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Kinder Morgan Bait & Switch: Backdoor pipeline to Washington State refineries could save Trans Mountain Expansion

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Washington Governor Jay Inslee meets with BC Premier John Horgan in Victoria (Flickr/Province of BC)

By Joyce Nelson

In a widely published June 3 op-ed for Postmedia newspapers, Thomas Gunton – a former B.C. Deputy Minister of Environment – decimated the Trudeau Liberals’ decision to buy Kinder Morgan’s Trans Mountain pipeline and build its expansion project.

But instead of urging that the Trudeau government stop this controversial purchase, Gunton stated this: “Ironically, their purchase of the pipeline may provide them with one last chance for changing course. If they insist on building TMX they could appoint a multi-stakeholder task force including First Nations to consider redesigning the project to reduce its worst impacts by scaling down the size of the expansion and directing increased shipments to refineries in Washington State. This would avoid tanker exports from Vancouver, reduce the number of Alaskan tankers through Georgia Straight, and allow for the phasing out of the higher risk aging pipeline.”

This suggested “redesign” to benefit Washington’s major refineries may have been the plan all along, or at least since November 15, 2016 when Gunton’s former boss – B.C.’s former premier Mike Harcourt – suggested that Kinder Morgan and the federal Liberals “consider an alternate route” to avoid Kinder Morgan’s Westridge Terminal in Burnaby. Even before Trudeau had given federal approval to Kinder Morgan’s expansion project, Harcourt was here urging that the tarsands diluted bitumen (dilbit) be shipped “to either Deltaport or just across the B.C.-Washington state border to the Cherry Point refinery” in order to avoid “insurrection” in B.C.

The Trans Mountain pipeline has a southern leg – called Puget Sound Pipeline – which splits off at Kinder Morgan’s Sumas Terminal in Abbotsford, B.C. and delivers tar sands dilbit to several refineries in Washington State, including the Ferndale Refinery (owned by Phillips 66), the Cherry Point Refinery (owned by BP), the Andeavor Anacortes Refinery (now owned by Marathon Petroleum), and the Shell Anacortes Refinery (owned by Shell Oil).

The Puget Sound Pipeline currently has a capacity of 170,000 barrels per day (bpd), but in the documents filed for its IPO in May 2017, Kinder Morgan indicated that they want to significantly increase that amount, according to Sven Biggs of Stand.earth’s Bellingham, Washington office.

That finding seems to have been part of the reason that the local council of Whatcom County (located in the northwest corner of Washington State), voted 6-1 in June 2017 to effectively put a moratorium on the export of unrefined oil and coal from their area. But refined oil products are allowed in order to protect the hundreds of highly-paid refinery jobs in the state.

Oddly, none of the press coverage of Washington State Governor Jay Inslee’s visit to B.C. in November 2017 mentioned Kinder Morgan’s Puget Sound Pipeline. Inslee had expressed concerns about the Trans Mountain expansion project in terms of ocean oil tanker spills and threats to whales in the region, but apparently no reporter asked him about the southern leg of the project which brings dilbit to Washington’s refineries.

During Inslee’s November 2017 visit to B.C., I was writing my latest book – Bypassing Dystopia, published in April by Watershed Sentinel Books – and decided to contact Sven Biggs for the chapter on Kinder Morgan. Biggs told me by email that under Kinder Morgan’s current expansion plans, the capacity of the Puget Sound Pipeline branch “will be increased to 225,000 bpd and in the IPO that the company filed earlier this year [2017] to raise money for the expansion they said it could one day be expanded to 500,000 bpd.”

With regard to Gov. Inslee, who is co-chair of the U.S. Climate Alliance, Biggs told me, “I am not aware of him taking a position on the existing Puget Sound Pipeline or Kinder Morgan’s plans to increase the amount of oil flowing through it.”

In February 2018, Gov. Inslee won praise from environmentalists when he rejected a proposal for a huge oil-train shipping terminal in his state. Weeks later he was back in B.C., appearing to support B.C. Premier John Horgan’s efforts to stop the Trans Mountain pipeline expansion, but this time reporters were more skeptical.

Tom Fletcher, writing for Grand Forks Gazette, noted, “Inslee sidestepped a question from a Vancouver reporter about his own state’s use of the pipeline to supply crude to its refineries at Anacortes, Cherry Point and Ferndale, some of which is sold back to B.C. as refined fuels.” The National Post’s Tristan Hopper called out the “hypocrisy of Washington State”, noting “Alberta oil products shipped through the Trans Mountain pipeline supplied 28.5 per cent of Washington’s petroleum needs in 2017. In fact, the majority of product now moved through the Trans Mountain pipeline ends up in Washington hands.”

Most important, The Tyee’s Mitchell Anderson wrote a major article exposing the extent to which Washington refineries already profit from Trans Mountain: “How badly is Canada missing out by not refining our own oil? The oil industry has a colourful term called the crack-spread to describe the profit margin for refineries between buying crude and selling refined products. Washington refineries buying Alberta bitumen have some of the largest profit margins in the world – up to $45 US per barrel in 2013. Not surprisingly, Vancouver also has some of the highest retail gasoline prices in North America.” 

Anderson cited a recent report indicating that Shell and BP refineries in Washington are especially poised to profit from the Trans Mountain expansion.

Of course, Alberta Premier Rachel Notley’s threat to cut off oil and gas shipments to B.C. provided good reason for Premier Horgan and Gov. Inslee to discuss access to refined products. And as the Ottawa Citizen noted, “…there are plenty of Washington State refineries ready to start sending gasoline over the border in a moment’s notice.” [6] That may have been the plan all along, with Washington State refining for the entire Pacific Northwest region.

After Prime Minister Trudeau announced his intent to purchase the Trans Mountain pipeline and proceed with its expansion, Gov. Inslee wrote an op-ed in The Seattle Times stating: “This project runs counter to everything our state is doing to fight climate change, protect our endangered southern resident killer whales and protect communities from the risks associated with increased fossil-fuel transportation – by rail and by sea.” Once again, Gov. Inslee was silent on the southern leg of Trans Mountain, the Puget Sound Pipeline feeding the BP, Shell, Marathon, and Phillips 66 refineries.

Now we have Thomas Gunton suggesting a “redesign” for the pipeline expansion that actually matches what Kinder Morgan has been planning for the Puget Sound Pipeline. 

On June 7, the Globe and Mail’s Justine Hunter reported that Ottawa’s proposed purchase of the Trans Mountain pipeline project would “make it the owner of [the] spur line that feeds Alberta oil to Washington State’s refineries”. [8] Hunter noted that Gov. Inslee “has been working closely with environmental organizations to impose new regulations and taxes on the transport of heavy oil through his state.”

But it must be said that Gov. Inslee’s May 30 op-ed mentions resistance only to oil transport “by rail and by sea”. Transport of dilbit by the Puget Sound Pipeline goes unmentioned, as does future export and transport of refined gasoline from Washington’s refineries by tanker and barge.

As usual, we are being “played.” Stay tuned.     

Joyce Nelson’s seventh book, Bypassing Dystopia: Hope-filled Challenges to Corporate Rule, has just been published by Watershed Sentinel Books. It is the sequel to Beyond Banksters: Resisting the New Feudalism and can be ordered at https://watershedsentinel.ca/bypassing-dystopia

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Why I got arrested for blocking Kinder Morgan

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Citizens preparing to get arrested outside Kinder Morgan’s Burnaby tank farm (Photo: Alex Harris)

By Kyle Farquharson

This year, nearly 200 people — including federal parliamentarians Elizabeth May and Kennedy Stewart — have been arrested on Burnaby Mountain for civil disobedience actions against the Kinder Morgan Trans Mountain pipeline expansion. Never having been arrested before, not even for a traffic infraction, I didn’t take my decision to join them lightly. On March 22 — World Water Day — I sat at the gate of Kinder Morgan’s Burnaby Mountain tank farm facility and got arrested. 

My motivations were both moral and practical. I know we need to address climate change and the degradation of our ecosystem to ensure our descendants and the most vulnerable members of the human family a viable future. I’ve concluded — reasonably, I think — that politicians and governments can’t be relied upon to deliver serious solutions absent public pressure to force their hand, including protest, public engagement, and, when appropriate, civil disobedience.

