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

June 8, 2018Energy and Resources, International, Oil&Gas, Pipelines and Supertankers, PoliticsfeaturedCommon Sense Canadian

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 . …

Aboriginal title claim threatens renewal of BC salmon farm tenures

May 28, 2018First Nations, Oceans, Salmon Farming and AquaculturefeaturedDamien Gillis

Members of the Dzawada’enuxw First Nation filing a claim of Aboriginal title at the BC Supreme Court (submitted)

A First Nation’s claim of Aboriginal title, filed today at the BC Supreme Court in Vancouver, threatens the future of some open net pen Atlantic salmon farms. Lawyer Jack Woodward, who filed the claim on behalf of the Dzawada’enuxw First Nation of Kingcome Inlet, warned the NDP government it should not be renewing salmon farm tenures in their territory “in the face of this competing claim of ownership of the territory,” according to a media release on the case.

The claim takes aim at ten salmon farms operated by Marine Harvest and Cermaq within Dzawada’enuxw territory. Each of these aquaculture sites requires a provincially-granted “Licence of Occupation” in order to operate, most of which expire on June 20. The claim also affects some forest tenures, mostly inactive, held by Western Forest Products and Interfor.

“The fish farming industry is infringing on our way of life, by breaking the natural circle of life that has sustained us since time immemorial,” said Hereditary Chief Hawil’kwo’lal (Joe Willie). “This cannot continue.”

The Dzawada’enuxw case adds to the mounting pressure from First Nations and environmental groups on Premier John Horgan not to renew these tenures, along with others throughout the Broughton Archipelago, later this month. The industry faces a number of serious challenges – from sea lice outbreaks and new research into the potential impact of piscine reovirus on Atlantic and Pacific salmon, to calls from high-profile groups like the Pacific Salmon Foundation and prominent BC chefs to end ocean-based salmon farming. But it may be a small nation from remote Kingcome Inlet – nestled among the coast mountains, 80 km northeast of Port Hardy – that poses the greatest threat to the industry’s future.

With Monday’s filing, the Dzawada’enuxw become one of only a handful of BC-based First Nations to launch Aboriginal title claims in the wake of the Supreme Court of Canada’s historic 2014 verdict in the Tsilhqot’in case, which firmly established title on unceded Indigenous territories. Woodward also represented the Tsilhqot’in in their title claim.

“The Dzawada’enuxw people have lived in our territories since time immemorial. We have never ceded these territories to anyone, and have remained living within our ancestral lands throughout time and will continue to for generations to come,” said Dzawada’enuxw First Nation Elected Chief & Traditional Leader Okwilagame (Willie Moon).

Establishing title in the eyes of the court requires demonstrating that a nation occupied its territory pre-1846 – the date of the Oregon Treaty between Britain and the United Sates which drew the current Canada-US border in the West – and that it is still there today. On both counts, the Dzawada’enuxw appear to have strong case.

Why I got arrested for blocking Kinder Morgan

May 23, 2018Energy and Resources, Oil&Gas, Pipelines and SupertankersfeaturedCommon Sense Canadian

Citizens preparing to get arrested outside Kinder Morgan’s Burnaby tank farm (Photo: Alex Harris)

By Kyle Farquharson

This year, nearly 200 people — including federal parliamentarians Elizabeth May and Kennedy Stewart — have been arrested on Burnaby Mountain for civil disobedience actions against the Kinder Morgan Trans Mountain pipeline expansion. Never having been arrested before, not even for a traffic infraction, I didn’t take my decision to join them lightly. On March 22 — World Water Day — I sat at the gate of Kinder Morgan’s Burnaby Mountain tank farm facility and got arrested.

My motivations were both moral and practical. I know we need to address climate change and the degradation of our ecosystem to ensure our descendants and the most vulnerable members of the human family a viable future. I’ve concluded — reasonably, I think — that politicians and governments can’t be relied upon to deliver serious solutions absent public pressure to force their hand, including protest, public engagement, and, when appropriate, civil disobedience.

