan County in Washington, applied to the US Federal Energy Regulatory Commission (FERC) to study a dam proposed at Shankers Bend in Washington, which would flood the BC section of the Similkameen valley as far upstream as Cawston.

Given the lesson learned from the argument over the Skagit Valley from 1969 to 1983 that it is essential to participate early in the regulatory process, the Okanagan Nation Alliance (ONA) and the Canadian Parks and Wilderness Society ( CPAWS) immediately filed with FERC as intervenors. The BC government sat back, and, although Minister Barry Penner was made well aware of the potential impacts in BC, declined to file as an intervenor leaving it to the ONA, CPAWS and the Regional District of Okanagan-Similkameen to register their objections. The PUD eventually withdrew its application.

Fortis applies for 165m-high dam on Similkameen

In 2013, Fortis BC, the local utility, applied for permits to conduct studies on the Crown land required for the reservoir ( 20km long) and the dam site for a 165m-high concrete dam in the Similkameen Canyon, 15km upstream from Princeton, with a generation capacity of 45-55MW. If the final proposed capacity is below 50MW, the project may not be required to go through the environmental assessment process. As the plant is proposed as a market generator, it would not have to be reviewed by the BC Utilities Commission, as the cost would not be rolled into the utility’s rate base. It is possible the project could escape review entirely.

Map of proposed dam site on the Similkameen River

Fortis conceded in a meeting with the Regional District on 22 May this year that the project may not be economical based on generation alone and that it had already approached downstream parties in the US with interests in generation and irrigation as to whether they would be prepared to pay for the downstream benefits created by the project.

This action was confirmed by information that the Washington State Department of Ecology had allocated $1.6M in its budget for 2015-17 for a payment to Fortis for “Evaluation of a proposed hydropower and water supply….shared cost and water supply for Washington and Oregon” – no mention of BC needs.

This allotment was confirmed by the Director, Office of the Columbia River, Washington Department of Ecology, to Steve Arstad, editor of the Keremeos Review, on 9 June, when he advised that

[quote]Fortis was interested in developing a contract with us for scheduled releases of some of the water stored behind the dam. The timing of the releases would coincide with when water would be needed in Washington for instream and out-of-stream uses. The term of the contract would be for 50 years.[/quote]

It is clear, therefore, that if the project proceeds, control of the river would pass to Fortis and downstream US interests.

Fortis would be sole beneficiary of agreements

The Columbia River Treaty gave BC half the value of the downstream benefits in the US from provision of water storage in BC. The province took that money for itself. Queries to the BC Comptroller of Water Resources resulted in advice that, for this project, the province was leaving Fortis to negotiate any downstream agreements, and that Fortis would be the sole beneficiary of these agreements. It should be noted that any agreement made between Fortis and US interests will be between private parties and thus not subject to Freedom of Information requests.

The BC Water Regulations allow the province to collect a fee from any licensee benefiting from payments from downstream generators in the US for benefits received for power generation, but have no such provision for benefits generated from flood control or water storage.

Province derelict of duty

In respect to this project, the province appears derelict in its management of the river in a number of ways, permitting Fortis to negotiate contracts that would mean control passing to US interests, not ensuring that the province would benefit from all downstream benefits, and lastly not having done the work to determine the future water needs of the BC section of the Similkameen Valley before contracts may be signed for water storage for US interests. It is possible BC interests could be locked out of access to such storage if it had all been negotiated away by Fortis.

There is already enough evidence to state that Fortis should be advised now by the province that this project is not in the public interest. Should the province continue to dither, there is a real risk that BC could lose control of this valued river, a public resource, for a sub-marginal project, with the benefits going solely to the shareholders of Fortis and downstream interests in Washington. The people of BC surely deserve better from our politicians and bureaucrats in planning for the future of this beautiful river and valley.

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Is Harper setting up BC govt to reject Northern Gateway?

June 29, 2014Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, PoliticsfeaturedCommon Sense Canadian

Is Harper setting up BC govt to reject Northern Gateway — Christy Clark photo: Darryl Dyck/CP)

By Geoff Salomons

To many, the recent decision by the Harper Government to approve the proposed Enbridge Northern Gateway pipeline – a project it has so emphatically been pushing – is not surprising at all. What was surprising was the relative lack of fanfare in which the announcement was released. As Jennifer Ditchburn noted, there was no MP, let alone the minister responsible, to make the announcement: just a simple press release four paragraphs long entitled “Government of Canada Accepts Recommendation to Impose 209 Conditions on Northern Gateway Proposal”.

In this release, the government highlighted the role of the (emphasized) independent panel in making the recommendation. It noted that this is another step in a long, thorough process. It urged Enbridge now to demonstrate how it will meet the 209 conditions the independent panel put forth, as well as the additional work Enbridge has to do to “fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route” (ignore for a moment the fact that the “duty to consult” is 1) the Crown’s responsibility, not Enbridge’s; or 2) one would assume extends to Coastal First Nations that are adamantly opposed to the pipeline due to spill potential, and isn’t restricted to First Nations living along the pipeline Right-of-Way). Finally, it stated:

[quote]It [Enbridge] will also have to apply for regulatory permits and authorizations from federal and provincial governments.[/quote]

Enbridge faces big hurdles with First Nations

All of this seems all well and good. Shortly thereafter, the First Nation groups stood up to voice their continued opposition and, to be clear, the “duty to consult” provision will likely be the most difficult hurdle for Enbridge to overcome – especially in light of the Supreme Court’s Tsilhqot’in decision, which closely followed the Enbridge announcement.

What was more intriguing for me was the response from BC Environment Minister Mary Polak. She noted that this was just the first of BC’s five previously stated conditions. She then went on to note that “the Federal government also highlights the fact that there are important permitting decisions that are properly the jurisdiction of the provinces.” Interesting.

