Category Archives: Fracking

What is John Horgan thinking on LNG?!

March 22, 2018Energy and Resources, Fracking, LNGfeaturedDamien Gillis

John Horgan announcing a new framework for LNG (Province of BC / Flickr)

In his desperate bid to keep Christy Clark’s LNG pipe dream alive, John Horgan has become completely untethered from reality.

Today, he announced further tax incentives for the industry – as if the sweetheart deal the Liberals gave them wasn’t bad enough for BC taxpayers already. Now, the industry won’t pay PST on construction costs for their plants and it will receive hugely-subsidized electricity from BC Hydro. Prior to the NDP taking over, the industry already secured big federal tax breaks and such a huge discount to the export tax that was supposed to fill our “Prosperity Fund” coffers as to render it meaningless. What was supposed to be a 7% tax got slashed to 1.5% and the industry could deduct its capital costs, so that it would pay no export tax until those were recouped (a.k.a. never). Apparently that wasn’t enough. The NDP is also repealing the LNG income tax.

This all makes for some real head scratching when one reads the technical briefing on the NDP government’s new LNG framework, compiled by Deputy Minister Don Wright. For instance, it boasts that Kitimat LNG – a consortium led by Chevron – would bring a windfall of public monies:

“The Ministries of Finance and Energy have estimated that the project will generate $22 billion in direct government revenue over the next 40 years…Significantly more if ‘multiplier’ effects are taken into account.”

Really? Even if that whopper of a figure encompasses upstream royalties, surely these ministries are aware that royalties have plummeted in recent years – from an annual high of $2 Billion in 2005/06 to a record low of $139 million in 2015/16, according to this useful report by Marc Lee at the BC Centre for Policy Alternatives (which Mr. Wright apparently hasn’t read).

It gets worse. “In addition to royalties paid on gas production, companies bid at auction for the rights to explore and drill on public land, known as leases of Crown land tenure,” Lee explains. “These revenues hit a record $2.4 billion in 2008/2009 and have now almost completely dried up: $16 million in 2015/2016 and a projected $15 million in 2016/2017. ”

Granted, these numbers have increased under the NDP, as Norm Farrell has documented – but with virtually no other tax revenues from the industry and a massive loss to Hydro ratepayers on steeply discounted electricity, it’s impossible to conceive of the $22 Billion-plus in government revenues Mr. Wright is promising.

On those Hydro rates, the NDP wants to extend to the LNG industry the old sweetheart deal we’ve given sawmills, pulp mills and mines, which used to be around half of what you and I pay for power but would now amount to less than a third of the cost of Site C’s new electricity. So you will get the privilege of paying $15 Billion-plus for a dam you didn’t need – which wipes away First Nations’ rights and vital farmland – all to give the power away for pennies on the dollar to the likes of Chevron, Shell and PetroChina! Doesn’t that make you feel so much better about the NDP’s decision to forge ahead with Site C?

Compounding the confusion generated by Mr. Wright’s report are the sections on climate action and reconciliation with First Nations (it claims Kitimat LNG “has received the support of most – but not all – area First Nations”). By cooling its gas into liquid using power from Site C – which has definitely not received the support of most area First Nations – Kitimat LNG would reduce its plant emissions nominally, making it “the least GHG-intensive large LNG facility in the world”, says Wright’s briefing, which is like being the skinniest obese person at KFC.

This does nothing to address the massive upstream GHG’s that come from fracking and processing this gas, which the David Suzuki Foundation’s John Werring has documented in horrifying detail. His peer-reviewed research, published in the journal Atmospheric Chemistry and Physics Discussions in 2017, revealed the staggering degree to which BC is underestimating the climate impacts of fracking.

This lines up with the leading research on the US industry, coming out places like Cornell University, which suggests that up to 8% of gas that is fracked leaks into the atmosphere by way of “fugitive methane emissions” – some 86 times worse for the climate than CO2 over a 20-year time scale. This explains why Dr. Robert Howarth from Cornell laughed when I put to him Premier Clark’s labelling of BC LNG – almost all of which would come from fracked shale gas – as the “cleanest fossil fuel on the planet”. “Your premier has her facts wrong,” he told me.

“Methane is such a powerful greenhouse gas that when you look at the cumulative impact of these greenhouse gas emissions, natural gas – and particularly shale gas – is the worst of the fossil fuels.”

The NDP government, in Wright’s presentation, acknowledges “leakage” associated with the gas industry. Only it’s a completely different type. “Government is committed to implementing a comprehensive Climate Action Plan that will meet B.C.’s carbon goals without disadvantaging our large industries,” it notes, adding, “Losing market share to companies who pay little or no carbon tax – known as carbon leakage – harms B.C.’s economy while causing higher global carbon emissions.”

So the “carbon leakage” they’re concerned about is the lack of competitive advantage inherent in our carbon tax being applied to the LNG industry. And they provide no answers to this problem other than vague statements about somehow making BC’s LNG “the cleanest in the world”. Clearly, highly-subsidized electricity is one piece of the puzzle, then there’s “Implementing strategies that enable industries to be the least GHG-intensive per unit of output in the world”. Thank you for clearing that up. Let’s get right on with implementing those unnamed strategies – that ought to magically take care of it.

It’s no wonder environmental groups are panning Horgan’s have-your-cake-and-it-too LNG framework. Says Jens Wieting of Sierra Club BC, “Pretending that LNG is part of a climate friendly future is as ludicrous as Prime Minister Trudeau saying we need tar sands pipelines to fight climate change.” Touché.

Even with all theses goodies the NDP is dangling, it’s doubtful Shell and PetroChina will take the bait and reach a Final Investment Decision. The Asian LNG market has picked up in recent months, but that’s likely temporary, with three large Australian plants coming online in 2018, Qatar lifting a moratorium on its massive North gas field, and a number of other key developments among the world’s major LNG players, including the US, which has entered the fray.

Most analysts forecast a global glut in LNG, but there is a little room for new projects to help meet peak winter demand. Canada, however, isn’t cost-competitive enough, and even these gifts from the NDP won’t substantially change that.

Getting fracked shale gas from northeast BC to market is an expensive proposition – on the order of $9-11/MMBtu. Asian prices have come up to that range recently, but over the past several years, they’ve typically been half that, meaning companies exporting it would do so at a substantial loss. Increased supply coming online will put further pressure on prices and send them back down from whence they came, leaving only the most competitive jurisdictions in the game. According to energy analysts Sanford C. Bernstein & Co., “Projects in Qatar, Papua New Guinea, Russia and the U.S. are most economically appealing, followed by Mozambique, Australian expansion projects and an Alaskan mega-project.” Notice which country is not on that list.

So even with all these contortions – the untenable doublespeak on climate action and LNG, the irreconcilable implications for First Nations, and giving away the farm to industry – the Horgan NDP will likely get no further with this pipe dream than its predecessors did.

What they might just succeed in doing is provoking the BC Greens to bring down their government, which leader Andrew Weaver has threatened to do over LNG.

Thus, LNG remains what it has always been: an albatross around the neck of whatever BC leader is foolish enough to take it on.

The NDP’s only shot at winning in BC: Embrace the NEW ECONOMY

March 25, 2016Economics, Energy and Resources, Fracking, LNG, Oil&Gas, Politics, Renewables, Western CanadafeaturedDamien Gillis

The NDP's only shot at winning in BC: Embrace the NEW ECONOMY — BCNDP Leader John Horgan has a tough row to hoe to win the next election (BCNDP/Flickr)

The following is Damien Gillis’ rebuttal to colleague Rafe Mair’s recent piece, “By Backing LNG, the Horgan NDP lost election before it began”

I agree with my colleague Rafe Mair on most things – including his commentary that John Horgan and the NDP’s choice to back LNG has been a political disaster. The only real difference between Rafe’s and my views on the subject is that I still think they have a shot, a slim one albeit, to win next year’s provincial election. But only if they own up to their mistakes and quickly embrace a new, winning narrative.