I blocked a gate at Kinder Morgan’s facility with the intention not of breaching a court order per se, but of causing delay and hindering the company’s efforts. A blockade has the advantages of being non-violent and effective at frustrating construction of fossil fuel infrastructure. Judging from its own admissions to investors and from its demand for strict police enforcement of an injunction it sought in order to deter such blockades, Kinder Morgan recognizes the effectiveness of the tactic too. At least we agree on something.

As a law-abiding citizen, both highly privileged and schooled in the importance of discipline, responsibility, and respect for institutions, I feel a strong temptation to outsource my conscience to the relevant authorities. That would certainly be more convenient for me. Yet I can’t avoid reckoning with an inconvenient truth: human history is full of abominations that were either legal or whose perpetrators have enjoyed impunity, some of which continue to the present day. On the other hand, we rightly celebrate cultural iconoclasts of the past who publicly defied unjust laws, at great personal risk. Lest we forget the hostility such individuals evoked at first from the powers that be.

NDP MP Kennedy Stewart and Green Party of Canada Leader Elizabeth May getting arrested on March 23 (Photo: Alex Harris)

The charge I now face — criminal contempt of court — caught me and many of my comrades by surprise. On the day of my arrest, I had signed police documents agreeing to appear on a slightly less onerous charge of civil contempt. Several of my fellow defendants, including Stewart, have already pleaded guilty to criminal contempt. I’m not yet in a position to discuss my own legal strategy.

In Canada’s legacy media, the conflict surrounding the Kinder Morgan pipeline expansion is often framed as a jurisdictional dust-up, with the provincial government of British Columbia on one side, and the governments of Alberta and Canada on the other. But the reality is quite different, and much more interesting.

Leading up to last year’s provincial election, B.C.’s New Democrats and Greens campaigned on opposition to the planned pipeline expansion. That promise resonated with a plurality of British Columbians, particularly in and around Metro Vancouver — both the province’s major population centre and a region imperiled by the risk of either a diluted bitumen spill or mishap at Kinder Morgan’s petroleum tank farm.

The electoral contest became a focus of organizing efforts against the project. Friends and allies of mine dedicated countless hours to canvassing and making phone calls, trying to mobilize any undecided voters they could to adopt an ABC electoral strategy — that is, Anyone But (Christy) Clark, whose incumbent Liberal government had already approved Kinder Morgan. Given how close the election was, this campaign within a campaign likely played a role in the eventual outcome.

Recent pronouncements by B.C. Environment Minister George Heyman suggest that his government may be trying to wriggle out of the NDP’s campaign commitment. Nonetheless, three elected Greens hold the balance of power in the provincial legislature. NDP Premier John Horgan‘s hold on power depends on the support of a party that has been outspoken and consistent on this issue.

To characterize the B.C. government’s behaviour as the institutionalization of “environmental extremism” or disregard for the “rule of law” is a grave misrepresentation. By calling for things like more scientific study of the effects of diluted bitumen spilled in a marine environment, and requesting a court opinion on the extent of its authority to regulate the flow of this product through a pipeline, Horgan’s administration is proceeding in line with the law and Canada’s constitution. Its stance thus far is mainstream, moderate, and roughly consistent with the will of B.C.’s electorate as expressed in the most recent election.

But you wouldn’t know that if your sole source of information were the strident, incautious outbursts of its pro-pipeline detractors.

Journalist and social critic Chris Hedges observed in 2015 that we are all Greeks now. Confronted with an extraordinary, concerted campaign of economic sabotage, the leftist governing coalition Syriza caved in to the demands of international financiers, and Greeks who had voted resoundingly to reject austerity were subjected to it anyway.

I have the impression that Prime Minister Justin Trudeau, Alberta Premier Rachel Notley, and corporate news organizations hand-wringing over the B.C. government’s “obstructionism” would be more than content to see B.C. voters endure a similar repudiation of our democratic sovereignty. They appear dedicated to the idea that the interests of the investor class deserve precedence in the deliberations of all levels of government, democracies and tyrannies alike.

Their attitude calls to mind an irreverent observation by the anarchist Emma Goldman: “If voting changed anything, they’d make it illegal.”

