Gas workers in BC’s Horn River Basin (Photo: Damien Gillis)
By Karen Cooling, Marc Lee and Shannon Daub
The steady stream of bad news from Alberta’s oilpatch is a potent reminder of the boom-and-bust nature of being a resource-commodity exporter. It’s a story deeply understood in resource communities, as decisions made halfway around the world dictate whether you will have a job tomorrow.
The outlook for fossil fuel-exporting industries is likely to get worse if governments negotiate a new global deal to limit carbon emissions this year. On the heels of a climate deal with China, U.S. President Barack Obama stated in his State of the Union address that:
[quote]No challenge poses a greater threat to future generations than climate change.[/quote]
Leaving it in the ground
It is now recognized that anywhere from two-thirds to four-fifths of proven fossil fuel reserves worldwide must be left in the ground to avert catastrophe. Canadian politicians live in denial of these facts, pushing instead for more bitumen, coal and LNG exports.
But what does all this mean for people whose livelihoods rely on these industries? We talked with resource workers around B.C. who have experienced boom-and-bust cycles first-hand — especially in forestry. What we uncovered is a very unhappy legacy. One concern is that climate action could mean the loss of well-paying jobs and a repeat of this tragic pattern.
A “just transition”
As we plan for a transition to a zero-carbon economy, we will need to ensure a “just transition” for oil and gas workers, who should not have to pay the price of doing the right thing on climate change.
In past resource busts, families have faced extreme financial and emotional instability due to job losses. There are also ripple effects throughout the economy, as reduced spending forces the closure of small businesses and service providers, municipal government budgets collapse and the residential housing market becomes glutted with “stranded assets.”
Stable management of fossil-fuel industries over a two-or three-decade wind-down period with a just transition plan can get us off the resource roller-coaster and better serve workers, communities and the economy.
How to build a sustainable future
Much work will be required to build the zero-emission economy we need but we should embrace that. Building new, green infrastructure for the future includes investments in district energy systems, localized food systems, regional rapid transit, efficient buildings and “zero waste” management of materials — all of which can be a major economic benefit in rural and resource communities.
We also need to stop lumping in all resource sectors together. While fossil-fuel industries are at the heart of the climate problem, there can and should be a bright future for renewable resources like forestry. With strong stewardship and enhanced value-added, forestry in B.C. could support an additional 20,000 good permanent jobs — far more than will arise from any LNG development. This means reversing direction on forestry policies that have gutted the industry and its connection to supporting communities.
Graphic by Norm Farrell
A “Green Social Contract”
A coherent, managed approach would also allow for planned transitions for workers that include income supports, skills training and apprenticeships. This means investing in skills that are transferable from carbon-intensive to green industries. Proactive planning and collaboration across government, industry and unions is critical for ensuring a just transition.
This new “green social contract” will require a reallocation of financial resources. We recommend creating a just transition fund out of resource royalties or carbon tax revenues. The fund could enhance income security for workers, support early retirement initiatives for some and help people through retraining and job search processes.
Rather than trying to cultivate the next boom (think LNG), our aspirations should be to develop a high-quality, full-employment strategy that supports workers, families and communities to transition beyond fossil fuels.
Part 1 of a 2-part story from innovation expert Will Dubitsky on Canada’s missed opportunity to build a prosperous green economy.
The ardent defenders of our resource economy are in no way limited to the climate skeptics who support TransCanada’s Energy East project, the Keystone XL pipeline and the tripling of Kinder Morgan’s pipeline capacity to Vancouver. There are also much larger and perhaps more influential groups of traditional resource economy supporters – the greenwashers such as Justin Trudeau, Quebec Premier Philippe Couillard, the majority of mainstream journalists, economists, Bay Streeters and more.
These stakeholders would have us believe that with a little tinkering of the status quo, we can address requirements to reduce greenhouse gases while supporting projects like TransCanada’s Energy East and the other proposed pipeline projects for Canada.
According to this line of thinking, the traditional resource-based economic paradigm is a permanent fixture of global economics. Consequently, if TransCanada’s Energy East pipeline isn’t built, another petroleum source would fill the “void”, leaving the impacts on greenhouse gases at the level of the status quo. In other words, new infrastructure to increase dour dependence on petroleum is fine, even though the International Energy Agency has said we must leave 80% of proven reserves in the ground if we are to avoid catastrophic climate change.
Green economy still ignored by many
It is rather unfortunate that the green economy paradigm – despite the facts on the ground in China, Europe and the US – remains off the radar screen of nearly all economists.
Even the very conservative International Monetary Fund, Goldman Sachs and UBS are way ahead traditional economists on the decline of the resource economy paradigm, respectively exposing: 1) the spellbinding levels of subsidization of the fossil fuel sectors; 2) the high financial risks of unconventional fossil resources, such as the tar sands; 3) the rapidly growing quantity of stranded oil assets due to the combination of high debt loads and reserves that cannot be supported by market prices; and 4) the growing aggressiveness and frequency of government action on climate change around the globe . Together, these factors are fostering the emergence of a global green economy.
Massive opportunity, huge job growth…except in Canada
The green sectors are among the fastest growing and highest job creation sectors of our times. Unfortunately, Canada is missing out on these opportunities while China, the European Union and, to a lesser extent, the US are way ahead of us.
There are 3.5 million people currently working in the green sectors in the European Union (EU), with 1.2 million in renewables. The clean energy sectors in Germany are right up there with the German auto sector in terms of job numbers, and there is a 7,000-position labour shortage in the EU wind energy sector.
Meanwhile, the US had174,000 people working in the solar sector as of November 2014.
All this makes good sense, given the fact that government investments in the green economy create 6 to 8 times more jobs than the same level of investment in the extractive resource economy.