Magic formula

That narrative is simple. It’s the only one they can win with and it’s so simple and powerful that if they pick it up, short of a Monica Lewinsky-level scandal, it will return them to government. This is it:

[quote]New Democrats, New Economy

[/quote]

Why is this the perfect slogan? It does everything the NDP needs it to. It promises an economic vision and jobs – the things people most want to hear. It contrasts them with the Liberals’ dowdy Old Economy – a shortsighted, failing vision based on fifty-year old ideas like big hydro dams and oil and gas.

It promises the single most popular and alluring of election outcomes – the very thing that brought Barack Obama, Justin Trudeau and many other usurpers to power: Change. Finally, it sets the stage for protecting the environment and the economy at the same time – the Holy Grail of Canadian politics today. I’m telling you, roll with this slogan, backed by a solid campaign, and you win.

It’s the economy, stupid

In the aftermath of the NDP’s catastrophic loss under Adrian Dix last time around, I penned a post-mortem titled, “It’s the economy, Stupid NDP” (based on American political guru James Carville’s famous slogan to that effect). I stand by every word to this day. The main points I made therein are:

The NDP didn’t deal with the ballot box issue of the campaign (and more often than not the key issue of all campaigns): the Economy.

The NDP failed to tell a compelling story, while the Liberals spun a powerful “jobs” meta-narrative. Sure, it was all bullshit, as we now see, but it worked at the time. They were going to deliver untold “prosperity” to British Columbians by building a brand new LNG industry. The NDP, by contrast, had no vision, no story to offer.

The NDP, in Mr. Dix’s pathetic “nice guy” campaign, failed to take away the Liberals’ only apparent strength – their purported fiscal prudence and economic mastery (again, all bullshit, as Rafe and I went around the province demonstrating, based on clear evidence).

Nice guys lose elections

The latter was easy pickens. You can be a strong, respectable, principled leader and still attack your opponent wherever justified. Christy Clark and her Liberals are unpopular and vulnerable, but you have to be willing to get your knuckles a little bloody in politics. You have to be willing to draw attention to the fact that Christy Clark failed three times to get a university eduction; worse yet, that she got stripped of her student presidency and fined for cheating in a campus election at SFU – hardly irrelevant when gauging her political character today.

Christy Clark commemorating new Port Mann Bridge - as it rang in at 550% of the government's original cost estimate of $600 million (Province of BC/Flickr) — Christy Clark commemorating the new Port Mann Bridge – as it rang in at 550% of the government’s original cost estimate of $600 million (Province of BC/Flickr)

You also have to be willing to remind voters that this government has increased our real debt from $34 Billion to well over $170 Billion since it came to power – much of that owning to a whole, new category of taxpayer obligations it invented to sweep sweetheart private power contracts and PPP construction deals under the rug (that’s not even counting the likely $20 Billion tab coming if Site C gets built).

You have to be willing to say that this government couldn’t manage its way out of a wet paper bag – pointing to a pattern of more than doubling initial estimates for major capital projects like bridges, highways, transmission lines and convention centres.

You have to be willing to tick off a long list of scandals, from triple-deleted emails and healthcare firings all the way back to illegally broken teacher contracts and BC Rail (hey, if your opponents are happy to go back to the fast ferries well, two decades later, over what now seems a paltry cost overrun by comparison to today’s boondoggles, well, then, BC Rail and legislature raids are more than fair game).

All of these things are fair game – not only that, they need to be brought up, in fairness to the electorate. But I digress. Back to that winning formula: The New Economy.

A golden opportunity missed

Asian LNG prices set to tumble further — LNG is a sinking ship (Jens Schott Knudsen/Flickr)

Nearly three years ago, I began doing townhall presentations around BC on the myths of the Liberal LNG vision. Armed with the latest data from Bloomberg and respected global and local energy analysts, I predicted that the bottom would fall out of the Asian LNG market long before we got to it (I said $8/unit, where the break-even point is around $12 – today it’s fallen even below that, with predictions of $4-5 over the next year, meaning it’s impossible to make a buck at LNG).

The response I heard from NDP MLAs at the time was, “We can’t say ‘No’ to everything.”

No, you can’t. But you can say “No” to stupid ideas and “Yes” to good ones. Had the NDP picked up on this intel 3 years ago, they may have taken a political hit in the short term, but by now, a year out from the election, they’d be looking like geniuses who could shamelessly crow, “We told you so!”

Say “Yes” to good ideas

Randall Benson is a former oil sands worker who runs a successful solar company and training program (Iron & Earth)

So, the flip-side of that coin is what you say “Yes” to. You say “Yes” to renewable energy. I don’t mean rip-off private power projects and old-school, destructive dams – rather our abundant geothermal potential, wind and solar.

You embrace a group like Iron & Earth – oil sands workers lining up to retool their skills for clean tech.

It’s no big leap for an unemployed gas pipeline welder from Fort St. John to weld wind turbine components instead, or for an oil sands electrician to wire up roof-top solar. We have the workforce – we just need to shift it from an old, shrinking economy, to a new, burgeoning one.

All around the world, except Canada, the leading industrial nations are getting it – investing tens of billions in renewable energy and reaping millions of new, green jobs. As our contributor Will Dubitsky recently noted, “according to the International Energy Agency, in 2015, an astounding 90% of all global electrical power capacity added was attributable to renewables.” Translation: nine tenths of the market for new electricity in the world today is clean tech, not fossil fuels. Pipelines, oil sands and fracking are on the way out. Why stake your future on a losing, outmoded idea?

Get creative

You also say “Yes” to the creative economy. Vancouver now has the biggest digital effects industry in the world and a booming tech sector – driven by the great lifestyle the region has to offer and a growing cluster of skilled people and hubs of activity and resources. Mayor Gregor Robertson is embracing and nurturing this trend, while Christy Clark has shown half-hearted acknowledgement at best. In the last election, her government also ran against the film industry – which is now thriving again in today’s low-dollar environment.

Super, Natural BC

You say “Yes” to preserving and growing our $13-14 Billion Super, Natural BC tourism economy, which employs over 135,000 people vs. 10,000 at the absolute peak of our oil and gas industry – roughly 3,000 direct jobs for British Columbians in oil and gas extraction and maybe double that in additional support services. But you don’t do that by destroying our salmon runs with LNG plants, marring our coastal viewscapes with bad clearcut logging practices, oil tankers and LNG plants. You don’t attract people to “the greatest place on earth” if it no longer is “the greatest place on earth”.

Adding value

Gas industry contributes 0.01 per cent of BC revenues, few jobs — Two of the province’s surprisingly few gas workers – in BC’s Horn River Basin in 2011 (Photo: Damien Gillis)

You also say “Yes” to local, value-added manufacturing. You don’t ship raw logs to China and Japan – you turn them into high-grade wood products here first, employing thousands in the process.

We seem to have it set in our minds that we’re bound to be nothing more than hewers of wood and drawers of water – a “resource” economy – forevermore. That’s our lot in life and there’s nothing we can do about it. Balderdash. It’s that sort of self-determining crap we’ve been feeding ourselves for decades and which keeps us from moving forward.

The bottom line is this: Oil and gas contributes a scarce few jobs to this province, compared with other sectors – same goes for mining. Don’t take my word for it – check out this handy chart, put together with Stats BC figures, for this publication by Norm Farrell.

Oil and gas also contributes just 0.1% of our provincial revenues – partly because since 2008 we’ve been subsidizing the industry to the tune of a billion dollars a year in taxpayer-funded infrastructure and massive royalty credit-backs. Imagine, for a second, if we invested that kind of dough in building a renewable energy sector!

We all gotta eat

Site C review panel changes mind, asks for ALC's input on farmland — The Peace River Valley is home to some of BC’s best farmland (Damien Gillis)

Finally, you say “Yes” to feeding ourselves. That means you don’t flood or disrupt 30,000 acres of the best farmland we have left to build a $20 Billion dam we don’t need. Agriculture is not only essential to our survival – it’s also important economically.

