Category Archives: Politics

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

Energy and Resources, International, Oil&Gas, Pipelines and Supertankers, Politics
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Washington Governor Jay Inslee meets with BC Premier John Horgan in Victoria (Flickr/Province of BC)

By Joyce Nelson

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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On Energy & First Nations, politicians want to have their cake and eat it too

Canada, Energy and Resources, First Nations, Hydropower, Oil&Gas, Pipelines and Supertankers, Politics, WATER
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Jonathan Ramos cartoon

Canada can fight climate change and build more climate-ravaging pipelines.

First Nations’ rights should be respected – just not at the expense of these pipelines, dams and other major projects they oppose. Got it?

It’s hard to fathom, but these are the positions of our provincial and federal leaders. They want to have their cake and eat it too.

All sunshine and broken promises

Justin Trudeau after election victory (John Tavares/Flickr CC)

If the first step in dealing with a problem is admitting you have one, then Canada has made some progress on the environment and Indigenous rights – but on that score alone.

We traded climate change-denying, First Nations-bashing Prime Minister Stephen Harper for the smooth-talking, Sunny Ways Justin Trudeau. He made bold declarations about fighting climate change on the campaign trail, then in Paris, earning him accolades from around the world. He installed Canada’s first ever Aboriginal Justice Minister, Jody Wilson-Raybould, promised a “new relationship” with First Nations, and vowed to adopt the United Nations Declaration on the Rights of Indigenous People (UNDRIP).

But many of his actions have not lived up to the words. The hypocrisy is on full display for everyone to behold. For instance, he recently told The National Observer that tripling Kinder Morgan’s dilbit pipeline capacity “is an unavoidable element in a national climate plan.” Huh?

Trudeau explained his twisted logic to CBC radio’s Gregor Craigie:

[quote]First of all, we need to have a world-class oceans protection plan in place, which is why we put over $1 billion in the biggest investment in protecting the B.C. coast that there’s ever been.[/quote]

Let’s pause there a moment. Wouldn’t not adding 340 new oil tankers a year to the BC coast be an even better way to protect it? Justin continued:

[quote]Second, we have to have an ambitious plan to fight carbon emissions, to reduce carbon emissions, right across the country, which we’ve brought in with the pan-Canadian framework…And third, we need to make sure that we are getting our resources to market overseas, safely and securely.

The only way we can get any of those things is if we do all three of those things together. That’s the plan that we put in place, and that’s what we’re going to move forward with.[/quote]

Justin has tried to clarify this dizzying argument by saying that “in order to get the national climate change plan — to get Alberta to be part of it, and we need Alberta to be part of it — we agreed to twin an existing pipeline in order to get to work.” So, in order to save the climate, he cut a deal that will only damage it more. I’m sure to him, this all makes perfect sense.

The problem is not only does Justin’s pipeline program undermine his climate promises, it breaks his commitments to First Nations, many of whom vehemently oppose this planned incursion into their unceded territories.

The latest to disappoint First Nations

On the provincial stage, in recent years, both Alberta and BC have also turfed long-running right-wing governments – in their case for the NDP (and BC Greens). In BC, John Horgan campaigned on clean energy jobs and a vow to fight Kinder Morgan, nebulous though it was. He also echoed Trudeau in supporting UNDRIP, and has since doubled down on his support for First Nations and the environment in his recent throne speech.

George Heyman, John Horgan and Michelle Mungall announce their decision to proceed with Site C Dam (Photo: Government of BC)

But where the rubber meets the road, it’s been a different story.

In announcing his controversial, factually-challenged decision to continue with Site C Dam, Horgan offered, “I’m not the first leader to stand before you and  disappoint Indigenous people.” Aside from being one of the great understatements post-contact, it showed how weak his resolve really was. He might as well have said to First Nations, “I have your back…as long as it costs me nothing.”

The Horgan cabinet ministers most directly connected to the Site C decision had essentially vowed on the campaign trail to pull the plug on the project. I say “essentially” because most left themselves a millimetre of wiggle room for insurance. Lana Popham, now agriculture minister, told a Victoria crowd, “In my view, we’re nine seats away from being able to stop Site C.”

Michelle Mungall, now minister of energy and mines, declared, “…if we’re government, then our plan is to go through the B.C. Utilities Commission and we will work to end Site C…Our desire is to stop the Site C dam.”

George Heyman, now environment minister, told Treaty 8 First Nations and citizens at the Paddle for the Peace, “The dam project is wrong on every count because of its negative impact on agriculture, the environment, First Nations, clean energy commitments, economics, and the promise of jobs”.

Is it any wonder so many First Nations and British Columbians feel betrayed by these very same people’s decision to carry on with Site C?

Alberta, the oil deep state

On the other side of the Rockies, the bar was admittedly much lower, even for a new NDP government. First Nations have never really factored into provincial decision-making there and few expected the NDP to shut down the bitumen sands. But Notley did run as a fresh face for Alberta politics, promising to tackle her province’s unfair oil and gas royalties. She even brought in a climate plan that included a provincial carbon tax and a promise to phase out coal-fired electricity by 2030.

In every meaningful way though, Notley has stayed the course of her Conservative predecessors. The royalty hike was soon kiboshed. Her provincial carbon tax is too low to accomplish anything and she’ll only buy into a bigger national tax if she gets her pipelines. Pro-industry voices have come to her defence, arguing it’s still technically possible to meet Canada’s climate commitments while adding new pipelines. Can we at least agree they don’t help?

Alberta Premier Rachel Notley and Canadian PM Justin Trudeau (Photo: Premier of Alberta/Flickr)

So committed to the industry is Notley that she’s prepared to start a trade war over it, as her childish antics have shown of late.

If we take their good intentions on the campaign trail at face value, how do these leaders get sucked into the status quo once elected? Former Alberta Liberal Opposition Leader Kevin Taft offers a credible explanation in his recent book, Oil’s Deep State: How the petroleum industry undermines democracy and stops action on global warming.

An “oil deep state”, says Taft, is what happens to jurisdictions around the world once they discover oil (as opposed to a “Petrostate”, which is “conceived in petroleum”). If governments don’t take serious steps early on to keep petrodollars out of their politics and ensure that the lion’s share of the benefits flow into public coffers, as Norway has successfully done, then it’s exceedingly difficult to hold on to one’s democracy. Industry leverages all that money back at controlling the very governments that are supposed to regulate them.

Albertans get 4% of oil wealth vs. 80% for Norwegians

This unholy relationship between Big Oil and our governments doesn’t just impact our environment, health and First Nations’ rights – it means a raw deal for taxpayers, as Mitchell Anderson lays out in a recent essay in The Tyee.  In 2015/16, he notes, the Notley Government “collected a mere $1.5 billion on 942 million barrels of bitumen production, worth only $38 billion due to collapsed oil prices. This resource rent works out to less than four per cent return to Alberta taxpayers. Compare that to the days of former premier Peter Lougheed when Alberta captured 28 per cent of resource revenue, or even 15 per cent even in the days of Ralph Klein. Norway taxes oil company profits at close to 80 per cent.”

So Notley had good reason to attempt a royalty re-jig – too bad she lacked the resolve to see it through. This helps explain her recent tantrums and her government’s desperation to expand the industry – though at a 4% share of depressed oil prices, they’d have to build an awful lot of new pipelines to claw their way out of their fiscal hole.

By the way, those who buy into Notley and Trudeau’s logic that without oil and gas revenues, we can’t afford to pay for our environmental programs need to take a hard look at these revenue numbers (BC’s are even more pathetic) and then promptly knock it off.