I blocked a gate at Kinder Morgan’s facility with the intention not of breaching a court order per se, but of causing delay and hindering the company’s efforts. A blockade has the advantages of being non-violent and effective at frustrating construction of fossil fuel infrastructure. Judging from its own admissions to investors and from its demand for strict police enforcement of an injunction it sought in order to deter such blockades, Kinder Morgan recognizes the effectiveness of the tactic too. At least we agree on something.

As a law-abiding citizen, both highly privileged and schooled in the importance of discipline, responsibility, and respect for institutions, I feel a strong temptation to outsource my conscience to the relevant authorities. That would certainly be more convenient for me. Yet I can’t avoid reckoning with an inconvenient truth: human history is full of abominations that were either legal or whose perpetrators have enjoyed impunity, some of which continue to the present day. On the other hand, we rightly celebrate cultural iconoclasts of the past who publicly defied unjust laws, at great personal risk. Lest we forget the hostility such individuals evoked at first from the powers that be.

NDP MP Kennedy Stewart and Green Party of Canada Leader Elizabeth May getting arrested on March 23 (Photo: Alex Harris)

The charge I now face — criminal contempt of court — caught me and many of my comrades by surprise. On the day of my arrest, I had signed police documents agreeing to appear on a slightly less onerous charge of civil contempt. Several of my fellow defendants, including Stewart, have already pleaded guilty to criminal contempt. I’m not yet in a position to discuss my own legal strategy.

In Canada’s legacy media, the conflict surrounding the Kinder Morgan pipeline expansion is often framed as a jurisdictional dust-up, with the provincial government of British Columbia on one side, and the governments of Alberta and Canada on the other. But the reality is quite different, and much more interesting.

Leading up to last year’s provincial election, B.C.’s New Democrats and Greens campaigned on opposition to the planned pipeline expansion. That promise resonated with a plurality of British Columbians, particularly in and around Metro Vancouver — both the province’s major population centre and a region imperiled by the risk of either a diluted bitumen spill or mishap at Kinder Morgan’s petroleum tank farm.

The electoral contest became a focus of organizing efforts against the project. Friends and allies of mine dedicated countless hours to canvassing and making phone calls, trying to mobilize any undecided voters they could to adopt an ABC electoral strategy — that is, Anyone But (Christy) Clark, whose incumbent Liberal government had already approved Kinder Morgan. Given how close the election was, this campaign within a campaign likely played a role in the eventual outcome.

Recent pronouncements by B.C. Environment Minister George Heyman suggest that his government may be trying to wriggle out of the NDP’s campaign commitment. Nonetheless, three elected Greens hold the balance of power in the provincial legislature. NDP Premier John Horgan‘s hold on power depends on the support of a party that has been outspoken and consistent on this issue.

To characterize the B.C. government’s behaviour as the institutionalization of “environmental extremism” or disregard for the “rule of law” is a grave misrepresentation. By calling for things like more scientific study of the effects of diluted bitumen spilled in a marine environment, and requesting a court opinion on the extent of its authority to regulate the flow of this product through a pipeline, Horgan’s administration is proceeding in line with the law and Canada’s constitution. Its stance thus far is mainstream, moderate, and roughly consistent with the will of B.C.’s electorate as expressed in the most recent election.

But you wouldn’t know that if your sole source of information were the strident, incautious outbursts of its pro-pipeline detractors.

Journalist and social critic Chris Hedges observed in 2015 that we are all Greeks now. Confronted with an extraordinary, concerted campaign of economic sabotage, the leftist governing coalition Syriza caved in to the demands of international financiers, and Greeks who had voted resoundingly to reject austerity were subjected to it anyway.

I have the impression that Prime Minister Justin Trudeau, Alberta Premier Rachel Notley, and corporate news organizations hand-wringing over the B.C. government’s “obstructionism” would be more than content to see B.C. voters endure a similar repudiation of our democratic sovereignty. They appear dedicated to the idea that the interests of the investor class deserve precedence in the deliberations of all levels of government, democracies and tyrannies alike.

Their attitude calls to mind an irreverent observation by the anarchist Emma Goldman: “If voting changed anything, they’d make it illegal.”

We hear frequent mention in press and political circles about Canada’s “national interest”, with which our prime minister and his cabinet assure us the Kinder Morgan pipeline aligns. Yet this formulation seems a questionable basis for policy — not only dubious, but insular, nationalistic, narrow, and intensely short-sighted as well. Kinder Morgan is a transnational corporation representing the transnational ambitions of a transnational, moneyed elite. The ill effects of the intended pipeline — including spill risk to Americans in western Washington State, and intensified climate change — would cross borders too.

Alberta Tar Sands
A tar sands plant in Fort McMurray, Alberta (photo: Kris Krüg)

In the words of renowned climatologist Dr. James Hansen, continued expansion of Canada’s tar sands enterprise would mean “game over” for the climate. Kinder Morgan’s pipeline would facilitate additional tar sands extraction and related CO2-emissions equivalent to 3 million gas-powered cars a year. This comes at a moment when we are already dangerously near a point where the rise in global average temperature could become irreversible.

All of this begs the question of whether it’s possible for an enterprise to serve Canada’s “national interest” while undermining the best interests of all humanity. If so, what does that say about Canada as a country?

Within the ranks of our critics are those determined to muddy the moral waters, labeling us hypocrites, extremists, or, more absurdly, “eco-terrorists”, and attributing our discontent to financing from foreign sources.

Yet there is only one atmosphere and climate system on earth, which means the entire global population has a material stake in Canada’s fossil fuel industry. Unsurprisingly, and by necessity, large organizations agitating for climate action tend to have an internationalist outlook, a global presence, and supporters and benefactors around the world. There is nothing unethical or illegitimate about that.

That said, make no mistake: the climate justice movement in B.C. and throughout Canada depends on the commitment of countless volunteers. I’m part of Climate Convergence Metro Vancouver, a grassroots coalition that includes many unpaid activists, including myself. Promoters of the “foreign funding” narrative strike me as desperate to poison the well, and impeach the integrity of people they know are motivated by moral conviction.

Of course, no opponents of this pipeline are fiercer in their determination and dedication than the First Nations peoples who are defying it in the courts, at the polls, and on the land.

Much of the second Kinder Morgan line would be built on land that First Nations have never ceded to the Crown. Plans for the original Trans Mountain line were approved in an era when the Indian Act afforded most First Nations people no right to vote and no right to retain counsel to defend their territorial rights. At a moment of great fanfare over reconciliation, Kinder Morgan’s beleaguered project embodies the legacy and continuity of Canadian settler colonialism.

Mike De Souza of the National Observer has uncovered evidence that the pipeline’s approval process was “rigged.” Among other things, this may amount to a violation of the federal government’s duty to consult meaningfully with Indigenous peoples on initiatives affecting their interests.

In fact, the conflict over Kinder Morgan could not be morally clearer. There is arguably no country in the world better positioned than Canada to effect a transition from fossil fuel dependency to emissions-free, renewable energy infrastructure. That means Canada has a moral responsibility. It’s long past time for our country to stop being complicit in climate change, as it drives droughts, floods, famines, super-storms, wildfires, armed conflicts, and refugee crises from which countless innocent people suffer and die.

There is also no credible business case for the Trans Mountain expansion. The economic rationale of an unjust discount from our inability to ship oil to Asia relies on unsound evidence. Mexican Maya crude, a comparable grade to western Canada’s diluted bitumen, has actually sold for an even lower price in Asia than in the U.S. Gulf Coast region.

The chief cause of the apparent discount is that diluted bitumen is costlier to refine and thus a less desirable product than lighter, purer grades of crude. Western Canadian producers can already ship product across the Pacific via the existing Kinder Morgan pipeline, yet they rarely do — presumably because demand for Canadian diluted bitumen in Asia is underwhelming.