Getting that land into production would create jobs at the same time as it saves consumers money from the rapidly escalating cost of importing half our food from drought-stricken places like California.

The NDP created the Agricultural Land Reserve – arguably its single greatest legacy. It should stand loud and proud for it now.

No more Mr. Nice Guy

John Horgan’s a smart guy. He’s a hell of a lot tougher than Adrian Dix too and I doubt he’ll make the same mistake of running a “nice guy” campaign. I’m also liking what I started hearing from him late last year, in terms of taking a tough stance against Site C Dam and rolling out a green economy platform called PowerBC. He needs to go much further on both of these points, but, hey, it’s a start.

Chances are…

That said, Rafe is correct that Horgan and the NDP have dug themselves a huge hole by failing to counter the Liberals’ disastrous LNG fib. So BC faces three possible outcomes next May:

Despite all their mistakes, fibs and failings, the Liberals get back into power…again
The NDP, under John Horgan, finally gets it together, embraces the “New Economy” and wins an election for the first time since cargo pants and Tevas were in fashion
There is a very narrow possibility that the BC Greens, under the leadership of Elizabeth May – on the wild chance she heeds Rafe’s advice and takes over the BC party – come from nowhere and steal this election.

Based on our current trajectory, we’re headed for option 1 – which would be an unmitigated disaster for our economy and environment. But if there’s any chance of it being option 2, things have to start changing right now. The NDP can’t win by default – just because their opponents are so bad. The last election proved that in stunning fashion. Moreover, they don’t deserve to come to power, nor will they help the province unless they have the right vision and commitment to follow through on it.

They also must get their shop in order, as I noted in my post-mortem 3 years ago. The party’s back rooms need fresh blood and the various factions within the NDP must commit to working together and winning for once. This campaign cannot be the sloppy mess the last one was – they require a well-oiled machine to beat a slick political operation like that of their rivals. And all that starts at the top, with the party’s leader.

All of which means the ball is in John Horgan’s court. And nothing short of the future of the province hangs on his next move.

Rafe: By backing LNG, the Horgan NDP lost election before it began

March 8, 2016Energy and Resources, Fracking, LNG, Oil&Gas, Politics, Western CanadafeaturedRafe Mair

By backing LNG, the Horgan NDP lost the election before it began — BCNDP leader John Horgan (BCNDP/Flickr)

The following is the first in a two-part opinion letter series. In a sequel letter, Common Sense Canadian publisher Damien Gillis will do what he rarely does: disagree with his old pal and partner, Rafe Mair.

Dear John Horgan,

I hate to say this, but I told you so, and the flock of chickens I promised have now come home to roost.

Many months ago I took you to task for supporting LNG without reservation. I told you that by doing this you had prevented your party from questioning each and every step of the LNG process as well as government policy in trying to flog it.

“Against Everything”

Your excuse was that “we cannot be against everything”, probably the most nonsensical thing I have ever heard in the political arena and that’s saying something. What you said to your party and the voter is that whether or not you approve of a policy depends not on whether it’s good policy but the optics.

What, I asked, if it turns out to be lousy policy? How will you be able to criticize a policy you vowed to support? And that’s just what happened, Mr. Horgan…and I told you it would.

The duty to oppose

Rafe- Vancouver Sun keeps shilling for LNG, Woodfibre plant — Christy Clark promotes “Clean LNG” at Vancouver conference last year (David P. Ball)

I tried to explain Lord Randolph Churchill’s dictum that “it is the duty of the opposition to oppose”. You obviously haven’t studied your politics or you would know that what he was saying was, basically, you must test every proposition of government policy in order to demonstrate its value or otherwise. If you approve of a policy before then, you abdicate your duty to the people. This was no minor matter I raised, Mr. Horgan, but goes to the very root of our parliamentary system.

See what’s happened? Since that time Christy & Co have screwed up every aspect of the LNG issue and you can’t utter a word about any of them because you’ve given her policy your blessing! Isn’t that precisely what I warned you would happen?

A big, fracking mistake

Horn River fracking — A fracking drill in BC’s Horn River Basin (Two Island Films)

There surely is no need for me to list the litany of absurdities that the government has committed in the last term over LNG. I just raise a couple of factors.

You approve of fracking – even though most scientists condemn it. Is that perhaps because a lot of it happens in constituencies you covet?

The entire question of extracting gas to make LNG has now become a very significant issue, since the detrimental effects of methane have become known. When you gave your blessing, it was commonly said and, indeed, still is by Premier Clark, that LNG is the least harmful of all of the fossil fuels whereas we now know it’s the most harmful. Yet you’re unable to raise that issue.

On the question of the business handling of LNG, it’s hard to imagine that any government of any political stripe could so mangle a file as the Liberals have, yet you must be taken to approve – how dumb is that? Moreover, you must also accept as true all the sheer rubbish Christy has been pumping out about 20 LNG plants by 2020! Isn’t this just what I said would happen?

The company you keep

The situation in Howe Sound is a microcosm of the mess you’ve got yourself in – let’s have a peek.

Do you favour licensing a crook, big time tax-cheater and jungle-burner – the owner of Woodfibre LNG (WLNG) – to become part of our community, to be trusted by our environmental ministries, our finance ministries and the people of Howe Sound? The answer, sir, is yes, you do.

Do you favour the sham environmental process used by the Clark government to approve this company? The answer is yes, you do.

Do you care about the clear threat to sea life from toxic emissions from WLNG, a sea life that, thanks to cleanup mainly from citizens, includes a stunning return of herring, salmon, Orca, dolphins, sea lions and seals once largely gone? Of course you don’t, because you cannot quarrel with any aspect of LNG policy.

Tanker trouble

Do you give a damn that Howe Sound is far too narrow for LNG tankers, even by industry standards set by The Society of International Tanker and Terminal Operators (SIGTTO), headquartered in London – the de facto world authority on LNG terminal siting standards? I doubt you’ve even read them, for why would you when you uncritically support LNG?

Do you know that Dr. Michael Hightower, a world-renowned expert on LNG tanker operations at Sandia International Laboratories, has defined for the US Department of Energy three hazard zones of 500m, 1600m (1 mile) and 3500m surrounding LNG tankers? That this means virtually the entire Sea to Sky Highway from Britannia to Lighthouse Park, Anvil, southeast Gambier, Bowyer, eastern Keats, Bowen, and all islands of the Pasley group fall within the zone?

Furthermore, from Britannia to Porteau Cove, Bowyer, White Cliff, both coasts of Bowen and eastern Pasley group are also within the much more dangerous 1600m zone? Do care at all about these people and their property put at risk? No, Mr. Horgan, you couldn’t care less because, of course, “you can’t be against everything!”

Kick ’em between the legs

You’re now telling people that you have to command respect, almost love, in order to get their support in 2016. Of course, you might get lucky and find that the Liberals have been so bloody awful that Screaming Lord Sutch and the Official Monster Raving Loony Party could win the next election. But that’s always a dangerous assumption, Mr. Horgan, and is where I’ve always disagreed with Tommy Douglas’s theory that when the government is falling all over itself, it’s time to get out of the way and let them fall. He was wrong, Mr. Horgan – that’s the time you kick them as hard as you can right between the legs to make sure they don’t suddenly recover their balance as sometimes happens.

Fess up

You must now do something that every politician hates to do, even 50 years after they’ve left office. You have to admit that you were wrong and you have to say approximately this:

[quote]We made a mistake in supporting the government on the LNG issue. We wanted to make sure people realized we support development, however we were premature and we must review all LNG issues so that the public is fully informed, and that’s precisely what we are going to do. Whether or not LNG has a future in British Columbia remains to be seen. The government has made, as everyone knows, an unholy mess of the whole issue and it is our duty to try to sort this out and let the people make a decision on the facts.[/quote]

People will remember an apology like this for a long time but they won’t hold it against you, Mr.Horgan, hard as that may be to believe. That’s because the greater sins belong to the government and people know and understand that.

