Will core public assets like WAC Bennett Dam go the way of BC Rail?
It’s rather like a pregnancy – you can only keep it a secret for so long. Thus it is with BC Hydro’s bankruptcy.
We recently learned that BC Hydro spends 50% of its power purchases on power bought, on a take-or-pay basis, from Independent Power Producers (IPPs) yet only gets 16% of its power from them. Did you know that last summer, following a high spring runoff, BC Hydro was forced to spill water (i.e. waste power) over their dams, buying power from IPPs instead of making it themselves?
Did you know that since 2002 BC Hydro has been forbidden to make any new power (excepting Site C – which has been on the books for 30 years) and that all new power must be bought from private power companies?
Did you know that BC Hydro must take all private power produced whether it needs it or not?
Did you know that these agreements, involving huge amounts of public money, are secret? From what little information we do have, we know that BC Hydro must pay IPPs about 3x the market rate for power and up to 10 times what they can produce it for themselves from their heritage dams!
Did you know that BC Hydro used to pay the government hundreds of millions per year in dividends and that they will do so this year only by raising our rates? Think of that – you will pay higher rates so that BC Hydro, in the red and getting redder, can pay this back to us?
Did you know that these contracts forced on BC Hydro have committed them to spend some $55 BILLION to IPPs over the coming decades?
Did you know that BC’s main political writers, Vaughn Palmer and Mike Smyth have said virtually nothing about this for 11 years?
That’s why I raise these matters here – apart from Erik Andersen, an economist specializing in government finances, this website and The Tyee, no one of whom I am aware has written a solitary word.
[signoff2]
I pose these questions because everyone I ask has no idea that this is going on and has been over 11 years.
This all started, as I mentioned, with the Campbell/Clark decision to make IPPs the only new suppliers of energy, with BC Hydro forced to buy it.
What are new Energy Minister Bill Bennett and the Clark government going to do about this as more and more people find out the truth?
It’s already started, as we are being primed to accept a substantial hike in our Hydro bills. This will be explained away as rising costs of producing power (which is true, thanks to paying all that money to IPPs), being necessary because the NDP government 13 years ago did not commit BC Hydro to make appropriate upgrades to their infrastructure – plus, I wouldn’t be surprised if the list included El Niño, sun spots, chem trails and too many seals in our oceans!
The reason people don’t know about this is the other side of the big lie technique – the utter silence method of fooling people.
The veil of secrecy has been very effective but the pregnancy is showing.
We will see, I predict, not only huge rate increases but a government blaming Hydro for mismanaging its business. Bennett and Clark will then start the process of saying, complete with crocodile tears, BC Hydro must be sold, with the dams being on a 990-year lease (ring a bell?!). Indeed it will be a reprise of BC Rail and the Fraser Institute, thanks to lack of media and two appalling election campaigns, 2009 and last May by the NDP – and the breach of duty to the public by the Campbell/Clark governments.
While the policy was created by the Liberals and kept secret by them, the NDP has its own, large share of the blame, for not raising these issues in timely fashion in day to day business. They contributed, by their silence, to the Liberals being able to proceed as if nothing was happening.
BC Hydro is worse than dead-broke, giving the government a self-made excuse to split this former jewel in our crown – leaving us all at the mercy of large international corporations.
My colleague Damien Gillis’s recent speech in Kelowna (see below) must be required reading if one is to comprehend what is going to happen to BC Hydro debt and your power bills.
Hydro was created out of the fertile mind of WAC Bennett when, in 1961, his government bought out The BC Electric Railway Company. The purpose of this gigantic move, which led to one of the longest lawsuits in history, was to provide secure and cheap hydro power for both citizens and industry. It succeeded – grandly.
During the time the Campbell Liberals were in Opposition, they planed to make the generation a private affair, and shortly after taking power, in 2002 to be exact, Premier Gordon Campbell, with Christy Clark as deputy Premier, forbade BC Hydro from generating any new power (the exception being Site “C”, which had been on the books for over two decades at that point).
The media, very much including me, fell down on the job. I can’t count the times I had the Independent Power Producers (IPPs) lawyer, David Austin, on my radio show singing the IPPs company tune. Mr. Austin did nothing wrong – he did his job and he told the story from his client’s perspective.