What this pipeline is likelier to deliver is expansion of the tar sands, an increase in the total volume of Canadian diluted bitumen on world markets, and, at best, ephemeral benefits for a few at the expense of the many. But to end the fossil fuel industry’s vicious cycle, we’ll need to leave possibly lucrative deposits in the ground. Canada needs to accept this reality sooner rather than later.

The conflict over Kinder Morgan is so much more than a petty row among the governments in Ottawa, Edmonton, and Victoria. It’s a clash between corrosive greed and the voices of reason, between cynicism and idealism, between might and right. It’s also a litmus test of whether ordinary Canadians can successfully and non-violently defy the dictates of corporate power.

Trudeau and Notley have offered firm assurances that the pipeline will proceed, backed by billions of taxpayer dollars. And by endorsing Kinder Morgan’s narrative that the B.C. government is to blame for supposed delays in Trans Mountain’s construction, Trudeau has foolishly exposed Canada to potential liability under a NAFTA Chapter 11 tribunal.

The federal government has hinted at deploying the armed forces to shunt aside non-violent defenders of the land and force this pipeline through, on behalf of Kinder Morgan, with or without the consent of communities in its path. I’d suggest these fulminations ill befit a prime minister who not only proclaims himself a climate leader, but a feminist too.

More arrestees blocking the gate at Kinder Morgan’s tank farm (Photo: Alex Harris)

Though I recognize the formidability of the forces arrayed against us, the faith that reason, justice, and humanitarianism will prevail sustains me. I also believe history will be no kinder to those who would condemn us as scofflaws or worse, than to the apartheid sympathizers who denounced Nelson Mandela and his allies as “terrorists”.

On World Water Day, I sat shivering on the rain-soaked pavement in front of a Kinder Morgan facility and waited over an hour for the Burnaby RCMP to arrest me. The ensuing legal process has been an emotional roller coaster and I still don’t know what the future holds – for my case or the pipeline.

The one thing I do know is I made the right choice.

Kyle Farquharson is a writer, social critic, and activist based in Vancouver, Canada. He studied Humanities at the University of Victoria and completed a graduate degree in Journalism at the University of British Columbia. He is involved in the climate justice, feminist, and anti-war movements, and is a volunteer organizer with Climate Convergence Metro Vancouver.

 

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How rich elites took over BC…and the Liberals welcomed them

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Imperial Metals' Murray Edwards, Real Eastate magnate Bob Rennie and Kinder Morgan's Ian Anderson
Imperial Metals’ Murray Edwards, Real Estate magnate Bob Rennie and Kinder Morgan’s Ian Anderson

The following is re-published with permission from author Roy Hales and The Eco-Report.

It’s been a fortnight since the New York Times carried the story. The author, Dan Levin, told Global News:

[quote]If this were in Russia or China or the Balkans or some developing-world country, it would just be written off as nepotism or corruption, but here [in British Columbia], because it’s not illegal, it seems to just get a pass.[/quote]

Corporate and union donations to political parties are banned in Nova Scotia, Manitoba, Alberta and Ontario, but not in British Columbia. NDP MLA David Eby believes the corruption runs much deeper than the $50,000-a-year “commission” Premier Clark has been receiving from her party’s campaign chest. In the firestorm of criticism following the Times story, she has swapped her stipend for what is potentially an equally rich expense account, but the issue remains: The rich and connected appear to run British Columbia.

All about access

NDP MLA and Housing Critic David Eby
David Eby, NDP MLA for Vancouver Point Grey

“We seem to be getting further and further away from the idea that citizens can directly influence government through traditional democratic avenues, whether it’s writing a letter or through a protest, or talking to a politician.  We are shifting towards a model where the people who get access to the Premier, to the cabinet, to decisions makers are lobbyists and political donors,” Eby told me in a recent interview.

“The government recently passed legislation allowing unlimited spending until the 30-day-writ period. Previously there had been a restriction on that spending.”

“I couldn’t get my head around why this is happening until we got the results from my conflict of interests complaint and that indicated that the Premier receives a very significant personal benefit from the existing system. She gets $50,000 from the Liberal party of BC, which comes from pooled political donations to that party. So she has a $50,000 incentive, each year, to not change the system. A change in the system would mean she would not have the money to take home because the Liberal party would not have as much money.”

Dermod Travis, executive director of the public watchdog group IntegrityBC, told the New York Times, “When anyone anywhere in the world can donate as much as they want to the system, you have an even bigger threat to the system…What it says to people is money talks and votes don’t.”

Did not respond

Neither the Premier’s Office or the BC Liberal party responded to, or acknowledged, the questions I emailed them.

Pamela Martin (red dress) & Premier Clark (r) 2012 courtesy Amber Strocel via Flickr (CC BY SA, 2.0 Lilcense)
Pamela Martin (red dress) & Premier Clark (r) 2012 courtesy Amber Strocel via Flickr (CC BY SA, 2.0 Lilcense)

This is a stark contrast to the highly efficient performance of individual ministries public relations personal during the past two years.

More so because,  according to a recent article in Common Ground, Premier Clark’s “communication army now numbers more than 200, 10 times the number of reporters in BC’s press gallery.” Many, like Clark’s old friend Pamela Martin, now the BC Liberal director of engagement, are well known media personnel.

Former BCTV Morning host Steve Darling and popular reporter Jas Johol have left journalism to run as BC Liberal candidates.

Eby explained, “The Liberals are confident that the volume of donations that they get insulates them from any public concern because they can just run repeated ads through-out the election cycle and convince people that they are not quite as bad as they might seem in the news reports. They do have millions of dollars to shift public opinion.”

$12 million war chest

Deputy Premier Rich Coleman did tell a group of reporters, including Metro News, that the New York Times story is “laughable.”

He explained, “We go out and work very hard to raise money and make those connections.”

According to a recent NDP press release, 1.5% of B.C. Liberal donors account for half of the more than $12 million the party raised in 2016.

“A tiny number of millionaires have our premier in their pocket, and it has to end,” said NDP leader John Horgan.

Real Estate donations and housing crisis

BC income growth declines to last place in country
Photo: Tourism Vancouver

Eby pointed to the province’s high priced housing as an illustration of what this means.

“We went through a two year period of trying to convince the provincial government that we were in a housing crisis. International money was driving prices beyond the reach of local buyers. Housing prices were putting the local economy at risk. The government made fun of us and said it was crazy.”

“I believe that the reason for the lack of action on the housing crisis is that 7 of their 10 largest donors are real estate development companies. The people who made these donations had a very strong interest to keep the high prices going because they were profiting quite handsomely. During the period that the government didn’t act,  the average house price in Vancouver went up $600,000.”

Kinder Morgan, Imperial Metals among biggest donors

The New York Times suggested that the provincial governments recent reversal of its’ position on the proposed Trans Mountain Pipeline expansion is connected to some timely campaign donations:

[quote]On Thursday, Ms. Clark’s government approved the Kinder Morgan Trans Mountain oil pipeline project, after opposing the proposal at hearings last January. Political donation records show that Kinder Morgan and other oil industry supporters of the project had donated more than $718,000 Canadian dollars, about $546,000, to the BC Liberal party through March 2016.[/quote]

Aerial image after Mount Polley mine tailings spill (Cariboo Regional District)
Aerial image after Mount Polley mine tailings spill (Cariboo Regional District)

Another big contributor is Imperial Metals, owners of the Mount Polley mine.

“When fossil fuel companies are able to throw their money around in our political process, it is a detriment to both our democracy and our climate. It makes our job that much harder,” Peter McCartney of the Wilderness Committee told me. “For a province with such an abundance of natural beauty that is in the cross-hairs of global mining, forestry and fossil fuel companies, that’s a recipe for disaster. It’s very clear British Columbia is far behind other jurisdictions who have banned big money in politics. It’s about time we caught up,”

Site C: latest example of big money’s influence?

Eby did not know if there were sizeable campaign donations behind the provincial government’s obstinate determination to build the Site C Dam.

“I haven’t done that research, but I’d be shocked if there weren’t. I get shocked if there is a major infrastructure project and the person awarded the successful project does not have a history of making donations and does not make a donation in the following year. It just doesn’t happen,” he said.