Quebec missing the boat
Though Quebec is participating in a carbon (cap and trade) market with California, current Couillard Quebec government actions are founded on a resource economy with negligible interest shown in high job creation green sectors. This is counterproductive not only for the environment but for the province’s economic development as well.
To begin, Quebec could better grow its economy and reduce its dependence on wealthier provinces by concurrently: 1) rejecting the few hundred jobs associated with Energy East; 2) reducing its dependence on petroleum from outside Quebec and thereby reducing local emissions; 3) focusing on the high job creation green sectors, including the development of Quebec’s emerging electric vehicle sector.
Quebec’s emerging EV success story
The transportation sector represents 42% of Québec’s emissions, so it’s a good place to start for tackling emissions. The good news is that not only does the province enjoy a clean energy surplus – mainly hydro – but its nascent electric vehicle (ev) sector has given rise to some promising local companies and institutions, including:
EV battery manufacturer Bolloré/Bathium
Electric motor wheel company TM4
A Nova Bus (Volvo) electric bus under development
Two manufacturers of electric vehicle charging stations – GRIDbot and ADDÉnergie
EV research centres such as the Centre National du Transport Avancé and L’Ecole de technologie supérieure
Should Québec and Canada not seize the day, it is China and the US – California in particular — that will continue to be the leaders in, and reap optimal long term benefits from, the electrification of transport.
China’s central government is also considering a $16 Billion program to set up charging stations across the country and it has removed the 10% purchase tax for electric and hybrid vehicles.
California leads way with EVs
In the US, California is leading the way on electric vehicles with a comprehensive plan and legislation agenda that includes financial assistance for low income residents and support for clean energy micro-grids complete with energy storage and electric vehicle charging stations. New homes and parking lots are also being required to have the electrical infrastructure in place for setting up electric vehicle charging stations.
Quebec backslides on green investment, shale oil and gas
Yet the Couillard government, much like policies of Harper and Trudeau, lives in the past tense, supporting TransCanada’s Energy East pipeline proposal while cancelling a $500 million PQ program for the electrification of transport, instead committing $450 million for an unneeded cement plant that will be fueled by petcoke – a high-carbon content fuel derived from the residues of tar sands refineries. Couillard also remains fixated on his predecessors’ Plan Nord – a large scale vision for heavy extractive industries in the province’s north.
In addition to the high level of methane leaks from shale gas wells and risks of soil, water and air pollution, it is becoming clear from the US experience that shale gas and oil lead to boom and bust economics. Yet Couillard appears reluctant to fully cut ties with this form of development and instead seize the enormous benefits available from the green economy.
Watch for the sequel to this story next week – exploring the decline of the fossil fuel era and remarkable rise of the green economy.
Squamish council rejects Fortis BC application for test drilling (Instagram/ Dan Prisk)
In a surprising show of municipal political power – even in a region that has demonstrated strong misgivings regarding proposed LNG development – Squamish council has rejected Fortis BC’s controversial permit application for test drilling in a Wildlife Management Area.
The vote came at Tuesday night’s council meeting, which revisited an earlier discussion regarding Fortis’ planned pipeline expansion to feed the Woodfibre LNG plant near Squamish, proposed by Indonesian billionaire Sukanto Tanoto.
Plan gets bogged down in sensitive area
Proposed Woodfibre LNG plant
The application – which sought permits for drilling in a sensitive ecological area – stoked vocal opposition in the community when it was first debated by council 2 weeks ago. With close to 200 citizens packing the council chamber, the local government set its decision aside until this week’s meeting.
The Tuesday vote fell 4-3 against the plan, which would involve test drilling for a pipeline to be routed under the Squamish River, through an estuary and Wildlife Management Area (WMA). Council instructed representatives of gas pipeline operator Fortis to come back to it with a plan that avoids the estuary and WMA and doesn’t involve a compressor station being located in the middle of town. Such a route would likely need to involve building the pipeline around the north end of the community, which Fortis complained would be too costly, lengthy and challenging.
A strongly-worded letter from the Squamish First Nation objecting to the company’s proposal appears to have helped sway council.
Back to the drawing board
Despite the heavy attention the issue received during the recent municipal election – which saw an anti-LNG mayor defeat a sitting mayor who favoured the Woodfibre project – and strong opposition from local grassroots groups, the decision came as a surprise to many in attendance.
Retired KMPG partner and My Sea to Sky member Eoin Finn – a leading public critic of the project – predicts that Fortis will now have to withdraw its proposal from the Environmental Assessment process and start from scratch with a new version, “as Fortis had baked in the rejected routing in their application to the BCEAO.”
Local governments get involved
The move by Squamish council is just the latest example of a growing trend of municipal governments inserting themselves into the energy planning process around BC – from Burnaby and Vancouver’s strong stances on Kinder Morgan, to various councils that have stood against the proposed Enbridge pipeline, and a long list of Sunshine Coast and Howe Sound councils which have voted against the proposed Woodfibre project.
Sukanto Tanoto (right), the man behind the proposed Woodfibre LNG project
Permit me to make some observations about the LNG situation in Squamish. What the people of Howe Sound do is their affair. I can only give them the benefit, if any, of my experience over the years.
We are not dealing here with honest people – it is not hyperbolic to call them crooks. The powers behind Woodfibre LNG have been convicted of large tax evasion and substantial environmental degradation. Sukanto Tanoto, his family and associates have been consorts of the worst sort of financial manipulators in Indonesia – right up to the former President Suharto.
…one of the world’s largest palm oil companies, owned by Sukanto Tanoto, was fined US$205m after being shown to have evaded taxes by using shell companies in the [British Virgin Islands] and elsewhere. The company has agreed to pay the fines.
Documents arising from the case show that Tanoto’s company, Asian Agri, systematically produced fake invoices and fake hedging contracts to evade more than $100m of taxes.