It was I who failed. I bought the crap about IPPs building handy-dandy little “run of the river” schemes that wouldn’t disturb the river in the slightest. Colin Hansen, then Finance Minister, did a TV interview that repeated this bullshit.
It wasn’t until 2006 that I understood what was really happening. The producer of my very short lived Internet show, gave me chapter and verse but asked me not to identify him, which I have never done. When I started to belatedly research this issue I learned that these IPP projects not only destroyed the fish but also scarred the landscape with roads for access and transmission lines.
And they ruined Hydro.
Not long afterwards I met Tom Rankin, who was to spend a fortune of his own money telling people what was really happening. I met my colleague Damien Gillis at the same time and both of us joined Tom in the Save our Rivers Society and we went to work, Damien with his camera and I with my pen and vocal cords.
We had comrades-in arms like independent economist Erik Andersen, who had the technical ability to translate into plain, unreconstructed English just what was going on.
But the NDP blew it. And here’s what’s going to happen.
BC Hydro owes IPPs $55 Billion dollars over the next 40 years, which, in itself, will break the crown corporation. During the spring months when you and I were bitching about the weather, IPPs were churning out power because the run-off is the only time most IPPs generate any appreciable power. BC HYDRO, IN THE MEANTIME, WAS FORCED TO BUY THIS POWER AT HUGELY INFLATED AMOUNTS WHILE THEY SPILLED THEIR WATER OVER THE DAMS, INSTEAD OF MAKING THEIR OWN POWER!
This energy “plan” has resulted in BCH being unable to handle its own upkeep, as we see with cost overruns to numerous capital projects.
Then came tragedy #1. The NDP simply did not understand or certainly didn’t reflect any knowledge of this issue going into the 2009 election and the Liberals won.
I cannot forecast just how it will happen, but the Clark government will break up Hydro and the ostensible reason will be because they so mismanaged themselves as to prove their Fraser Institute proposition that only private companies know how to do things right. I can say that the first step has been taken as the government has made it clear that rates will, alas and alack, have to increase. What the government won’t tell you is that the Campbell/Clark government has deliberately brought Hydro to its fiscal knees so that it can be privatized. One guess is that somehow the dams will be leased for 990 years, a formula that they successfully got away with as they privatized BC Rail.
It gives no pleasure, I assure you, for us at The Common Sense Canadian to say “we told you so”, although the fact is that it, and especially Erik Andersen, have been spot on for years now.
No…the feeling is sorrow, anger. And a sense that perhaps we could have and should have presented our arguments better in some way. And that may be true, except I think we’re permitted to observe that with our meager resources we tried while the mainstream media were silent throughout and remain so.
Please do watch and pass on Damien’s Kelowna speech because he tells it like it is.
BC’s new Energy Minister Bill Bennett (Glen Baglo/CP)
BC Liberal Energy Minister Bill Bennett came on CBC’s Early Edition Monday to answer some of the mounting questions regarding BC Hydro’s financial troubles and his party’s energy policies (listen to the full interview here). Suffice it to say, he fell well short of coming clean – and yet, the exchange yielded a few very interesting moments from the East Kootenay MLA, newly appointed to the Cabinet position.
Host Stephen Quinn put to Bennett that Hydro’s grave financial problems stem from policies of the BC Liberal Government over the past decade, asking him if it is now in a position to have to undo some of those policies. “I would certainly challenge vigorously the assertion that BC Hydro is in financial crisis and, some people have said, close to bankruptcy – and that’s simply not true.”
Bennett defended Hydro’s Liberal-appointed board, suggesting he wasn’t intending to make significant changes or fire its members and Hydro’s executive staff. Contrary to his recent criticisms of “surprise” cost overruns for capital projects – including the Northwest Transmission Line – he began by expressing confidence in Hydro’s project management. Given his comments in recent weeks, this 180 degree about-face from the minister was the only real surprise here.
Much of the conversation focused on Hydro’s $5 billion in “deferral accounts” – a controversial accounting practice criticized by the Auditor General, which allows Hydro to bank future revenues from rate increases against current deficit spending on capital projects and operations. Bennett again, largely defended the practice as business-as-usual accounting.