Even Dix would be better

Both of your predecessors, Ms. Carole James and Mr. Adrian Dix have proved to be far more effective in opposition, inside the House and out, than you have. Both in their time ran lousy campaigns, but the NDP should look for improvement, not perfection, and, even given the warts, Dix makes more sense as the leader of the NDP going into the next election than you do. The public won’t reject Dix in advance because he lost an election. The Liberal media will make a fuss but it’s a matter of making the best of a lousy situation. The issue is Mair’s Axion II, “you don’t have to be a 10 in politics, you can be a 3 if everyone else is a 2”. Under that formula, Dix doesn’t look that bad.

I have never, going back a ways now, seen a government that I thought should be tossed out on its ass quicker and more effectively than this one. At the same time I can’t remember any moment where the opposition was in a worse position to do that.

You should be fired but, never fear, your party won’t force you out…they would rather lose an election then lose face.

That means you may be the man who, through stubbornness, lost the election to the worst government in the living memory of this ancient political junkie.

Tsawwassen LNG plant would harm Treaty 8 First Nations, northeast

December 14, 2015Energy and Resources, Fracking, LNG, Oil&GasfeaturedCommon Sense Canadian

Tsawwassen LNG plant would harm Treaty 8 First Nations, northeast — Tsawwassen First Nation Chief Bryce Williams announcing LNG plans or his community

Will LNG proposals put coastal First Nations at odds with those fighting to protect land and water in Treaty 8 Territory?

By Kevin Washbrook

On an unusually chilly afternoon last month I had the opportunity to listen to Chief Liz Logan of the Fort Nelson First Nation and Grand Chief Stewart Phillip of the Union of BC Indian Chiefs at the Drums for the Peace Rally in front of BC Hydro headquarters in downtown Vancouver. The Rally was held to mark the start of Treaty 8 First Nations’ federal appeals court case, which argues that the BC government’s approval of Site C Dam infringes on their treaty rights.

I was struck by the speakers’ determination to continue fighting Site C in court even as BC Hydro races to clear land for this destructive project. It saddens me that Christy Clark would willingly sacrifice the traditional territory of Treaty 8 Nations, not to mention some of the best farmland in BC in pursuit of her government’s obsession with exporting LNG, but that afternoon I was buoyed by the resilience of these front line land defenders. The fight against Site C clearly isn’t over.

Tsawwassen chief downplays LNG plant’s impacts

Premier Christy Clark and TFN Chief Bryce Williams get a tour of FortisBC's nearby Tillbury LNG facility upgrade (Instagram - FortisBC) — Premier Christy Clark and TFN Chief Bryce Williams get a tour of FortisBC’s nearby Tillbury LNG facility upgrade (Instagram – FortisBC)

Like many people, a few days later, I was surprised to hear Chief Bryce Williams of Tsawwassen First Nation announce a joint proposal with FortisBC and others for yet another LNG terminal, this one on Tsawwassen Nation treaty lands at Roberts Bank on the Fraser delta. Chief Williams explained that he was neutral on the proposal and that it would be put to a community vote, but he also took effort describe the project as relatively low impact, including pointing out that the LNG terminal would be powered by electricity, and not natural gas, if it went ahead.

Cooling and condensing natural gas into a compact liquid for export is a very energy intensive process, so powering up this new LNG terminal would take a lot of electricity. As I listened to Chief Williams I had to wonder, is this the LNG project that will make Site C dam inevitable? And if so, how will Chief Williams and the Tsawwassen people justify that to the Treaty 8 Nations in Northeast BC who are fighting to keep it from being built?

Lots more fracking needed to supply LNG plant

When Fortis, the BC government and the many LNG proponents now active in BC describe their LNG proposals as “low impact”, they are talking about the LNG facility itself. However, that LNG doesn’t come from nowhere. If the Tsawwassen LNG proposal goes ahead it will require an enormous amount of natural gas from the fields of Northeast BC — and that demand will trigger more well drilling and more fracking, and contaminate more fresh water in Treaty 8 territory.

Listening to Chief Williams I was reminded of Dene-Cree lawyer Caleb Behn — recently featured in the movie Fractured Land — who, along with many others, is working hard to reduce the impacts from all the seismic exploration, roadbuilding, well drilling and fracking generated by the natural gas boom in their traditional territories in the northeast.

LNG industry’s inconvenient upstream truths

These upstream impacts are an inconvenient truth that LNG proponents don’t like to talk about when they pitch their proposals. Thanks to a model developed by the Pembina Institue and Navius Research, we’re now able to produce a solid estimate of the upstream impacts of any given LNG proposal.

The Pembina model says that over a 30-year period, sourcing natural gas to supply the the Tsawwassen LNG project could require more than 2000 new wells in northeast BC, could use more than 30 billion litres of freshwater, and could produce more than 11 billion litres of waste water. The model also says that over that 30-year period the Tsawwassen project could generate more than 47 million tonnes of climate emissions during the drilling, processing and transport of gas to the LNG facility on the Fraser Delta.

On Wednesday December 16 Tsawwassen First Nations community members will vote on whether to move forward with their LNG proposal. I have no doubt that Fortis and the other project partners are actively promoting the benefits that would follow from approval. I sincerely hope that community members also have access to information on the upstream impacts that would be generated by that approval, so that they can make a fully informed decision on the project.

Kevin Washbrook is a director of Voters Taking Action on Climate Change.

Fracking, Site C and the mystery of Hudson’s Hope water contamination

October 30, 2015Energy and Resources, Fracking, Health and Environment, Hydropower, Oil&Gas, WATER, Water and HydrocarbonsfeaturedDamien Gillis

Fracking, Site C and the mystery of Hudson's Hope water contamination — Five year-old River Summer looks on at Brenot Creek landslide (Photo: Leigh Summer)

A series of landslides above the northeast BC community of Hudson’s Hope has been dumping contaminated soils into several local creeks, extending now to the Peace River. Local landowners whose water supply has been affected are demanding answers.

But Mayor Gwen Johansson, who has been monitoring the situation since trouble first appeared last summer, says all she really has is a lot of questions.

The three biggest ones are:

1. Did nearby fracking operations – or related wastewater disposal – cause the landslides?

2. Is fracking wastewater the source of the contamination unleashed into a series of interconnected creeks?

3. If not, and the the contamination is naturally-occurring in local soils, as the Oil and Gas Commission contends, then what are the implications for the proposed Site C Dam, which could further erode and carry contaminated soils downstream for decades to come?

What we do know

Since the summer of 2014, the ongoing slides have spewed sediment laced with toxic heavy metals – including lead, arsenic, barium, cadmium and lithium – into Brenot Creek, which flows into Lynx Creek, which in turn feeds into the Peace River. Large bars of sediment have formed in Brenot and Lynx Creeks and contaminated water has now nearly reached another major river in the area, the Halfway – according to local landowner, Ross Peck.

Farmer Leigh Summer, whose property lies below the slide area, has watched with horror as Brenot Creek has become packed with toxic silt. “Now it’s so muddy that when you put your hand in it, if you have an inch of water over top of your hand, you can’t see your hand,” Summer told the Alaska Highway News. “There used to be fish in the creek, but it’s basically dead today.”

His neighbour, Rhee Simpson, has seen the well she depends on run dry, likely filled in with sediment. “I have no water,” Simpson, a resident and farmer near the creek for 62 years, told the CBC earlier this week. “You can’t play in it. You can’t fish in it. You can’t drink it. Your stock can’t drink it. Someone has to do something to get our water back.”

We also know that there were fracking operations in close proximity to the slide approximately 3 years ago, with more in the surrounding areas of Talisman (now Progress Energy/Petronas’) Farrell Creek play – but likely not close enough to be related. See the map below – provided by the District of Hudson’s Hope (click to expand).