According to evidence contained in more than 8,000 papers, the company, which employs 25,000 people in 14 subsidiaries and owns 165,000 hectares of plantations, was engaged in “routine and systematic fraudulent accounting and book-keeping practices” using British jurisdictions.
I am by no means the only person to notice that the permit request by Fortis BC to upgrade its pipelines in order to feed the proposed Woodfibre plant precedes permission to build the plant. That’s because the “fix is in”.
From childhood we’re taught to respect the law and the “policemen” who enforce it. It rubs against the grain to think of breaking even a minor law.
What happens, however, if the laws are stacked in favour of the powerful and against ordinary citizens? What if the laws are so unfair as to be travesties of justice?
The place we, the public, look for protection is environmental assessment laws. So let’s look at The National Energy Board, in the news much recently, and see how they look after us.
Hearings called a “farce”
Some of the most damning evidence of the National Energy Board’s Kinder Morgan hearings came from a former BC Hydro CEO and deputy minister of energy for both Manitoba and Ontario, Mark Eliesen. He says this about the proceedings of the National Energy Board in the Kinder Morgan hearings, from which he resigned as an official intervenor:
[quote]
In effect, this so-called public hearing process has become a farce, and this Board a truly industry captured regulator.
In addition to gutting the oral-cross examination feature of a public hearing process that supports proper questioning and an adequate level of due diligence, there are other Board decisions that have been made over the course of this hearing that reflect a pre-determined outcome.
The evidence on the record shows that decisions made by the Board at this hearing are dismissive of Intervenors. They reflect a lack of respect for hearing participants, a deep erosion of the standards and practices of natural justice that previous Boards have respected, and an undemocratic restriction of participation by citizens, communities, professionals and First Nations either by rejecting them outright or failing to provide adequate funding to facilitate meaningful participation. (Emphasis added)
[/quote]
He closed his letter resigning as an intervenor thusly:
[quote]The National Energy Board is not fulfilling its obligation to review the Trans Mountain Expansion Project objectively. Accordingly it is not only British Columbians, but all Canadians that cannot look to the Board’s conclusions as relevant as to whether or not this project deserves a social license. Continued involvement in the process endorses this sham and is not in the public interest. (Emphasis added)[/quote]
(Along with the presidency of BC Hydro, Eliesen sat on the board of Suncor Energy and was former CEO of the Manitoba Energy Authority and Ontario Hydro. In total, he has worked for seven governments and nine ministers of the crown.)
MP, MLAs avoid public meeting
What about expecting justice on the political front?
John Weston, the local Conservative MP, was not in attendance at Tuesday’s council meeting to discuss the controversial permit application from Fortis BC, which involves test drilling in a wildlife management area for its its planned pipeline expansion. He had no reason to be absent – the Commons is not in session and, besides, as with all government backbenchers, he doesn’t do anything anyway. Surely he should’ve at least troubled himself to be there to report back to the government on the feelings of the people present, his constituents.
I understand that neither of the Liberal MLAs were there either. Same criticism as Weston. They have nothing else to do of any use but to report back to the government what they see and hear.
Did I go to unpleasant meetings such as this when I was in cabinet?
You bet your life I did. If I hadn’t, Premier Bill Bennett would have quite rightly tossed me out on my ass. Perhaps standards were different then but I can tell you about meetings I was at that would curl your hair!
I could go on but suffice it to say that not only has the public not been consulted, there is no fair process by which it can be consulted unless it’s through local Councils. In every case in the Howe Sound area, the Councils have rejected the notion of an LNG plant in Squamish and concomitant tanker traffic. However, these Council decisions evidently don’t count with either the provincial or the federal governments.
Civil disobedience on the horizon
My own personal opinion is that nothing will be accomplished except by civil disobedience. I have held that opinion for a long time and it is certainly not because I am a violent person. My whole political life has been fighting elections not policemen.
The fact remains, however, that times come when the citizen has no other option. When all of the cards are stacked, when the hearings are fixed, when politicians are in bed with the powerful, when all the laws favour one side of a dispute, then what choice do people have?
I must be careful here – I am not physically able to do that which I preach. I’m sorry about that. I will, however, continue to say my piece and I presume that if I continue to press for civil disobedience I’ll be in contempt of something sufficient to be in trouble with the authorities.
Citizens line the Sea to Sky Highway to protest Woodfibre LNG (My Sea to Sky)
Former District of Squamish Councillor Meg Fellowes addresses current mayor and council over Fortis BC’s controversial application to conduct test drilling in a wildlife management area. The drilling is in connection to a planned pipeline expansion to feed gas to the proposed Woodfibre LNG plant near Squamish. At a Tuesday meeting, council deferred its decision on the drilling permit issue, to be revisited in 2 weeks.
Mayor and Council – District of Squamish (Dos):
Council is caught between a rock and a hard place. The rock is a possible Fortis legal suit if Council doesn’t approve drilling in the [wildlife management area]; and, the hard place is a possible legal suit by one or more taxpayer/resident if council does approve the drilling.
During the council meeting of January 6th, 2015, a disconnect was identified between the Official Community Plan (OCP) and the authorizing bylaw. Awareness of the disconnect provides grounds for a community legal challenge should Council approve the permit. The prudent solution, for a risk adverse council, is to officially amend the OCP to reflect the bylaw; or, amend the bylaw to reflect the OCP.
A legal challenge coming from the community happened in 2000 when [anti-woodchip transfer facility group] CHIPS took on DoS in the wood-chip transfer facility debacle where Squamish council was taken to court by concerned citizens. Despite the assurance of municipal lawyers, the District of Squamish lost the court case, the proposed wood-chip transfer facility wasn’t built, and one of the enterprising citizens was subsequently elected mayor of Squamish.