The minsiter blamed the NDP for not investing enough in infrastructure upgrades during its tenure in the 1990s, suggesting that caused the Liberal Government to have to carry out billions of dollars in upgrades. What he leaves out is that a significant portion of this capital spending is directed to hooking up private power projects to the public grid. Moreover, as independent economist Erik Andersen has demonstrated in these pages, the rate of spending is out of line with Hydro’s retained earnings and would not be considered acceptable to the shareholders or board of any private sector company.
Finally came the most important discussion – on the government’s private power program at the root of Hydro’s present difficulties. Quinn played a tape of a recent interview with SFU professor and noted critic of the Liberal Government’s energy policy, Dr. Marvin Schaffer:
The government told BC Hydro how it had to plan its system; it told BC Hydro where to get its power from; it told BC Hydro what projects it had to do; it told the [BC Utilities] Commission it couldn’t review a whole range of projects – and that’s part of the problem that has to be fixed going forward if we want to get some of the cost-drivers under control.
I don’t agree with him…What he just expressed is a very narrow and biased point of view. When he refers to telling BC Hydro where they’re going to get their power, he’s obviously referring to the green – the clean power that’s been generated in the province and we made a decision a number of years ago that we were going to start to develop alternatives to the big hydroelectric dams. I mean, do people want more dams in British Columbia? I’m not sure they do. We’re trying to build something at Site C in the northeast and there’s lots of opposition to that. I think the public support the development of wind power and solar and run-of-the river projects.
They account for such a small proportion of the total debt at BC Hydro and they account for such a small proportion of the power that’s actually generated in the province. For the life of me I can’t understand why people make such a big deal out of having clean power.
Mr. Bennett is correct that private power projects account for a small proportion of the electricity produced in BC – approximately 16% – and yet, as of 2011they made up roughly half of the total amount Hydro spends on power every year, according to SFU’s esteemed energy expert and former Hydro board member, Professor Marjorie Griffin-Cohen.
“What Marvin Shaffer was talking about there was the ‘self-sufficiency’ requirement that means that BC Hydro has to purchase power at what amounts to an inflated rate,” Quinn followed up. “Is it time for that requirement to go?”
Bennett’s surprising response: “I won’t say ‘no’ or ‘yes’ at this point in time”, suggesting that some adjustments to this policy – the very basis for the private power purchasing program – were being made and may continue to be made in the future. Reducing these artificial requirement for more power than Hydro needs access to would erase the justification for private power projects – which was the crux of comments made by then-CEO Dave Cobb two years ago, resulting in his premature departure from the crown corporation to work for Jimmy Pattison.
Where Bennett and the Liberal Government go from here on the Hydro file remains to be seen – but judging from their continually shifting positions and confused statements, they’re running scared. And so they should be. They got us into this mess – now it’s catching up with them.
What promised to be a ground-breaking report into the effects of natural gas hydraulic fracturing on groundwater has devolved into a classic case of the fox in charge of the hen house.
The US Environmental Protection Agency’s hotly anticipated study into links between fracking and water contamination in Wyoming has been co-opted by the very company whose activities it was investigating – Canadian natural gas titan, EnCana.
ProPublica is reporting that the Wyoming study – a draft of which was published in 2011, stirring up significant controversy and opposition from industry – has been abandoned by the EPA to Wyoming state authorities and will now be funded by EnCana.
EnCana is also at the centre of a high-profile lawsuit regarding water contamination being brought in Alberta court by Jessica Ernst, an environmental consultant with 30 years experience working in oil and gas. Ernst herself released a landmark compendium of evidenceregarding water contamination from fracking last month.
The draft 2011 Wyoming report found carcinogenic fracking fluids in a pair of deep groundwater monitoring wells drilled into an aquifer in Pavillion, Wyoming. Local residents had been complaining that drilling “fouled their water has turned up alarming levels of underground pollution,” according to ProPublica – which has been doing leading-edge investigative work into the impacts of fracking on water from several years now.
Now, ProPublica reveals that the EPA is backing away from the research – which was the first of its kind to establish a scientific link between fracking and groundwater contamination – under significant pressure from the industry.
Industry advocates say the EPA’s turnabout reflects an overdue recognition that it had over-reached on fracking and that its science was critically flawed.
But environmentalists see an agency that is systematically disengaging from any research that could be perceived as questioning the safety of fracking or oil drilling, even as President Obama lays out a plan to combat climate change that rests heavily on the use of natural gas.