We hear frequent mention in press and political circles about Canada’s “national interest”, with which our prime minister and his cabinet assure us the Kinder Morgan pipeline aligns. Yet this formulation seems a questionable basis for policy — not only dubious, but insular, nationalistic, narrow, and intensely short-sighted as well. Kinder Morgan is a transnational corporation representing the transnational ambitions of a transnational, moneyed elite. The ill effects of the intended pipeline — including spill risk to Americans in western Washington State, and intensified climate change — would cross borders too.

Alberta Tar Sands — A tar sands plant in Fort McMurray, Alberta (photo: Kris Krüg)

In the words of renowned climatologist Dr. James Hansen, continued expansion of Canada’s tar sands enterprise would mean “game over” for the climate. Kinder Morgan’s pipeline would facilitate additional tar sands extraction and related CO2-emissions equivalent to 3 million gas-powered cars a year. This comes at a moment when we are already dangerously near a point where the rise in global average temperature could become irreversible.

All of this begs the question of whether it’s possible for an enterprise to serve Canada’s “national interest” while undermining the best interests of all humanity. If so, what does that say about Canada as a country?

Within the ranks of our critics are those determined to muddy the moral waters, labeling us hypocrites, extremists, or, more absurdly, “eco-terrorists”, and attributing our discontent to financing from foreign sources.

Yet there is only one atmosphere and climate system on earth, which means the entire global population has a material stake in Canada’s fossil fuel industry. Unsurprisingly, and by necessity, large organizations agitating for climate action tend to have an internationalist outlook, a global presence, and supporters and benefactors around the world. There is nothing unethical or illegitimate about that.

That said, make no mistake: the climate justice movement in B.C. and throughout Canada depends on the commitment of countless volunteers. I’m part of Climate Convergence Metro Vancouver, a grassroots coalition that includes many unpaid activists, including myself. Promoters of the “foreign funding” narrative strike me as desperate to poison the well, and impeach the integrity of people they know are motivated by moral conviction.

Of course, no opponents of this pipeline are fiercer in their determination and dedication than the First Nations peoples who are defying it in the courts, at the polls, and on the land.

Much of the second Kinder Morgan line would be built on land that First Nations have never ceded to the Crown. Plans for the original Trans Mountain line were approved in an era when the Indian Act afforded most First Nations people no right to vote and no right to retain counsel to defend their territorial rights. At a moment of great fanfare over reconciliation, Kinder Morgan’s beleaguered project embodies the legacy and continuity of Canadian settler colonialism.

Mike De Souza of the National Observer has uncovered evidence that the pipeline’s approval process was “rigged.” Among other things, this may amount to a violation of the federal government’s duty to consult meaningfully with Indigenous peoples on initiatives affecting their interests.

In fact, the conflict over Kinder Morgan could not be morally clearer. There is arguably no country in the world better positioned than Canada to effect a transition from fossil fuel dependency to emissions-free, renewable energy infrastructure. That means Canada has a moral responsibility. It’s long past time for our country to stop being complicit in climate change, as it drives droughts, floods, famines, super-storms, wildfires, armed conflicts, and refugee crises from which countless innocent people suffer and die.

There is also no credible business case for the Trans Mountain expansion. The economic rationale of an unjust discount from our inability to ship oil to Asia relies on unsound evidence. Mexican Maya crude, a comparable grade to western Canada’s diluted bitumen, has actually sold for an even lower price in Asia than in the U.S. Gulf Coast region.

The chief cause of the apparent discount is that diluted bitumen is costlier to refine and thus a less desirable product than lighter, purer grades of crude. Western Canadian producers can already ship product across the Pacific via the existing Kinder Morgan pipeline, yet they rarely do — presumably because demand for Canadian diluted bitumen in Asia is underwhelming.

What this pipeline is likelier to deliver is expansion of the tar sands, an increase in the total volume of Canadian diluted bitumen on world markets, and, at best, ephemeral benefits for a few at the expense of the many. But to end the fossil fuel industry’s vicious cycle, we’ll need to leave possibly lucrative deposits in the ground. Canada needs to accept this reality sooner rather than later.