Under the influence

I say the above to provide context to our problem, not to absolve our leaders for the bad choices they keep making. Horgan’s predecessor Christy Clark let the oil industry write her climate plan, while she clung to the promise of a fracking-powered LNG industry. Sadly, inexplicably, Horgan is now trying to keep her LNG pipe dream alive.  Meanwhile, the Trudeau government welcomed Donald Trump’s election as they saw it would help resurrect the embattled Keystone XL Pipeline.

Our federal and provincial governments may well be “captured” by this industry – but one way to ensure they remain captured is for new leaders to keep taking the same campaign donations and meetings as their predecessors did. According to Huffington Post Canada, by late 2016, the Trudeau Government had already met with these big oil and gas companies or lobby groups the following number of times:

  • Enbridge: 86 times
  • Canadian Association of Petroleum Producers: 70 times
  • The Canadian Energy Pipeline Association: 57 times
  • TransCanada Pipelines: 45 times
  • Imperial Oil: 57 times
  • Kinder Morgan 35 times

That’s 350 meetings — nearly one per day — with just six of the top players in the Canadian oil and gas industry in Trudeau’s first year in office. Perhaps this explains why he wound up sticking with the very same Harper-era climate targets he once mocked for being too weak.

How do First Nations, environmental defenders and everyday citizens stand a chance against this kind of influence?

Horgan, the Enigma

On the surface, John Horgan is in many ways different from Christy Clark and at odds with Trudeau and Notley. His government has brought in a full grizzly trophy hunting ban, turned down the proposed Ajax mine, and it’s taking meetings with First Nations and carrying out investigations into the salmon farming industry. But, make no mistake, he too has much to answer for.

Harry Swain, head of the Joint Review Panel on Site C Dam, has attacked Horgan’s rationale for continuing the project (Photo: JRP)

He had everything he needed to kill the aforementioned environmentally and economically disastrous Site C – a BC Utilities Commission report that was a slam dunk against the dam; the testimony of highly respected, independent experts like the head of the Joint Review Panel on the project, Dr. Harry Swain, and former BC Hydro CEO Marc Eliesen, tearing to shreds the economic argument for the dam and Horgan’s statement in defence of proceeding.

Horgan had made commitments to First Nations that are simply impossible to keep while continuing to break treaty promises and violate their rights in such a significant way – even if he’s real “conflicted” about it.

He has talked tough on Kinder Morgan, particularly of late, but his true resolve remains to be seen. He took the bizarre position of backing the project in provincial court (against the Squamish First Nation), while opposing it in federal court. And he’s still backing the economically unviable, climate and ecology-destroying LNG industry.

By backing LNG, the Horgan NDP lost the election before it began
On energy, Horgan remains an enigma

It remains to be seen where the Horgan NDP goes from here. Their hypocrisy on key issues has already frayed relations with many of their longtime supporters and their legislative partners, the BC Greens. But much of their legacy has yet to be written. Will they show they respect the environment and First Nations’ title and rights by giving their all to oppose Kinder Morgan? Will they refuse to renew unsustainable open net pen salmon farming tenures – many of which come due this June? Will they drop this LNG business once and for all? Will they reverse their disastrous position on Site C? (They still very much can and should).

Or will they just be a milder version of the Alberta NDP or federal Liberals?

These are tough political choices, no doubt. But it’s the tough choices that reveal true character and leadership. It’s actions, not promises that count.

At least be honest

As I argued in a critique of Justin long before he was elected prime minister, it’s his hypocrisy that’s the hardest to stomach. At least with Stephen Harper, Ralph Klein, Christy Clark and Gordon Campbell, we knew what we were getting. They may not have been honest about a lot of things, but they made no bones about their policies on energy, the environment, and Indigenous Rights. They didn’t care and they told you, straight up.

It’s somehow worse being lied to, and then, to add insult to injury, getting lectured for having a problem about it. Justin clearly cares about his brand. Unlike Harper, he desperately wants to be liked – and when people turn on him, even for perfectly good reasons, he doesn’t take it well.

Witness the irony of Justin losing it on a pipeline opponent at a town hall meeting in Nanaimo: “If you’re not going to respect the people in this room, then you need to leave.” What’s worse – not respecting the decorum of a public meeting or not respecting an entire province, the rights of Indigenous people and the environment? If we’re talking about respect, who in this situation deserves the lecture?

Sure as God made little green apples, British Columbians and First Nations will keep fighting Trudeau and Notley on Kinder Morgan and Horgan on Site C, LNG, and fish farms.

These defenders of the environment and Indigenous rights have proven determined to stick to their convictions, even when doing so is deeply inconvenient. Even when it means being bullied, publicly insulted, and threatened with financial ruin or jail. They know Trudeau and Notley’s “National Interest” argument doesn’t hold water; that even the threat of pitting our police officers and military soldiers against decent citizens is a gross abuse of power that makes a mockery of our prime minister’s commitment to obtaining “social licence” for projects; that science and the law tell us we must take our environment and Indigenous rights seriously, and that our leaders are wrong not to – even worse, to pretend to and then break their word.

Of course politicians lie. A cynic might say it’s even quaint or naive to complain about it. But a lot is riding on just how pissed off citizens get about being lied to – and what they are prepared to do about it.

After the backlash from his Site C decision, Horgan can’t make another misstep, like faltering on Kinder Morgan, without losing critical votes to the Greens and dashing his chances of reelection. Justin’s 17 BC seats matter far more to his own future than do his four in Alberta, so declaring war on BC could prove a big mistake. Rachel can’t get reelected without getting her pipelines built, but, let’s face it, even with them, her days are numbered.

So they all had better enjoy their cake while they can.

At this rate, it won’t be long before the party’s over.

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Horgan’s right on Kinder Morgan, even if he got Site C wrong

Canada, Energy and Resources, Pipelines and Supertankers, Politics, Tar Sands, Western Canada
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On Kinder Morgan, John Horgan is standing up for British Columbians — as he should (BCNDP/Flickr)

Dear Premier Horgan,

I’m still mad at you for carrying on with Site C Dam, based on the utterly bogus reasons you offered the public. But when it comes to Kinder Morgan, I’ve got your back, because you clearly have mine — along with all British Columbians determined to protect our precious air, land, and water in what we are proud to call Super, Natural BC. You’re on the right track — stay the course.

I’m proud of the well-reasoned, principled stance you’ve taken in the face of unconscionable bullying and bluster from your Alberta counterpart, Rachel Notley, and our Prime Minister.

As you’ve stated, the Royal Society, a preeminent collective of Canadian scientists, has identified significant knowledge gaps with regards to how diluted bitumen behaves when it’s spilled into our environment. You’ve said that until we get answers to these questions we should not be expanding the flow of this gunk through our waters. I agree.

Some have accused you of using this issue to delay the project — I don’t believe that, but even if I did, that wouldn’t change my opinion. For reasons of climate, ecology, Indigenous rights, and protecting BC’s economy, this pipeline should not be built, period.

I’ve read lots of comments on stories about this bizarre Alberta-led “Trade War” calling you and Rachel both children. There are two children in this fiasco — one’s name is Rachel and the other’s Justin. You are not among them.

When Little Rachel doesn’t get her way, she indulges in petulant retaliation, like depriving her own citizens of delicious BC wines, making idle threats and pouty faces. When Justin feels disrespected by the very people he’s running roughshod over, he throws temper tantrums — “Aw, come on! Really? Really!” He turns into a playground bully. As I’m sure you know, John, the last thing you do with bullies is give into them.