Seeming procedural technicalities cost taxpayers money, developers time, and communities their reputation when local governments try to take short-cuts on contentious issues.
On Monday, as Canadians got back to work following the holidays, the price for crude oil dipped below $50/barrel for the first time since 2009, offering a glimpse of the profound changes in store for the country in 2015. With some $60 Billion in oil/tar sands projects now in peril – harkening back to “dark days” of decades past – this federal election year promises to put the fossil fuel-dominant economic vision of Canada’s political leaders to the test.
Good news, bad news
Burnaby Mountain protests (Dan Pierce)
If 2014 was the year of the pipeline protest, 2015 may advance the cause of environmentalists and First Nations even further, without a single placard being waved or arrest made. In a country where the economy increasingly drives political policy and media commentary, something as simple as the halving of oil prices will likely do more to reshape the future than years of ardent protests. Cynical but true.
Yet these changes are complex and fraught with contradictions. Lower oil prices stall new oil/tar sands projects and pipelines while chilling investment in LNG projects. Yet they also drive consumer demand through lower prices at the pump.
And although this setback for Canada’s fossil fuel sector should be a wake-up call as to the need to diversify our economy and energy options, in some ways it hampers renewable energy development, by eroding recent gains in cost competitiveness for clean technologies. When oil costs over $100/barrel and natural gas is $8/unit, increasingly cost-effective wind and solar look pretty good these days. Cut those fossil fuel prices in half, and not so much.
Ontario Premier Kathleen Wynn tours an Airbus plant (CNW)
Another important contradiction to note is the benefit to Canada’s economy from a weakened fossil fuel sector. As a new study from RBC reminds us, lower fuel costs to consumers free up cash that can flow into our economy through other avenues. More importantly, lower oil prices mean a lower Canadian dollar and lower energy costs to manufacturers, both greatly benefitting Canadian exports.
In other words, the jobs we lose in Fort McMurray may be replaced – and then some – by a strengthened manufacturing sector in places like Ontario.
What this moment – and potentially extended period – of depressed fossil fuel prices offers Canadians is the opportunity, in a pivotal election year, to rethink our economic future. And this applies at both the federal and provincial level – from BC’s proposed LNG industry, to the Yukon’s debate over fracking, to Alberta’s oil/tar sands, to several pipelines planned to carry dilbit eastward.
To get the conversation started, here are a few big ideas we should be considering in 2015:
Estimates of government subsidies for the oil and gas industry range from a billion and a half dollars a year to as much as 6 billion, depending on how you calculate them and whom you listen to. So to those “free marketeers” who would balk at subsidizing clean tech innovation, just be sure to apply the same standards to the fossil fuel sector, which, we’re frequently threatened, would up and walk away if we didn’t maintain the lowest royalty and tax regimes in the world.
As our contributor Will Dubitsky has documented over the past year, Canada is the exception when it comes to major industrial nations investing in clean tech. While Stephen Harper cut our only federal clean tech innovation funding in 2013-14 (which stood at a paltry $82 million), China invested $68 Billion in clean tech in 2012, with the US not far behind. Both countries, along with Germany, Denmark, Spain, Brazil, and many others, have reaped the rewards with millions of new green jobs. Canada’s tax incentives and subsidies for clean tech lag far behind these other nations.
Steam rising from the Nesjavellir Geothermal Power Station in Iceland (Photo: Gretar Ívarsson / Wikipedia)
Even in Canada, despite a wildly unfair balance of public investment in fossil fuels compared with renewables, the employment balance is shifting. Trying to assess the real job benefits of the oil and gas industry is a tricky business, because so many different numbers and definitions are thrown around (“direct”, “indirect”, “related”, Canada, Alberta, etc.). The Alberta Ministry of Energy, for instance, pegs “oil sands related direct employment in Alberta” at 146,000; whereas a 2011 study by the the Petroleum Resources Council of Canada acknowledged just 20,000 jobs in the Alberta oil sands sector, with 130,000 total oil and gas jobs across Canada.
Renewable energy proponent Clean Energy Canada subscribes to the latter measurements and made headlines with a report last year suggesting we now have more jobs in clean tech than we do in the oil/tar sands. The comments on this Globe and Mail story discussing the report range from skeptical to apoplectic at the audacity of these dimwitted eco-pinkos. But the key take-away is that clean tech jobs are growing in Canada – and rapidly – with very little help; whereas the future of oil sands construction jobs is suddenly looking pretty bleak.
If you believe the derision of oil sands boosters, these green jobs pose no real threat to their sector, so what are we waiting for? What are we not seeing that China, America and Germany are? If jobs are the name of the game, then it’s high time we got behind these sustainable alternatives.
And that doesn’t just mean wind and solar. As we’ve learned from a number of recent reports, Canada – particularly these western provinces doubling down on fossil fuels and big, antiquated dams – are sitting on top of huge geothermal potential. This is a clean, renewable energy source which, unlike wind and solar, is as predictable and consistent as coal or natural gas – without the wild market fluctuations.
While lower oil and gas prices may inhibit investment in clean tech and consumption of renewables, as noted above, that’s precisely what government intervention is for. This is where a government with long-term vision can step in an catalyze private sector investment and job growth for the future, laying the groundwork for an economy that is not strapped to the roller coaster of fossil fuel prices.
2. Take advantage of lower oil prices
As I noted earlier, lower fossil fuel prices can be a very good thing for Canada’s economy. There is strong evidence – from the likes of Industry Canada, no less – that higher oil and related currency prices have cost our nation more jobs than they’ve created.