We know that the shale gas extraction process is associated with increased seismic activity – as we were reminded by the recent 4.6 magnitude quake in Wonowon, some 70 km away, as the crow flies. This is most frequently associated with the injection of “produced water” (used fracking fluids) into waste wells to dispose of it underground after a well has been fracked – though in some cases the fracking process itself can trigger seismic activity.

We also know that the terrain in this region is no stranger to landslides, as it’s composed of loose materials like shale, sand and clay. That’s always been a strong argument against Site C Dam by local landowners who know this. The Williston Reservoir, West of the planned Site C reservoir has seen massive expansion since its flooding in 1968, gobbling up the banks of the water body far beyond original predictions, due to the instability of the soils. The terrain East of there, where Site C is proposed, is even less stable. More on that in a moment.

See no evil

Fracking operations near Hudson's Hope in 2012 (Damien Gillis) — Fracking near Hudson’s Hope in 2012 (Damien Gillis)

The testing of the Brenot creek slide and contamination been pretty pitiful thus far, given what’s at stake. The OGC has declared the toxins “naturally occurring”, maintaining, “there’s no evidence” that fracking operations are the source of the contamination – which has the ring of the sort of technicality-based, legalistic denials we heard for years from the tobacco industry. As Carl Sagan said, “The absence of evidence is not the evidence of absence.” Bear in mind, too, that the OGC is hardly known for its tough, independent monitoring and regulation of the oil and gas industry.

The municipality spent its own money to hire independent hydrologist and shale gas expert Dr. Gilles Wendling to conduct some preliminary tests beginning last summer, but it lacks the resources to carry the load with the kind of in-depth, ongoing testing required here. According to the mayor in a letter to the community published in January, 2015 (see page 22), “Dr. Wendling’s readings were consistently above guidelines for the heavy metals, and the origin was sand in the water coming out of the bank at a slide on Brenot Creek.”

Those findings prompted the District to install a water advisory in September, 2014, which the Ministry of Environment supported, formally warning people to avoid the water for personal use, animals and irrigation.

In January, Johansson wrote, “The MoE representative said they have no plans to do anything further, other than file a report. He said he expected that eventually the creek would cleanse itself.”

Well, a year later, the creek has not cleansed itself. According to Johansson, The Ministry Forests, Lands and Natural Resource Operations (FLNRO) has a landslide specialist who has been monitoring expansion of slide. He has explained that because the slide is so vertical, we can expect that it will continue moving for some time to come.

Mayor Johansson notes that in the old days, this is the kind of work MoE could have been counted on to carry out in a thorough manner but they haven’t been back to investigate further to date. In the wake of recent media attention on the issue, though, officials have indicated they are coming up for a site visit by helicopter next week. If what they see from the air is enough cause for concern – as it well should be – then Johansson hopes they will return to take soil samples and conduct thorough testing.

Another possible culprit

bennett dam-2 — The Williston Reservoir and Bennett Dam

Landowner Leigh Summer isn’t convinced that shale gas activity is responsible – or at least the sole culprit – for the slides. “I was pretty convinced initially, but the flow seems to increase with the level of Williston (Reservoir) increasing, so I have a feeling it’s a conjunction of the two,” he told the Alaska Highway News.

“There’s something going on with the aquifers underneath…I suspect, in my mind, that there’s some connection between one or the other, or both.”

Pandora’s box

Regardless of the cause of the slides, if the OGC is correct and this erosion has simply unleashed naturally-occurring contaminants in the soil – a sort of opening up of Pandora’s Box – that’s a frightening prospect indeed.

Plainly put, if fracking operations are the source of the contamination, that’s bad news. But if they aren’t, that’s perhaps even worse news when you consider that the proposed Site C Dam would engulf much of the area below the slide, closer to the river, and potentially continue carrying contamination far downstream well into the distant future.

“If these contaminants are in the soil, how far along the Peace Valley do they extend?” asks Mayor Johansson. The fact is, given the dearth of studies, we don’t yet have a clue. And the implications could be massive for the region – and well beyond – as Summer notes:

“We are really subjecting ourselves to the risk of having a contaminated reservoir which, obviously, contaminates the river all the way to the Slave (River) and to the Mackenzie (River) and the Arctic Ocean, so it’s pretty significant.”

Either way, we need serious, credible testing now. The Clark government is already spending hundreds of millions of tax dollars, rushing ahead with early Site C construction 70 KM downstream, at the proposed dam site. This despite BC Hydro’s own acknowledgement that the power from the dam won’t be required until at least 2029! If this naturally-occurring contamination extends for a great distance along the banks of the Peace River, then building Site C and flooding this area is a nightmare scenario we would do well to avoid.

Northern First Nations band together to block Petronas’ LNG plans

September 14, 2015Energy and Resources, Fracking, LNG, Oil&GasfeaturedDamien Gillis

Northern First Nations band together to block Petronas' LNG plans — Gitxsan leaders of Madii Lii Camp are standing behind the Lax Kw’alaams (submitted)

Several First Nations groups are banding together to block early work by contractors for Petronas’ Lelu Island LNG terminal. Leaders of the Madii Lii resistance camp – situated atop several proposed pipeline routes in the Skeena Valley – are rallying behind hereditary chiefs of the Lax Kw’alaams Nation who have been occupying Lelu Island in opposition to survey work for Petronas’ controversial project.

“We are standing together with the Chiefs on Lelu Island in opposition to the same LNG project. Our Madii Lii territory is on the pipeline route, and their Lelu Island territory is on the terminal site. We have both said no,” said Gitxsan Hereditary Chief Luutkudziiwus (Charlie Wright) in a statement today.

“This project threatens the salmon that all Skeena River and North Coast people depend on, and we thank the Yahaan (Don Wesley) and other Tsimshian Chiefs for what they are doing for all of us.”

Hereditary chiefs hold the line

Hereditary leaders of the Lax Kw’alaams and their supporters – a group of approximately 45 in total – erected a camp on Lelu Island, in the Skeena estuary, about two weeks ago in order to halt seismic and survey work by Petronas’ contractors. The work reportedly stems from concerns raised by the Lax Kw’alaams’ elected leadership over the initially planned location of a causeway for ships visiting the terminal – which sat in the middle of vital, sensitive habitat for salmon and other marine life. The elected leaders granted permission to the contractors to survey the area for an alternate location for the causeway, but this has not sat well with a group of hereditary chiefs now leading the occupation.

They confronted the crew of the Quin Delta drill ship and a barge which moved into the area over the weekend.

According to The Vancouver Sun, “Some equipment was set up before First Nations went out to the ship and asked the workers to stop, said Joey Wesley, a Lax Kw’alaams First Nation member. The activity ceased, but the workers appeared to have trouble removing equipment from the ocean floor, including heavy concrete blocks with surface markers, he said. The ship and barge remained in their location on Sunday just off Lelu Island, said Wesley.”

Shocking Petronas audit raises fears in BC

Concerns have been compounded by recent revelations by The Sun of a damning audit of Petronas’ Malaysian offshore operations, which reveals systemic neglect of equipment and safety issues.

Moreover, while Petronas’ contractors are operating under permits from the BC government and the Prince Rupert Port Authority, the federal review for the project is ongoing, after facing multiple delays owing to unanswered questions from the Canadian Environmental Assessment Agency.

The Port Authority is nevertheless warning that it will take action against anyone who obstructs survey work for the Lelu Island project – which will likely only inflame an already tense situation.

Gitxsan to take legal action

The Gitxsan leaders of Madii Lii Camp are not only backing their Skeena brethren, but they have been occupying their own territory in staunch opposition to pipeline construction and are now promising legal action of their own. “We are taking the government to court over the lack of consultation, the inadequate baseline information presented, the weak and subjective impact assessment, the current cumulative effects from past development, and the massive infringement of our Aboriginal rights,” says Madii Lii spokesperson Richard Wright.

“People are now on the ground blocking the Petronas project from the coast to far inland.”

Is ‘reconciliation’ possible amid energy conflicts?