The conflict over Kinder Morgan is so much more than a petty row among the governments in Ottawa, Edmonton, and Victoria. It’s a clash between corrosive greed and the voices of reason, between cynicism and idealism, between might and right. It’s also a litmus test of whether ordinary Canadians can successfully and non-violently defy the dictates of corporate power.

Trudeau and Notley have offered firm assurances that the pipeline will proceed, backed by billions of taxpayer dollars. And by endorsing Kinder Morgan’s narrative that the B.C. government is to blame for supposed delays in Trans Mountain’s construction, Trudeau has foolishly exposed Canada to potential liability under a NAFTA Chapter 11 tribunal.

The federal government has hinted at deploying the armed forces to shunt aside non-violent defenders of the land and force this pipeline through, on behalf of Kinder Morgan, with or without the consent of communities in its path. I’d suggest these fulminations ill befit a prime minister who not only proclaims himself a climate leader, but a feminist too.

More arrestees blocking the gate at Kinder Morgan’s tank farm (Photo: Alex Harris)

Though I recognize the formidability of the forces arrayed against us, the faith that reason, justice, and humanitarianism will prevail sustains me. I also believe history will be no kinder to those who would condemn us as scofflaws or worse, than to the apartheid sympathizers who denounced Nelson Mandela and his allies as “terrorists”.

On World Water Day, I sat shivering on the rain-soaked pavement in front of a Kinder Morgan facility and waited over an hour for the Burnaby RCMP to arrest me. The ensuing legal process has been an emotional roller coaster and I still don’t know what the future holds – for my case or the pipeline.

The one thing I do know is I made the right choice.

Kyle Farquharson is a writer, social critic, and activist based in Vancouver, Canada. He studied Humanities at the University of Victoria and completed a graduate degree in Journalism at the University of British Columbia. He is involved in the climate justice, feminist, and anti-war movements, and is a volunteer organizer with Climate Convergence Metro Vancouver.

Canada backs foreign investor rights to protect mining sector: Book

May 10, 2018Canadian Mining Abroad, Economics, MiningfeaturedDamien Gillis

Canadian Prime Minister Justin Trudeau with OECD Secretary-General Angel Gurria during a bi-lateral meeting in Paris (OECD/Flickr CC Licence)

Canada’s controversial mining sector may be the driving force behind the country’s insistence on protecting foreign investors’ rights over laws that guard its own citizens and environmental values. Prime Minister Justin Trudeau, like Stephen Harper before him, has doggedly defended corporate rights enshrined in an increasingly controversial aspect of many international trade deals, commonly referred to as an Investor-State Dispute Settlement (ISDS) clause. The provision protects foreign investors from domestic environmental and labour laws that could impede their development of a mine, a pipeline, or other potentially destructive industrial projects.

This is just one of the many fascinating revelations detailed by Canadian author Joyce Nelson in her new book Bypassing Dystopia: Hope-filled Challenges to Corporate Rule – the essential sequel to her 2016 book Beyond Banksters: Resisting the New Feudalism, which my late colleague Rafe Mair reviewed in these pages.

In her latest effort, available now from publisher Watershed Sentinel, Nelson paints a frightening picture of what The Economist has called “The Arbitration Game” – a system of corporate lawyers, hedge funds, industry-friendly governments and secretive international tribunals that enable corporations to profit off these clauses.

Canada defends Corporate Magna Carta

World Bank headquarters, home to the International Centre for the Settlement of Investment Disputes (Photo: Makzhou/Flickr CC Licence)

The idea grew out of a “magna carta for corporations”, which The World Bank endorsed in 1964, setting up the International Centre for the Settlement of Investment Disputes (ICSID) at its Washington, D.C. headquarters. There are four other venues for ISDS-related hearings, Nelson explains: the Permanent Court of Arbitration in the Hague, the Court of International Arbitration in London, the International Chamber of Commerce in Paris, and the Chamber of Commerce in Stockholm. These closed-door arbitration panels preside over cases arising from some 3,000 international investment agreements. “Lawsuits have been increasing exponentially in recent years, rising from about 15 per year in 2000, to 70 in 2015,” Nelson notes.

