Category Archives: Energy and Resources

Squamish & Tsleil-Waututh Nations Sign Historic Declaration to Protect the Salish Sea

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Read this article from Tsleil-Waututh Nation on Canada Newswire about their canoe journey from Ambleside Park to Cates Park, and the declaration that came out of it. (September 2, 2012)

Read more: http://www.newswire.ca/en/story/1029413/squamish-tsleil-waututh-nations-sign-historic-declaration-to-protect-the-salish-sea

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Tankers too risky for coast environment

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I am, God knows, no scientist and it’s this that made by heart warm when I saw the story in the Vancouver Sun, September 1 at page A5 headlined “Tankers too risky for coast environment, engineers say”.

Three engineers including two professors emeritus from UBC have verified what I and others have been saying for some time. From the story: “Known as Dilbit, diluted bitumen is a mix of heavy crude oil and a condensate that allows it to flow through a pipe, the analysis explains. When Dilbit spills occur, the condensate separates from the bitumen and forms a toxic cloud, poisonous to all life around a spill” …

“And whereas lighter oil floats on the surface of water where it’s easier to clean up, bitumen sinks to the bottom in fresh water and to a level below the surface in saline water.”

“In both cases it is almost impossible to clean up and tides and currents can spread it over vast areas, with severe and catastrophic consequences for fisheries, marine life, and human safety.” (Emphasis added)

This is scarcely the whole picture when we remember that the Enbridge pipeline travels 1100 kms over the world’s most formidable terrain where the spills are many times more likely to happen than on the coast and will be unreachable by the company which won’t be able to do anything about them anyway. Because these spills will remain, we have a serial polluter on our hands with each new spill adding a new area of devastation.

There is another area no one seems to want to talk about – vandalism or terrorism. We have seen examples of this with gas lines in the Peace area – why do we ignore them with Enbridge and the Kinder Morgan lines.

Yet one more area of concern is how the public and the authorities ever know if there’s a spill on either of these lines. Kinder Morgan has had spills in populated areas but have there been others along their lines that have simply been repaired with none any the wiser?

It’s past time for Premier Clark to make it clear that the Province opposes both the pipelines and the tanker traffic and will do all in its power to prevent them from happening.

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$100b LNG projects imperiled by African gas rush

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Read this article in the Sydney Morning Herald about a competition in natural gas development between Australia and east Africa. “Royal Dutch Shell, BG Group of the UK and France’s Total may scale back projects to build liquefied natural gas export plants in Australia and switch to Tanzania and Mozambique, where the new prospects lie and will cost about half as much.” (August 31, 2012)

Read more: http://www.smh.com.au/business/world-business/100b-lng-projects-imperiled-by-african-gas-rush-20120831-25428.html

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The Enbridge Pipeline – it’s all about PR now

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Today is dedicated to the 51% the polls say could be swayed by evidence and support the Enbridge Northern Gateway pipeline proposal.

To recap, The pipeline proposed runs 1,100 kms. through the Rockies, the Rocky Mountain Trench, through the Coast Range getting to the ocean at Kitimat thence by tanker through the Douglas Channel to China. This is some of the roughest terrain in the world and Douglas Channel is an extremely dangerous waterway.

The pipeline would pass over 1000 rivers and streams. many of them critical to our salmon runs.

The issue is not whether or not there will be spills for we know that for certainty – in fact we know by Enbridge’s own documents that they have more than a spill per week. In short, the mathematics of statistics tells us spills on land and sea are inevitable.

Earlier in the week we heard from Enbridge that bitumen is the same as ordinary crude when it’s spilled, as if that would make everything OK.

We are now seeing the public relations world at work. I know something about the philosophy behind Public Relations companies and their siamese twin, the advertising company. I have done some work for a large PR firm and saw lots of advertising flacks at work when I was in government. If I were to say that these people told lies they would rise as one in protest. OK, they don’t tell lies in the same way Bill Clinton didn’t lie when he said he had never had sex with Monica Lewinsky.