A recent Insights West poll found that 73% of British Columbians support sending the Site C dam for an independent review of both costs and demand, as recommended by the Joint (Federal and Provincial) Review Panel’s report.

The Clark government has steadfastly avoided this and Harry Swain, former Chair of the Joint Review Panel, has become one of the project’s most outspoken critics.

The Union of BC MunicipalitiesBC Hydro Ratepayers Association,  250 professors from across Canada, Union of BC Indian ChiefsAssembly of First Nations and National Farmers Union are among the many organizations that have voiced their opposition.

Law suits, govt errors may sink Site C Dam
Peace Valley ranchers Ken and Arlene Boon face the expropriation of their home for Site C Dam (Damien Gillis)

This is of limited comfort to Ken and Arlene Boon, whose farm in the Peace River Valley was expropriated by BC Hydro on December 15. They are the third generation to live on this property, which could soon be submerged beneath the dam’s reservoir.

“We are permitted to stay in the house until May 31st.  Then we will move back to our little strip of remainder land to a second small house we have there.  Biggest hope for us is the upcoming election…and maybe we will not even have to move this spring?” said Boon.

He added, “We have to take big money out politics to help take away corruption, or even perception of such.  We are slowly being drawn further into the world of election cycles where big money wins the day, and of course that is just wrong on many levels.  In fact, why do we even allow (corporate?) campaign contributions, and all the problems that arise from that?”

At least one of the companies connected to Site C has made extensive contributions to Clark’s political party. DeSmog Canada reports that KPMG – the accounting firm that reviewed the anticipated costs of Site C for BC Hydro – and its related companies donated $284,994 to the BC Liberals between 2004 and 2014.

Hitting the jackpot

The worst example that Eby has seen was a contract put up by the BC Lotteries Corporation.

“During the tendering process, one bidder made a $50,000 dollar donation to the BC Liberal party. They won the bid. Even if those two processes were completely insulated from each other, that looks pretty bad to someone from the outside. Sometimes the appearance of conflict of interest is as corrosive to public confidence as an actual conflict of interest.”

Having someone make a donation like that in the middle of a bidding process “really stinks.”

$20,000 a plate

“I think this government can’t be trusted to look after the public interest because they are so under the influence of their donors.”

He cited the example of the dinner parties that the BC Liberals now hold at private residences. Do you think participants are paying between $10,000 and $20,000 just to see Christy Clark and her senior cabinet ministers? Or are they hoping to get something for their money? Who do you think the Premier will pay more attention to, someone who writes a letter or the person who pays $20,000 for the opportunity to say, “Listen, I think the province should be doing this, or shouldn’t be doing that.”

“Corruption isn’t handing a bag full of money to someone and saying give us this project. It’s often a relationship built over time, through a series of things like donations and buying tickets for fund raisers and so on. That results in a relationship that causes someone to want to favour one particular proponent. It may not be one to one, but if a company has made 10 donations totalling more than $700,000 over three or four years, that’s going to have an influence over how the government feels about that company and whether or not they get government contracts,” said Eby.

Banning corporate and union donations

After the provincial legislature resumes sitting, on February 14, NDP Leader John Horgan will bring forward a private members’ bill to ban union and corporate donations and limit the amount private individuals can contribute.

This is the seventh time his party has brought a bill of this kind forward. For obvious reasons, they do not expect much support from the Liberal side of the House.

“There are two models. One is where you only permit limited donations from individuals and the other is where you have public funding on a per vote basis. Every vote you get, for example, would result in a 30 cent contribution from the public purse,” said Eby.

“The BC NDP support the model of limited personal donations, not a public funding model. I think that strikes the right balance. You still have to get out there and people have to want to support you, but it also sets limits to your political contributions.”

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Liberal pals plundering BC Hydro for tens of Billions

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how-the-liberals-and-their-pals-are-plundering-bc-hydro

By Norm Farrell

Until the mid-twentieth century, much of British Columbia lacked reliable and affordable electricity. To resolve the privation, W.A.C. Bennett created BC Hydro, a publicly owned utility. The province’s leader acted because the private sector had refused to meet growing needs for electricity. Unlike less effective successors, Premier Bennett was a pragmatist, not an ideologue.

Longtime Bc Premier WAC Bennett's dream is dead
BC Premier and BC Hydro founder WAC Bennett

Existing power producers focused on profitable services in the southwest but Bennett had a province-wide vision. His was an audacious plan, but appropriate and successful. BC Hydro became indispensable to the growth and wealth of British Columbia. However, success sowed seeds of destruction.

BC Hydro’s profitability and financial strength guaranteed corporate raiders would attack, seeking to convert public wealth to private. To be successful, they needed cooperation of modern political rulers and, whether explained by incompetence, philosophical bent or desire for covert rewards, the Liberals cooperated fully.

Looting Bennett’s Legacy

Ironically, among today’s political facilitators of the utility’s destruction is W.A.C. Bennett’s grandson, BC Hydro Chair Brad Bennett, a Liberal apparatchik and close Christy Clark pal. Another is Hydro CEO Jessica McDonald. She was Deputy Minister and confidant to Gordon Campbell in 2006 when the premier’s office invited predators to get rich on electricity. (Blogger Alison Creekside named lucky BC Liberal operatives and allies in her article Gordon Campbell’s Big Jobs.)

A decade ago, Citizens for Public Power member and SFU professor John Calvert wrote:

[quote]B.C. Hydro announced the outcome of its 2006 tender call for electricity from private energy developers. The results were startling. Not only had B.C. Hydro agreed to buy three times the power requested in the tender, it had done so at locked-in prices far above projected market rates.

…The core of that policy was laid out in the 2002 Energy Plan, which prevents B.C. Hydro from building new generation assets, and transforms the Crown corporation from a generator of publicly-owned electricity to a purchaser of energy from the private sector.

The rationale for this change is hard to fathom. The old policy worked very well. By generating its own power, B.C. Hydro ensured that ratepayers enjoyed, on average, the second lowest electricity prices in North America. This is because prices were based on the historic cost of production, not the current energy market price…[/quote]

Dr. Calvert’s warnings were insufficient and subsequent Liberal actions even more egregious. The professor noted early independent power producer (IPP) contracts locked BC Hydro (and BC taxpayers) into financial commitments of up to 40 years. Recently, contracts have extended to 60 years and all are indexed to protect suppliers against inflation. Some required large public expenditures for distribution. Calvert said IPP prices were double the market value but they’ve since risen to even more.

IPP costs explode under Clark

We also know that, instead of costing between $400 million and $500 million every year, IPP payments have climbed beyond $1.3 billion yearly, a number that has increased 188% since 2011 when Christy Clark was appointed Premier.

All graphics courtesy of Norm Farrell
All graphics courtesy of Norm Farrell

Chronically overestimating demand

BC Hydro’s encompassing blunder was failure to recognize technology and market changes revolutionizing the energy industry. Hoping to grow their fiefdoms and deliver value to demanding friends, Hydro executives chose to ignore reality. They steadily issued demand forecasts predicting immense growth. (“If a boy holds a hammer, everything needs pounding.”) Meanwhile, consumers were conserving.

Here’s how badly they’ve gotten it wrong:

  • In 1994, they predicted 52% demand growth by 2004. Actual growth: 18%
  • In 2005, they predicted 20% demand growth by 2016. Actual growth: 0%
  • In 2011, they predicted 20% demand growth by 2016. Actual growth: 1%
  • In 2012, they revised to 9% demand growth by 2016. Actual growth: -1%

Indeed, the utility’s records reveal that electricity consumption by regular customers has been flat for more than a decade.

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IPPs get rich on ratepayers’ backs

Despite all the above, over the past decade, amounts paid to IPPs have tripled. Independent power producers more than doubled deliveries to BC Hydro and the utility was forced to dump surplus power outside the province, with trades sales at an average, since 2005, of just 28% of prices paid private producers. And that loss is made worse because of Hydro’s collection and distribution costs.

10-yearsSo, for every dollar we pay them, we lose more than 72 cents.