So important are these ISDS clauses to the Trudeau Government’s trade policy that when another government it’s negotiating with proposes to cut one from a draft agreement, it’s often a deal-breaker for Canada. “Reportedly, in 2016 Canadian officials stopped free trade talks with India ‘until it agreed to sign’ the Foreign Investment Promotion and Protection Agreement that included ISDS – which India still has not done,” Nelson writes, drawing on a story from The Council of Canadians. A source within the Canadian government’s NAFTA negotiation team told The Washington Examiner in 2017 that Canada “would refuse any changes to the existing [ISDS] system. ‘It would be something we couldn’t accept,’ the source said, adding that was ‘a pretty hard no.’”

The same issue threatened to topple the Canada-EU Comprehensive Economic and Trade Agreement (CETA) when the EU’s top court ruled in 2017 “that any deal allowing foreign investors to challenge national governments, such as the proposed investment court system within CETA, must be unanimously approved by all [28] EU states,” the Toronto Star’s Thomas Walkom explained. “Just a few weeks after EU’s top court ruling (May 2017), discussions around another Canada trade deal were ‘paused’ because of Trudeau’s insistence that it must include the ISDS provision,” Nelson adds.

Chapter 11 costs Canadian taxpayers

With all the pushback against ISDS clauses, why is the Trudeau Government so hell-bent on protecting foreign investors’ rights? After all, Canada is about as big a loser as they come from these international courts and related settlements. The country has been sued at least 39 times under NAFTA’s Chapter 11 ISDS clause, costing taxpayers over $300 million, though that figure is set to skyrocket this year, with big, new judgments in the pipeline. That’s all in addition to bizarre, voluntary settlements like the one Stephen Harper made with US forestry, pulp and paper company AbitibiBowater for $130 million in 2010.

In that case, the provincial government of Newfoundland and Labrador had justifiably reclaimed water and electrical rights from the company after it closed the mill they were tied to, costing the community of Grand Falls-Windsor 800 jobs. The company sued for compensation over the expropriation of those rights and rather than try the case at the NAFTA tribunal, the federal Conservative government cut one of the largest Chapter 11-related cheques ever written at the time.

Today, that figure is less astonishing, compared to the ballooning settlements and judgements under ISDS clauses. Canada just lost its appeal of a $570 million judgement against it over US concrete company Bilcon’s rejected quarry in Nova Scotia. And the country could well face its biggest ISDS judgement yet if Texas-based Kinder Morgan decides to file a Chapter 11 case over the Trans Mountain Pipeline.

Digging for gold through ISDS claims

So, on the surface, Canadian leaders’ support for these clauses is puzzling. But Nelson offers a compelling explanation for why Trudeau and company would continue to champion investors’ rights, writing:

[quote]A February 2017 report from Corporate Europe Observatory (CEO) called Gold-Digging with Investor-State Lawsuits sheds some further light on the situation. It states that Canadian mining corporations are “among the worst in the world when it comes to using investor-state lawsuits to bully governments” into backtracking on environmental regulations: “62% of the 55 ISDS cases that involved a Canadian investor until 2015 were in the resource or energy sectors. And 58% of the cases challenged resource management or environmental protection measures.”[/quote]

Nelson underscores this point with the dispute between two Canadian mining companies and El Salvador. “For more than a decade, the people of El Salvador fought against a mining site proposed by Canadian gold mining company Pacific Rim,” she writes. “Understandably, they were concerned that toxic cyanide from the mining would enter the watershed of the Rio Lempa, a river that provides water to more than half of El Salvador’s population.”

But when Pacific Rim was acquired by larger Canadian-Australian mining company OceanaGold in 2013, the new owner, despite holding only a preliminary exploration licence, launched a $300 million ISDS challenge against El Salvador for balking at the project’s environmental impact statement. The tiny nation eventually won the case, but still had to foot a $12 million legal bill for its defence. (Despite a 2016 court order to reimburse the country for $8 million of these costs, OceanaGold had yet to pay up by the time the 120-day deadline passed in early 2017).