New BC Liberal Leader Andrew Wilkinson dog-piled on you today, saying “Premier John Horgan has decided to pick a fight with Alberta that is probably going to lead to a constitutional challenge and in which British Columbia will probably lose in the courts.” How is this your fault, John? For listening to science when no other leader seems interested? For standing up for the people who elected you? For refusing to be cowed into submission? No, you’re doing your job, as you should.

Rachel picked this fight and Justin’s egging her on. Andrew doesn’t seem to understand the people he is now seeking to lead. We’re not going to roll over and allow ourselves to become the doormat for Asia-bound heavy oil that threatens our economy and environment while further destroying our planet’s climate — all while getting nothing in return (unless he counts 50 jobs at the new Kinder Morgan terminal). Why on earth would we ever do that?

It is unfortunate that Rachel made BC’s winemakers innocent victims of her retaliation. Thankfully many British Columbians are pulling up their socks to make them whole. It’s a tough job, but someone’s got to drink all those nicely balanced Chardonnays and full-bodied, complex Cab-Savs — and we British Columbians, with our newfound friends in Quebec, are up to the task. Sooner or later, Rachel’s own citizens — some of whom actually own vineyards in BC or whose establishments depend on BC wines — will get fed up with this futile campaign.

Will this end up in the courts? Who knows. Justin maintains a Texas pipeline company’s project, designed to benefit big oil companies who continue cutting local jobs while keeping profits to their shareholders and foreign owners, is in the “National Interest.” John, you and I know that’s a load of hooey and proving it in court, in order to invoke Sections 91 and 92 of our constitution, is a far bigger challenge than Justin would care to admit.

We also both know there is far more to this story — like the Indigenous rights Justin (and you) have pledged to respect. The courts haven’t yet had their say on that matter. Then there are the moral and political calculations at hand. Justin needs BC’s 17 Liberal seats far more than he does his 4 in Alberta. He’s carefully cultivated a youthful, Sunny Ways brand in the eyes of local and international media. How does that square with calling in jackbooted RCMP or soldiers to stomp all over First Nations grandmothers, youth, decent British Columbians — all captured on social media for the world to see?

Rachel’s on the way out — anyone can see that this is merely a desperate last-ditch ploy for her to cling to power. But for you and Justin, how you carry yourselves on this file could have a decisive impact on your reelection. Your position is politically wise. You have much ground to make up from your disastrous Site C decision. This won’t fix that problem (what would fix it is reversing that call — it’s not too late). But it helps.

Justin, on the other hand, has now painted himself into a corner. It’s hard for him to walk back these strong declarations he and his government have made about getting the pipeline built. Yet it’s impossible for him to carry on this logical fallacy that we can’t meet his climate goals or protect the coast from oil spills without building another pipeline and exporting more oil! Moreover, with these heavy-handed tactics against BC citizens and First Nations, he stands to smear his own brand with Tar Sands goop and lose a lot of key seats in BC.

Justin needs to decide between the oil lobbyists who have clearly captured his government and his own political future.

As for your political future, John, that’s an open question, but it can only benefit from staying the course on Kinder Morgan. Rachel and Justin will keep bullying you. The Old Media pundits and business lobbyists will push you to question yourself. Right-wing British Columbians who would never in a million years vote for you anyway will slag you on social media. Pay no mind.

The rest of us are raising a glass of the Okanagan’s finest in your name.

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Rafe: Christy’s oily legacy is the stain that can’t be cleaned, as climate plan revelation reminds us

Canada, Energy and Resources, Oil&Gas, Politics
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Photo: Province of BC/Flickr CC Licence

In 1988,  a year before the Iron Curtain fell, I was in Budapest and after a stroll I went back to my group in the hotel and said this: “Folks, this regime is in trouble…when I was in the main square, the money changers were doing their deals bold as brass right under the nostrils of the police. When moneylenders in a communist country lose fear, respect, call it what you will, authority is in trouble.”

I really had no premonition that 10 moths later, that ironclad border which passed through to Austria would be as open as the Ambleside Seawall on a Sunday afternoon.

People are that way. Where they will hide their actions at one point, the more time that passes, the more caution is fluttering off in the breeze. I thought of that when I read the National Observer yesterday and was horrified to find myself about to upchuck my Cheerios at a sight I thought was out of my life – the admittedly pretty face of the last premier, her full toothed, ear-to-ear grin of self satisfaction at something agreeably trivial.

What now, for the sake of sanity, was she back for? And what was the Observer, which had the guts to tell her to get stuffed when she was in office, doing with that god damned – forgive me, I lost my head – picture, hard hat and all?

It was a good story. The first line says it:  

[quote]Environmentalists expressed shock and outrage on Monday over revelations from internal documents that suggested that British Columbia’s plan to tackle climate pollution was written in the boardrooms of big oil and gas companies in Alberta.[/quote]

The story was broken by the Canadian Centre for Policy Alternatives – sort of. In fact, the Vancouver Observer tentatively broke the story in February, 2014 when they did a feature on the Tar Sands and told how Postmedia was holding hands with the Canadian Association of Petroleum Producers. I got in the act, penning a series of editorials on the relationship between big media and big oil, including a similar deal between the Postmedia-owned Vancouver Province and Resource Works, the shills for the Woodfibre LNG project.

Now, patience dear readers, none of this is what I’m on about. The media, the oil companies and governments, federal and provincial, are thicker than thieves – in fact, they are thieves. It’s rather got down to this: it’s hard to set a thief to catch a thief when the whole bloody lot are thieves. No, my sights are where they’ve been for some years – on a provincial government that from the moment they took office were corrupt.

Now, I was scarcely the first journalist to notice this or to chronicle it. From the time Damien Gillis and I became colleagues in The Common Sense Canadian we had an outlet and were able to provide it to others. It’s a pretty narrow band, to be sure, but the alternatives are narrow too, and not many.

What we must all wake up to is that before our very eyes the provincial treasury and the treasuries of the two main Crown Corporations, the jewels in the Crown, BC Hydro and ICBC are in disrepair unto ruin.

A number of people have chronicled the several tales which have resulted in the complex fraud perpetrated on the public. I have no desire to pick jockeys and steeds for special attention and there have been many facets to the debacle. Few would disagree that Norm Farrell has been the main master chronicler, with other specialists in different areas. When you consider that BC Hydro includes Site C, political pay-offs, draining public assets into private pockets, environmental carnage and international trade shenanigans, there’s been more than enough chronicling to share, with the provincial debt and ICBC left over, not to mention countless associated shell games.

What is not missing are victims all the way from Hydro being cheated in its hugely overpriced energy purchases in sweetheart deals for independent power projects.

What surely is not missing is the miscreants who plotted and profited.

No, it was the hard hat, the cheerful visage, the Pepsodent smile about to burst into happy songs for all the happy kiddies to join in that did it. Something snapped. Doesn’t anyone have to pay for the party? Even a little bit?

Is this all a 16-year victimless serial crime? Is it just that the Campbell/Clark – not government, for God’s sake, perhaps frolic is the word – brought our youth back, eternal laughing youth, where Santa Claus was really in charge? Nothing cost anything because a guy in a 3 piece suit always methodically intoned yet another balanced budget; where the cash piled up in the corner was real stuff but the bills just took Monopoly money?

Were there no laws because there weren’t any bad people meaning no policemen and empty jails?

And it came to me, this was the punishment. Of course, the victims paid, and the crooks got to laugh endlessly in our faces at our stupidity.

So that was it – we all have to look at that fucking hard hat and the mocking smile for eternity.

And since our stupidity was unbelievable, it just goes on…and on…and on.

And there it is, the perfect crime.