These actions are mirrored by the Unist’ot’en Camp in Wet’suwet’en territory to the south, which stands in the path of several planned Kitimat-bound gas pipelines and the proposed Enbridge Northern Gateway pipeline. Tensions there have also grown recently, with the spectre of an armed RCMP takedown of the camp.

Despite a recent meeting between the BC Liberal government and First Nations leaders, aimed at reconciling historical enmity between the two groups, Premier Christy Clark’s key economic vision of LNG development remains dogged by First Nations at every turn. In addition to the above conflicts, the Fort Nelson First Nation recently won a landmark victory at the Environmental Appeal Board, forcing the cancellation of a major water licence for fracking, while the Tsartlip First Nation poured cold water on the notion of a floating LNG terminal in Saanich Inlet.

$BC's biggest fracking quake yet? 4.6 felt by residents north of Fort St. John$

BC’s biggest fracking quake yet? 4.6 felt by residents north of Fort St. John

August 27, 2015Energy and Resources, Fracking, Oil&GasfeaturedRoy Hales

$BC's biggest fracking quake yet? 4.6 felt by residents north of Fort St. John$

Republished from the ECOreport.

A recent earthquake near Wonowon, 100 km north of Fort St. John, is the largest of over 500 seismic events in northeastern BC, believed to be related to hydraulic fracturing. It may be remembered as BC’s 4.6m fracking quake.

“Likely induced by hydraulic fracturing”

Though the connection has not yet been proven, the quake’s epicentre was just 3 kilometres from Progress Energy’s fracking site. The company immediately shut down operations and notified the province’s oil and gas commission.

“It’s still under investigation, but it was likely induced by hydraulic fracturing,” said Alan Clay, the commission’s communications manager.

History of tremors

Toxic flowback fluid from hydraulic fracking (Photo: Upstream Pumping Solutions). — Frack fluid disposal equipment (Photo: Upstream Pumping Solutions).

When the commission monitored seismic events in this area, during the fourteen months ending in October 2014, they “found that during this period 231 seismic events in the Montney were attributed to oil and gas operations – 38 induced by wastewater disposal and 193 by hydraulic fracturing operations. None of the recorded events resulted in any injuries, property damage or loss of wellbore containment.”

A previous study, in the province’s Horn River Basin,”(2012) documented 272 seismic events” that “were caused by fluid injection during hydraulic fracturing in proximity to pre-existing faults” between April 2009 and December 2011.

Though most of these seismic events were also too slight to be felt, the Wonowon quake is different.

“Everyone here felt it”

“Everybody here felt it. I was sitting in my medic truck and I felt the whole thing shake. Some light towers were shaking,” Kaila Walton told the Alaska Highway News.

“My house got shook. My couch I was on was actually shaking with me. It dawned on me it could be earthquake, but it could be fracking in the area. I don’t think they should continue fracking,” Bernice Lilly told the CBC.

Magnitudes growing

There have also been quakes across the border, in the Fox Creek area of Alberta. Prior to the commencement of fracking operations in 2013, this region had one measurable quake a year. There have been at least 160 “small” quakes since then and two measuring 4.4 this year.

According to Gail Atkinson, who holds the Canada Research Chair in Induced Seismicity Hazards at Ontario’s Western University, “the magnitudes have been increasing every year.”

BCIT demands LNG lobby drop falsely used name from “partner” list

August 4, 2015Energy and Resources, Fracking, LNGfeaturedRafe Mair

BCIT campus (Dago Agacino / Flickr CC licence)

I find myself spending more time than I would like on Resource Works, the invention of The BC Business Council, that blindly supports approval of Woodfibre LNG in Squamish.

To follow on last week’s column, where we learned that Resource Works’ website contained the names of two “partners” which stoutly deny they’d ever been such.

Well, I have another for you, this week.

BCIT’s name used without knowledge

BCIT’s logo on Resource Works’ “Partnerships” page as of last week. BCIT has since been removed and the name of the page changed to “Partnerships & Sponsorships”

I was alarmed to read that the British Columbia Institute of Technology (BCIT) was also listed as a partner. What, I asked myself, was this much-admired academic institution doing in the middle of this dispute in our communities?

Well, it turned out to be a hell of a good question because they advised me that they were not a partner, never have been, and had demanded that this entry be eradicated. I note that this has since happened and that their president, Kathy Kinloch, is no longer on RW’s Board of Directors (though, as of this writing, she is still listed as such on RW’s website).

I wondered, with more of these revelations to come, what RW would do now?

Well, get this for shysterism non pareil!

In the past week they have changed “Partners” to “Partners & Sponsorships”, noting, “We’re proud to work with a diverse range of partners, and to help sponsor exciting initiatives”. Now, anyone RW declares that they support is automatically thrown in this new category and there is no way anyone reading the “About” section of their website can tell which is which – the obvious hope being that the company is taken to be a partner!

All RW need do if it wants to have a big name appear to support them is write a letter to said group telling them how much RW supports whatever it is they do!

My God, the BC Business Council, former attorneys-general Bud Smith and Geoff Plant and ex-Premier Dan Miller (each advisors or board members) have stooped to this sleazy slight-of-hand!

Come on Mr. Stewart Muir (Executive Director), I know that the complete truth is a difficult concept for a newspaperman, especially an editor, but give it a try and split that list in two so that the public can tell who is a partner and who is not. It will only hurt for a little bit!

A dishonest broker

My involvement with Resource Works started a couple of months ago when I read their Mission Statement. I could not believe that educated, rational, and honourable members of the business and a labour union communities could write tripe like this:

[quote]Resource Works is a non-profit society, open to participation by all British Columbians, to help bring fact-based information to the public discourse about the natural resource sector and its role in BC’s future.

We bring people together for a respectful, fact-based dialogue on responsible resource development in British Columbia.[/quote]

Noble sentiments if they were remotely true. In fact, RW, far from being some sort of honest broker, by any objective standard, uncritically supports Woodfibre LNG.

This is a free country, of course, and while I profoundly disagree with their position, I accept their right to present it – as long as it’s done honestly and candidly, words with which RW seems to have a great deal of difficulty.

First of all, in their presentation A Citizen’s Guide To LNG: Sea To Sky Country Edition, a booklet of 58 pages, they uncritically present the case for Woodfibre LNG using the company’s own propaganda as fact! Don’t take my word for it – read it for yourself.

RW’s discussion of “fracking” is confined to two short paragraphs and doesn’t deal with any of the many concerns scientists have raised whatsoever.

Faked interview takes the cake

Then we get into the faked interview with acknowledged LNG tanker safety expert Dr. Michael Hightower, making out that Dr. Hightower supported tanker traffic in Howe Sound whereas he’d never addressed Howe Sound. Moreover, the measurements he and Sandia Laboratories recommended made it clear that Howe Sound is utterly unsuitable for tanker traffic. (Alongside you’ll see these measurements, which are the law in the United States, applied to a chart of Howe Sound – giving you the true picture.)

Let’s move to the legal case brought by the Wilderness Committee and The Sierra Club against Encana as described by RW in this document thusly:

“When a ruling came down in late 2014 it showed that the regulatory processes in place, and industry compliance with them, are sound and well managed.

“In an overwhelming endorsement of current practices in water protection, justice Fitzpatrick concluded that when it comes to the regulation of industries water usage, British Columbia is in good shape with a ‘justifiable transparent and intelligible framework for the regulation of short term water use.'”

When I, a lawyer by trade, read this, I was suspicious. I couldn’t believe that Madam Justice Fitzpatrick would offer this effusive praise so I obtained a copy of the judgment, which you can easily do, and found that the judge not only said nothing of the sort but made it plain that she was only deciding whether or not section 8 of the Water Act was constitutional.

58 pages of barnyard droppings by an organization professing to be even-handed!

Woodfibre’s shady owner

As you may have noticed, in all the thousands of words published by RW, there’s not been one peep about the ownership of Woodfibre LNG. Wouldn’t you have expected voluminous praise of his acumen, experience, honourable reputation and, of course, commitment to the environment?