[quote]…from 2000-2011, the oil and gas sector created about 16,500 jobs, while, at the same time, Canada lost 520,000 manufacturing jobs. Much of the manufacturing losses are tied to the rise of the petro-dollar which tends to rise and fall with the price of petroleum…Even Industry Canada acknowledges the problem. Their report notes that between 2002 -2007, from 33-39 per cent of Canadian manufacturing job losses were due to “resource-driven currency appreciation.”[/quote]
Sure, many Canadians will feel the pinch in their stock portfolios as our overly energy-bound TSX falters, but the opportunity for benefits to Canada’s economy from lower oil prices is significant – reinforced by a recent report from RBC, which notes:
[quote]Our current Canadian forecast assumes that both consumers and exporters will respond to these incentives that will slightly more than offset the expected weakening in oil-sector investment.[/quote]
What this all boils down to is a choice: Either export raw, unrefined bitumen and syncrude – generating few local jobs – or export finished goods, manufactured in Canada. Since the latter brings more jobs and value-add to Canadian resources, shouldn’t that be a no brainer?
3. Pull the plug on pipelines
Keystone has strained Canada-US relations (Adrian Wyld/CP)
Keystone XL, for both political and economic reasons, appears less and less likely by the day. Even an expected bill from a dual-majority Republican congress can and likely will be vetoed by Barack Obama. Clinging to this vision will only further strain diplomatic relations with our southern neighbour. It’s time for Stephen Harper to throw in the towel on Keystone.
As for Enbridge and Kinder Morgan, on top of all the law suits, the widespread public opposition – culminating in highly effective civil disobedience at the end of 2014 – and the well-justified environmental concerns, these plummeting oil prices mean the demand for increased export capacity is simply not there. Many oil/tar sands projects can’t make a buck at $50 oil (which is substantially lower when you factor in the Western Canadian Select discount on bitumen) – evidenced by the cancellation of numerous expansion projects in recent months.
[quote]Canadian oil and gas projects worth a total of $59-billion may be deferred during the next three years as the ‘collapse’ in capital investment in the global oil industry echoes the dark days of 2009 and 1999.[/quote]
The same thing is happening with risky, expensive shale oil from the Bakken in North Dakota, with production and train shipments plummeting in recent months. These unconventional fossil fuels are the first to lose their lustre in low-price periods. Upstart American shale oil producers are a victim of their own success – flooding the market with too much supply. Now, with OPEC unwilling to back off with its cheaper, light crude supply, it is forcing these more costly new sources out of the market.
Meanwhile, controversy is heating up over Enbridge and TransCanada’s eastbound pipeline proposals, which are also subject to the same economic challenges as the BC projects. A slew of mounting headaches for TransCanada’s Energy East project – from endangered belugas to the Quebec government’s long list of tough conditions – prompted Alberta Premier Jim Prentice to travel east in December for a round of palm pressing and damage control.
Added environmental hurdles and calls for increased provincial benefits and reassurances, piled on top of a weakening business case, spell trouble for these projects – once considered a cake walk compared to getting through BC.
Times change, new facts emerge. Canada needs to evolve its thinking accordingly. If Stephen Harper wants to hang onto his majority – even stay in power with a minority government – he should rethink his dogmatic devotion to pipelines unpopular with many voters and for which the economic justification is simply no longer there. The oil/tar sands isn’t the only avenue to create jobs and be strong on the economy.
4. For God sakes, abandon LNG
Christy Clark pitching LNG in 2014 (Damien Gillis)
Christy Clark’s LNG vision is the biggest loser of them all.
With most Asian LNG contracts tied to oil prices, the current climate has scared away even the most intrepid LNG proponents. That includes Malaysia’s Petronas, which cited this reason for further waylaying its final investment decision (again) last year. (Let’s remember too that even if it did go ahead with its pipeline and plant, Petronas has indicated that it would import Malaysian workers to build them – while the BC government signs deals with India and China to supply foreign temporary workers for the LNG industry…so there goes the whole “jobs” argument!)
Petronas’ stalling comes on the heels of many other big players getting cold feet, including Encana, EOG, Apache, and BG Group.
And with good reason. Even after Clark gave away the farm to these companies – slashing down to nothing the export tax at the root of the Liberals’ grand “$100 Billion Prosperity Fund” promises in the last election – this dog still won’t hunt.
Here’s why: With all the added costs to produce and ship LNG to Asian customers, the break-even point is between $10-13/unit of gas. When Asian prices momentarily spiked to $16-18 a few years ago, it seemed like BC exporters could make some real money exporting LNG. But as we and other pundits correctly predicted, this price bubble wouldn’t last. Now, with spot prices hovering at or below $10 – and expected to continue falling throughout 2015 – that Asian price premium is gone, taking BC’s LNG pipe dream with it.
Sure, oil prices may pick up and with them LNG prices, but the lesson here remains: LNG is expensive and volatile – not characteristics that make big energy companies likely to fork out the tens of billions of dollars and half decade in pipeline and plant construction required to get this industry up and running. Which is why the sooner we abandon this delusion and start focusing on real, sustainable economic alternatives for the province, the better off we’ll all be.
“It’s the economy, stupid.” That’s the refrain environmentally-minded folks are browbeaten with, their pipeline and climate change protests patronizingly brushed aside by wise economic pragmatists.
But in 2015, with $50 oil, we should all be on the same page for once.
Ben West addressing a Vancouver crowd about Kinder Morgan in 2012 (Damien Gillis)
There’s big news on the environmental front!
Ben West, the eminent young environmentalist until now with Forest Ethics and, before that, the Wilderness Committee, has joined Rex Weyler fighting tanker traffic on the BC coast through Tanker Free BC. This makes a very potent combination indeed. (Full disclosure: My colleague, Common Sense Canadian publisher Damien Gillis, is a founding board member of TFBC along with Mr. Weyler).
For those who may not know, Rex Weyler was a founder of Greenpeace International and its biographer. He has been active in environmental matters for many years and in 2009 took up the cudgels against tanker traffic on our coast. Tanker Free BC was formed some 5 years ago, specifically to take on the Kinder Morgan issue and the organization laid much of the early groundwork for the campaign to block the project.