Over the past 15 months, they point out, the EPA has:
Closed an investigation into groundwater pollution in Dimock, Pa., saying the level of contamination was below federal safety triggers.
Abandoned its claim that a driller in Parker County, Texas, was responsible for methane gas bubbling up in residents’ faucets, even though a geologist hired by the agency confirmed this finding.
Sharply revised downward a 2010 estimate showing that leaking gas from wells and pipelines was contributing to climate change, crediting better pollution controls by the drilling industry even as other reports indicate the leaks may be larger than previously thought.
Failed to enforce a statutory ban on using diesel fuel in fracking.
“We’re seeing a pattern that is of great concern,” said Amy Mall, a senior policy analyst for the Natural Resources Defense Council in Washington. “They need to make sure that scientific investigations are thorough enough to ensure that the public is getting a full scientific explanation.”
The agency is publicly maintaining the above developments and issues are unrelated, yet, according to ProPublica, “In private conversations…high-ranking agency officials acknowledge that fierce pressure from the drilling industry and its powerful allies on Capitol Hill – as well as financial constraints and a delicate policy balance sought by the White House — is squelching their ability to scrutinize not only the effects of oil and gas drilling, but other environmental protections as well.”
British Columbians have been hearing a lot lately about BC Hydro’s shocking debt situation – which is far worse than it’s being described. Newly-minted BC Liberal Energy Minister Bill Bennett is supposedly on the warpath, looking for ways to trim the fat from the crown corporation’s bulging belly. The Liberal Government was “surprised” by last-minute cost revisions to a few Hydro projects, skewing its budget calculations, we’re told.
Bollocks.
There is no “surprise” here – any suggestion thereof is political theatre. Strike that. Let me call it what it is: LYING.
The ballooning cost of the Northwest Transmission Line, cited as the key cause of this budgetary hiccup, represents but one tiny fraction of Hydro’s real financial mess – and the BC Liberal Government knows it.
Why? Because they caused these problems themselves.
The mainstream media, as is to be expected, is largely parroting the government’s cover story and ignoring the real problem: BC Hydro and its ratepayers are in a world of hurt because of 12 years of very deliberate and disastrous BC Liberal Government policies, pushed on the public utility.
First and foremost of these was the forcing of BC Hydro to purchase $55 BILLION worth of sweetheart, long-term contracts with private power companies, which we didn’t need. As our resident, independent economist Erik Andersen – supported by figures and confirmation from the Auditor General – has demonstrated through a series of over the past 3 years, BC Hydro has chronically overestimated domestic demand for power. Historical estimates by Hydro have projected our current use at well over 60,000 Gigawatt hours (GWhrs) of electricity per year, when, instead, we’ve been flat-lined at around 50,000 for several years and show no real sign of growing beyond that (unless, of course, we build massive new capacity to subsidize mines and gas projects – more on that in a moment).
But you can’t merely blame BC Hydro for getting the numbers wrong. Forecasting power demand has, unfortunately, always been a more of a political exercise than a statistical one. Hydro’s masters are under enormous pressure to justify the government’s energy agenda. Those who question it – even at the top of the crown corporation’s executive ladder – pay the price.
Two CEOs who presided over a significant portion of this era – Bob Elton and Dave Cobb – were both pushed out after making cryptic references to the problem of private power contracts.
As for the Northwest Transmission Line? This project was pushed on Hydro in order to support the province’s agenda to open up new mines in northwest BC – again, highly subsidized by taxpayers. Why aren’t these mines building the line themselves (they’re kicking in only a fraction of the cost)? Why were the federal government and companies’ contributions capped, with BC Hydro left holding the bag for the entire cost overrun, now in the hundreds of millions of dollars?
Has BC Hydro done a poor job managing costs on the project? Is the Pope Catholic? But that’s largely beside the point. This project is the BC Liberal Government’s baby and now, when it goes sideways, they blame the public utility…and act surprised about it? How cowardly and dishonest can this bunch get?
The way this is all playing out should be of great concern to British Columbians. The Liberal Government and its private power pals are taking a page out of the neoliberal handbook, which aims to privatize anything of value, while unfettering “the market” of all “regulation” (which you and I would call “laws”). Here’s how it works:
1. You saddle a valuable public utility or asset with enormous debt through private sector contracts it doesn’t need (of course, the stated rationale is the opposite – i.e. saving the public money through “private sector efficiencies”, which somehow NEVER, EVER materialize).