Harper couldn’t reject Enbridge

What is interesting is that in no plausible scenario could Stephen Harper reject the Northern Gateway pipeline, given this government’s behaviour in backing the oil industry generally speaking, doing its best to discredit environmental opposition and going so far as to label such opposition “radicals” with an ideological agenda, and criticizing the Obama administration for delaying its decision on Keystone XL.

Once the Joint Review Panel gave its approval – subject to its conditions – the door was wide open. The problem is the political opposition, not only within the “radical” environmental circles, but broadly speaking in British Columbia is increasing. 300 scholars signed a letter arguing that the Joint Review Panel was fundamentally flawed, particularly because it included upstream oil sands development as a benefit, while excluding the environmental and climactic costs associated with such development.

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Numerous polls have come out showing increasing opposition to the project (to be fair, the polls do vary, depending on whether pro-pipeline or anti-pipeline framing is given to the questions – yet even the most pipeline-friendly polling questions show 50% opposition). If Harper rejects the project based on political calculations, it looks bad, particularly to his base in Alberta. If he approves the project, he potentially loses BC in the 2015 election, which doesn’t look bad, it is bad.

The question is whether the Northern Gateway project has become such a political landmine that Harper has essentially written it off (knowing the likely outcome of First Nation challenges in court) and is searching for a way to reject the project, without him rejecting the project.

Where does BC govt stand?

Enter British Columbia. It is at this point that the comments made by BC Environment Minister Polak seem much more significant. Opposition to Northern Gateway is significant. Christy Clark has issued five conditions which must be achieved in order for her to approve the project. One of them – “Ensuring British Columbia receives its fair share” – seems almost impossible, given the structure of federal equalization payments.

In either case, it is a way for Premier Clark to publicly look like she is saying “help me find a way to yes” when she knows, politically, that she’ll have to reject it anyway. If public opinion in BC is truly in opposition to the extent that it seems, and the Federal Government’s press release makes me think that it is, then rejecting the pipeline is a political win for Premier Clark.

In addition, it would take the Northern Gateway off Stephen Harper’s agenda and let him focus his attention on other, less politically volatile pipeline proposals. The emphasis of the provincial role in issuing permits by the federal government, and shortly thereafter re-emphasized by Minister Polak could very well be coincidental. Unless this is exactly what Stephen Harper wants.

Geoff Salomons is a University of Alberta Political Science PhD student studying environmental policy, democratic theory and long-term policy problems.

300 scholars to Harper: Enbridge recommendation based on junk science

June 3, 2014Energy and Resources, Oil&Gas, Pipelines and Supertankers, UncategorizedfeaturedCommon Sense Canadian

In an open letter, 300 scholars poke holes in the Joint Review Panel’s recommendation of the proposed Enbridge pipeline, urging PM Stephen Harper to reject its final report.

May 26, 2014

Dear Prime Minister Harper:

Based on the evidence presented below, we, the undersigned scholars, have concluded that the Joint Review Panel’s (JRP) assessment of the Northern Gateway Project (the Project) represents a flawed analysis of the risks and benefits to British Columbia’s environment and society. Consequently, the JRP report should not serve as the basis for concluding that the Northern Gateway Project is in the best interests of Canadians. We urge you in the strongest possible terms to reject this report.

The Canadian electorate expected the JRP ruling to present a balanced and appropriate consideration of the risks and benefits of the Project, drawing upon the best available evidence, and expressing a cogent rationale for the final ruling.

By our analysis, the Canadian electorate received a ruling that is not balanced or defensible due to five major flaws. The Panel’s review:

Failed to adequately articulate the rationale for its findings,
Considered only a narrow set of risks but a broad array of benefits, thereby omitting adequate consideration of key issues,
Relied on information from the proponent, without external evaluation,
Contradicted scientific evidence contained in official government documents,
Treated uncertain risks as unimportant risks, and assumed these would be negated by the proponent’s yet-to-be-developed mitigation measures.

Below, we expand on these five fundamental flaws that invalidate the report as an appropriate basis for your Cabinet to approve the Project.

1. Failure to articulate a rationale

The panel failed to articulate a rationale for numerous findings, and failed to satisfy the criteria of “justification, transparency and intelligibility” expected of administrative tribunals. Such a rationale is fundamental to both scientific and legal judgment. The Panel’s charge was to determine whether the Project is in the public interest of British Columbians and Canadians, based on a critical analysis of the Project’s economic, environmental and social benefits, costs and risks over the long term. Instead of such a balanced consideration, the panel justified its recommendation of the project by summarizing the panel’s understanding of environmental burdens in five short paragraphs and judging that these adverse environmental outcomes were outweighed by the potential societal and economic benefits. Without a rationale for why the expected benefits justify the risks (e.g., why must an environmental effect be certain and/or permanently widespread to outweigh economic benefits that themselves are subject to some uncertainty?), any ruling of overall public interest is unsupportable.

2. Consideration of narrow risks but broad benefits, omission of key issues

The panel included in its deliberation a broad view of the economic benefits, but an asymmetrically narrow view of the environmental risks and costs. The need for the Project as stipulated by Enbridge includes consideration of the enhanced revenues that would accrue from higher prices for oil sands products in Asian markets. These enhanced revenues are benefits to producers from production. The environmental risks, however, were only considered if they are associated with transport, not production or later burning/consumption. All negative effects associated with the enhanced production of oil sands bitumen, or the burning of such products in Asia, were excluded, as were greenhouse gas emissions generally. This exclusion of the project’s contributions to increased atmospheric emissions undermines Canada’s formal international commitments and federal policies on greenhouse emissions. Other key issues omitted include the difficulty of containing freshwater spills under ice, as has already been demonstrated on the Athabasca River from oil sands developments.