Hedge funds join the “arbitration game”

The ISDS “arbitration game” could prove highly lucrative for Canadian mining firm Gabriel Resources through its $4.4 billion claim against Romania, over the government’s rejection of permits for the company’s proposed Rosia Montana mine. Corporate Europe Observatory’s 2017 report documents the case, raising a troubling new development in the world of investor rights litigation – the money hedge funds are putting up to back and profit from such arbitration:

[quote]Despite the secrecy, it has emerged that Gabriel’s claim is financially backed by Wall Street hedge fund Tenor Capital Management. Tenor pays Gabriel’s lawyers in exchange for getting a share of the compensation that the company might win. The [hedge] fund has already profited handsomely from an ISDS case of another Canadian mining company, Crystallex: it will cash in 35% of a whopping US$1.4 billion ruling against Venezuela from 2016 – a return of over 1,000% on the US $36 million that Tenor had initially injected in the claim. Such funding arrangements allow companies like Gabriel to draw out legal fights, driving up defence costs for states and [increasing] the likelihood that governments give in to corporate demands.[/quote]

Other companies and countries are getting into the game as well. Another major “investor” in ISDS litigation is New York-based Burford Capital, which describes itself plainly as “the world’s largest provider of arbitration and litigation finance.” The company reportedly made $140 million when an arbitration panel awarded its client $324 million from the government of Argentina over the country’s nationalization of the airline Aerolíneas Argentinas.

Meanwhile, Canada has become a major player in the global arbitration game. According to one of Nelson’s sources, Cecilia Olivet of the Netherlands-based Transnational Institute, Canada ranks fifth in the world in ISDS-related suits, led by its mining sector. “More than 60% of the world’s mining companies are headquartered in Canada (about 1,700 companies), operating more than 8,000 mining sites in over 100 countries,” Nelson adds.

“If these companies ‘are among the worst in the world’ when it comes to using ISDS lawsuits to bully governments, it becomes clearer why the Justin Trudeau government (and previous Canadian administrations) have been so adamant about trade deals needing to contain ISDS.”

Is the jig up for investor rights clauses?

Montreal-based writer and activist Yves Engler supports this notion, writing last year, “Nearly two years into their mandate the Trudeau regime has yet to follow through on any of their promises to rein in Canada’s controversial international mining sector. In fact, the Liberals have largely continued Harper’s aggressive support for mining companies.”

That should come as no surprise given the amount of lobbying access the industry has received from the Trudeau government. Between November of 2015, when Trudeau was sworn in, and March of 2018 (the last month for which data is available), federal government representatives recorded 636 communications (meetings, emails and phone calls) with The Mining Association of Canada, the industry’s chief lobby – according to data from Canada’s lobbying registry. That doesn’t include other groups and corporations within the sector.

Yet while Canada continues to push hard for ISDS clauses protecting its mining sector, many other countries are growing fed up with the arbitration game. As Nelson writes, “India – like Ecuador, South Africa, Bolivia, Venezuela, Indonesia, China and other countries resisting ISDS – has developed its own Model [Bilateral Investment Treaty] that requires investors to pursue disputes in public domestic courts for at least five years before moving on to international arbitration.”

If this trend continues, the Trudeau government will face increasingly hard choices between growing international trade and protecting its mining sector. Even Donald Trump reportedly wants to scrap Chapter 11, as Canada and the US renegotiate NAFTA. Trudeau would be wise to let him have his way on this one, rather than defending a clause that runs so contrary to regular Canadians’ interests.

The ISDS racket is just one of many important topics Nelson addresses in Bypassing Dystopia. The book serves two important functions – first, decoding the corporate jargon used to disguise what is really the transfer of wealth from the pockets of everyday citizens to the hidden offshore accounts of multinational corporations and the elite investor class. Terms like “quantitative easing” (bailouts for big banks), “austerity“ (passing the cost onto regular people), and ”asset recycling” (privatizing public assets) are translated into plain English, so the public can know what it’s up against.