Little wonder this has not been forthcoming!

The owner, Sukanto Tanoto, is a crook* who has been found guilty of substantial tax evasion, paid over $200 million fine and is well-known around the world as having destroyed tropical jungles and having no regard for environmental concerns if there’s a buck to be made. I recommend you do some research on him.

The company itself is loaded with former Enron employees and its structure is such that it would be duck soup for a first-year law student to siphon off all taxes and royalties and send them off to Singapore where there’s no tax on LNG. I don’t say that will happen, just that it would be easy to do and Tanoto has done it before.

The obvious question: Why has Resource Works never addressed the question of the ownership of Woodfibre LNG? Do they endorse the sort of behaviour its owner has displayed? Are they not concerned that this company has never built an LNG plant before? Before advising the public that we should support this outfit, has RW done any “due diligence” whatsoever? If so, tell us about it.

Unanswered questions

In fact, one of the biggest unanswered questions by Resource Works and Premier Clark is why on earth would they invite lawbreakers into our communities when we have enough of our own?

A second major question is why Resource Works has never dealt with the issue of the width of Howe Sound, other than by childish misrepresentations?

The mantra of RW and executives of Woodfibre LNG is that LNG tanker traffic has a 50 year safety record, therefore we have nothing to worry about.

This is the sort of delicious half-truth that somehow numbs the mind when it should inspire skepticism. The fact is that this LNG Tanker record is for the high seas and not narrow passages like Howe Sound or the Fraser River!

In fact, narrow passages have inspired a good deal of study.

Hazard zone

Let’s return to Dr. Hightower and the internationally respected Sandia Laboratories, which have set the standards that are law in the United States. Bear in mind that the US is a capitalistic society that doesn’t much like restrictive rules and regulations.

Sandia National Laboratories defines for the US Department of Energy three Hazard Zones (also called “Zones of Concern”) surrounding LNG carriers. The largest Zone is 2.2 miles/3,500 meters around the vessel, indicating that LNG ports and tankers must be located at least that distance from civilians. Some world-recognized LNG hazard experts, such as Dr. Jerry Havens (University of Arkansas; former Coast Guard LNG vapor hazard researcher), indicate that three miles or more is a more realistic Hazard Zone distance.

When Dr. Eoin Finn superimposed the measurements on a chart, it was clear that most of Howe Sound is within the Hazard Zone and above is a copy of that chart.

In short, by internationally accepted standards, there’s no way any LNG tankers would be permitted to proceed from Squamish to the ocean.

The question then becomes, why are Resource Works and their client Woodfibre LNG unwilling to address this question?

The only assumption a reasonable person can come to is because they can’t.

A question of credibility

My final question concerns credibility.

Why does Resource Works not tell the truth? Why do they consistently play word games? Why do they use little tricks as when suddenly caught out, changing “Partners” to the trick phrase “We are proud to work with a diverse range of partners and to help sponsor exciting initiatives” which, apart from all else, doesn’t distinguish between the two, so that the reader has no way of knowing which category the company falls into?

Why did they fake a TV interview and distort evidence?

Why did they take a judge’s remarks out of context? Why do they avoid discussion of fracking? Why do they not deal with the Eoin Finn chart which clearly shows that LNG tankers in Howe Sound are, from a safety point of view, completely out of the question?

Why don’t they talk about ownership and, indeed, management shortcomings? And the fact that Woodfibre LNG have never built an LNG plant before?

In sum, if they truly want, as they so piously state, to help bring fact-based information to the public discourse about the natural resource sector…why do they so carefully avoid dealing with any of the serious questions?

A fair conclusion is that they avoid these questions because the answers would destroy their ambition to visit an LNG plant on Howe Sound, which, in any civilized a jurisdiction, would be a park.

*Merriam Webster: a person who engages in fraudulent or criminal practices

LNG lobby fakes partnerships with prominent organizations

July 27, 2015Energy and Resources, Fracking, LNGfeaturedRafe Mair

Clockwise from top left: Teck's Doug Horswill, Stewart Muir, former A-G Geoff Plant, and Lyn Anglin of Geoscience BC — Key Resource Works members (clockwise from top left): Teck’s Doug Horswill, ex-Vancouver Sun editor Stewart Muir, former A-G Geoff Plant, and Lyn Anglin of Geoscience BC

Desperate people do desperate things.

Today I want to talk about Resource Works, the shills for Woodfibre LNG, proposed for Squamish at the head of Howe Sound – BC’s beautiful and southernmost fjord.

I’m part of a large group opposed to this plant. Let me, however, make this abundantly clear: Our opposition, contrary to what you may read and hear in the media, has nothing to do with NIMBYism. Our concern is LNG tanker traffic which, if allowed in Howe Sound, would be in direct contravention of minimum exclusion zone requirements and other safety operating criteria as generally recognized worldwide and by the law in the United States.

Pushing the limit

These danger zones have been superimposed on the chart of Howe Sound to the right (click on the chart to see in greater detail).

You can see from this chart why residents are extremely upset and why every municipal council in West Vancouver, Sea-To-Sky, Squamish and the Sunshine Coast have passed resolutions against the development of Woodfibre LNG.

Credibility deficit

Resource Works presents itself as independent and only desirous of establishing a fair dialogue. This rubbish demonstrates their credibility deficit which will become clear.

For, if you read their Mission Statement, you’ll see a petition next to it under the title “BC NEEDS LNG”, asking you to sign. There is no need to elaborate – this outfit has made no secret of the fact that it supports the WLNG plant fully and opposes our group.

On that last point, they allege that our organization of homeowners and residents, which raises its meagre funds through fundraisers in local community halls, is well-funded while they, in fact, have the entire business community the British Columbia behind them. We’re not complaining – those odds are perfect as far as we are concerned.

Making it up as they go

To the meat of the matter – Resource Works lies, cheats and dissembles without batting an eyelash. I don’t accuse any particular person, however obviously somebody in Resource Works is making these things up and doing these unethical and, indeed, unlawful things. My case…so far.

A few weeks ago, in an article here unchallenged by Resource Works, I demonstrated that they had faked a TV interview with an American expert on tanker traffic, Dr. Michael Hightower of Sandia Laboritories in New Mexico, and had him saying precisely the opposite of what he had in fact concluded. At least Resource Works were embarrassed enough to quickly withdraw that from their propaganda when they were caught out but the fact remains that this was done and proved to be done – something you wouldn’t think even stocks and bonds salesmen would do.

At the same time, in a report found on their website, Resource Works quoted a judge as extolling the virtues of BC laws relative to Natural Gas, whereas Justice Fitzpatrick had said nothing of the sort and had gone out of her way to say that she was not commenting upon this matter. A glance at the judgment, which is easily available, will demonstrate that.

Forging ahead

A composite of Resource Works' "Partner" page, reflecting two organizations who did not authorize their names and logos to be used as such — A composite of Resource Works’ “Partner” page, showing two groups who didn’t authorize their names and logos to be used

Now we have a new wrinkle and let me tell you how I discovered it.

Quite by accident, I went to their list of Partners on Resource Works’ website and saw that the Jack Webster Foundation was listed as one.

I could not believe my eyes! I have a strong relationship with that foundation, having received their highest honour, the Bruce Hutchison Lifetime Achievement Award. Moreover, Jack Webster arranged for me to go into radio in the first place back in 1980 and was my mentor. There is no way on God’s earth that Jack would have taken sides in a dispute like this, let alone on the side of big industry, against the “little people” he always went to bat for.

I immediately wrote to the Foundation expressing my dismay that it would get in the midst of a controversy in our community, only to find out by return mail that they knew nothing about it!

Resource Works, without any discussion, much less permission from the Webster Foundation, included them as a partner and forged* their logo on top of the statement!

The Webster Foundation, which prides itself on independence and support of journalism without political or other affiliation, was horrified at what had happened and demanded that their name be removed forthwith.