3. Reliance on information from the Proponent, without external evaluation

On critical issues, the panel relied on information from the proponent without external assessment. For example, on the pivotal matter of the risks of a diluted bitumen tanker spill, the panel concluded that a major spill was unlikely. Yet, a professional engineers’ report concluded that the quantitative risk assessment upon which the panel relied was so flawed as to provide no meaningful results. Regarding the consequences of such a spill, the panel relied on the proponent’s modeling to conclude that the adverse consequences of a spill would not be widespread or permanent, even as it acknowledged that there is much uncertainty about the behavior of diluted bitumen in the marine environment. That modeling discounted the prospect that diluted bitumen could be transported long distance by currents, when the product submerges, as it does under a wide range of conditions. Thus, the panel may have underestimated the scale of potential damages. Because the proponent is in a clear conflict of interest, an independent assessment of potential oil spill damage should have been commissioned.

4. Contradiction of official government documents

A decision on the potential for significant adverse environmental effects on any species or habitat must be consistent with the government’s own official documents. The panel’s conclusions that marine mammals in general will not suffer significant adverse cumulative effects stands in direct contradiction to the government’s own management and recovery plans. For example, the Recovery Plan for large whales (blue, fin, and sei whales—species-at-risk under the federal Species at Risk Act, SARA) lists “collisions with vessels, noise from industrial … activities, [and] pollution” as imminent threats —all three threats are associated with the NGP proposal. Contamination has also been identified as a threat for other marine mammals: the management plans for both the sea otter and the Steller sea lion identify a risk from marine contamination—in particular the acute effects of large oil spills, but also from the toxicity of smaller, chronic spills that are likely to increase proportionally with vessel traffic. The panel also failed to account for newly identified critical habitat of the humpback whale and failed to specify how the proponent’s mitigation plan would reduce the significant risks from increased shipping, a serious threat identified in the recently published Recovery Strategy for the species. A plan to manage the threats to the species and its habitat is a legal requirement given that the humpback whale is a species of Special Concern under SARA.

5. Inappropriate treatment of uncertain risks, and reliance on yet-to-be-developed mitigation measures

The panel effectively treated uncertain risks as unimportant. For instance, Northern Gateway omitted specified mitigation plans for numerous environmental damages or accidents. This omission produced fundamental uncertainties about the environmental impacts of Northern Gateway’s proposal (associated with the behaviour of bitumen in saltwater, adequate dispersion modeling, etc.). The panel recognized these fundamental uncertainties, but sought to remedy them by demanding the future submission of plans. However, the panel described no mechanism by which the evaluation of these plans could reverse their ruling. Since these uncertainties are primarily a product of omitted mitigation plans, such plans should have been required and evaluated before the JRP report was issued. To assume that such uncertainties would not influence the final decision of the panel, is to sanction the proponent’s strategic omissions, and effectively discount these potentially significant risks of the Project, to the detriment of the interests of the Canadian public.

Conclusion

The JRP report could have offered guidance, both to concerned Canadians in forming their opinions on the project and to the federal government in its official decision. However, given the major flaws detailed above, the report does not provide the needed guidance. Rather, the JRP’s conclusion—that Canadians would be better off with than without the Northern Gateway Project given all “environmental, social, and economic considerations”xvii—stands unsupported.

Given such flaws, the JRP report is indefensible as a basis to judge in favour of the Project.

Sincerely,

Kai MA Chan – Associate Professor, University of British Columbia

Anne Salomon – Assistant Professor, Simon Fraser University

Eric B. Taylor – Professor, University of British Columbia

Read original letter with 300 additional signatories and supporting evidence here.

Read: Engineers poke holes in Enbridge tanker safety

Read: It’s all about the economy…no evidence required

Corky Evans: How YOU can help save the ALR in 5 min

May 9, 2014Farmland and Food Security, Food, UncategorizedfeaturedCommon Sense Canadian

Corky Evans-Our last chance to save the ALR — Former BC Environment Minister Corky Evans (Photo: Alex Hanson)

An Open Letter to Almost Everybody:

My name is Corky Evans. I garden and farm in the Kootenays of B.C. Many years ago I was the Minister of Agriculture.

I do not understand popular culture or electronic communication. I have not learned to do Facebook. What I have been told is that when people find something interesting from someone they trust, they send it on to other people and in this way it is possible to engage more people, faster, than ever before.

I have decided that this technology that I do not understand may be the last chance we have to influence the Government of B. C. not to dismantle the historical protection of farmland where we live.

All you need to know

I am not going to try to explain the issue or the history or the legislation that is being debated in Victoria as I write. You do not have to know that stuff to know that food is important and that land to grow food on needs to be protected from being paved over. That is all you need to know. For forty years we have had rules in B.C. that protected farm land pretty well. This week the Government is trying to pass a law that will destroy the protection of farmland.

The Government didn’t think up this idea. They got it from the Fraser Institute. You may have heard of those people. They represent the largest Corporations and Banks in the Province. They are not known for caring a great deal about public policy. They will get richer paving farmland than by leaving it alone.

Bad law

I think lots of the MLAs in Victoria know this law they are debating is a bad law. The law is opposed by Greens, New Democrats and Independents. They are, as I write, trying to delay passage to give citizens a chance to learn what is happening and react. I think it also opposed by some Liberal members who are too afraid to speak publicly.

You can research everything I am saying if you have time. If you don’t have time, and if you got this letter from someone you trust, I beg you to take 5 minutes to try and stop this law. I do not care, by the way, if it is stopped forever. I just want it stopped until citizens understand what is happening and get to have a say before the Government wrecks something of great importance for our shared future.