When may we do it again, huh? Christy?

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Forget Paris: Justin takes LNG, Kinder Morgan over climate, democracy

Canada, Politics
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Justin Trudeau joined by Canadian premiers at Paris climate talks in 2015 (Province of BC/Flickr)

Justin Trudeau is not as young as he looks – obviously. If he was, he would have noticed a sea change in public attitudes that this old man, more of his father’s generation, has not just noticed but takes as obvious and natural.

Prime Minister, lets take just a very short look down the road and start with parliament. You are in the lull before the storm, sir, and you would be wise to  think about it, not only in your interest but that of the country.

Canada is a complacent place. It doesn’t like change. We always avoid it by making perfection the enemy of improvement. That’s what happened in 2005 when BC narrowly defeated a new electoral system more because opponents cast doubt than demonstrated flaws in a governance method that worked fine elsewhere.

Please pay attention here, Mr. Trudeau. People are slow to react to injustice if it’s not accompanied by serious pain and people have become accustomed to what pain there is. But eventually the dam breaks and when that happens, all political hell breaks loose. I think – and I’m far from alone in this – that moment is nigh.

First, let me deal with the “democracy deficit.”

Government for and by elites

We’re taught to believe that the people, through their MPs, run parliament and pass laws for the general good of the people. That, sir, is demonstrable nonsense.

Parliament is run by the elite of the nation for the benefit of the elite who control the power structures – industry, organized labour, major lending institutions and, most notably, the editorial offices of the Mainstream Media. In fact, the elite have become so used to getting their way that they usually don’t even trouble themselves with parliaments – they just get you to  declare the desired policy. Tell me,  Mr. Trudeau, when did the people have that debate and vote in Parliament on the proposed LNG plant in Squamish? How about the Kinder Morgan pipeline? Or Site C Dam?

In all likelihood, a civic council proposing a crosswalk will have public hearings, a passionate debate, and a proper vote. You simply casually let it be known that a $15 or 20 billion project will take place and that no genuine public consultation, much less approval, will be sought. The press applauds like trained seals and those who will profit handsomely sing your praises while the public can only scowl in frustration.

Do you think this will go on forever, Prime Minister?

You have sung such lovely songs about climate change and became a world star at the Paris Conference, saying, “Today, with my signature, I give you our word that Canada’s efforts will not cease. Climate change will test our intelligence, our compassion and our will. But we are equal to that challenge.”

When President Trump opted out of the Paris agreements last June, your criticism was scathing. Your words were almost warlike!

[quote]We are deeply disappointed that the United States federal government has decided to withdraw from the Paris Agreement. Canada is unwavering in our commitment to fight climate change and support clean economic growth. Canadians know we need to take decisive and collective action to tackle the many harsh realities of our changing climate.

While the U.S. decision is disheartening, we remain inspired by the growing momentum around the world to combat climate change and transition to clean growth economies. We are proud that Canada stands united with all the other parties that support the Agreement. We will continue to work with our domestic and international partners to drive progress on one of the greatest challenges we face as a world.

This is not only about the huge economic opportunities of clean growth and the need to address the pressing threats of climate change. This is about an ambitious and unshakeable desire to leave a cleaner, healthier and more sustainable planet for our kids and for generations to come.

We are all custodians of this world…[/quote]

That’s been the talk, Mr. Trudeau, let’s look at the walk.

Where the rubber meets the road

From the moment you returned from Paris you have passionately supported the refining, use, and sale of LNG, the worst of all the fossil fuels in terms of impact on the atmosphere. You forced Woodfibre LNG in Squamish on us based upon fraudulent Environmental Assessments or, in the critical matter of fitness of Howe Sound for LNG tankers, no assessment at all and even contrary to industry standards.

Your consultations? None with the House of Commons, none with the public, indeed you didn’t even bother to inform the local Liberal MP!

Kinder Morgan protest in Vancouver (Photo: Lu Iz/Facebook)

Kinder Morgan. You have placed critical areas of British Columbia into certain disaster in Burrard Inlet, the Salish Sea, the Gulf Islands, the Straits of Juan de Fuca and beyond and threatened to use force on any who get in the way. This is your position: revive the filthy Tar Sands, use the sensitive coast of BC as a sewer, ship the highly toxic bitumen to Asia where it will burned, the resultant methane poison pumped into the atmosphere to pollute the entire world including Canada, all while you praise the business acumen and patriotism of Alberta and call British Columbians bad Canadians and threaten them.

And then there is Site C, not only an environmental disaster to all affected but a financial boondoggle of the first order.

I’ve warned you in the past and warn you again that if you do these things, you will split the country, if not politically, in terms of loyalty. We have values that all Canada once had – apparently we are now alone.

A new era

I warn you of this too: The chickens will soon be home to roost. People are waking up. The environment is no longer the private preserve of long haired youth. You wouldn’t have noticed, Prime Minister, but that summer day in 1993 in Clayoquot Sound when 900 so-called “tree huggers” were thrown in jail, British Columbia lost its virginity and came of age.

The public are not only noticing your assault on our wondrous, precious legacy but you’re doing it as a dictator. When I compared the ability of our Liberal MP to the effectiveness of a fencepost with hair, I was flattering her.

There have been two books – about to be three – on the market exposing this, the first two in 2014; the allegations have never been denied, much less disproved. The first, in time, is Tragedy in the Commons by Alison Loat and Michael MacMillan (Random House, 2014).     

It relies upon the evidence of 50 retired MPs and it tells how useless and powerless MPs have become, down to being little more than ombudsmen for the bureaucracy, ensuring that pension cheques arrive on time and that sort of thing. They jealously guard the right to personally deliver cheques of any size even when they are routine government payments they had nothing to do with. These payments always have the local press there, complete with cameras. 

The second, Irresponsible Government (Dundern 2014) is by Brent Rathgeber, an Edmonton lawyer who left the Harper government in disgust over the very matters I have mentioned here. Both books are easy-to-read, compelling presentations and from those who have seen the inside and know how to report. I personally felt a strong sense of déjà vu reading each of thess highly readable and irrefutable stories of prime ministerial dictatorship in action.

The third book is called POLITICALLY INCORRECT: How Canada Lost Its Way and The Simple Path Home. I wrote it and it will be out later this month.

There will be more. So my point, Prime Minister, is that the jig is almost up and soon the entire country will see that it’s been cheated of its prize possession – the right to govern itself. How the country handles that, Prime Minister, depends on how the elite handle it.

Perhaps my book will pass unnoticed but I can tell you, Mr. Trudeau, just as sure as God made little green apples, the story it tells will not go on untold much longer.

And your legacy will be secure – the last, arrogant tyrant to tromp his jackboots over this glorious province of ours. 

I pray that I’m still around to join nearly 5 million other voices yelling “good bloody riddance”.

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Rafe: Christy, Libs let off hook for ruining Hydro, ICBC, failing on LNG

Politics, Western Canada
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Christy Clark and Rich Coleman (center) meeting with Malaysian LNG officials in 2014 (BC Govt photo)

I have a bit of a knack for remembering doggerel as part of my brain’s principal function as a storehouse of useless information. Ergo this:

[quote]You cannot hope to bribe or twist
Thank God, the British Journalist.
Considering what the man will do
Unbribed, there’s no occasion to.[/quote]

It seems that this applies equally to our political writers with the odd, very odd exception, right here in Lotusland.