Ben is a first class student of the environment and a very able presenter. I have had the privilege of appearing at podiums with both he and Rex.
Huge proposed increase in tanker traffic
The number of tankers required on our coast to transport the oil proposed by Kinder Morgan runs about 400 per year – minimum. This doesn’t count tankers coming from Squamish from a proposed LNG plant.
Despite what the professional mariners tell us, it’s a matter of mathematics. Sooner or later we’ll have a serious accident on our coast. In fact, there’s nothing to say there won’t be more than one.
If this were a relatively minor matter, we could and would have to live with it. But they are transporting bitumen, or dilbit, which is highly toxic and, as the spill on the Kalamazoo River by Enbridge 4 1/2 years ago demonstrated, it is virtually impossible to clean up. This means, to articulate the obvious, that the risk of running tankers on our coast cannot possibly match any advantage it would confer upon the people of British Columbia.
It’s for this reason that opposition to both the Enbridge and Kinder Morgan pipelines has been so vigorous. Of course, part of the opposition has come from those who must live with the pipeline in their communities but the issue is the same – be it train, truck or pipeline, they transport a vicious and dangerous poison.
Oil-by-rail threat used to scare pipeline opponents
MP James Moore being interviewed by CBC’s Chris Hall (Photo: James Moore/Twitter)
At the same time as the West/Weyler story we hear from Tory cabinet minister James Moore that pipelines must come, otherwise transportation will be by rail which, by common consent, is far more dangerous than by pipeline.
I must confess here that I’m not certain about the capacity of rail to deliver a comparable quantity of oil – in the case of Kinder Morgan 780,000-1.000,000 barrels a day, and this is of course an important figure to know. If pipelines were simply not to happen, would rail transport be sufficient to fill up 400 or more likely 450 tankers per year?
The answer, according to the limited research facilities available to me, is that this is highly unlikely. Moreover, the safety factors are enormous and make those of pipelines pale into insignificance. This, of course, is the argument that James Moore and the supercilious finance Minister, Joe Oliver, are making – permit pipelines or else…
Weston continues “Environment IS Economy” refrain
Just by way of an aside, a few moments ago when Wendy brought the mail, there was yet again another release by my MP, John Weston, bleating once more “the environment IS the economy”. As I’ve mentioned before, this slogan has about as much meaning as “please adjust your clothing when leaving the lavatory” and gives an idea of typical Tory bafflegab which desperately hopes that their own appalling ignorance is matched by that of the bovine masses.
Rex and Ben face the ill-disguised ultimatum laid down by James Moore that bitumen will come through British Columbia one way or another. The Tories are, of course, in thrall to Alberta voters with an election coming up where every seat is crucial and the safety of unreliable British Columbians not on the radar.
Remember the bitumen
We must remember that the enemy is not the train or the pipeline or indeed the tanker – it is the bitumen from the tar sands. We’re being asked – indeed perhaps ordered – to transport this highly noxious substance through the wilds of our province to populated areas, into tankers and shipped down our coast.
Sham “Process”
The politicians are unconcerned about the feelings of the people of our province. Mr. Moore has, from the beginning, been contemptuous of public opinion and those of us who have fought against the transport of bitumen are portrayed as American-financed neo-hippies. The so-called “process” by which energy decisions are made is as phoney as a three dollar bill as has been amply demonstrated by no less a figure than Mark Eliesen, one of the most prominent energy experts in the country.
Public attention, diverted by the pipeline issue, has not considered that the governments of Canada and British Columbia would cast aside safety issues and threaten the transport of this terrible substance by rail. What this does, of course, is clarify the issue for Ben and Rex and all those who join them in the fight, very much including me. It is the two senior governments who are the enemies – the bitter enemies.
The public of British Columbia must, by civil disobedience if need be, convince the federal and provincial governments that we have sufficient democracy left in this country that the people still count, or we’ll end up with a an oil sands catastrophe on our land and on our coasts, whether we like it or not.
Tory MP John Weston (from his annual Christmas video message/Youtube)
There is surely nothing quite as ridiculous as a Tory pretending that he cares. Money and rich friends they understand but when it comes to the values that ordinary people revere they’re at sea. In fact they’re bewildered by those who think that the poor ought to be considered by society or that such things as lakes and mountains and animals and parks and neighbourhoods have any serious meaning to people.
This doesn’t mean that they don’t understand that they must make believe and always speak in loving terms about the things that I’ve mentioned.
There’s another sure thing to be added to Benjamin Franklin’s “death and taxes”. It’s that by reading the bullshit in a Tory MP’s annual newspaper to his constituents you can determine, with only the minimum of thinking, what the Tories are really planning and what their electoral word games are going to be all about.
LNG in Howe Sound
I hate to be seen as picking on my MP, John Weston, but because I know him, I’m bewildered that he would prostitute his brains and compromise his honesty to the extent he has over the last three years.
Now, John is a very earnest sort of a chap and I’m sure honestly feels that he is front and centre in Canadian public life and of considerable importance to the governance of the nation. I fact, he is inconsequential and in three years has contributed nothing and couldn’t if he wanted to. Nor can any of his backbench colleagues. I would respect that and leave him alone if it weren’t for the fact that he pretends importance where there is none, as do his colleagues. It must be an awful thing to have to fake self-importance in order to keep up one’s self respect.
Let’s get down to cases. I live on the Sea-to-Sky in wonderful Lions Bay. I have not always lived here, of course, but I’ve always felt much attached to Howe Sound, having spent so many of my boyhood hours happily fishing and swimming and cruising in this area. It’s sacred.