2. Blame the utility and its managers for the debt load when it becomes unbearable.
3. Use this as a justification to break up and sell off the utility, for pennies on the dollar, to the very private sector players who were instrumental – along with their government puppets – in bankrupting it in the first place.
The same pattern has repeated itself, all across the United States, Central and South America, Africa, you name it. It’s a tried and true formula, designed to steal the public’s most valuable assets out from under them – and, mark my words, they will try to do it here next.
My colleagues Rafe Mair, Tom Rankin, Gwen Barlee, John Calvert, Andy Ross, Erik Andersen and I have been warning about this – and documenting and sharing it with the public – for years now. Everything we predicted has come to pass. EXACTLY as we predicted it would – from the unchecked destruction of fish and wildlife habitat through these unnecessary, highly inefficient and costly private river power projects, to the precise nature of Hydro’s present financial troubles.
Now it falls to the BC public to ensure the right corrective measures are taken to prevent the theft of our crown jewel. And the mainstream media needs to hear that its readers, listeners and viewers will not buy the official party line – this sob story of the poor government, betrayed by reckless managers at BC Hydro.
Our resident economist Erik Andersen has laid it out like so: either we raise power bills by 35-40% right now (politically impossible), or, preferably, we “un-saddle” Hydro of these private power contracts. He suggests doing so by removing them from Hydro’s books and dealing with them as their own category of government liability (which is, in fact, where they belong, since it wasn’t Hydro’s choice to take them on).
Moreover, Andersen advises, we should not be building the $10 Billion Site C Dam to subsidize the mining and natural gas industries with cheap electricity, while regular British Columbians and small businesses pay 3 times as much for their power. This is a practice – the public subsidization of large-scale industrial corporations with highly-discounted hydro power – that needs to be rethought under the present circumstances.
I would go one step further. These $55 Billion of secret, private power contracts need to be opened up to public scrutiny – and unwound, to whatever extent is legally possible. The BC Liberals should consider such steps to save their own skin, now that they are being confronted with the full consequences of their decisions over the past decade. Most of these projects are in blatant non-compliance of the terms of their agreements. Others are experiencing serious operational challenges, which gives you a sense of what a botched deal this is – even under these favourable terms, akin to highway robbery, they can’t help but screw things up.
The Liberals should consider unwinding whatever contracts they can to give themselves some budgetary breathing room going forward and avoid the need to jack up power bills to unacceptable levels.
Above all, they need to face a massive public backlash over the mere suggestion of breaking up BC Hydro. They must be made to understand that this is not a viable political option. Think the fact they’ve been re-elected for another term and face a weak NDP opposition means they can get away with whatever they want? Three words: Harmonized Sales Tax.
The four cheapest districts in North America for electricity have historically been – not coincidentally – the only remaining public power states and provinces: Quebec, Manitoba, Tennessee and BC (though not for long, at this rate). This is no accident. For all the rhetoric of “private sector efficiencies”, the record of evidence is clear: private power is a racket, designed by the likes of Enron for one purpose – to suck maximum dollars out of the pockets of unsuspecting citizens.
This program is legalized fraud, plain and simple. Yes, I am quite comfortable using that word here – which Merriam-Webster defines as “intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right.”
We British Columbians cannot, under any circumstances, allow ourselves to be the next in a long line of suckers duped by this agenda. If we do, we can look to the likes of Greece, Ireland and Spain for some sense of what’s in store for our future.
Damien Gillis will be discussing these issues in depth at a public forum in Kelowna this Saturday evening, in advance of the upcoming by-election.
BC Energy Minister Bill Bennett (government photo)
The Honorable Bill Bennett;
Re: BC Hydro
It was event in 2009 that the financial direction taken by the BC Hydro Board, under the direction of the Cabinet, was a serious misread on the global and provincial economic circumstances and outlook. Far too much was expected when all the credible evidence indicated a global slow down was in the making. Nothing much has changed since then but BC Hydro has carried on with the narrative that growth and “good times” are just around the corner.