In 1986, Bill Bennett retired after 10 years as premier through some tough economic times with the province in good shape financially. He had managed public money carefully, been a builder with the odd overrun which were laughably tiny compared to those since, especially the whoppers of the Campbell/Clark bunch, and he gave us Expo 86, for which the boo-birds predicted a catastrophe but which turned out to be a huge win that’s still paying off. In a very careful move, he demurred on Site C after a referral to the BC Utilities Commission and even though in those days there was not the prospect of backup from alternative sources, there are, in fast growing terms, today. Yet many people bid Bennett goodbye with a shout of “good riddance”.

Liberals’ ruinous legacy

Christy Clark leaves government after playing a major role in an immense increase of the BC public debt. BC Hydro, once the jewel in BC’s crowns has been guided into virtual bankruptcy during good times, despite lots of customers all able to pay, no disaster like a burst dam, while ruining scores of rivers let out to private companies, charging Hydro triple the market price. These independent power producers (IPPs), by an amazing coincidence, poured money into the BC Liberal Party.

Ms. Clark leaves us with Site C, a $10 billion (at least) ad-on to the already bankrupt BC Hydro, a project for which there is no domestic need (filling that happens to be BCH’s mandate) and no customers, unless the  LNG mirage becomes a reality in time to take the power and convert it into massive atmospheric pollution and climate destruction.

ICBC is a hard company to lose money on given it has a virtual monopoly on car insurance, but it’s in deep trouble because of holding rates down to buy votes and pocketing a cool half a billion dollars as a dividend to government. This is an accounting masterpiece invented by the Campbell/Clark wizards, where you cure huge losses in Crown Corps like Hydro and ICBC by pilfering huge sums from their already deeply indebted treasuries. As The Tyee reports, “Last November, ICBC admitted that it would require the equivalent of a cumulative 117 per cent increase in basic insurance revenue to keep its capital reserves from falling below the government’s regulatory minimum levels.”

Then we have the huge bonanza brought to you by Christy Clark and the brains of the outfit, Rich Coleman, and with a roll of the drums I give you BC’s majestic LNG industry. The Christy and Rich Show kept up an almost never-ending sales extravaganza round and round the world selling LNG we didn’t have to countries that didn’t need it at prices they couldn’t afford. But prosperity was right around the corner said Christy who won the 2013 election because voters accepted her solemn promise of multiple new LNG plants, 100,000 jobs and enough money to fill a $100-billion prosperity fund to erase B.C.’s debt and lower taxes.

Surely Christy and The Brains didn’t lie to us, did they?

BC Premier Christy Clark touring Petronas’ operations in Malaysia (BC Govt / Flickr CC licence)

I’ll answer that question. Writer after writer, scientist after scientist, every international economist you can think of said that this was all nonsense. Mind you, to get this bitter truth you had to read The Common Sense Canadian or The Tyee, not the government organs of Postmedia. It was sheer drivel, yet the more Clark was told this, the more she and The Brains jumped into the 1st Class section and visited their valuable contacts in Asia – the ones not in jail – and got more assurances of even more sales. Somehow, at the end of the day, the multiple new plants came to ZERO, the 100,000 jobs came to NONE and, golly gee whiz, that $100 billion Prosperity Fund fell just $100 billion short.

But, in fairness to Christy, maybe the government overspent on health, education, welfare, help to children, assistance to women in distress, the homeless, the mentally ill, and those of our fellow citizens in distress who needed our help.

No, I can’t tease on this issue because this government was far and away the cruelest in modern history to those in need. I, for one, am ashamed – good God, if this is how we treat those in need during prosperous times, what will happen when the inevitable recession or depression comes?

As I close, I must comment that one well-known journalist, who ought to know better, lauds the government for 5 straight “balanced budgets”. What a crock of barnyard droppings. It’s not hard to balance your budgets if you get to leave all the bad stuff “off budget”. I am surprised that anyone would believe that bullshit from Finance Minister DeJong, much less an award-winning political journalist.

Now my question: Given the record above, which is scarcely complete, and given that one of the obligations of high office is a reasonable proximity to truthfulness, why in the name of God are you singing the praises of a woman who has driven the province into a huge financial mess, destroyed money-making public companies, spent millions flogging a product we didn’t have to people who didn’t want it while lying through her teeth at every turn, and let down the very neediest of our fellow citizens? Didn’t you do harm enough by failing in your duty to hold her to account while she was in office?

I hate to say it but my brand of journalism was both honest and accurate when I summed up her leave-taking in two words: Good riddance.

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

A short note on Gordon Wilson who just got canned from his ill-gotten sinecure flogging LNG, with singular lack of success after being vehemently opposed to the stuff until he needed the money.

From 1987-93 Wilson led the BC Liberals and surprised all by taking them from zero seats to Official Opposition in 1991. He badly mishandled his relationship with his House Leader, whom he married, and politically it was all downhill after that as he formed a new party after Gordon Campbell took the Liberal leadership away from him, moved over to the NDP for a cabinet post in the disastrous Dosanjh Government, and lost his seat in 2001. In 2013 Wilson completed the circle by becoming a right-winger again, supported Clark and, after she won, he became an LNG salesman.

I remember through all this a very courageous Gordon Wilson.

Wilson became Liberal Leader at the same time as the Meech Lake Accord. In spite of serious opposition from influential backbencher David Mitchell and other prominent Liberals, Wilson opposed Meech Lake and gave hearty and welcome support to Newfoundland Premier Clyde Wells. At the same time, I was vigorously opposing Meech on my morning show on CKNW.

Wilson brought Premier Wells on my show where he became almost a regular and gained enormous popularity. By 1990, Meech was dead, Wells was, under duress, switching sides and we were into the Charlottetown Accord. In spite of losing his Newfoundland ally, Gordon Wilson stayed the course and supplied much assistance to me on my show.

I can’t help but remember Wilson’s fall from grace but I know what courage it took for him to stand by his convictions too. Luck, raw luck, has a lot to do with the seminal events of life. When I, as a cabinet minister, had an affair of the heart, such things were considered to be private matters and ignored. When I went hugely broke, was desperate and probably would have taken any job that came my way, I met CKNW’s John Plul at a party and a few days later was hired by CKNW, leading to a 19 year career, a Michener Award and the Hall of Fame. All just plain good luck. Similar circumstances, but Gordon Wilson didn’t have my luck.

It makes you think a bit when you assess what others do when they’re in a jam and makes it easier and appropriate to say “good luck” Gordon, good things could happen, for, as Margaret Thatcher, in one of her wiser moments, once said, “It’s a funny old world.”

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Rafe to Horgan: Get Serious about Kinder Morgan, Woodfibre LNG

Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Western Canada
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John Horgan being sworn in as Premier, with Environment Minister George Heyman looking on (Photo: Flickr/Province of British Columbia)

Dear Premier Horgan,

My congratulations to you and your new government. I can tell you that a great many British Columbians who do not usually support your party voted for you on May 9 last with the same feelings as Dr. Johnson ascribed to second marriages – a triumph of hope over experience.

I realize that over the past few years I have not been flavour of the month for either you or Dr. Andrew Weaver but I know that you would think even less of me if I allowed that to bother me. It doesn’t.

Until the Liberals came to power, it was not customary for the mainstream media to shower governments with praise. I intend to practice my profession the traditional way – the way I was treated when when I was in government.

Allow me a short anecdote, Premier. In 1975, during the Dave Barrett NDP years, I was the nominated candidate for the Social Credit Party for Kamloops. Each evening I would faithfully read the late Sun Columnist, Marjorie Nichols, chortling with glee as she regularly kicked hell out Barrett. Night after night I listened, enjoying every syllable. On December 11, I won a seat in the general election and on the 22nd, was sworn into cabinet. It wasn’t long before Marjorie, good old Marjorie, was kicking hell out of Bill Bennett! Then me! What the devil had caused her to change?