I then wrote three or four other Partners and within the hour got a reply from the head of the nationally well-known Macdonald-Laurier Institute, stating bluntly that they had never heard of their being a Partner of Resource Works! This was news, and not welcome news to them! Moreover, they avoid controversies of this sort like the plague.

Apparently, one of their experts had given Resource Works some paid advice somewhere along the line from which Resource Works concluded that made Macdonald-Laurier a Partner! Again they forged* the Macdonald-Laurier Institute’s logo on their Mission Statement. (I’m waiting for three other replies, two of them very small outfits but one of the BC Institute of Technology and I would be surprised indeed if the same results were not forthcoming.)

I have to wonder if the former Attorney General Bud Smith knows anything about this? What about former AG Geoff Plant? How about former Premier Dan Miller? What about the BC Business Council and their well known President and CEO, Greg D’Avignon? They’re helping finance this bunch – does Mr D’Avignon know about these shenanigans?

What about premier Christy Clark who has, or at least at the time of its inception, had close personal relations with the management of Resource Works?

Our group fully expects that WLNG will make its case as strongly as possible and we understand the right of Resource Works to support them with all of the resources at their command.

What we don’t expect is that we will have to face constant falsehoods, dissembling, and, indeed, chicanery in building a list of partners.

How can we trust them?

Surely what this does is call into question their entire campaign! For, if Resource Works can’t be honest in their basic presentation of themselves and of what they are doing, how can we trust a word they ever say?

The truth is not in them. Resource Works real partner, Woodfibre LNG’s president, Anthony Gelotti, has had an op-ed published in the Province (another Resource Works “partner”!) alleging that tanker traffic is safe as proved by records going back many years.

This is the sort of distortion we have come to expect. In fact it is the constant mantra of Byng Giraud, WLNG Vice-President. The statistics they use relate to tanker traffic on the high seas, not in harbours, fjords and rivers! One only has to read GCaptain each day to see how many large tankers, including LNG tankers, are colliding, running aground, and hitting things in waters similar to the Fraser River and Howe Sound almost on a daily basis. The Bosphorus, not unlike Howe Sound, is a particular problem.

While we’re concerned that the tanker traffic be safe everywhere, our principal concern is with Howe Sound, the Fraser River and with many others including Vancouver Harbour, the Salish Sea, the Straits of Juan De Fuca and the BC coast in general. Statistically, there must be accidents – we don’t want them to happen in these waters, bringing inevitable tragedies.

*The Criminal Code of Canada defines Forgery as:

(2) Making a false document includes

(a) altering a genuine document in any material part;

(b) making a material addition to a genuine document or adding to it a false date, attestation, seal or other thing that is material; or

(c) making a material alteration in a genuine document by erasure, obliteration, removal or in any other way.

BC LNG Bill locks in public rip-off for a generation

July 14, 2015Energy and Resources, Fracking, LNGfeaturedCommon Sense Canadian

Ex-Petronas CEO Shamsul Abbas shaking hands with BC Premier Christy Clark in 2014 (BC gov photo)

Republished with permission from the Canadian Centre for Policy Alternatives’ Policy Note.

By Marc Lee

Last week, the BC government released the text of its Project Development Agreement with Pacific Northwest LNG (led by Malaysian state enterprise, Petronas), considered the front-runner in getting BC an LNG export industry. The agreement goes to the BC legislature this week in order to convince Petronas to make a “final investment decision.” There are still other barriers to this project going forward, due to First Nations rights and the province’s environmental assessment process. The project hit a major snag when the Lax Kw’alaams first nation balked at Petronas’ proposed site for its LNG terminal. Also, the Gitga’at first nation has just launched a legal challenge for not being consulted in the development process.

Where’s the money for BC?

As far as the Project Development Agreement goes, much of the concern raised has been that the BC government is locking in the tax and regulatory regime for 25 years into the future. Changes made by subsequent governments – to the LNG tax, a special tax credit on corporate income tax, the BC carbon tax, and anything else that would affect project costs – would essentially have to pay compensation to Petronas. It is understandable why Petronas would seek such provisions, as this is a low-margin industry, and without them the company could not justify laying down tens of billions of dollars in capital investment.

However, what’s most disturbing is that this is a massive privatization of a public resource, for which the people of BC will get very little in return. Let’s look at the numbers:

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Phase one of the project would produce 12 million tonnes of LNG per year for export, with a second phase that could raise that to 18 million tonnes. The actual amount of gas extracted, however, would be about 25% higher because of the huge amount of gas that would be used to extract, process, transport and liquefy the gas into exportable product.

For BC, there are two potential sources of gains: the revenues to the provincial government; and gains in employment.

Public revenues for BC depend on what price Petronas is able to get for LNG in Asia, but prices for LNG have crashed along with oil prices. It costs about $10 per mcf (thousand cubic feet) to land LNG in Asia due to the high costs of liquefaction and shipping, whereas current prices in Japan, Korea and China are much lower ($7.45 to $7.85). So any company exporting BC LNG in the current market would be losing lots of money.

Petronas can benefit despite low prices

In spite of these horrible economics, it is possible that Petronas can justify paying a premium in order to secure supply over multiple decades, or its hope is that LNG prices will rise back to earlier highs. The initial hype for LNG was based on prices around $16, which seems completely unrealistic, especially given slowing demand for LNG worldwide, combined with lots of new (mostly Australian) LNG coming into the market.

So let’s assume landed price of $12, or about $2/mcf in profit, and 12 million tonnes (=576,000 mcf) of LNG exported per year. Based on that, over the 25 years of the agreement, the landed value of that LNG would be about $173 billion, and Petronas’ profit would be almost $29 billion.

Loopholes, slashed rates mean few export taxes for BC

BC lowered its corporate income tax rate for LNG to 8% so this would represent about $1.8 billion in corporate income tax over the 25 years. That said, this revenue may not be new money – the industry and government are now arguing that LNG exports are necessary to displace lost sales to the US.

BC also introduced a 3.5% LNG income tax, but allows companies to fully deduct capital costs before paying the full tax, a process that would take 8-10 years. This notably puts taxpayers on the hook for reduced revenues should there be cost over-runs (and this is an industry known for its cost over-runs). Over 25 years, BC would collect $600 to 700 million in LNG income tax assuming no cost over-runs.

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Royalties are the other key revenue source. It is important to remember that royalties are not a tax, but the public’s share of the revenues for the exploitation of a public resource. In recent years, BC has been charging low royalties to keep production high, largely due to credits to companies for fracking operations. Those low royalties have averaged 7% per year, and assuming that rate over 25 years, this would amount to about $4 billion in royalties. A new royalty agreement with the proponents suggests these could be much lower, although it is hard to say how much.

Adding these together, BC would get about $6.5 billion in additional revenues over 25 years, or just over $200 million per year. Compare that to a provincial budget of $46 billion per year, and total provincial debt of $43 billion. There are also costs to the public sector associated with infrastructure, services and so forth, so we should really be looking at net revenues.

Revenues would go up if Petronas builds phase two, and its export capacity increases to 18 million tonnes per year. And prices in Asia could venture higher, thereby increasing corporate profits and BC’s share. On the other hand, I do not account for “transfer pricing,” whereby companies shift costs in order to minimize their global taxes payable.

Jobs in the hundreds not thousands

What about jobs? The Petronas environmental assessment application estimates a peak of 3,500 temporary jobs during the 3-year construction phase of the project. After that, only 200 to 300 permanent jobs. There would likely be some additional employment upstream due to increased fracking as well, but in total the job creation is very small given the size of the venture. And that’s assuming all of these full time jobs hire people who would otherwise be unemployed; if they just shift from another part of the economy the benefits are much less. In comparison, BC has 2.4 million employed people.

For all of the hype about LNG creating jobs and eliminating our provincial debt, these real-world numbers are underwhelming to say the least. Having campaigned on that hype in the provincial election two years ago, it appears our provincial government is willing to accept a bad deal over no deal.