Starting in 2006, fueled by the fraudulent activity of Enron, BC has been on the well trodden path of others who believed the export of electricity, particularly “green energy”, was the road to financial salvation for BC. This was a theme from the 70s and coal was the fuel. Natural gas is the current narrative.In every case taxpayers were committed to debt that became “stranded” – of no economic value.
Since 2006/09 domestic (BC only) demand has mostly “flat-lined” at about 50,000 GWhrs making liars out of the many at Hydro and elsewhere who, a decade ago, forecasted demand to be well over 60,000 GWhrs per year by 2012. The record is replete with similar examples of demand exaggerations from BC Hydro.
Using the narrative of “need” being an absolutely ridiculously high number the government engineered a serious gross generation surplus that came at a cost of more than $50 billion in new contractual debt, from which the citizens of BC earn no equity after paying for the cost to build these sites. Surplus generation capacity is a luxury that comes at a very high cost, much like any excessively large insurance policy.
That is now all history. What is needed now is rational action. Collapsing contracts, while instinctively appealing, is hardly the solution.
Raising BC customer rates to get BC Hydro into a cash break even condition is politically dynamite. An across the board rate increase of 35-40% would be what is needed if all else is left to run its course.
Far better would be to transfer IPP contracts, with their ongoing payment obligations, from Hydro to the Government. A total that represents a production value of 15,000 GWhrs per year would be a good target amount. These would then be categorized as an “industrial development” component, not truly the responsibility of existing Hydro ratepayers, but rightly the responsibility of all the citizens of BC.
As to Site C and other new projects, the cost of electricity from these IPPs is north of $100/megawatt hour but large industrial users in BC expect to pay $40 or less. The contradiction is that large industrial customers in BC expect to pay $40 or less. In most other places in the world LNG plants use their own commodity to generate electricity for liquefaction purposes. Why we in BC would use high cost new electricity to do this job is hard to fathom as it would represent a huge subsidy from Hydro ratepayers for a trivial amount of employment.
Crown utility BC Hydro has been saddled with massive debt associated with overpriced private power contracts
We are getting barrow after barrow of barnyard droppings dumped on our laps and we should know it.
Premier Clark promised us huge LNG (Liquefied Natural Gas) revenues in a few years. We would be debt free and have $100 BILLION in the to be created “Prosperity Fund”. That was at the start of the election campaign. Then it became a year after the next election. Now, according to Mike Smyth of the Province, this is 15 years away.
It’s all bullshit. For LNG to become a major export industry 15 years from now requires a phenomenal outlay of capital and it isn’t going to happen. Of course companies will, cross their hearts and hope to die, promise great things but they will not happen. We have only begun to learn about the reserves of shale gas and oil around the world but, in all likelihood, they will be everywhere and in abundance. Premier Clark and Finance Minister de Jong are telling us not to worry but it will all happen.
Well, then, would the two of you please outline the timetable for all this?
As Mario Cuomo said, “you campaign in poetry and govern in prose.” These promises however, are dangerous and deliberate nonsense.
Within the mandate of this government, it will try to break up BC Hydro and sell off the parts. Just like BC Rail, the government will retain residual ownership, in 900 years, to take back the dams. At the rate we’re going, this will have to happen. BC Hydro is awash in debt in its normal operations and new projects and is now facing an ever-increasing debt as private power producers (IPPs) provide power to BC Hydro at double-plus the market price and 10x what it can generate for itself from heritage assets.
This is the elephant in the room no one will talk seriously about – not the Premier, not the Minister of Finance, certainly not a government MLA, not Vaughn Palmer or Mike Smyth – it just throws its weight around unchecked.
BC Hydro has only one source of revenue – you and me, the taxpayer and ratepayer – and when the government comes clean, the rate increases will be beyond our ability to pay.
This all started with the Gordon Campbell government and my bet is that privatization talks have been ongoing since then.
The balanced budget of Mike de Jong is bullshit too. In the first place, you can hardly say with a straight face that you’ve balanced a budget when, to make ends meet, you’ve sold hard assets for your revenue side. This is precisely like you balancing your personal budget by taking on a new mortgage or selling the car.
The real debt of the province per capita, under the Liberals, has quintupled. It will continue to grow at a frightening rate.
There’s insufficient money for current social funding, let alone increasing it.
This government’s election platform was a tissue of lies, but so what? It kept the bad guys out and left the white hats in control, didn’t it?