Take action

If you have 5 minutes here is what you do: You look in the phone book for the number of your MLA and call them and say you don’t want them to pass Bill 24. Or you send them an e-mail by looking here to find their address. Then you send this request to the people who trust your judgement enough to read it.

This probably won’t work. I am asking, though, because nothing else will. In a week or so we will all know how it turned out.

Thank you for reading this.

Sincerely,

Corky Evans

Winlaw, BC

Parks Act changed for Kinder Morgan’s illegal pipeline research?

April 14, 2014Energy and Resources, Pipelines and SupertankersfeaturedCommon Sense Canadian

By Andrew Gage

You may have heard about controversial amendments to the Park Act by way of Bill 4, the Park Amendment Act, which critics say are to allow industrial “research,” or even industrial activity, in B.C. parks.

Over 160,000 people have signed a petition opposing Bill 4. However, B.C. Environment Minister Mary Polak insists that the types of research to be allowed are minor, and that the amendments have nothing whatsoever to do with allowing pipelines in B.C. parks.

Kinder Morgan was illegally researching pipeline

Before Bill 4, any research done in a park had to be “necessary for the preservation or maintenance of the recreational values of the park involved.” But as we’ve recently learned, pipeline giant Kinder Morgan has, with a permit from the B.C. government, been conducting research in B.C. parks for their pipeline expansion project since November 2013, four months before Bill 4 was introduced.

As you read this, researchers hired by Trans Mountain L.P., a subsidiary of Kinder Morgan, are already at work evaluating the feasibility of building its controversial pipeline expansion through five B.C. parks and protected areas, taking soil samples and electro-shocking fish.

The eventual aim is to have these lands taken out of the parks. In some cases the new pipeline will widen the right of way through the park alongside the existing Kinder Morgan oil pipeline, but in other cases entirely new pipeline routes through parks are being considered.

Government admits permits were illegal

This work was authorized by the Ministry of Environment in November 2013, through a park use permit allowing Trans Mountain to conduct “research” related to pipeline construction in Finn Creek Provincial Park, North Thompson River Provincial Park, Lac Du Bois Grasslands Protected Area, Coquihalla Summit Recreation Area and Bridal Veil Falls Provincial Park.

The B.C. government has recently admitted that this industrial park use permit was likely illegal under the Park Act. That’s because the legislation gives B.C. parks a high level of legal protection (who knew?), requiring (as mentioned above) that activities provide a benefit to the park.

So with no public consultation it rushed through Bill 4, the Park Amendment Act. In the legislature, Polak, the environment minister, admitted:

[quote]The reason we brought forward the amendment — and I would say one of the reasons that the consultation has not been aggressive or thorough on this — is that we are seeking to ensure that we have the statutory authority for things that up until now we took for granted that we did….

We’ve been advised that the granting of the permits as we have done likely would not stand the test of a [court] review, and therefore, we need to amend the Park Act to ensure that we can continue on with what we have been doing but with the statutory authority so that we would not be in a case where either the granting of or the denial of the application for a permit could be successfully challenged and overturned based on our lack of authority. [Emphasis added][/quote]

Bill 4 paves path for large-scale industrial activity in parks

Bill 4 explicitly allows the environment minister to authorize research into the “the feasibility of the location, design, construction, use, maintenance … of a pipeline,” and research intended to “inform a [government] decision … in relation to the boundaries of the protected area.” The government has suggested that the Bill 4 amendments were mostly for the film industry or low impact academic research. But Bill 4 is clearly equally about large-scale industrial development, such as the pipeline development being investigated by Kinder Morgan.

Surprisingly, while the government acknowledges that Bill 4 is about authorizing permits like the Kinder Morgan park use permit in future, it does not correct the legal error for a permit issued in November. So in our view, Kinder Morgan continues to be acting under an illegal permit.

Agricultural land to be plowed under for industry too

Meanwhile, following on the heels of Bill 4, the B.C. government has introduced legislation (Bill 24, the Agricultural Land Commission Amendment Act) to make industrial activity and urban development on most lands in B.C.’s agricultural land reserve (ALR) easier, threatening B.C.’s food security.

We hope that these two bills are not part of a broader trend towards weakening laws intended to protect the environment and public values in order to give industry more “flexibility.”

Minister Polak and B.C. Premier Christy Clark need to stand up for our parks. They can start by revoking the illegal Kinder Morgan permit, and by committing not to change B.C.’s laws to accommodate industrial development.

Andrew Gage is an environmental lawyer at West Coast Environmental Law. Follow West Coast Environmental Law on Twitter @WCELaw

Transport industry driving a ‘SmartWay’ to tackle emissions

April 4, 2014Urban & TransportfeaturedCommon Sense Canadian

by Jesse Yardley

An innovative new method for tracking the transport industry’s fuel consumption may hold the key to reducing carbon emissions, according to a group of academics and industry representatives.

Government partner Natural Resources Canada explains, “The SmartWay Transport Partnership is a collaboration designed to help businesses reduce fuel costs while transporting goods in the cleanest most efficient way possible.”

Originally developed in 2004 by the US Environmental Protection Agency, the program was adopted in Canada in 2012 by the Supply Chain Management Association (SCMA) and Natural Resources Canada. It offers shippers the opportunity to choose carriers based on their emissions rating – the transportation equivalent of “Certified Organic” food labelling.

SmartWay enables companies to measure vital emission factors such as fuel consumption, mileage and payload data. Once collected and entered into the system, the data is available for review by shippers who want to lower their carbon footprint.