If you read Mr. Weston’s annual rag, you might think that he had won a stunning victory. The bold headline sings praise for Council’s commitment to “Good Process”, even though it politely told him to get stuffed. In the body of the article, Mr. Weston plays down the disappointment the entire constituency knew he had and made believe that he was thrilled that he managed to get a hearing for his client.
Not satisfied with leaving after one paragraph, Mr. Weston prattles on for seven more dealing with the wonders of development. One paragraph probably tells the story
[quote]As MP, I am increasingly required to consider the impact of industrial projects on our economy and our environment. Throughout the summer, conversations [at] backyard barbecues and coffee gatherings [are] often related to responsible resource development. “The Environment IS the Economy” [emphasis his] is the message I am increasingly taking to cabinet and other leaders.[/quote]
That is, of course, rubbish. Mr. Weston is not taking any messages to cabinet nor to any leaders, nor does any other Tory backbencher. Who in hell is he kidding? They’re overpaid ciphers who do what they are told and speak when they’re spoken to.
IS the environment the economy?
But let me deal with this slogan “The Environment IS the Economy ” – to which Weston recently dedicated a column on his website directed at yours truly. That’s a very helpful slogan indeed and reminds me of “Conscription if necessary but not necessarily Conscription”, “The Land is Strong” and “Please adjust your clothing before leaving the Lavatory”.
When the Tory government took away protection for fish under an omnibus bill, Mr. Weston, in my presence, enthusiastically supported this move on the grounds that now there was “process”. In other words where it was once forbidden to bugger up fish habitat, now you could do it if you went through the proper “process”.
Mr. Weston goes on to say, “If a project respects the factors just mentioned, I am likely to support it. Otherwise, I will not support it.”
Again we see the ridiculousness of a Tory backbencher trying to act important. The plain fact is that Prime Minister Harper doesn’t give a fiddler’s fart what John Weston thinks about a project. The truth of the matter is that backbencher Weston was instructed to try to get the West Vancouver Council to reverse itself – after all, Harper and his poodle, Christy Clark uncritically support LNG. He failed and now must save face.
“Process”
I have spoken of this before but I think it’s worth revisiting. The “process” involved in environmental matters is a fraud. Now that’s admittedly a nasty word to use, I agree, but let’s examine the position taken by Mark Eliesen who was, until he resigned, an intervenor in the Kinder Morgan hearings before the National Energy Board.
Mr Eliesen is former Chair of BC Hydro, CEO of the Manitoba Energy Commission, CEO of Ontario Hydro, CEO of Manitoba Hydro and a director of Suncor.
In his lengthy resignation letter, Mr. Eliesen concluded:
[quote]In effect, this so-called public hearing process has become a farce, and this Board a truly industry captured regulator…The National Energy Board is not fulfilling its obligation to review the Trans Mountain Expansion Project objectively. Accordingly it is not only British Columbians, but all Canadians that cannot look to the Board’s conclusions as relevant as to whether or not this project deserves a social license. Continued involvement in the process endorses this sham and is not in the public interest.[/quote]
John Weston no doubt believes his own bullshit, but that’s what it is. Without hesitation, I would take the word of Mark Eliesen over Weston’s and most certainly over that of Prime Minister Harper or any of his cabinet toadies.
“The Environment IS the Economy” (or is it the other way around?) simply means, in Tory Talk, “Always speak in hushed, respectful terms about the environment – but, for God’s sake, don’t ever let environmental considerations get in the way of our friends making money.”
Gerry Hummel’s cartoon on John Weston’s support of private river power projects (IPPs)
There’s no free ride when it comes to generating energy. Even the cleanest sources have environmental consequences. Materials for all power-generating facilities have to be obtained and transported, and infrastructure must be built, maintained and eventually decommissioned. Wind turbines take up space and can harm wildlife. Hydro floods agricultural land and alters water cycles.
No matter how good we get at conserving, though, we’ll always need energy, so we must find ways to employ the least damaging technologies and reduce negative effects. We know the world’s preferred, and currently cheapest, method to generate power — burning fossil fuels like coal, oil and gas — is the most destructive, causing pollution, global warming and massive environmental damage during extraction, transport, refining and use. And supplies are becoming more difficult to obtain and will eventually run out.
In contrast, wind power doesn’t create pollution or global warming emissions, is affordable and will never run out. Improvements to power-generation capacity, efficiency and affordability will continue to boost its importance in the energy mix. But we must ensure turbines are installed in locations and using methods that reduce negative impacts on humans and wildlife.
Wind power has come a long way
Thanks to ongoing research and testing, wind power has come a long way in a relatively short time. Wildlife behaviour studies, along with technological improvements, have significantly reduced harm to birds and bats, and better siting has reduced impacts on other wildlife and habitat. Wind power generation is far safer for birds, bats and other animals than burning fossil fuels.
But what about wind power’s effects on humans, a key argument used by opponents? Turbines, especially older ones, can be noisy, and some people find them unsightly — although I prefer the sight of wind farms to smokestacks and smog. Many problems can be addressed by locating quieter turbines far enough from human habitation to reduce impacts.
Human health impacts negligible: Health Canada
As for health effects, a recent comprehensive Health Canada study confirms previous research: Although people report being annoyed by wind turbines, there’s no measurable association between wind turbine noise and sleep disturbance and disorders, illnesses and chronic health conditions, or stress and quality-of-life issues. A 2013 Australian report concluded people living near wind installations where anti-wind campaigns were active were more likely to report health problems, suggesting some issues may be psychological.
Health Canada says more research may be needed and we shouldn’t downplay the annoyance factor. Again, improvements in technology and proper siting will help overcome many problems. And there’s no doubt that fossil fuel development and use — from bitumen mining, deep-sea drilling, mountaintop removal and fracking to wasteful burning in single-user vehicles — are far more annoying and damaging to human health than wind power and other renewable-energy technologies.