If you want to observe the the ethics of the industry, go to a Third World Country and look at their advertisements for tobacco companies. It will remind you of North America in the 50s with the modern equivalent of “More Doctors Smoke Camels Than Any Other Cigarette”. Take a look, for example, at Shell Oil ads, then remember their record in Nigeria where they have the government bought and paid for and are generally believed to have had Ken Saro-Wiwa, the activist and journalist, murdered by the state.

I am not suggesting that Enbridge has contracts out on anyone, just that the industry they employ, and the PR people on staff, are in the same business as the giant PR firm Hill and Knowlton, famous for tobacco ads and making the 1984 Union Carbide’s disaster in Bhopal India appear as if they had conferred a benefit on the local population – well, not quite, but you get my drift.

We’ve seen evidence of this in the now famous cartoon Enbridge put out showing the Rockies and Coast Range mountains as pimples and deleting all those troublesome islands in Douglas Channel.

The spin now is, of course, that bitumen, the gunk from the tar sands, is no more toxic or different to clean up than crude oil. Not only is that bull shit, it’s a typical PR way of making the bad look good by comparing it to something else not quite so bad. It’s the PR way of “bait and switch”. It is hoped that the public will accept that bitumen is no worse than crude, heave a sigh of relief saying thank God, I was afraid that bitumen was really bad for the environment.

I write this piece today to newcomers to this issue to warn them that the pipeliners and tanker people have their PR and advertising folks in action.

It is well that we remember, as we enter the corporate crap phase of this issue, just what corporations are all about. Their mandate is a simple one – make money for shareholders. It is not part of their mandate to provide decent paying jobs, workplace safety or protection of the environment. To the extent that they do these things it is what they’ve been forced to do by market forces or governments.

One need only look again at Third World countries and see how companies like Shell, Rio Tinto or The Reynolds Corporation operate when they are free from government rules (usually because they have bought off the governments).

I’m no communist or socialist just a realist who, as an octogenarian, has seen quite a bit of life’s truisms pass before his eyes.

Here is something you can take to the bank – if Enbridge tells the truth about any part of their policy it’s only by accident or it’s in its interest to do so. They couldn’t care less about British Columbia, its fish and wildlife or its wilderness.

The environmental concerns of the people of British Columbia are of no concern to the company.

We’d all better understand this if we want to keep our beautiful and bountiful province intact for generations to come for whom we hold it all in trust.

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Alberta’s bogus labour shortage

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Read this article by Tony Clark at rabble.ca which deflates the idea that foreign workers need to be brought in for Alberta projects. Excerpt: “The Certified General Accountants Association of Canada released its own report with similar findings. Their findings include ‘Labour shortages are difficult to observe and measure directly’ and ‘Where sufficient data exists, an assessment shows that labour shortages occurred rather sporadically and did not persist for more than one year at a time over the past ten years.’
These bad numbers lead to bad public-policy decisions.” (August 7, 2012)

Read more: http://rabble.ca/blogs/bloggers/progressive-economics-forum/2012/08/albertas-bogus-labour-shortage

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How one Black Press paper covers David Black’s refinery proposal in Kitimat

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Read this article by Charlie Smith in the Georgia Straight about the coverage given to David Black’s refinery proposal by the Terrace Standard, a Black newspaper. Excerpt: “Here’s how the editorial ended—and make no mistake, the endings of editorials are often what’s most important because that’s what’s left in the reader’s mind.

“‘Significant economic benefit derived from the pipeline could sway popular opinion, especially [for] people living through hard times in northern B.C., but probably not enough to tip the scales.

“‘Black and Enbridge will have a tough time convincing residents in southern cities that the potential of thousands of jobs in the northern oil sector is worth the risk of a pipeline leak or a tanker running aground on B.C.’s coast.’