The other role the book plays is offering solutions from empowering stories of resistance to these neoliberal economic policies. Through Rafael Correa’s Ecuador, Mexico’s Zappatistas, Spain’s “Indignados”, Cuba’s revolutionary organic farmers, the North American divestment movement, Denmark’s happiness-boosting social services, and Japan’s erasure of “sovereign debt” with smart central banking, Nelson provides a roadmap to liberation from the greedy banksters’ deathgrip on our environment and societies.

For all that, you need only buy her book.

What is John Horgan thinking on LNG?!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

February 21, 2018Canada, Energy and Resources, First Nations, Hydropower, Oil&Gas, Pipelines and Supertankers, Politics, WATERfeaturedDamien Gillis

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.

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

February 9, 2018Canada, Energy and Resources, Pipelines and Supertankers, Politics, Tar Sands, Western CanadafeaturedDamien Gillis

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.

Swain: Building Site C would harm BC’s credit rating; cancelling it would not

December 7, 2017Economics, Hydropower, WATERfeaturedDamien Gillis

The head of the Joint Review Panel on the controversial Site C Dam, Harry Swain, is dispelling the notion that cancelling Site C would somehow harm BC’s credit rating. In fact, it’s quite the opposite, he warns:

[quote]Terminating Site C means paying back the money that’s already spent in order to avoid another $10 billion in debt. From the credit rating agencies’ point of view, that’s a huge relief. No downgrade will be necessary.[/quote]

A lower credit rating means a higher cost of borrowing for the province, which would strain the budget and further hamper the NDP-led government’s ability to deliver on its campaign promises. Swain’s comments are in line with a warning from Moody’s that the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. The already over budget Site C – piled on top of all the costly private power contracts and new debt the crown corporation accrued under the Liberals – would only compound an already bad situation.

Swain’s comments, made in an emailed statement obtained by The Common Sense Canadian, add to the message he delivered at a press conference earlier this week, when he rebutted claims that cancelling the $10-12.5 Billion project would cause a significant increase to power bills in the coming years. “A decision to continue to build the dam based on fears of a big rate hike from cancellation would be a decision taken in serious ignorance,” Swain noted today.

“The decision about how many years it will take to pay off the termination costs will be decided by BCUC,” he added. “It will not be immediate. It will be done over a reasonable period of time so as to avoid unnecessary rate shock.”

Swain has repeatedly dispelled the need for the power, drawing attention to BC Hydro’s poor track record on predicting future demand, and quoting from the BC Utilities Commission’s similar finding on the subject, stating at the recent press conference:

[quote][The BCUC] was severely critical of BC Hydro’s load forecasting ability…noting that in forecasts going back fifty years, 77% of the time, they had been high to way-too-high…Even by Hydro’s account, we don’t need new power until somewhere in the middle of the 2030’s. By better load forecasting, that’s probably put off to the 2040’s.[/quote]

Caught on camera: More blood water from Tofino farmed salmon processing plant

December 6, 2017Oceans, Salmon Farming and AquaculturefeaturedDamien Gillis

A live camera this morning captured more blood water spilling from the outfall pipe of a farmed salmon processing plant in downtown Tofino. The footage, obtained by investigative diver and filmmaker Tavish Campbell, was posted to facebook with realtime commentary from Campbell and independent biologist and salmon farm critic Alexandra Morton.

The blood water comes from the processing of a fresh batch of farmed salmon harvested from a nearby farm owned by Creative Salmon. A similar discharge was recorded in the summer by Campbell, along with another at Brown’s Bay processing plant north of Campbell River. Tests of those discharges by the Atlantic Veterinary College came back positive for Piscine reovirus, which is know to cause the disease Heart and Skeletal Muscular Inflammation (HSMI) in both farmed and wild salmon. The recent release of that footage caused a firestorm and prompted promises from the provincial and federal governments to review the matter.