The Liberals have a hell of a lot to answer for. So do the NDP, who ran a pitiful campaign.
So do the nearly 50% of voters who stayed home last May 14.
Environmental consultant Jessica Ernst on her land in Alberta (Colin Smith photo)
Jessica Ernst, a high-profile, Alberta-based environmental consultant, has released a comprehensive summary of science, facts and documents relating to groundwater contamination from the controversial practice of natural gas hydraulic fracturing (fracking).
The culmination of ten years of research, the 93-page reportis sure to cause a stir with the energy sector and its critics. Groundwater contamination has been a key concern surrounding the booming fracking industry.
“Jessica Ernst has made a strong case,” says Will Koop, BC Tapwater Alliance Coordinator. “Her collection provides excellent and technically friendly working tools, enabling the public to draw their own conclusions from the critical information. This is not just an invaluable document for North Americans, but for the world.”
Having consulted for the oil and gas industry for thirty years, Ernst became concerned about its impacts when they began to hit home – “living with dangerous contamination after EnCana hydraulically fractured my community’s drinking water aquifers.”
Ernst’s battle with Encana prompted her to bring a landmark lawsuit against the company in Alberta last year.
Ernst cites the industry’s propensity for secrecy and covering up impacts from its operations as a key motivation for compiling this broad spectrum of evidence. In the preface to her report, she quotes renowned energy journalist Andrew Nikiforuk: “As somebody who has reported for 20 years on this industry in [Alberta], I can tell you I’ve met hundreds of people in this province who have signed confidentiality agreements once their water was blown, once their livestock was killed, once a member of their family were injured, once they lost most of their grass or their trees as a result of fouling events, contamination events, air pollution, you name it.”
With this compendium of scientific data, correspondence with regulators, internal government and industry communications, transcripts from news reports, and links to a wide array of journalistic and academic references on the subject, Ernst aims to bring these issues into the light.
Ernst has gathered – in an unprecedented way – a large body of evidence which should raise serious questions for the public, regulators and policy makers about the environmental and human health impacts of fracking, particularly as we discuss a massive global expansion of the industry.
I find myself in complete empathy with H.L. Mencken, when he said “Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.”
I read Vaughn Palmer in Friday’s Sun, where he said, talking about the challenges facing Bill Bennett (not the real one but the one now in charge of BC Hydro), saying his mandate is “to minimize rate increases to consumers.” Palmer counters, “Yet Hydro needs to manage soaring debt, rising costs and billions of dollars worth of spending in unresolved deferral accounts. Plus it is being pressured to deliver gobs of clean, cheap power for an expanded liquefied natural gas industry.”
Vaughn – where the hell have you been?
I’ve defended the pussycat approach you and your colleague Mike Smyth have taken towards this government for some years, saying that, unlike me, you have mortgages and education fees for your children that I don’t have thus I shouldn’t criticize the ongoing corporate blowjobs you have given and continue to give the Campbell/Clark government. No more.
BC Hydro is in a terrible way, as are we, its shareholders. And many, starting with Dr. John Calvert of SFU and other academics along with environmentalists like Tom Rankin, Damien Gillis and me – and most notably economist Erik Andersen – have been saying as loudly as our limited public outlets will permit that the Campbell/Clark government has forced BC Hydro into making deals with private companies for energy they don’t need yet must take at a cost at least double the market price and up to ten times what they can produce it for themselves. AND, these contracts are now in the range of $50-60 BILLION.
Where the hell have you and the government sucks that employ you been on this issue? A little one-liner in your column implying that this is something surprising that perhaps we should investigate. Golly, gee whiz, look what I found Mommy – a suspicious looking expenditure by BC Hydro that maybe, just maybe we should have a look at!
The scandal is not just the government and the private companies that just financed their re-election – not just the woefully inept Opposition Party – but YOU! Yes, Vaughn, you and those who employ you bear ultimate responsibility for covering this up, going back to the beginning of the Campbell/Clark government that connived to create these secret pay-offs.
I, personally, bear some of that responsibility, for it wasn’t until 2005 that I started questioning this energy policy. I interviewed David Austin, the lawyer for the Independent Power Producers for several years and never questioned closely these secret deals. I admit that and I’m ashamed of it. But I did start to ask questions, penetrating questions and, hearing no honest answers, persisted.