“In other words, Enbridge and Black would create thousands of jobs and significant economic benefits, but it’s those southerners who just don’t get it.” (August 25, 2012)

Read more: http://www.straight.com/article-764151/vancouver/how-one-black-press-paper-covers-david-blacks-refinery-proposal-kitimat

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First Nation says Alberta oilsands plan will ‘annihilate’ its lands and future

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Read this article from Canadian Press, published by The Tyee. Excerpt: “Your plan, your land, your future? This is not our plan, it’s the governments plan to annihilate our lands and our future.” – Chief Allan Adam (August 24, 2012)

Read more: http://thetyee.ca/Blogs/TheHook/Aboriginal-Affairs/2012/08/24/First-Nation-says-Alberta-oilsands-plan-will-annihilate/

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Ride the Pipe: Michelle Staples

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Read this blog posting by Michelle Staples at Ride the Pipe, a project to engage with and photograph the people most affected by the proposed Northern Gateway Pipeline and to capture the landscapes and seascape that will be altered by construction or destroyed by an accidental oil spill. (August 24, 2012)

Read more: http://ridethepipe.ca/blog/michelle-staples/

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A rendering of the proposed site of Kitimat LNG Facility - a joint venture between Encana, EOG Resources and Apache Canada

LNG, Fracking and Site C Dam: BC’s Looming Energy Boondoggle

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The proposed Enbridge and Kinder Morgan bitumen pipelines through BC are finally receiving the attention they deserve – as is the much-needed corollary conversation on the Alberta Tar Sands and their true impact on Canada’s economic future, elevated to national prominence by Official Opposition leader Thomas Mulcair. Yet, as big of a game-changer as oil pipelines and tankers would be for BC, one could argue that the collection of proposed natural gas-related developments on the table is, taken together, at least as transformative for the province’s future – though you wouldn’t know it from the relative silence on the topic.

Until recently, that is. The past several months have seen a number of highly significant events related to this matter.

First, in mid-June, Apache Canada announced a massive new shale gas find in the Liard Basin, which stretches from northeast BC into the southeast corner of the Yukon. The Liard play, being touted as the “best shale gas reservoir in North America”, is west of the Horn River basin play, already one of the world’s largest. The find is undoubtedly a game-changer, elevating northeast BC to the world’s mecca for the relatively new, yet highly controversial process for breaking open shale gas formations deep underground, known as “fracking”.

The next big development came the day after Apache’s announcement, when the NDP, led by Energy Critic and likely future Energy Minister John Horgan, came out fully supporting an expanded natural gas industry in Northeast BC, downplaying environmental concerns about fracking. In the same breath, the Official Opposition showed clear support for the Liberal plan to build a number of Liquid Natural Gas (LNG) plants in Kitimat to export the resource to Asia.

The party’s position was solidified last week when the Georgia Straight reported it was fully backing a new pipeline from Summit Lake, north of Prince George – Encana, EOG and Apache Canada’s joint venture Pacific Trails Pipeline – to carry natural gas from northeast BC to three proposed LNG refineries in Kitimat.

Finally, Premier Christy Clark announced a week later that her government will be reclassifying previously dirty natural gas as “clean” – but only when it’s burned to power these proposed LNG plants in Kitimat. The Campbell/Clark Government previously banned the development of new gas-fired electrical plants, putting the emphasis on renewable or so-called “clean” energy alternatives – wind, solar, geothermal, biomass and hydro.

The premise for these new multi-billion dollar LNG plants is to access new markets in Asia which currently pay far more for gas than North American customers. Prices in China, Japan and Korea range up to $17 per thousand cubic feet versus a historic low of two to three dollars in North America today – largely thanks to the glut of natural gas flooding the domestic market as a result of new shale gas plays. The idea is to turn some of BC’s plentiful gas supply into liquid, put it on tankers and ship it to Asia to reap big profits. Without these prices, big finds like Apache’s in the Liard Basin simply don’t make sense to develop.

While the plan looks financially (though certainly not environmentally) promising on the surface, it’s fraught with complications:

1. The process of converting gas to liquid is enormously energy intensive. According to Christy Clark, all the the power from BC Hydro’s proposed new 1,100 Megawatt Site C Dam on the Peace River would be required for just Shell’s one proposed LNG plant in Kitimat. That may have changed, now that these plants are allowed to burn their own cheap gas for power, but, curiously, Site C Dam has not been taken off the table in the wake of that announcement. The otherwise energy self-sufficient BC has nowhere near enough electrical supply to power three new LNG plants and all the new mines the Clark Government is pushing forward.