Says Morton:

[quote]The blood pipe looks like a fire hose of blood, pumping the virus directly into migration corridors. The risk to wild salmon is just astronomical.[/quote]

The discharge poured directly into Clayoquot Sound, a world-renowned tourism destination and UNESCO biosphere reserve.

Both Morton and Campbell comment on the situation in the above video, which includes graphic footage of the bloody discharge and marine life eating from it. “This current is dispersing infected blood water into critical wild salmon migration routes. It is pure insanity,” says Campbell.

Morton and Campbell are “calling on DFO and the B.C. Government to stop promoting open-net pen salmon farming and a moratorium on new open net-pen fish farms in B.C. with an immediate transition to closed containment farms on land, away from wild salmon migration routes,” according to a press release on the video from conservation group Pacific Wild.

No rate shock from cancelling Site C: Head of review panel

December 4, 2017HydropowerfeaturedDamien Gillis

Harry Swain leading the Joint Review Panel into Site C (Photo: JRP)

At a press conference earlier today, Harry Swain, head of the Joint Review Panel into Site C Dam, disputed recent claims that the costs of cancelling Site C Dam would have to be borne by ratepayers in a short timeframe that causes rates to spike. Swain made the comments as a part of a wide-ranging critique of fear-mongering coming from the pro-dam Allied Hydro Council, the Liberal Opposition, and a loaded letter from the government’s own deputy ministers. He explained:

[quote]There is no requirement that the sunk costs be paid immediately. There are lots of precedents in regulatory proceedings in Canada and the United States for these costs to be spread out over a reasonable period of time, and so I don’t think that is going to be the source of a rate shock for BC.[/quote]

Swain suggested the BCUC’s projected remediation costs were too high as well. “We are still mired in this sunk cost fallacy. Probably the one area where I disagreed with the BCUC was their contribution of about $1.9 Billion for remediation. I think that’s too high…I don’t think it’s a real issue.”

Swain also shot down other common attacks of the BC Utilities Commission’s report on Site C, such as its use of the lower end of Hydro’s demand forecasts:

[quote]It was severely critical of BC Hydro’s load forecasting ability…noting that in forecasts going back fifty years, 77% of the time, they had been high to way-too-high. They showed the increased attractiveness of the termination scenario, the lower the actual load turns out to be. In other words, if you adopted the load forecast that was given by BC Hydro, which the BCUC was constrained to do, you could be drawn to the notion that we needed the power early on. The Utilities Commission said, “Nah”. The low forecast – they had a band, high, medium, low – is the one that we would use and there are a number of considerations that could make the reality less than that.[/quote]

“Even by Hydro’s account, we don’t need new power until somewhere in the middle of the 2030’s,” added Swain. “By better load forecasting, that’s probably put off to the 2040’s.”

Swain was highly dismissive of the two deputy ministers, Dave Nikolejsin and Lori Wanamaker, who challenged the BCUC report, including its use of low-end demand forecasting, questioning whether they had even bothered to read it.

Swain also picked apart the contention of the Allied Hydro Council – which is made up of unions seeking jobs from Site C construction – that Site C is important for “decarbonization” – a “serious, serious issue”, he acknowledged. “British Columbia is not the greatest sinner in this respect [and] has considerable capacity for further generation that does not emit carbon dioxide or methane, that does not involve damming a river.”

[quote]The argument that we cannot integrate renewable energy into the system because of its intermittency and its non-dispatchability doesn’t work very well. First off, we have more storage than just about anybody else…Second, we have some million-and-half acre-feet [of storage] coming back to us [from the Columbia River Dams] in 2024 – coincidentally, the date that Site C is supposed to be finished – which is non-treaty storage and ours to do with as we like. Even BC Hydro says that we can integrate on the order of more than a third of renewables in the existing system without new storage.[/quote]

Finally, he noted that Site C, essentially a large run-of-river project as opposed to a storage dam, has only 0.4% of the storage capacity of the Williston Reservoir – making the argument for Site C over other renewables like wind and solar a moot point.

Swain’s comments come as the NDP cabinet is rumoured to be on the verge of announcing its decision on the project.