Well, she hadn’t – it was the government that changed!

M.r Premier, I have two points today. The first is on LNG – you seem to have a blind spot about Woodfibre LNG proposed for Squamish.

Do you not know Howe Sound, Premier? Allow me to introduce you to some of my neighbours in Howe Sound, my backyard.

Next to the beautiful Chinook Salmon, or Spring as we used to call them, those are Orca, commonly called Killer Whales, which abounded in Howe Sound when I was a young boy in the 30s, along with humpback whales, seals, porpoise, dolphin, all 7 species of Pacific salmon native to BC – and herring.

They all gradually disappeared from much of Howe Sound, largely due to industrial development. Some 20 years ago, the government, with massive involvement of ordinary people, went to work and began cleaning up the old pulp mill site in Squamish and the mine site at Britannia. Slowly but steadily nature healed and our friends were all back. Surely you have a soul, Mr Premier, and can understand what this means. Well, the biologists tell us that with an LNG facility in Squamish, with their discharges and tankers, we’ll almost certainly lose it all again.

Do you know, Premier, that the environmental process held for Woodfibre LNG was as phoney as Confederate money, having been conducted, so to speak, by the National Energy Board in hearings so roundly criticized by Prime Minister Trudeau, who now relies upon them?

Did you know, Mr. Premier, that Howe Sound is too narrow for LNG Tanker traffic by world standards, US EPA standards and – get this, Mr. Horgan – by the standards of SIGTTO, the Society of International Gas Tanker and Terminal Operators (the Industry’s own organization) and that the Federal Liberal government hasn’t taken this into account? You are our premier, Mr. Horgan, and Howe Sound, the most southern fjord in Canada, an internationally renowned beauty spot, is on the brink of ruin by the LNG industry, and you are on record as supporting Woodfibre LNG!

Why, Premier, in the name of God, why?

Now I turn to the Kinder Morgan pipeline, over which both you and your Attorney-General David Eby were dressed down by Justin Trudeau and you hung your heads like naughty schoolboys. I can’t speak for others, Mr. Premier, but I watched conference after conference attended by Premier Bill Bennett with Justin’s father – twice the man – time and time again standing up to him and for British Columbia. I have little doubt that Dave Barrett would have done likewise. You cringe because if, as you first suggested, BC works to rule, thereby delaying provincial permits for Kinder Morgan, BC will be sued.

I hate to mention this because he is a fine man, lawyer, accomplished author, teacher, civil rights advocate and activist – all accomplishments I admire and indeed he’s a man I admire – but David Eby is not a British Columbian of sufficient length to have all the assets, especially the animal life of Howe Sound and the Salish Sea, engrained in his psyche as is necessary for a BC warrior to be prepared to go to the wall for this province.

A man who has the commitment I’m talking about is Grand Chief Stewart Philip, President of the Union of BC Indian Chiefs; others include Green Party Leader Elizabeth May, who is personally prepared to go to jail; a man like Mayor Derek Corrigan of Burnaby; Vicki Huntington, former MLA; Kai Nagata, communications director for the Dogwood Initiative; Vancouver City Councillor Adriane Carr; but more than this, Premier, while your Central Canada-loyal Attorney-General is quaking in his boots because someone might sue us, for using the obvious “work-to-rule” tactic of delaying provincial approvals, you’ve also chickened out.

For God’s sake, Mr. Horgan, thousands of British Columbians are prepared to go to jail while you and the Attorney-General, leaders of the party of protest, heirs to the men and women of the people whose names you still mention in hushed terms of reverence, are afraid that if you stand up for our sacred environment, that nasty man Trudeau Minor or big, bad Kinder Morgan might sue us!

Do you think that real British Columbians ready to risk going to jail are going to be pushed around by a coward from Ottawa, propped by the oil industry, just as you apparently are?

Time is short, Mr. Horgan, and I suggest that you and the Kid from Kitchener, David Eby, look in the mirror at two politicians prepared to sell out their province, so that the Tar Sands can hum away, polluting the earth’s atmosphere and so Justin will be nice to you as he goes back to chasing old Tory seats in Alberta.

If Kinder Morgan happens on your watch, do you think voters will forgive you because some lawsuits were threatened? I tell you plain, Premier, it won’t be a mere 16 years next time if Kinder Morgan is forced on British Columbians who marched and went to jail while the quislings in Victoria skulked in their offices and sent obsequious emails to Kinder Morgan and Justin.

Yes, Mr Horgan, l’ll stand up to Ottawa for British Columbia. So, I suspect will most British Columbians. And what are you going to do when Ottawa shoves another environmental catastrophe under your nose and says, “Here, Premier Pussycat, sign or by golly you’ll be sued?”

Not a very good start, Mr. Horgan, not a good start at all.

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As Big Oil tanks, why is Canada so slow to adapt?

Canada, Energy and Resources, Oil&Gas, Politics, Renewables
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Alberta Premier Rachel Notley and Canadian PM Justin Trudeau (Photo: Premier of Alberta/Flickr)

The business model of Big Oil has already started to collapse.  The model is premised on strong growth to fuel high prices and render economically viable the exploitation of expensive-to-develop, non-conventional fossil fuels, including the tar sands and shale oil and gas.

Persistent low oil prices are having a devastating impact on global investments in oil discoveries, which have dropped to an all-time low of 2.4 billion barrels in 2016 , a substantive decline from the 9 billion barrel annual average of the last 15 years.

Sanctioned oil reserves – those identified for new development – dropped to 4.7 billion barrels in 2016, a 30% drop from 2015.  But that doesn’t tell the whole story because the numbers of “new development” projects receiving a final investment decision fell to their lowest level since the 1940’s.  Total oil output was 85 million barrels/day (MB/d) with 69 MB/d coming from conventional sources, 6.6 MB/d from shale wells and the rest from tar sands and heavy oil. 

Added to this portrait, there is currently a market glut due, in part, to US shale oil supplies, combined with existing tar sands production. 

Under these circumstances, BP anticipates stranded assets.

Stranded in Alberta

tarsands industry-kris krüg
Twilight in Fort McMurray (Photo: Kris Krüg)

Naturally, the first projects to be stranded are those extracting expensive resources – the Alberta tar sands being high on that list.  The cost of extracting oil from the tar sands is worse than for any other resource.  It takes one unit of natural gas to produce less than three units of oil.  Capital investment in the oil sands fell about 30% in both 2015 and 2016.  The decline is estimated to be another 11% for 2017.

In Fall 2016, Exxon made its biggest reserve revision in its history, cutting 19% from its reported reserves, most of the cut – 3.6 billion barrels – from its Kearl, Alberta oil sands project.  This is in addition to a re-assessment of 1 billion barrels of other North American reserves.  In keeping with the collapse of the high growth/high price business model, other oil companies, Chevron and Shell included, have lowered their valuations of reserves by more than $50 billion since 2014. 

Shell, ConocoPhillips and Marathon Oil Corporation have also pulled back on their tar sands investments. For Statoil, it has been a total withdrawal from the sands at a loss of $500-$550 million.

Especially significant, Koch Industries, formerly the third largest leaseholder in the tar sands and a strong champion of Keystone XL to bring tar sands bitumen to Koch refineries in Texas, has indicated it’s pulling out of its $800 million Muskwa region lease in Alberta.  This, after a 50 years of Koch Industries involvement in the tar sands.

BP and Chevron are considering getting out of the tar sands business as well.

So far, 17 tar sands projects have been suspended or terminated and no major new projects are planned.