[quote]Historically, shippers have focused on cost, service and quality when choosing a carrier. However, sustainability has a chance of becoming a fourth consideration on par with the others.[/quote]

Climate scholars, government embrace program

The transportation industry is one of the biggest producers of climate change-causing CO₂, says UBC associate professor and logistics expert Garland Chow. In Canada, the sector contributes 25% of the country’s greenhouse gas emissions, according to the federal government.

Last year, with the financial support of Natural Resources Canada, the SCMA’s Chow led a nationwide survey of 169 shippers and logistics providers. The results, published in January, provide valuable insight into how Canadian companies view sustainability and make decisions affecting greenhouse gas emissions.

Helping industry go green

SCMA project manager Alison Toscano says the transportation industry is responsible for a large and “growing share” of air pollutants, which is why SCMA has been holding information sessions across Canada to show companies how they can be more green.

“SCMA has also been conducting one-on-one meetings with target companies to make them aware of the program,” says Toscano.

In the first quarter of 2014, meetings have been held across Canada in Vancouver, Calgary, Toronto, Montreal and Halifax.

“Our motivation is to encourage industry to be more green,” Chow says.

Sustainability becomes a consideration for shippers and carriers

Historically, shippers have focused on cost, service and quality when choosing a carrier. However, sustainability has a chance of becoming a fourth consideration on par with the others.

Both shippers and carriers can make use of SmartWay in their own unique ways.

Natural Resources Canada explains the value of the program as follows:

Shippers can use SmartWay to:

Compare the environmental performance of carriers

Calculate their freight carbon footprint

Qualify to use the SmartWay Transport Partnership logo

Carriers can use SmartWay to:

Market themselves to shippers that are concerned about emissions

Benchmark themselves against industry peers

Qualify to use the SmartWay Transport Partnership logo

Shippers, as the customer, can put pressure on individual carriers to be more sustainable when they transport goods.

But it won’t be easy. Chow says fewer than 5% of the companies surveyed would be willing to make capital investments – such as buying more fuel efficient transport vehicles – to support sustainability if it negatively affected profits.

A win-win solution

Thankfully, it’s not a zero sum game. The most effective ways of reducing emissions often have the effect of increasing profits, which is a win-win situation.

According Toscano, in many instances, companies will see a return on investment within two to three years.

“There’s no reason why you can’t earn a profit and be sustainable at the same time,” Chow says.

[quote]Many sustainability practices are actions that should be taken to increase efficiencies anyway.[/quote]

The most commonly used sustainability practices involve optimizing:

Trip movement by making delivery routes as direct as possible
How goods are fitted into shipping containers
Using the most efficient means of transport, such as rail
Using more energy efficient vehicles, such as natural gas powered trucks

Training drivers correctly is also important says Alison Toscano, a SCMA project manager.

[quote]Even if you have the most fuel efficient trucks, if the operators drive them like Ferraris, it defeats the purpose.[/quote]

Taking the guesswork out of improved efficiency

For too long, shippers and carriers have only been able to guess at efficiency improvements.

“If you can’t measure the performance that you’re looking for, you can’t manage it,” says Chow.

That’s where the SmartWay system comes in. “Shippers that select SmartWay-registered carriers can see very clearly those who have reduced their emissions,” Toscano says, offering sustainable carriers a competitive advantage.

SCMA says on its website that SmartWay won’t improve operations directly, but it helps companies understand where improvements can be made.

Measurements better prepare companies for carbon taxes

Measurements are also important for forward-thinking executives who recognize that carbon taxes might be inevitable. British Columbia, for instance, has already implemented such taxes. In other provinces and territories, some companies are preparing for that eventuality. A true carbon tax would be levied on all emissions, unlike performance regulations that only set limits on certain industries.

“It’s a matter of risk management,” Chow says.

[quote]If you are not already measuring your emissions, if and when a tax is implemented, you’ll be forced to play catch up.[/quote]

The implication is that judicious companies would have the upper hand over competitors scrambling to meet new regulations.

Consumers support green companies

Government is not the only source of pressure for shippers and carriers to be more sustainable. Consumers are increasingly rewarding green companies with their patronage. Companies are responding by increasingly adopting programs that address environmental concerns. They market their involvement by showcasing environmental program logos on product labels or websites. The idea is to demonstrate their commitment to the environment.

“Now you can communicate your data to your customers, and show them why they should buy from you and not your competitors,” says Chow. “You can show how being more efficient is the same thing as lighting 5,000 homes, or taking ten trucks off the road every day, or planting six trees.”

But Dr. Gwen O’Sullivan of Mount Royal University cautions against ‘green-washing’. According to her, consumers don’t always know what these programs represent.

[quote]Sometimes it looks like companies are taking big steps, but what is the reality?[/quote]

Clearly, there’s a long road ahead for the transport industry to become more sustainable, but programs like SmartWay help put companies on the right path.

Jesse Yardley has over 15 years experience in communications and has owned and managed two successful businesses in Calgary, AB. He is currently enrolled in the journalism program at Mount Royal University.

My life as the son of an Alberta oil man

March 14, 2014Economics, Energy and Resources, Western CanadafeaturedCommon Sense Canadian

Alex (right) and father (left) riding dirt bikes. (Photo: Matt Sutton's Facebook) — Alex (right) and father (left) riding dirt bikes. (Photo: Matt Sutton’s Facebook)

by Matt Sutton

In November, 2013, I drove to Lacombe, Alberta, to visit my Dad and his family, accompanied by my best friend Alex – a chemical engineer technologist at Imperial Oil, responsible for conducting research on how to clean up tailing ponds.

My Dad has worked in Alberta’s oil and gas industry for twenty-two years.

Both Alex and myself have been shaped by this multi-billion dollar industry, Alex working in it and me having grown up in a household financially supported by it.

This reality was reflected in our trip to Lacombe.