Wind becoming more affordable, reliable
Wind energy is also becoming more affordable and reliable. Denmark gets 34 per cent of its electricity from wind and Spain 21 per cent, making wind their largest electricity source. Portugal gets more than 20 per cent, Ireland 16 and Germany nine per cent. All have much higher population densities than Canada. Overall, wind power contributes about four per cent to worldwide electricity generation.
Improvements in grid and storage technologies also mean wind and other renewable technologies are increasingly feasible and desirable, especially as costs continue to drop. Investing in wind and other renewable energy is also good for jobs and the economy and can create greater stability in energy pricing than relying on volatile fossil fuel markets.
Green jobs blossoming
Total global investment in wind energy in 2012 was more than $80 billion, creating 670,000 jobs. According to a Blue Green Canada report, investing the $1.3 billion the oil industry gets in annual federal taxpayer subsidies in renewable energy and conservation could create 18,000 to 20,000 jobs, compared to fewer than 3,000 in oil and gas. And we can’t ignore the many related cost impacts of fossil fuel development, from health-care to infrastructure.
To reduce global greenhouse gas emissions at a pace and scale that experts agree is necessary to avoid increasing catastrophic effects of global warming, we need a mix of renewable energy. Wind power will play a large role.
Written with contributions from David Suzuki Foundations Senior Editor Ian Hanington.
Neptune coal terminal (Image: Dan Pierce/Wilderness Committee)
By Andrew Gage and Anna Johnston – republished with permission from the West Coast Environmental Law Association.
On October 23, 2014, the federal government introduced Bill C-43, A second Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures (also called the “Economic Action Plan 2014 Act, No. 2”). Buried in Division 16 of the 475 page omnibus bill are proposed changes to the Canada Marine Act that, if adopted, would pose a serious threat to legal protection from environmental threats and public oversight of activities that occur in ports.
The proposed amendments raise a number of concerns for British Columbians, especially as they relate to controversial shipping industries like coal and LNG – indeed one of the most troubling amendments could be viewed as a direct challenge to a lawsuit filed by Voters Taking Action on Climate Change against the environmental assessment of the controversial Fraser Surrey Coal Docks. For detailed information, see our legal backgrounder Bill C-43: A threat to environmental safety and democracy, but two of the most concerning changes are:
Allowing the federal Cabinet to exempt port lands from key requirements of the Canadian Environmental Assessment Act 2012 and Species At Risk Act that regulate “federal lands” by turning those lands over to port authorities.
Giving Cabinet extensive powers to write new laws for ports, and to delegate law-making powers for ports to any person, without many checks and balances.
Exempting “federal lands” from federal environmental laws
Some federal environmental statutes create special environmental requirements for activities taking place on “federal lands.” Examples include:
Canadian Environmental Assessment 2012– the requirement to consider the environmental impacts of projects – even where they would not otherwise require an environmental assessment;
Species At Risk Act– The requirement to protect land-based endangered and threatened species and their habitat on federal lands.
Bill C-43 gives the federal government the ability to get around these legal protections by converting federal lands into port lands. Specifically, Cabinet would gain the ability to sell its lands in a port to the port authority. Once it does so, even though the port authority is supposed to act as an agent of the federal government, those lands will no longer be considered “federal lands.”
And, presto, as if by magic those nasty environmental protections disappear.
A controversial coal port proposed for Surrey, BC gives a tangible example of what this might mean. As we write in the backgrounder:
[quote]…Fraser Surrey Docks LP’s proposed Direct Transfer Coal Facility in Surrey, BC was required to undergo a federal environmental assessment by the Vancouver Fraser Port Authority because the project occurs on federal lands under Port Authority supervision. The Port Authority’s approval of the facility has been challenged in court by a group of citizen and non-profit applicants represented by Ecojustice and Beverly Hobby (with funding from West Coast) for failing to follow the requirements of CEAA 2012. If the Bill C-43 changes to the Canada Marine Act come into effect and the federal government were to sell the property on which it is located to the Port Authority, it would be possible for controversial projects like this one to bypass reviews under CEAA 2012 altogether.[/quote]
Trust us, we’re law-makers
The second thing that Bill C-43 does is to turn over exceptionally wide law-making powers to Cabinet, including giving it the ability to turn broad powers over to port authorities, provinces or even industry. While Cabinet often has the power to make regulations under a statute, these powers are exceptionally broad, and include powers to:
hand over regulatory, administrative or even judicial (court) control of industrial activities in ports to any person, including a province, port authority or even industry itself;
powers to incorporate industry or other documents in the regulations without necessarily making those documents publicly available;
create rules for the retention or destruction of documents.
The Bill provides few explicit constraints over how these powers could be used, and the government hasn’t given any real indication as to its plans, but:
Powers that can be delegated include responsibility for making laws and policies regarding specified industrial activities in ports, administering activities under those instruments, and hearing disputes that occur regarding port activities. For example, Cabinet could in principle allow an industry association to write the rules regarding the assessment and permitting processes for LNG facilities and coal storage, and the shipping of both. It could then incorporate those rules into federal law without public notice or opportunity to comment.
The Bill even purports to allow Cabinet to take oversight of the new rules away from the courts by creating a tribunal to hear any disputes regarding those activities in ports, including challenges by the public. It could appoint industry representatives as the tribunal’s members and authorize port authorities to write the rules governing port activities and for hearing disputes (including who would have standing to bring a challenge).
Canadians understand the value of checks and balances and transparency in laws. These amendments do away with both.
Secret amendments
What are these amendments doing in a budget bill? This is the latest of a series of amendments to environmental laws that have been hidden in voluminous budget bills and debated by the House Finance Committee (instead of environmental committee). This is not the way democracy is supposed to work, and now is the time to say no.