Equally important, Canada’s bitumen is a lower quality oil, which only the US Gulf Coast refineries are capable of handling.  Then, like compounded interest, the high viscosity of tar sands oil renders the cost of transportation higher than conventional oil.  This is because condensates must be added to improve the viscosity.  The result is Canada’s bitumen acquires a lower price in European and Asian markets.

Finally, economics aside, there aren’t any environmentally friendly options for exploiting the tar sands region, an area of 140,000 square kilometres, equivalent to the size of Florida.  The process to get a barrel of oil out of the ground is both energy-intensive and harmful to the environment.  One either has to bake the oil to the top or use open pit mining techniques.  Due to these procedures, there are 170 square kilometres metres of toxic lakes in Alberta.

Higher on the totem pole of environmental considerations, the tar sands are the greatest single source of current and potential emissions in Canada.  These factors mean Canada cannot meet its 2030 GHG reduction targets with a tar sands “business as usual” formula.  Presently, the petroleum sector represents 25% of Canada’s GHGs.

Trudeau stalls progress

Despite all this, the Trudeau government continues to adhere to the industry’s objectives to double tar sands production to 4.3 MB/d by 2030.

But scientists are warning us that to limit the warming of the planet to 2° Centigrade, the carbon budget that the planet will have left is 800 gigatonnes (Gt).  However, the existing and likely-to-be-exploited reserves of fossil fuels represent 15,000 Gt.  This means that Canada has a large role to play by in keeping tar sands reserves in the ground.

Clean Transportation – beginning of end for Big Oil

The transportation sector represents 55% of the global demand for oil.  Consequently, even a modest penetration of the vehicle market would have a major impact on the supply-demand portrait of the petroleum industry.

Volvo’s first fully-electric car is due to arrive in 2019

According to Bloomberg New Energy Finance, about 120 electric vehicle models will be on the market by 2020.  Case in point, beginning 2019, all Volvo models will be either hybrids or fully electric vehicles. Five new Volvo all-electric models will be introduced between 2019 and 2021.  Other European and Asian vehicle manufactures are not far behind.

Then there is China, which is destined to be the leader in the clean transportation revolution, thereby keeping the pressure on the rest of the world – the Trump administration included – to maintain or accelerate the shift to zero and low-emission vehicles. 

Not only has China legislated a 5 L/100km overall fleet corporate average fuel economy (CAFE) target for 2020 – the average fuel economy of each automaker based on its sales for the year in question – but it also has the world’s most aggressive legislation on electric vehicle sales.  China mandates that 12% of automakers’ sales in 2020 must be electric, with interim regulations set at 8% for 2018 and 10% for 2019.  These regulations apply to foreign and domestic manufacturers alike.

By comparison, the US CAFE standard for 2025, and the Canadian clone target, is 4.3L/100km for cars and 5.9L/100km for light duty trucks, as per the decision of the former Obama administration.  The term “light duty trucks” includes the highly popular SUVs, which represent approximately 60% of automakers’ new vehicle sales in Canada.

Of course, the unpredictable Trump administration may weaken the 2022-2025 CAFE legislation, or give them the total axe.  But the good news is that 14 US states are prepared to take the matter to the courts should President Trump decide to do so.

Moreover, California and 9 other US states, plus Quebec, have legislation requiring that 15.4% of each manufacturer’s sales be zero and low-emission vehicles by 2025.  This would apply to electric vehicles and plug-in hybrids.

The global picture also includes the fact that European Union emission standards are considerably more stringent than those of the US.

This leaves little wiggle room for the North American automakers to breath a Trump-related sigh of relief on the pace of the shift to clean transportation.  This assumes that North American manufacturers want to be competitive in the global economy.  Governments shouldn’t have to bail them out a second time.

Methane & Pipelines: Canada forgets Paris

Trudeau’s pipeline dreams cannot be achieved with Big Oil pulling out of the more expensive-to-exploit projects and the inevitable shift to clean transportation beginning around 2020, when electric vehicles will become competitively priced.

More important, Trudeau’s pipeline dreams are incompatible with the Paris Accord and Trudeau’s own modest targets for a 30% GHG reduction relative to 2005, by 2030. 

Trudeau also sidesteps the challenges associated with the global carbon budget by having postponed the required reductions of methane emissions to 2023.  Trudeau approved the Pacific Northwest LNG facility, whose proponent recently pulled the plug due to low global LNG prices. But with his government’s continued support for LNG development, we cannot expect to reduce methane emissions by 40% to 45% by 2025, relative to 2012 levels.  In other words, Trudeau had taken advantage of Trump pulling out of the Canada-US methane agreement that would have the two countries begin reducing methane emissions in 2020. 

Trudeau may have been too quick on the methane trigger though, since a US Court of Appeals in Washington DC has ruled that the Trump administration has overstepped its authority in suspending the rules on methane emission reductions.

Overall, between 2005 and 2015, Canada reduced its emissions by just 2.2%, which indicates it will be impossible to achieve a 17% GHG reduction by 2020, something that is necessary in order to meet Trudeau’s 2030 target.

Consequently, it is high time that the Government of Canada and the provinces start thinking of economic development and the green economy as synonymous…as opposed to the token gestures of the 2016-17 Budget of the Government of Canada.

No wonder Shell and Norway’s Statoil are already becoming diversified energy companies, with a new emphasis on clean technologies. If only Trudeau would apply that thinking to Canada.

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NDP must name & shame or catch the blame – Don’t let Libs off hook for disastrous record

Economics, Politics
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Former BC Liberal Premiers Christy Clark (Kris Krug/Flickr) and Gordon Campbell (Province of BC/Flickr)

One of the biggest mistakes Barack Obama made was not doing more to expose George W. Bush’s disastrous financial record as president. As a result, he was quickly blamed for America’s “Great Recession” though everything that set it in motion occurred on his predecessor’s watch. The BC NDP can learn from Obama’s mistake and be brutally honest about the mess they’ve been left by Campbell, Clark & co.

Already, the revisionism has started. The likes of ex-Deputy Premier Rich Coleman have taken to twitter, scolding the NDP for wasteful spending and poor management. Liberal-friendly pundits like Vaughn Palmer and Keith Baldrey are bemoaning John Horgan’s much-needed house cleaning at BC Hydro.

But it will get much, much worse from here on out – both the depth of the financial disaster for BC and the size of the whoppers told about it.

The problems the NDP will face have already been baked into the system, starting with Gordon Campbell and carried on by Christy Clark. They make the NDP’s Fast Ferries look like chump change (at a mere $250 million over budget, that penny-ante boondoggle looks like a bargain by Liberal standards). Here are just a few depressing realities the NDP must be clear they had nothing to do with – the shortest list I could come up with:

  • Under the Liberals, BC Hydro’s total debt and contractual obligations rose by at least $74 Billion (through the crown corp’s debt, plus so-called “deferral” accounts – much like a giant credit card – and ruinous, unnecessary private power contracts)
  • Conventional provincial debt essentially doubled
  • ICBC was driven deep into the red, necessitating huge, impending rate hikes
  • BC Ferries continued their downward spiral, with increased cost to the public, despite being nominally “privatized” (right!)
  • Our other once-great, strategically invaluable crown corporation, BC Rail, was sold off for cheap under a cloud of corruption, secrecy and criminality
  • Vital social services for seniors, the disabled, children and youth in care, and the impoverished were neglected at positively inhumane levels
  • Rather than investing wisely in public transportation, BC doubled down on disastrously expensive, outmoded bridge and highway projects
  • The Liberal government presided over massive, taxpayer-funded capital projects which routinely doubled in cost (The convention centre, the stadium roof, Port Mann Bridge and Hwy 1 widening, Northwest Transmission Line, etc.). And that’s to say nothing of Site C Dam, bound for true white elephant status unless it’s prudently halted by our new government
  • Real estate and housing costs, as we all know, have spiralled out of reach for many, while income inequality intensifies
  • Day care is so expensive and hard to find, especially in urban centres, that it’s become a serious impediment to economic productivity, and a huge burden on BC families
  • The Libs presided over an unprecedented hollowing out of jobs in forestry, wood products and pulp and paper – at least 40,000 lost
  • The Liberals’ one big economic idea, the galactically stupid LNG industry, proved a massive bust, as this publication warned it would before even the 2013 election!
  • Not to beat a dead horse, but so bad is the situation at BC Hydro that it is likely to cost us our Triple-A credit rating, as Moody’s warned earlier this year. Again, not your fault, NDP. But it will mean a higher cost of borrowing, making all the above problems seem that much greater.