[quote]I was aware of northern Alberta and Fort McMurray before I knew what the oil and gas industry was.[/quote]

David ‘Vivuki’ is an idiot

After a day of dirt biking on my father’s acreage, we sat down for dinner and within minutes discussion about the oil sands, Neil Young and David Suzuki joined us at the table.

“David ‘Vivuki’ is an idiot,” stated the eight-year-old at the table.

“It’s Suzuki, sweetie,” corrected her Mother, “but that’s right, he’s an idiot.”

At the time it was hilarious hearing her numerous attempts at saying the name ‘Suzuki’, but as I look back now the meaning of this dinner table discussion scares me.

Growing up in an oil and gas family, I have first-hand experience of the benefits the industry offers. My Dad always had a job, and subsequently, I always had new toys and my family always had a meal for dinner.

But for me – and I suspect many like me – it has also created a lot of confusion about how we should respond to the debate over an economy that has clothed us, but is also controversial in many other ways.

Alberta’s economic promise

My Dad left his home in England at 18 and joined the British Military. He spent the following decade fixing England’s tanks internationally. Then, at some point, he met my Mom, had me and my sister, left the army and settled in Calgary, Alberta.

Being a heavy-duty mechanic, he began work with a drilling company and moved up the ladder of the oil and gas industry. Today, he is a maintenance manager for a coil tubing company which conducts drilling internationally.

As a kid, I didn’t understand the ins and outs of what my Dad did, nor did I really care – similar to the way his fiancé’s eight-year-old daughter doesn’t understand who David Suzuki is – she only understands what she hears.

I knew my Dad worked on drilling rigs up north and that meant he was gone all the time. I remember him being in a place described to me as ‘up north’, or sometimes it was ‘Fort Mac’.

I was aware of northern Alberta and Fort McMurray before I knew what the oil and gas industry was.

Trading family time for toys

But my Dad missed a lot – hockey games, skateboard contests, birthdays and school concerts – and the reasoning for it was always, “Your Dad has to work.”

Alberta Tar Sands — A oil sands operation in Fort McMurray, Alberta (Photo: Chris Krüg)

Looking back now, I still wish he could have been there, but without that work I never could have played hockey, I never would have had skateboards and I would not have gotten Gameboys, CD players, or new skates for my birthday.

Now that I am older and attempting to find my place in the world, having become more aware of the public debate surrounding the oil and gas industry, I face a great deal of confusion.

On one side, I am being shown the horrific damage to the environment caused by these companies taking oil from the ground, the ecosystems they have destroyed and the way they are jeopardizing the future of our planet.

On the other side, I see an industry responsible for my Dad always having work and for my life’s privileges.

Does opposing the oil and gas industry’s actions make me ungrateful?

Does agreeing with the oil and gas industry’s actions make me ignorant?

I am constantly unsure. In Alberta, it feels like I’m not supposed to question what’s going on. I’m supposed to be appreciative of the ways it makes my life and my cities economy better.

Same old corporate oil answers

At some points, I have asked my Dad questions about the oil sands, what he thinks and what it all means to him, but it always seems to be the same corporate oil answers:

[quote]We need oil, there’s not much you can touch in a day that doesn’t come from oil.

How come there’s a big fuss about Alberta but nobody cares about drilling in Saudi Arabia? Is it different because it’s not in Canada?

Yeah there’s pollution but nowhere near as much as they’re emitting in China.[/quote]

These are just some of the answers I’ve received from my Dad in the past, and although these things are true and I appreciate the conversations we have, they do not provide answers. They are all responses that simply divert my attention away from the topic I originally brought up.

Matt Sutton (Photo: Jon Peters). — Matt Sutton (Photo: Jon Peters)

Most of the time I feel like I will never find truth. Most who provide an argument on the situation seem to be making money off of it one way or another, and that makes it difficult to discover the truth.

Both sides overreaching

Every time I look into the left side of the conversation I find the same frustrations as I have on the right. Everything seems blown out of proportion with both perspectives.

For example, Neil Young’s private jet and tour buses are enormous consumers of the same fuel his lyrics stand against. I don’t blame him though – if I had the money I’d probably have a private jet too, and I’m not saying that I think the message of his songs are wrong. My problem is I don’t know how I’m supposed to believe his conviction when his actions do not align with his words.

The same kind of things can be said about David Suzuki, another spokesman against the oil sands. Suzuki writes frequently against the oil sands, describing them as ‘scary’ and relating the suits behind the oil companies to the mythical ‘bogeyman’ his children used to ask him about. Suzuki then says, “or maybe there’s something more frightening to consider. Perhaps the bogeyman is us – the public that places short-term economic value of the tar sands above the priceless value of our environment and our earth.”

To be honest, I don’t very much appreciate Mr. Suzuki saying that I, or any other hard working citizen is any kind of bogeyman who values money over the environment. Especially when money is not something he has to worry about.

If being frustrated because another millionaire is making me feel bad for appreciating the money generated from the oil sands wasn’t enough, I found it even harder to listen to David Suzuki’s arguments after hearing the accusations that he made up some information in an opinion piece saying cyclones were an environmental threat to the great barrier reef. When asked about this claim, Suzuki’s response was “that one, I have to admit, was suggested to me by an Australian and it may be true that it might be a mistake, I don’t know.” Is it just me, or does saying that an idea was suggested to him by an Australian make it any less frightening that he wrote it in his article without double checking first?

The trial of David Suzuki (Photo: The Royal Ontario Museum)

If David Suzuki had such an easy time putting false information into an article about climate change in Australia, how do I know he’s not doing the same thing here? This is why I have a hard time believing either side of the oil sands argument.