I repeat, Vaughn, where the hell have you and the mainstream media been? How can you now just slough the matter off with sort of a dreamy observation that BC Hydro has some bills to pay?
BC Hydro is broke, Bust. Bankrupt. At least it certainly would be were it in the private sector. Its only salvation is that it can raise its rates to the long-suffering ratepayers.
Now, in the June 15 Weekend Sun, Scott Simpson and Derrick Penner do an interview with Rich Coleman, who is in charge of getting Liquefied Natural Gas rolling. Good Grief! Can’t anyone ask a question? A real question? One slow pitch after another!
But the mainstream media and their neutered columnists are as much to blame as is the lily-livered Opposition. You have never even questioned this so-called “run of river”, private power policy, just as you have never questioned salmon farms, pipelines and tankers. You have let it happen and thus it happened. Now, it would seem, you will give Coleman and company free rein as they try with LNG to make a silk purse out of a sow’s ear – and fail.
All of you should at least admit it, late in the day though it is, and start telling the people the truth and force the government to do the same.
I want to clarify my position on the proposed Site C Dam: I AM AGAINST IT.
One of the troubles in this business is that one comments on many aspects of the environment and can have a word or two or a line taken out of context – as happened with a column of mine last week, in which I referred to newly elected Premier Clark’s resolve to push forward with the dam to power shale gas operations.
Here are my thoughts on Site C.
We do not need the power, nor will we in the foreseeable future. In a blog sometime many years back, I answered the question, “Isn’t Site C better than so-called ‘run-of-river’ projects?” My answer was if that’s the choice we face, I suppose I would have to agree. Except it’s false premise, since we don’t need either. That was, I believe, about 2008.
Now I would leave no doubt. These are two separate issues. I am unalterably opposed to so-called “run-of-river” because they not only destroy our precious rivers, they are – if they haven’t already –bankrupting BC Hydro.
Let’s then look at Site C. They say this will cost $8 billion – using the usual margin of error on such matters, we can safely assume it will be at least 25% higher, say $10 billion.
At any price the project would wipe out a large and very important amount of farmland and wildlife habitat.
At this point we have no firm customers for one cubic meter of LNG and none on the horizon! Of course companies will say they are going to recover all this natural gas, ship it to Prince Rupert and sell it to China and Japan. I repeat – there isn’t a single firm contract in place and my bet is there never will be.
We’re in an entirely new world from a few years ago. A process called “fracking” lets one drill vertically into shale rock up to a kilometre or more then horizontally to capture fossil fuels trapped between the layers of shale. They do this with huge quantities of water laced with chemicals.
Leaving aside, for the moment, the question of markets and refineries, I’m sure you’ve picked up a couple of important environmental questions. What does this process do to the fragility of the nearby landscape?
And, what about the water? It takes huge amounts – where does it come from and where, after it’s become so toxic, does it go?
The fracking and LNG processes use large quantities of power – this is where Site C comes in. We would sacrifice all that land in order to make power to be sold at bargain rates to gas companies. We, the people of BC, would make power, sell it at a discount to a company that would use that power to make more energy, to which more energy would be applied so as to transfer it to an LNG plant in Prince Rupert, where energy would be used again to make more energy to be shipped and sold!
Whom the gods wish to destroy, they first make mad.
Now let’s look at the markets.
The world is awash in natural gas. While fracking isn’t new, it’s come into vogue over the past few years. No one yet knows how much is available but there are huge deposits in Asia, especially Russia and China. Premier Clark would have us use public money to gamble on BC gas being lapped up in Asia, when, all signs say, they have ample of their own and the higher prices they currently pay are likely to vanish by the time we get our gas to market.
Don’t take my word for it – this is according to top business publications like Bloomberg, which wrote in January, “The difference between U.S. and Asian gas is poised to drop by more than 60 percent by 2020, leaving exporters facing a loss of as much as $6 million per tanker, according to calculations by Bloomberg based on data from Rice University in Houston.”
Moreover, if Asia does need gas, Australia is already in the position to supply it. In fact, the immense amounts of public money spent on this is a huge scandal in Australia which, it seems, Premier Clark wants us to join.
Let there be no doubt – I and my colleagues at the Common Sense Canadian stand firmly against Site C, no matter what those who would ravage our environment, including the governments, would have us believe.