Consumer demand was not growing, private power supplies were rising and export markets were soft. BC Hydro could only dump power outside the province for little revenue or reduce its internal production. Again, the utility’s own reports lead to a conclusion.

The following numbers are drawn from BC Hydro’s annual and quarterly reports and from U.S. Department of Energy market recaps. They demonstrate that in nine months, BC Hydro paid more than $600 million above market to independent power producers – having purchased the power from IPPs at $85,261/GWh, while the market for selling electricity to the US market was just $28,930 CAD per unit. Unfortunately, the rate of loss is accelerating.

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Liberals pulling Hydro’s puppet strings

The Liberal Premier and cabinet failed catastrophically when they directed BC Hydro to contract for private power the utility did not need at prices it could not afford. The extent of this gross mismanagement, unprecedented and ruinous for the crown corporation, remains concealed by government-friendly media that is enjoying millions of public funds spent on advertising and public relations.

The Liberal decision to exercise absolute control over BC Hydro’s management was made clear in 2008. CEO Bob Elton, a qualified professional, was fired by Gordon Campbell after stating publicly, “Conservation is the cleanest, easiest and least expensive way to meet the increasing demand for electricity in B.C. – it’s like building a virtual dam.”

Reducing consumption of electricity simply did not fit with the Liberal gang’s desire to buy private power from their pals for tens of billions of dollars.

The goose that lays the golden egg

More recent opponents of Liberal power policy assume that, beyond grabbing the profits to be made flipping IPP contracts, political operatives aimed to cripple BC Hydro to make its privatization palatable. The writer believes that, while this was the initial plan, the guiding parties decided they could gain more another way.

There was no need to privatize Hydro’s assets and liabilities. Instead, they privatized its profits and left Hydro and the public with all the financial risks.

One example is Site C, which will create more unneeded and unaffordable power. No private investors in the world would fund a hydroelectric dam with environmental issues, First Nations conflicts and near zero prospects of profitable operations. But, if the public pays for the dam and sells power to the private sector at a fraction of cost, there are private profits to be made.

Former TD Bank Comptroller: Site C Dam too costly, unnecessary
Site C Dam will likely run well over its $8.8 Billion price tag

Budgeted at $8.8 billion, if spending on Site C matches other Liberal megaprojects, it will cost substantially more. That money goes straight into the pockets of big construction companies who have donated heavily to the Liberal Party. Far from caring about keeping the project on budget, they have a huge incentive to see that it goes over.

In addition, there are indicators the dam’s output will be less than forecast. In 2011 through 2016, BC Hydro’s three largest facilities annually produced 3.6 times stated capacities. Proponents claim that Site C, with 1,100 MWh capacity will produce 5,100 GWh. That is a ratio of 4.6, considerably above Hydro’s typical experience. Reduced production will mean higher costs for each unit of power the dam generates.

That should set off alarms for residents and small businesses operators. BC Liberal policy enables heavy industries to pay well below the average cost of new power so residents, commercial enterprises and light industry are the utility’s only profit producing customers. High production costs for private power and Site C output and weak export markets make significantly higher domestic prices inevitable.

Liberal donors control Hydro board

Hydro Board, Liberal DonorsClearly, BC Hydro has been in disarray for some time. In fact, it is operating as an affiliate of the BC Liberal Party. Of the eleven people collecting fees as directors of the province’s utility in the last fiscal year, all have records as party contributors or close associates of Liberal politicians. Some have business dealings impacted by business activities of BC Hydro.

Political meddling, moronic contracts, deceptive accounting and the self-serving management of mediocre hacks devastated what was once a competent and professional crown corporation. Not by accident or mere negligence, this was deliberate.

Recovery will not be simple or quick but, if it is to happen at all, a new beginning starts with the provincial election on May 9.

Note: Site C’s output was originally stated as 1,100 GW, which has been corrected to 1,100 MW.

Norm Farrell is a longtime blogger and published of IN-SIGHTS.

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Pipelines being driven by private equity firms through ratings agency they now own

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Former federal cabinet minister and Alberta Premier Jim Prentice, whose recent work with major private equity firm Warburg Pincus has seem him become a strong proponent for multiple pipelines. (Photo: Canada2020/Flickr)
Former federal cabinet minister and Alberta Premier Jim Prentice, whose recent work with a major private equity firm has him acting as a strong advocate for multiple pipelines.  (Canada2020/Flickr)

By Joyce Nelson

You may have caught the Sept. 12 headline in the Globe and Mail, the Edmonton Journal, etc: “Canada needs new energy pipelines, bond rating agency says.”

A new report from DBRS, Canada’s credit ratings agency (CRA), says Kinder Morgan’s TransMountain pipeline expansion, Enbridge’s Northern Gateway pipeline, and TransCanada Corp’s Energy East pipeline are all necessary, but, as the Edmonton Journal put it, the “strong political, environmental and regulatory opposition” to these projects throws “a big question mark over Canada’s energy future,” the report says.

Ratings agency bought by private equity firms

DBRS is Canada’s (small) equivalent to the big three CRAs: Moody’s, Standard & Poors (S&P), and Fitch, which wield enormous power around the world by granting or downgrading the Triple-A ratings of companies, countries, and governments. The threat of a downgrade by a CRA can create scary media stories, especially if the target is a local government.

In December 2014, DBRS was bought up by two huge private equity firms – Carlyle Group LP and Warburg Pincus LLC. Both invest billions in energy projects around the world.

Conflict of interest

Since the 1970s the CRAs (aside from sometimes issuing unsolicited ratings) are paid for their services not by investors who want to know the safety of a bond being issued, but by the bond issuers themselves – who obviously have a stake in getting a Triple-A rating for their investment vehicle. These factors came into play during the U.S. subprime mortgage bubble, when some investment banks were paying the big three CRAs millions of dollars for Triple-A ratings on what turned out to be toxic assets.

In July 2014, I wrote a three-part series (“Debunking the Bogeyman”) on CRAs for Rabble.ca, so I knew a bit about how these CRAs operate. When I saw that DBRS had been purchased by Carlyle Group and Warburg Pincus, my first thought was: I wonder what those investment giants will do with DBRS?

Prentice delivers message for private equity firms

Fast-forward to September 12, 2016 and the new DBRS report, stating: “If pipeline infrastructure is not built, Canada’s energy sector increasingly risks the eventual loss of global market share” and “could eventually see their credit ratings change without more overseas access…”

The next day, September 13, Bloomberg reported that PM Justin Trudeau is said to be favouring Kinder Morgan’s pipeline expansion, but former Alberta premier Jim Prentice “warned Kinder Morgan’s project alone won’t be enough.”

Bloomberg quoted Prentice:

[quote]’We need pipelines, we need pipelines to the West Coast, and most advantageous for Canada of course are pipelines into the Asia-Pacific basin and Trans Mountain would certainly be helpful,’ Prentice, a Calgary-based adviser in the energy group at Warburg Pincus, said Tuesday at the Bloomberg Canadian Fixed Income Conference in New York.[/quote]

The Bloomberg quote from Prentice continued: “‘But we also need to bear in mind that Trans Mountain won’t solve the problem,’ because tankers that can navigate the region are too small to service Asia, he said.  Canada needs an energy port that can ship up to two million barrels per day to Asia, Prentice said, and Canadians should be concerned that investors are cooling to the country’s oil patch. ‘The concern that really should alarm us as Canadians is low-cost capital is exiting the Canadian basin,’ he said.”

So Warburg Pincus adviser Jim Prentice is endorsing the views of DBRS, owned by Warburg Pincus and the Carlyle Group, which have billions they want to loan to governments for investment in infrastructure. Prentice had earlier been a paid advisor for Enbridge in 2014, helping the company negotiate with First Nations opposed to Northern Gateway. 

Revolving door

BlackRock's New York headquarters
BlackRock’s New York headquarters

Making the picture even more interesting, on September 12 the Financial Post reported that Mark Jenkins, global head of private investments at the Canadian Pension Plan Investment Board (CPPIB) is leaving to take a senior leadership role at the Carlyle Group. The CPPIB’s Mark Wiseman has already left to work for BlackRock, the biggest asset manager in the world.