It is examples such as these that frustrate me about the environmental side of the argument. They take things out of context or exaggerate them beyond reason to belittle the oil industry, the same way that the oil industry will downplay issues to make them seem better in the public eye. It is equally frustrating on both sides and makes me feel like neither are being honest.

That said, it is not just the battle between the oil and gas industry and environmentalists that exists this way – nearly every conversation has two different parts from each side that aren’t necessarily honest, and that’s why I got into journalism in the first place, to discover the truth.

I believe the truth is balanced somewhere between the environmentalists comparing the oil sands to Hiroshima and the oil companies calling their reclaimed lands ‘lush’.

My job now, and everybody’s job for that matter, is to listen. Listen to everything said and try understand that although those comments may be exaggerated and both sides may be wrong sometimes, if everybody listens to each other then there is hope for a truth. A truth that I will be willing to accept from both sides.

It is important now more than ever to pay attention to what is going on and listen to everything being said about the oil sands regardless of what you believe and regardless of which side the information is coming from because neither side holds the full truth.

It is going to take a lot of time, patience and cooperation but I do believe the truth is out there to be found.

Matt Sutton is studying journalism at Mount Royal University in Calgary, AB.

Rex Tillerson, you are a big, fat NIMBY

March 6, 2014Energy and Resources, FrackingfeaturedCommon Sense Canadian

Rex Tillerson, you are a big, fat NIMBY — ExxonMobil CEO Rex Tillerson loves fracking other people’s back yards – just not his own

Dear Rex Tillerson,

I am writing to express my disappointment in learning that you recently opposed the construction of a water tower essential to shale gas development near your home in Texas.

As you and I both know, hydraulic fracturing – or “fracking”, as rabid environmentalist-types refer to it – is a game-changing technology that presents many wonderful opportunities to the American people and economy. Your company, ExxonMobil, has been a global leader in its development, for which I applaud you, as CEO.

I recognize that you are concerned the value of your $5 million home will be negatively affected by the construction of this 160-foot water tower – and you are likely right.

But sometimes in life, we are called upon to take one for the team – and this is just such a moment. By acting like every other pinko, tree-hugging NIMBY (Not In My Back Yard) who stands in the way of progress by protesting the alleged impacts of fracking and related activities on their property values and family’s health and well being, I feel you are setting a very bad example for the rest of the country.

Just think – now every time a fracking company wants to suck a lake dry or inject poisonous chemicals into fresh water, or raise the risk of earthquakes from fracking, they will be able to point to you and say, “Yeah, but…the CEO of Exxon protested it too!”

Can you imagine the potential consequences for America’s economy? As you’re well aware, shale gas offers billions of dollars in economic opportunities, gazillions of jobs, and the ability for America to become energy independent – and you want to put all that at risk because your home might go down in value by a measly few million bucks?!

You had me worried when you acknowledged that human-caused climate change is real (beg to differ), but when you told those environmentalists that it’s no big deal and people who are affected by it should just move, you regained my confidence. You have always worked hard to promote the virtues of fracking and dismiss those pesky greenies, farmers and such – and for that, I admire your leadership.

But as for this water tower, I suggest it’s time you suck it up and deal with it, like so many millions of other Americans have had to.

Otherwise, not only will the environmentalists hate you, but so will all us reasonable folks who believe in the vision you’ve sold us about our energy future.

For the love of shale, please don’t be just another NIMBY, Rex!

Sincerely,

A concerned citizen for energy progress

European Commission wades into war over Galway salmon farm

March 3, 2014Oceans, Salmon Farming and AquacultureCommon Sense Canadian

Irish salmon farms on trial at European Commission — Anti-salmon farming activist Don Staniford presents to the European Commission last week (courtesy of Don Staniford)

Read this Feb. 26 story from the Irish Examiner on the battle over open net pen salmon farms that has now reached the European Commission, with allegations of a buried report highlighting serious risks to wild fish from industrial feed lots.

A full-scale war under way between the Department of Agriculture and the Inland Fisheries Ireland is likely to determine the fate of Europe’s biggest fish farm planned for Galway Bay.

The European Commission is investigating why it did not receive a scientific report from the Department which showed the amount of sea lice likely to come from such a farm could devastate much of the country’s wild salmon and trout.

This report was drawn up by Inland Fisheries Ireland, responsible for protecting and developing inland fisheries and sea angling and protecting wild salmon under the EU’s Habitats Directive.

Instead, the Department sent a different study from another state agency, the Marine Institute, that said the danger would be small: about 1% compared with the 39% suggested by the Inland Fisheries report.

The Ombudsman is also investigating the issue and was told by the Department that the Inland Fisheries report had many inaccuracies and fundamental errors and that it “would have had disastrous results for Ireland’s reputation” had they sent it to the Commission.

They put forward a report from the Marine Institute, which provides scientific advice to the Department, and which painted a very different picture, suggesting the danger from such a farm would be small.

However, this report was questioned by four independent scientists when published in Journal of Fish Diseases, forcing the head of the Institute, Dr Peter Heffernan, to defend the work, saying the scientists had not considered the entire study.

The European Commission has reopened its investigation of the matter having received the Inland Fisheries study. Their spokesperson said they were investigating, but had just received the Department’s response on Monday and needed time to assess it.

Friends of the Irish Environment (FIE) want the issue of the Galway Bay farm investigated, saying the environmental impact study was largely based on the Marine Institute’s report, while the report from the body responsible for wild fish conservation, Inland Fisheries, was sidelined.

READ MORE

LNG Pipedreams: Global investors getting cold feet?

February 25, 2014Energy and Resources, LNGfeaturedCommon Sense Canadian

by Anna C. Novacek

The projections supporting the BC Liberals’ prosperity fund rest on the assumption that there will be indefinite demand to buy into BC’s fledgling LNG market. However, as the Common Sense Canadian has reported, the numbers guaranteeing prosperity to Canadians, while assuring maximum profit for investors, aren’t adding up. The indicators below demonstrate examples of a rapidly shifting LNG market and early signs of hesitation from international proponents.