In other words, take all the messes created by all our previous Socred and NDP governments, add them together, multiply by pi, and you still don’t come close to capturing the scale of mess left behind by the BC Liberals – these self-styled shrewd fiscal managers (and I apologize to readers for all the other worthy items not on this list, but I’m mindful of your time). The sad reality is, thanks in no small part to our woefully inadequate mainstream media, if the NDP don’t hammer this home every day for years to come, they will wind up being blamed for all of it – and losing the next election because of it.

Get ‘r done

NDP Premier John Horgan and his cabinet being sworn in by Lieutenant Governor Judith Guichon (Photo: Province of BC / Flickr)

John Horgan has a massive challenge before him: how to get BC back on track fiscally while stimulating new economy jobs and getting back in the business of taking care of people.

Difficult but not impossible.

I’m with the NDP-Greens on scrapping Kinder Morgan. It’s a terrible deal for BC, creating virtually no jobs yet risking so much environmentally and economically. We are also past the point where it’s OK – legally, practically, morally – to thumb our noses at First Nations in their unceded territories. So KM is a non-starter. So are Site C and LNG (though the latter may not yet be clear to Horgan). But that all heightens the need for creative thinking in building the jobs of the future. And there is much the NDP can do on that front – from Super, Natural BC tourism, to the tech sector, real green energy, the film industry, a better-managed forestry sector, value-added local manufacturing and food production, and investing in smart infrastructure.

In terms of tightening our belts, on the Hydro front, go ahead with the BCUC review of Site C – just be sure to cancel the project, and quickly. Do whatever is in your power to unwind these sweetheart private power contracts. And quit pretending you can freeze rates. It’s not your fault, but the reality is they will have to rise for some time to come. Find a way for this to impact lower income people less than the rest of us – we don’t need to add to their poverty with astronomical power bills.

No one knows how long this NDP-Green partnership will last, so you need to prioritize which election promises come first, and the one that has the greatest potential to impact all the others is election financing reform. If you do nothing else, getting big money and “pay-to-play” out of our system would strengthen our economy and democracy.

But when it falls apart and you’re forced back to the polls, remember that if you haven’t successfully put the blame for all of this squarely where it belongs – on the shoulders of the BC Liberals – then it will fall upon you instead and crush you…and a lot of other innocent British Columbians too.

You don’t have to be brutal – just brutally honest.

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Rafe to NDP: Now you’re the government…here’s what to expect that you’re not expecting

Politics, Western Canada
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NDP Premier John Horgan and his cabinet being sworn in by Lieutenant Governor Judith Guichon (Photo: Province of BC / Flickr)

In politics, speculation is half the fun – the other half is figuring out how, with all your experience in the field, you could have been so bloody wrong.

Actually, for the new minister, the reasons he or she is usually wrong are predictable as hell to a guy like me – not because I’m smart, but because I was there once myself. I went into my new Ministry office back on December 22, 1975, full of piss and vinegar, not to mention urgent plans. After all, I had 3 1/2 years of mismanagement to clean up and there’s no time to start like right now.

Well, yes, there is, you quickly find out from your Deputy Minister, because there are several decisions to make first. Not that they’re earth-shattering, just that not making them means you’re going to be pestered until you do. You need a good parking spot, preferably better than Vander Zalm’s, a key to your private loo lost by your predecessor, and clear instructions on how to replenish your liquor cabinet.

This turns out to be a good thing because you quickly learn that you need to take a bit longer getting acquainted, but it will have to wait a few days because, at the Premier’s request – well, not really a request – you’re flying out to Ottawa that afternoon with two colleagues to meet federal counterparts to straighten out an issue that the Premier pledged to clean up personally the moment he was sworn in.

When you get back to your office four days later, you discover that priorities you were going to deal with up front will have to come even later because you have a cabinet meeting you’re already late for and, afterwards, your deputy has arranged for you to tour your offices, show the flag, and meet the people who work for you. Cabinet runs late and you’re off to meet the 120 pissed off employees that didn’t leave at quitting time. Welcome to government, Mr. Minister.

A sticky problem

Former Minister and friend, Dr. Tom Perry and I were talking about this not long ago and agreed that if you’re lucky, you run into a sticky, double-headed problem right off the bat because it re-occurs with nauseating frequency and best you get used to it and have some practice dealing with it. I’ll make up an example because it’s just the kind that happened to me and, later, Tom.

A rancher is irate and won’t leave your office. Once a year he must drive his cattle over a faraway piece of unused land but the Agricultural Land Commission won’t permit it. Exceptions are routinely made in cases like this, so my Deputy Minister tells me, but they won’t budge. He is sure that a nudge from me will get the job done.

Then, prepare a suitable letter and I’ll sign it, I say. “Minister,” my deputy replies, “the trouble is he’s a regional director of the opposition party, hated by your party, and we know that if you do him a favour he’s going to raise hell with your party for doing him, the enemy, a favour you were under no obligation to do. Your cabinet colleagues will shun you, your constituency president will give you hell, and the Land Commission members will badly lose face and accuse you of usurping their sworn jurisdiction.” Shit!

The other scenario is exactly the same except the rancher is a bagman for your party, is the premier’s wife’s second cousin, and the Opposition is just waiting to pounce, big time! Shit!

If you don’t think this happens, you’ve never been in politics.

Out to get you

Actually, we’re all in for a huge adjustment and we should get ready – a good, stiff, single malt whiskey should do it.

Are you ready?

The Postmedia papers, the Sun and the Province, will have columnists, editorial writers, the editor of the Op-Ed page, the Canadian Taxpayers Federation and the Fraser Institute on high alert to pour it on this pack of Reds now running things and, at the suggestion of the Canadian Association of Petroleum Producers, there will be a new feature in the Sun called “Oil and the Sun for everyone”. Resource Works – the BC LNG booster – will have a feature in the Province, their formal partners, called “Hey, hee, golly gee, LNG is good for ye, hotter weather for me and thee!”

Phil Hochstein will have a feature called  “Breaking the Union for Sun and Fun”, but Jimmy Pattison, having killed all the salmon, in a public display of contrition, will set up a benevolent society called Jimmy Pattison Pals in Poverty for fishermen, last place car salesmen and talk show hosts he’s known.

The biggest change will come in the media, of course, where the Masthead of the Vancouver Sun will holler, “Hating Horrible Horgan helps keep the climate crummy and casts comforting kisses to Coleman and Christy.”

The last big change may come when Damien sees this and puts his own masthead saying “Rafe’s Ready for Retirement”. [Publisher’s Note: You’re not getting off that easy, Rafe]

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