As I reveal in my forthcoming book – Beyond Banksters: Resisting the New Feudalism – all these big financial players are central to the infrastructure and privatization plans being rolled out for Canada and North America in the coming months. The Justin Trudeau Liberals are planning to spend $120 billion on infrastructure (by borrowing from private sources), and are readying for their 2017 budget announcement, which will reveal Phase 2 of their big infrastructure plans.

On November 14, BlackRock (which manages trillions of investment dollars) will host a private summit for major international investors hoping to loan billions of dollars to Canadian governments for infrastructure spending. On the speakers list are Justin Trudeau, Finance Minister Bill Morneau, Infrastructure Minister Amarjeet Sohi, and other federal officials.

Will the Carlyle Group and Warburg Pincus be at that private summit? You can safely bet on it. Will the press be allowed to cover this private summit that includes our elected officials? That’s a big question. Will DBRS be playing a bigger role in the next few months? Stay tuned.     

Joyce Nelson is an award-winning freelance writer whose sixth book, Beyond Banksters: Resisting the New Feudalism, can be pre-ordered at http://watershedsentinel.ca/banksters now.

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Opinion: Environment & Climate Change Minister Catherine McKenna gets failing report card

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Environment and Climate Change Minister Catherine McKenna gets failing report card
Environment & Climate Change Minister Catherine McKenna (Mike Gifford/Flickr cc licence)

The following is an op-ed by Dr. Eoin Finn – B.Sc., Ph.D., MBA

In October 2015, SFU Energy and Materials Research Group  Professor Mark Jaccard published a report titled “Canadian Climate Policy Report Card: 2015”. In part, it is a damning critique of the (Harper) Conservative Government’s climate action record, though it documents over three decades of inaction by Governments of all stripes.  Its Executive Summary concludes that:

[quote]Over the past three decades, governments in developed countries have made many commitments to reduce a specific quantity or percentage of greenhouse gases by a specific date, but often they have failed to implement effective climate policies that would achieve their commitment. Fortunately, energy-economy analysts can determine well in advance of the target date if a government is keeping its promise. In this 2015 climate policy report card, I evaluate the Canadian government’s emission commitments and policy actions. I find that in the nine years since its promise to reduce Canadian emissions 20% by 2020 and 65% by 2050, the Canadian government has implemented virtually no polices that would materially reduce emissions. The 2020 target is now unachievable without great harm to the Canadian economy. And this may also be the case for the 2050 target, this latter requiring an almost complete transformation of the Canadian energy system in the remaining 35 years after almost a decade of inaction.[/quote]

This summary even-handedly describes a similar era of inaction under the (Chrétien /Martin) Liberal governments. After all, it was a Liberal government that signed the 1997 Kyoto agreement, and then lollygagged along to their 2006 ejection without taking a single significant action to ensure its ambitious targets could be met.

Real Change?

Trudeau and McKenna (Photo: Environment & Climate Change Canada/Flickr)
Trudeau and McKenna (Photo: Environment & Climate Change Canada/Flickr)

Justin Trudeau’s October 2015 electoral elevation to power came with a Liberal policy book promising “Real Change” on this file. It started well. A new National Energy Board Environmental Review process was promised. November’s COP21 in Paris saw Canada espousing lofty climate goals to the theme of “Canada is back”. February meetings in Vancouver with provincial Premiers urged setting a price on carbon. A climate change test was added to environmental assessments, and promises to eliminate fossil-fuel subsidies and promote sustainable technologies were trumpeted.

However, of late, the decisions of the Government, and this Ministry in particular, evoke a creeping sense of déjà vu and backsliding on the climate file and the instructions in Minister McKenna’s mandate letter. Cogent examples of these decisions include:

  • Failure to clarify what, exactly, Canada’s GHG emissions target should be if we are to play our part in meeting the COP21 goal of limiting climate change to an increase of less than 20C.  There is a looming gap between Environment Canada’s 2030 GHG emissions estimate of 817 megatonnes and the Copenhagen target of 524 millions. Nobody in McKenna’s remit (or Energy Minister Carr’s) seems to wants to grasp that 300 megatonne nettle, nor venture an estimate of what further reductions will be needed to meet COP21 commitments
  • Maintaining the Harper Government’s unambitious and inadequate GHG emission targets of 17% reduction by 2030, which, without swift action, we have no hope of meeting
  • Bowing to the desires of a few Premiers to kick the carbon-tax proposal down the road and (they hope) out of sight
  • Inaction on the review of the Oil & Gas industry emissions that successive Environment Ministers in the Harper Government had promised year after year. This industry contributes over 26% of Canada’s GHG emissions. Singling it out for inaction suggests that this Government is also a “captive regulator”
  • A decision to continue the 30% accelerated capital cost allowance for LNG facilities – a fossil-fuel subsidy granted by the Harper Government in 2014
  • Approval of the Woodfibre LNG plant in Howe Sound, despite its almost 1 million tonnes of annual GHG emissions. This puzzling and highly-unpopular decision also belied another Trudeau promise – that of “politicians may issue permits, but only communities can grant permission”
  • Cabinet’s approval of NEB’s decision to approve Kinder Morgan’s Trans Mountain pipeline extension, LNG Canada’s 40-year license extension for its Kitimat plant and Steelhead LNG’s 5 export licenses – each of which represents a vast expansion of Canada’s GHG emissions
  • Publicly supporting the Keystone XL and Energy East pipeline proposals
  • Silence and inaction on repealing any of the Harper Government’s egregious environmental legislation – particularly the omnibus Bill C-38, which shredded environmental protections in the Species at Risk Act, Navigable Waters Act, NEB Act and 60+ others
  • Promises to reform the National Energy Board and its farcical review process replaced with nominating yet another dubious set of second-guessers. This is hardly the stuff of meaningful reform to “restore public confidence” in the NEB;
  • Not one concrete legislative or regulatory action on Liberal energy efficiency promises – boosting renewable alternatives, setting tighter automobile emission standards, elevating building insulation standards, promoting public transit initiatives, and inaction on the PM’s lofty promise to the U.N. that “Climate change will test our intelligence, our compassion and our will. But we are equal to that challenge. I encourage other signatories to move swiftly to follow through on their commitments”. Since then – nothing, nada, zilch.

Blowing hot air

Recent interviews with Minister McKenna have deteriorated into the avoidance, obfuscation and outright nonsense many had come to regard as par for the Harper Government course. Even allowing that this Ministry deteriorated hugely in the 10 years of Harperite neglect, this about-face and foot-dragging is deeply disappointing to scientists and NGO’s, many of whom worked hard on the election that put the LPC in power. Remembering the counsel that “those who cannot learn from history are doomed to repeat it”, this trend is highly discouraging to those who thought October’s election result would herald sunnier ways on the climate front.

Kinder Morgan, PNWLNG will tell the tale

Lelu Island and Flora Bank - site of Petronas's controversial, proposed LNG terminal near Prince Rupert (submitted)
Lelu Island and Flora Bank – site of Petronas’s proposed PNWLNG terminal near Prince Rupert (submitted)

The Minister’s (and Government’s) grade on its climate report card: a big fat “F”. As they say in the North – big sled, no dogs. 

Two litmus tests for her and the Liberal Government loom large – decisions on the Kinder-Morgan/TME pipeline expansion and Pacific NorthWest LNG.  Approving either would undermine policies for “Real Change”, return Canada’s international reputation to the doghouse, consign to the dumpster the promises of a better First Nations relationship and severely dent chances of re-electing Federal Liberals in BC in 2019.

On this form, if Professor Jaccard is to write a 2020 update to his report, it won’t arrive at any different conclusion.

***************

Dr. Eoin Finn is Director of Research for My Sea to Sky, an NGO concerned about proposals to re-industrialize iconic Howe Sound, BC.

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Cost-cutting trumps safety at Woodfibre LNG

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The aging "LNG Taurus" off of South Africa in 2013 ( Photo: Anton Bergstrom )
The aging “LNG Taurus” off of South Africa in 2013 (Photo: Anton Bergstrom)

Written by Eoin Finn

In a recent post in the Squamish Chief and other media, Woodfibre LNG’s VP Byng Giraud said he must “cut costs to make the business profitable”. The company website states that safety will come about through “Use of appropriate materials and compliance with industry and safety best practices” andProper engineering design of all onshore and floating facilities”.