The BC Liberals are likely considering these factors as they race against the clock to get construction rolling before the alluring, yet ambiguous, projections behind the ‘100 billion dollar’ prosperity fund are a faded memory.

LNG proponents were probably never too concerned that provincial and federal regulatory bodies would be giving them much trouble as they applied to start operation and export. The uncertainty, however, lies in the stability and viability of international consumer markets to justify the significant costs associated with construction and export. From the proponent’s perspective, even after gaining regulatory permits, the risk-benefit analysis continues until the construction of LNG terminals actually starts.

Increasing Competition

As the Canada West Foundation discusses in Managing Expectations: Assessing BC’s LNG Industry, there may soon be more natural gas available to Asia than it needs, and other competitors are based in better geographic positions to access Asian markets.

[quote]Australian projects, although higher cost than originally projected, are much closer to completion than the BC projects. There will also be competition from Africa, the US, and potentially South American and Middle Eastern projects. China also has plans to develop its own shale gas industry, contributing 150 billion cubic metres of new supply by 2030.[/quote]

Energy editor for the Financial Times, Yadallah Hussain states that Canada comprised a smaller percent of total global upstream transaction value in 2013 (7% of total global, versus around 15% in 2012) as merger and acquisition activity shifted to emerging regions where there has recently been prolific deep water oil and gas discoveries, such as Africa (15% of global total in 2013).

Canada will face pressure to design an export tax and royalty regime that can compensate proponents for the added costs required to compete with facilities in closer proximity to Asian markets.

We learned recently that the BC Liberal government’s LNG export tax, unveiled after many delays in last week’s budget, will enable proponents to deduct capital costs for plant construction.

Early Stages of an ‘Asian Buyers Club’: Getting More for Less

There is no arguing that demand for LNG in Asian-Pacific markets has resulted in high LNG prices – the question now is how long will they last.

On December 5^th-9^th, 2013, countries importing 69.3% of the world’s LNG met in New Delhi to discuss how to get a better deal on LNG. India called on large consumers in the region like China, Japan and Korea to forge an Asian buyers’ block to extract price discounts. The Financial Post referred to this conference as “the early stages of an Asian buyers club”:

[quote]Most LNG is bought on long-term contract and it is the cost of these supplies that Asian buyers are trying to reduce. They also want to delink contracts from oil prices and eliminate the clauses that restrict the destination of shipments and prevent them from selling excess cargo.[/quote]

The article cites the historical precedent of the formation of the International Energy Agency, which was set up by western economies to counter OPEC after the first oil shock in the 1970s.

Anyone Feel Like Sharing?

The majority of proposed LNG projects in BC are located in the Prince Rupert and Kitimat areas on the province’s north coast, an area which intersects with the traditional territories of several First Nations in the region. While the duty to consult rests with the Crown, the procedural aspects of this legal obligation are often delegated to the project proponent. This means that the proponent must be proactive in engaging with potentially affected First Nations.

As Selina Lee- Andersen writes:

[quote]If it is determined that the project will have impacts on local First Nations, the Crown and project proponent may be required to accommodate Aboriginal rights or interests. At law, accommodation can include mitigating, minimizing or avoiding adverse effects of project activities on Aboriginal interests. A common business practice that has evolved in various industries across Canada is the negotiation of so-called impact and benefit agreements (IBAs) between project proponents and First Nation groups. IBAs aim to provide benefits to the local Aboriginal community and may include training and business opportunities, profit sharing, equity participation and other economic incentives.[/quote]

While this is a fundamental and important aspect of Canadian law, it may not be all that appealing to international project proponents scouting their options to develop LNG facilities in a location that will allow them to transport the resource to Asian-Pacific markets with maximum gain and minimum effort.

‘Drastic Drop in Volume’ of Merger & Acquisitions Activity

After allowing China’s CNOOC Ltd. to buy Canadian energy firm Nexen Inc., Harper brought in new rules outlining that state-owned companies will only be able to buy majority stakes in Canadian oil sands in exceptional circumstances. Uncertainty regarding the precise nature of these rules is causing hesitation in foreign investors looking to invest in Canadian oil and gas, including LNG.

Alison Redford cites this legislative uncertainty as the impetus for a ‘drastic drop in volume’ of merger and acquisition activity from foreign investors. Yadallah Hussain writes that Canadian mergers and acquisitions plunged 80% last year to US$10.2-billion compared to US$50-billion in 2012, a five-year low, according to IHS Herold Mergers and Acquisitions data. Hussain writes that lower commodity prices and competition from U.S. basins resulted in a reluctance of oil majors to open their chequebooks to acquire Canadian assets in 2013.

So, When Do We Start Construction?

One might think that after Christy Clark was re-elected in a haze of prosperity fund glory that construction of approved LNG facilities would be underway. As Brent Jang writes for the Globe and Mail, the NEB has already granted export licenses for seven BC LNG projects and is reviewing applications from another five. Kitimat LNG, for example, has all the necessary approvals to start construction but has not done so yet. Jang explains proponents have stated that approved projects are not yet in construction stage because they are still doing “internal assessments on the economics of proceeding”.

In a rapidly shifting economic climate, these internal assessments may result in cost-benefit analyses that see the BC Liberals’ prosperity fund projections go down in economic history as a nothing but a pipedream.

Anna C. Novacek earned an Honours LL.B from Durham Law School in England and has interned with West Coast Environmental Law in BC. Today, she works at Stevens and Company on Vancouver Island and co-publishes the Energy Law BC blog.