2. The whole plan is contingent on this high price differential carrying forward – which is doubtful for a number of reasons. China’s economy is already showing signs of slowing down, while Japan is looking to restart its nuclear program; where will its energy demand be in 10 years when these plants are built and supplying the Asian market with LNG?

3. We’re not the only horse in the race. China has its own shale gas plays – which it is now starting to develop. Moreover, a number of other countries are thinking the same way we are – chief among them Australia, which is much further along and has already secured contracts to sell LNG to China.

4. The main method of supplying these plants – gas from fracking operations – is coming under increased scrutiny globally, with various moratoria having been instituted in other regions, relating to concerns over water use and contamination, earthquakes, and myriad human and animal health concerns. Fracking producers may well (and should) face increased regulation – meaning added costs and further reduced profits – or, worse, outright restrictions and shutting down of operations as awareness and evidence build against this controversial technique.

LNG and Mines Mean Site C

As befuddled and full of flip-flopery as the Liberals have been on this file, the NDP are in quite a pickle too. First, they give their environmental seal of approval to shale gas, while supporting the massively risky undertaking that is building and fueling multi-billion dollar plants on BC’s coast to turn this gas into liquid and ship it to new markets in Asia. But when the Liberals reclassify gas as “clean” (remember, the NDP just did as much themselves not a week previous) in order to allow these plants to use their own gas to power the enormously energy-intensive liquid compression process, the Opposition cries foul. Why? Because burning gas isn’t clean. So which is it, Mr. Dix?

I filmed a rally in Victoria two years ago led by First Nations and farmers from the Peace Valley in opposition to Site C Dam. NDP Energy Critic John Horgan, to his credit, attended the rally and spoke – but he stopped short of outright opposing the dam. He would only say that it required a full environmental assessment and that it should only proceed if the science supports it.

Then, in January, 2011, Horgan told the Georgia Straight that he didn’t think Site C was “necessary” at the time – though still leaving the door open to the project:

They want some peace in the valley, and as long as the spectre of Site C hangs over their head, there’s never going to be a comfort level in the community,” Horgan said. “They want a full-fledged, full-on environmental assessment, so that they can put on the table the science of the sloughing, the costs of dredging, and the total costs on ratepayers of a $6- to $7- to $8- or even $9-billion project.

Earlier this year, my colleague at the Common Sense Canadian, Rafe Mair put NDP leader Adrian Dix on the spot regarding Site C and got more of the same fence-sitting.

To my understanding, the NDP is on the fence or publicly committed to the above schemes – Site C, fracking, LNG – for three main reasons:

1. It is conscious of not allowing itself to be branded by its political opponents as “anti-progress” or “anti-industry”, especially after having taken a strong position against the Enbridge pipeline

2. It is wary of not stepping on the toes of First Nations who have signed onto to the LNG scheme – particularly the Haisla Nation of Kitimat, who have also been vocal opponents of the Enbridge pipeline.

3. It recognizes how much the province’s coffers have come to depend on royalties, licenses and other fees related to the natural gas industry and doesn’t want to disturb that flow, leading to big deficits that will play into its opponents’ hands.

While these are all politically understandable reasons for supporting this massive industrialization of northern BC, they do not excuse the arguments against this program.

In the very least, the environmental and health concerns associated with fracking and the loss of vital farmland and fish and wildlife habitat from Site C – not to mention the notion of massive public subsidies for an industry on less than solid ground going forward – should argue for a more mature position from the province’s government-in-waiting. They know this whole scheme is fraught with complications and this outright endorsement of it shows the NDP is ready to put short-term politics ahead of reasoned, long-term policy for the province.

Subsidizing Energy for Industry

Clearly, Site C, mining, fracking, LNG are all interrelated. Even if Site C isn’t used to power LNG, there are over a dozen proposed new mines in northern BC – each of which is hungry for taxpayer-subsidized electricity. This begs the question – one answered by economist Erik Andersen in a recent interview with Rafe Mair: should the public be subsidizing new industry at all, with skyrocketing power bills and new $10-plus billion dam projects like Site C?