Many wondered what the tradeoffs would be between safety and cost. Now comes word from the influential shipping magazine TradeWinds last month that Woodfibre plans “to use two elderly LNG carriers as floating storage units (FSUs)…Two LNG carriers, the 126,300 m3 LNG Capricorn (built 1978) and LNG Taurus (built 1979), which were purchased by Singapore-based Nova Shipping & Logistics last year, have been widely rumoured to be earmarked for conversion into FSUs for the Woodfibre project. Both ships are currently laid up in Southeast Asia”.

Past “best before” date

LNG Capricorn (Photo: Frasquito/FleetMon)
LNG Capricorn (Photo: Frasquito/FleetMon)

You may well ask: What can possibly go wrong with using two “elderly” 285m.-long, bolted-together vessels holding 120,000 tonnes of flammable fracked gas in the waters of Northern Howe Sound?  The answer is … plenty! Consider that:

These ships are old! At almost 40 years old, they are among the oldest 5% of  the world’s 420+ LNG carriers and 3.5 times older than the fleet’s average age. Putting that in human terms, these ships are nearing 150 years old. If installed for the 25-year life of the plant, by 2045 they would be by far the oldest active LNG vessels ever; 

An LNG plant near populated areas is no place for aging rust-buckets, acquired for eight cents on the dollar, that are well beyond their 20-year design lifetime. This lifetime takes into account the stress, metal fatigue and tank damage these ships endure from pounding waves  (100 million of them over 20 years of voyages), sloshing cargoes, electrolytic thinning of the hull’s steel and rusting of key pumps and valves essential to keeping the vessel operating safely;

If a spill were to happen – an accident or a terrorist attack on these “sitting ducks” – these tankers have no secondary containment. Like Chernobyl’s reactors and Lac Megantic’s rail-cars.

LNG novice takes unprecedented chances

Woodfibre’s configuration would be a first.  There’s not a single instance worldwide of an LNG liquefaction plant using floating LNG storage. Woodfibre and its parent have never built or operated an LNG facility anywhere.  Ever.

Japan, the world’s leading importer of LNG, knows a thing or two about disasters, and insists on putting LNG storage tanks on land, buried up to their domes, so a spill can’t go anywhere untoward. Woodfibre’s on-the-water storage scheme violates that hard-learned safety precaution and Canada’s CSA safety standard of having tanks spaced at least a tank diameter apart;

SIGTTO (the LNG industry’s association) recommends that LNG facilities have tugs available 24/7 to help LNG tankers maneuver quickly away from the loading jetty should the need arise (due to spills, fires, forest fires, winds over 25 knots).  As these two bolted-together tankers will have no engines or crew aboard, accomplishing this simple safety step will be difficult, if not impossible. What tug (or hypothetical fire-boat) would be brave enough to approach and try to tow away a pair of burning, engineless LNG tankers?  Where would they take them – to Squamish, Britannia, Anvil Island…where??

Both vessels have been in accidents

Transferring LNG from these FSUs to the transiting LNG tanker will have the three tankers lined up broadside to one another at the jetty (yes – the same place where, in 1955, the entire jetty suddenly slumped into the depths of Howe Sound, taking an onsite warehouse with it). This will require the delicate act of transferring the -1620C LNG, via an inflexible metal bellows, between ships moving vertically and laterally relative to each other in the waves. In the often-windy conditions of Howe Sound. All while balancing the amount of LNG taken from each storage tanker so as not to stress the bolts strapping them together. Ship-to-ship LNG transfer was not invented when these tankers were built and has only recently been tested, in one trial, under perfect conditions;

Both of these vessels have been in accidents.  The LNG Taurus suffered severe hull damage in a grounding off Japan in 1980, while the LNG Capricorn had a fire in its #5 insulated tank and hard-whacked a pier while docking. In the Taurus incident, the Captain so feared the catastrophic rupture of the ship’s LNG tanks that he took his own life on the spot. His ghost is rumoured to haunt the Taurus!

Putting a price on safety

Given this apparent sacrifice of public safety on the altar of cost reduction, it is cold comfort to contemplate the words of Woodfibre LNG’s Vice-President Byng Giraud – then (2013) VP of Imperial Metals’ Mount Polley Mine – who said “There needs to be a public realization that the costs imposed on industry to remove extreme risks—reducing a risk from one in 1,000 to one in 10,000—comes with a price.”

Indeed it does. Just ask the victims of disasters in Likely, BC, Lac-Mégantic, Fort McMurray, Halifax, Westray and Grassy Narrows.

Eoin Finn is a retired KPMG partner and a seasonal resident of Bowyer Island in Howe Sound. He holds an MBA in International Business and a Ph.D. in physical chemistry.

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Engineers- Tanker risks from Kinder Morgan expansion being ignored

Engineers: Tanker risks from Kinder Morgan expansion being ignored

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Engineers- Tanker risks from Kinder Morgan expansion being ignored
An oil tanker passing beneath the Second Narrows and rail bridges in Burrard Inlet

The following is an op-ed by Brian Gunn of the group Concerned Professional Engineers.

Kinder Morgan’s proposed project to increase their transport of Diluted Bitumen from the Eastern Burrard Inlet to the Pacific Ocean offer risks that are many times higher than those accepted for other major infrastructure projects.

As Concerned Professional Engineers (CPE) we feel this is not acceptable.  We believe that a proper analysis of risk needs to be made to ascertain whether risks proposed by Kinder Morgan are acceptable and anything less than that is gross negligence on the part of decision makers.

Kinder Morgan predicts 10% risk of major spill

First, what is risk?  The dictionary defines it as a situation involving exposure to danger or exposing someone or something valued to danger, harm or the possibility of financial loss.  When it comes to building infrastructure like homes, bridges, buildings and highways, various levels of government have established building codes.  These are set parameters for how structures must be built so they meet a tolerable risk. 

Kinder Morgan predicts a 10 percent risk of a major oil spill, greater than 8,250 cubic meters during the 50 year operating life of the project.  They have not made available the computational tools they used to make that risk analysis.  As well, the Port Authority of Vancouver refused a recommendation to clear the Vancouver harbour when the oil tankers would be moving through it.  On top of this, the risks and consequences of a tanker hitting the Second Narrows Bridges have not been evaluated, despite our requests to the National Energy Board (NEB).  Together these variables increase the risk of the project.

Even accepting Kinder Morgan’s computer generated risk assessment, the Trans Mountain Expansion poses a far higher risk than what is acceptable for buildings and bridges.

Double standard

Building codes demand that the risk of an earthquake occurring, causing probable collapse of a structure, be no more than two percent over a 50 year period.  Kinder Morgan’s numbers are five times higher (10 percent over a 50 period).  In other words, the acceptable risk for an oil spill is not up to the same standard as it is for earthquakes. 

A much smaller vessel than an Aframax tanker collides with the rail bridge in 1979
A much smaller vessel than an Aframax tanker collides with the rail bridge in 1979

New bridges like the Port Mann bridge must meet the Canadian Bridge code guidelines that the probability of collapse be no more than 0.5 percent over a 50 year operating life.  This is in recognition of the fact that if a ship collides with a bridge it could cause catastrophic damage to the bridge or even collapse.

Historically, there have been a number of collisions with the railway bridge at the Second Narrows, when hit by vessels of a much smaller scale (weight, height and width) than that of an Aframax tanker.  In two cases, the bridge has been completely knocked out of service and had to be rebuilt.  Damage to the Second Narrows Highway bridge can result in economic catastrophe because it is a main artery of transportation in Vancouver. 

Is it acceptable to risk collision with any bridges in the Burrard Inlet?  Is the consequence of an oil spill in the city of Vancouver, a place seen by the world as both green and vibrant, acceptable?  Our answer is ‘no’. 

Brian Gunn

Spokesperson for CPE

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Longtime Lions Bay Mayor: LNG is plain dirty, violates Canada’s climate commitments

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Christy Clark promotes "Clean LNG" at Vancouver conference last year (David P. Ball)
Christy Clark promotes “Clean LNG” at Vancouver conference last year (David P. Ball)
By Brenda Broughton
It is vital to oppose the previous government’s disregard and denial of science.
However, this new government appears to be cherry-picking the science it uses and then hiding behind the science against the interests of citizens and against the science needing review to meet COP 21 commitments.
Justin Trudeau and Christy Clark (Province of BC/Flickr CC)
Both Justin Trudeau and Christy Clark are ignoring the climate science on LNG (Province of BC/Flickr CC)

No part of the word ‘clean’ should be used in association with LNG, as LNG is NOT clean energy. This is very clearly stated by the oil and gas industry. It is very curious that the Provincial and Federal governments are refusing to acknowledge this clear fact-based science that LNG is NOT clean energy. It is only government, not industry, that is attempting to erroneously and wrongly market LNG as clean or cleaner energy.

Governments are failing COP 21.

Courageous leadership is essential. Canadians were promised intelligent leadership and we are receiving dogmatic decisions not based upon intelligent leadership. This now must become a public discussion.

Woodfibre LNG is wrong, science and scientists report that it is wrong for the environment and acts against COP 21 goals.

The CEAA called for public  comment on the GHG emissions and upstream impacts on February 9th, 2016 without notice, and ending March 1st, 2016, thus providing only 3 weeks for public comment.

Squamish Council faces legal action from both sides in LNG pipeline dispute
Citizens line the Sea to Sky Highway to protest Woodfibre LNG (My Sea to Sky)

In this brief period the CEAA received 9, 980 public comments. In analyzing the comments including the just short of 100 verbal presentations, there were 11 neutral, 83 written letters of support, with only a handful addressing the science, and 99.1% opposed, that is, approximately 9,800 comments of opposition with most comments addressing the GHG emissions and the upstream impacts.

At the Liberal Convention ‘People, People, People’ was said to be important by several including the Prime Minister, and yet the Minister of Environment appears to not have even reviewed these CEAA responses and stated that they relied on the BCEAO analysis, which was not based upon science and was concluded prior to COP 21. Science and sustainability also includes people.

Woodfibre LNG will not produce any revenue for the following reasons:

1. PST forgiveness negotiated for LNG export in BC;
2. NEB allowance for an offshore Woodfibre company for retail sales;
3. Provincial carbon tax forgiveness of 5 million tonnes;
4. Total of 32 jobs which after payroll tax paid. Province of BC will pay net to Woodfibre LNG between $200,000 to $600,000 dollars annually;
5. No tax revenue will be realized and our economy, environment, fisheries, marine and human safety will be seriously compromised as Howe Sound and its beauty are an economic driver for Canada.

The Squamish First Nation has no jurisdiction over most of Howe Sound. The peoples of Howe Sound are very concerned, as their opposition is not being heard. The Minister of Environment appears to have not reviewed the science and also to be turning her back on, or avoiding speaking or meeting with the people expressing real and serious concerns.

 Supertanker Shipping does not meet the International SIGTTO Shipping lane standards, thus in the United States, Howe Sound would have automatically been rejected as a possible LNG Supertanker Shipping lane as it is too dangerous, with pre-existing population and pre-existing commerce.
Last day for public comments on Woodfibre LNG proposal
Rendering of proposed Woodfibre LNG project near Squamish, BC

Woodfibre LNG is the only single cycle water exchange design among the BC LNG proposals. This is outlawed in the United States and any LNG plants with the single cycle have changed them or are on notice for change. The single cycle water exchange will damage herring roe, and thus harm the health of Howe Sound. The herring roe is drawing dolphins, who are drawing whales to Howe Sound.

Howe Sound has been in an active recovery for decades and had a significant pink salmon catch of 300,000 recently. This renewal of the fish has taken decades to accomplish following a decades-long and amazing clean up. The single cycle will also warm the water further harming spawning grounds and potentially attracting warm water primitive sea life, such as sharks. Howe Sound is a regular swimming location at Lions Bay, Porteau Cove, Bowen Island, Gambier Island, Anvil Island, Camp Potlach and is the home of many children’s camps for the Metro Vancouver region.

Brenda Broughton (Twitter)
Brenda Broughton (Twitter)

I implore you to reverse the Woodfibre LNG decision, with the Minister of Transport and the Minister of Fisheries advisedly and unequivocally denying permits.

The growing addiction to minimization of the environmental damage that will occur if Woodfibre LNG goes ahead, must stop. Ministers who continue to minimize rather than make courageous leadership decisions on behalf of the environment and Canada’s COP 21 goals, for the economy now and in the future, should step aside from their Cabinet posts immediately.

Brenda Broughton, MA, RCC is the former 5 term mayor of the Village of Lions Bay and Envisioner and former Charter Chair of the Howe Sound Community Forum.

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BC Hydro being used to funnel tens of billions to Liberal friends

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BC Hydro being used to funnel billions to Liberal friends

By Norman Farrell – republished from In-sights

Readers may tire of reports on BC Hydro but the more I examine this public utility, the more convinced I am that citizens of BC are victims of massive financial deception.

In 20 years leading up to 1996, BC Hydro’s average annual revenue from trading in North American electricity markets was $115 million. In three years ended March 2003, the utility realized gross trading revenue of  $11.25 billion, although that sum was tempered by the $1 billion or so BC Hydro paid to end a subsequent lawsuit by California.

Transferring risk

Construction of a private power project on the Ashlu River (Photo: Range Life)
Construction of a private power project on the Ashlu River (Photo: Range Life)

Although the American power market had been manipulated by Enron and other criminal fixers, Gordon Campbell and his colleagues believed that British Columbia could become a permanent power supplier to the western USA. Liberals wanted the electricity to be created by private operators, but it was soon clear that private entrepreneurs were not prepared to take significant financial risks.

The provincial government was determined to proceed so it decided that BC Hydro would sign long-term contracts to purchase power produced by independents at prices that made projects attractive to investors. This effectively transferred all business risks from private operators to the public. While dumb, it’s a fairly common occurrence today when governments are keen to be seen as business-friendly.

Compounding the situation was the Liberals’ misjudgment of future markets because they didn’t anticipate improved technologies and growing availability and affordability of alternative power. Consumption efficiencies, declining heavy industries and falling costs of solar and wind permanently changed the energy industries.

A losing proposition

BC Hydro has contracted with independent power producers for increasing quantities at prices adjusted upwards each year for inflation. But, domestic demand has been flat for a decade and the export market in the last five years has returned only 2.8¢ per KWh, a fraction of the 22.8¢ gained in the heyday of 2001.

Because it is buying each KWh from IPPs at over 9¢ but has no need for the total it must buy, BC Hydro is left with two choices. One is to generate less power in its own facilities and the other is to dump power outside the province at prices less than 1/3 of the amount IPPs are paid. BC Hydro is doing both.

Spending more to make less

power sourcesI’ve had utility defenders argue the company has never reduced its own output to accommodate private power so I reviewed sources of power reports for more than two decades. Here is a chart showing the last five years under Premier Clark’ leadership and the five years between 1996 and 2001.

The situation is not improving. In FY 2015, BC Hydro facilities generated 41,443 GWh of electricity. In FY 2001, those very same sites produced 49,940 GWh, which is 20% more.

However, here’s a vital point. In 2001, BC Hydro had assets of $12.6 billion. In 2015, assets had grown to $27.8 billion. The company has been spending heavily, allegedly to make the system more efficient. In fact, what is continuing is misappropriation of public wealth for the benefit of suppliers, contractors and other BC Liberal friends.

Some people believe the government intention is to privatize BC Hydro. However, I believe the present situation, with another $10 billion of public funds being thrown at Site C, is working just fine for Christy Clark, her cabinet colleagues and their sponsors.

Citizens should be asking for explanations, from politicians and the pro-media journalists who choose to ignore these facts.

A longtime blogger and publisher of In-sights, North Shore resident Norman Farrell has experience in a broad range of small business activities with a particular focus on accounting and financial management.

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