One of the key bones of contention at this year’s failed Rio climate conference was the matter of ending subsidies for hydrocarbon production. Plainly, this is a no-brainer, if we are to get on with the necessary transition away from fossil fuels to more sustainable energy sources. Moreover, the wealthiest corporations in history are the last entities that should be receiving public subsidies. And yet, we learned through a leaked memo that the Harper Government was leading the charge against the move to end hydrocarbon subsidies. So much for the “free market” Stephen Harper and his fellow Milton Friedman disciples keep railing on about!

So in that regard, it makes abundant sense for the natural gas industry to use some of its own product to supply the enormous energy needs of these LNG plants. And yet, anyone should be able to recognize the environmental folly of reclassifying gas as “clean” to enable its burning, to ship more gas half way around the world to be…burned. And that’s ignoring the myriad environmental problems associated with the initial extraction of the gas through fracking.

A Looming Boondoggle

No matter the degree to which Site C or our public hydroelectric system are used to power this LNG program, the taxpayers of BC, as shareholders in our gas resource, are impacted by the choices the industry makes on numerous levels. We need to ask whether this LNG-Asian market vision is an economically viable, environmentally responsible idea, or an epic resource boondoggle in the making, as we have seen in the past with similar forays into the Asia market with our coal and timber.

These political parties and the industry are banking on achieving a higher price for their gas in Asian markets – particularly China and Japan. But China has its own shale gas potential and is only just beginning to develop it. On top of that, China’s economy – and thus energy demand – is showing real signs of faltering. It will take us 5-10 years to build all these LNG plants and the additional energy assets to power them. Will China still be paying premium prices for LNG a decade from now, given the volatility of the various factors which enable that pricing today?

There are other players, such as Korea and Southeast Asia who might. Petronas Energy of Malaysia recently scooped up Candian gas company Progress Energy for over $5 Billion.

But this raises another question: how will this benefit the BC and Canadian economy – especially in light of new labour laws from the Harper Government that allow companies like Petronas to import foreign workers and pay them 15% less than Canadian employees. So under this system, we could see many jobs going to foreigners (excepting those that are too technical to be done by cheap, imported workers), while these new profits flow out of Canada, along with the energy resource.

This LNG scheme – as with plans to export Alberta bitumen to Asia – should be viewed as a hail mary pass to try and get the Canadian oil and gas industry out of the financial pit into which it is presently sinking. With prices where they are, there is a real danger that BC’s once-thriving industry could collapse, without a North American market willing to pay a reasonable price for its product. And yet, Site C, LNG and fracking, taken together – as they should be – constitute a massive gamble for the citizens of Birtish Columbia, both environmentally and economically. As such it’s time we have a frank  conversation about the issue before rushing headlong into a potential boondoggle of unprecedented proportions for our province.

Perhaps what needs to happen here – from both an environmental and economic perspective – is a planned ramping down of the North American natural gas supply, until prices begin to stabilize again. As energy economists like Jeff Rubin argue, the most effective way to regulate energy consumption is through price. Clearly, at $2-3/unit of energy, there is no incentive for the North American public or industry to conserve natural gas. Nor does this price point benefit the gas industry or the public, who are partners in the resource through the royalties and tax dollars we receive from its sale – all of which are significantly diminished in this climate. And yet, reducing supply in the North American market would be a tremendous undertaking that requires a level of collusion – and may not be practical, regardless, with hundreds of companies looking out for their own short-term interests.

In any event, while the public reaction and much-needed discussion around these issues have been delayed, there are signs they are now developing quickly. The political discussion surrounding the issue is intensifying, as is the media’s coverage of it. Already, the bubble shows signs of bursting, as Kitimat LNG – the joint venture between Encana, EOG and Apache – was recently delayed by another year as the consortium has yet to sign the contracts it needs with Asian buyers to finance the project. Meanwhile, some First Nations and environmentalists are beginning to organize protests against the consortium’s Pacific Trails Pipeline – the primary connector between fracked gas of northeast BC and this and other proposed LNG plants on the coast. Opposition to Site C Dam has been steadily growing as well, as I documented at this year’s record-setting ‘Paddle for the Peace’.

It’s high time this issue generated some of the intensity that the Enbridge project has received – as it would likely have as big, if not an even greater cumulative impact on the future of this province, environmentally and socioeconomically.

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