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Shocking critique from Site C Panel Chair should have govt pulling plug

March 12, 2015Hydropower, WATERfeaturedDamien Gillis

Shocking critique from Site C Panel Chair should have govt pulling plug — Site C Joint Review Panel, with Chair Harry Swain seated in middle (250 News)

In a highly unorthodox move for a person in his position, the chair of the Joint Review Panel for Site C Dam has come out with harsh words for the $9 Billion project and the BC government’s hurry to get it built.

Harry Swain, a former federal deputy minister with deep experience in the environmental assessment business, made the comments in an eye-opening interview with Desmog Canada’s Emma Gilchrist, almost a year after the panel he led issued its report. Speaking for himself, Swain said:

[quote]There’s a whole bunch of unanswered questions, some of which would be markedly advanced by waiting three or four years. And you’d still be within the period of time, even by Hydro’s bullish forecasts, when you’re going to need the juice.[/quote]

The province and BC Hydro, by contrast, want shovels in the ground on the project – which would flood or disrupt 30,000 acres of prime farmland – as early as this summer.

Cost and need questioned

Recent changes to environmental assessment laws in Canada mean review panels no longer make decisions on projects, instead issuing recommendations to Cabinet, which has the ultimate say. Swain agrees with this approach, noting to Gilchrist, “I’m still strongly of the view that review panels are advisors and governments get paid to make the decisions and live with the consequences at the next election.”

To that end, Swain’s panel gave the provincial and federal governments plenty of food for thought in a 471-page report that raised tough questions about the economic case and need for the project.

And with good reason. In just the few months between the province issuing Site C’s environmental certificate to confirming the project will proceed, the cost ballooned by nearly another billion dollars. This from a government with a long track record of doubling the cost of major capital projects on its watch.

As our resident economist Erik Andersen has demonstrated time and time again in these pages, the power from Site C is simply not needed – not now, nor far into the future. BC’s electrical demand has flatlined, thanks to increased conservation and a decline in industrial demand, and Hydro has consistently, vastly overestimated future demand.

Swain echoed this point in his recent interview. “Frankly, I think their low-demand figure was probably overstated,” he noted. “So far there is no evidence that even their low usage scenario is likely to take place.”

To this point, the stated need for Site C has changed several times, including powering LNG and a new justification that emerged before the panel – that BC could sell this excess power to California.

A $350 million/year loss

The only trouble with this plan is that it’s a losing proposition for BC ratepayers and taxpayers. With power trading consistently for $30/megawatt hour on the spot market and Site C’s anticipated cost at over $100/MWh, it’s not hard to see how the project could end up costing the public far more than the crippling $9 Billion sticker price and financing.

In fact, the panel projected an $800 million operating loss for the project in its first four years. Dan Potts, retired head of the Association of Major Power Users of BC, pegs this figure even higher, at $350 million a year loss going forward.

Then there’s the matter of the risk the project’s escalating cost poses to the province’s credit rating – enough of a concern that it prompted Finance Minister Mike de Jong to take a last-minute trip to Toronto, before announcing Site C would proceed, to meet with ratings agencies and plead the province’s case. So far, we’ve held onto our Triple-A rating. But how long will that last with massive new debts like these and the likelihood of major cost overruns?

Energy watchdog stripped of oversight

Swain is also highly critical of the government’s process in reviewing the project, especially stripping the public’s energy watchdog, the BC Utilities Commission, of its oversight. Says Swain:

[quote]Knowing that the province had decided to exempt the project from the scrutiny of the utilities commission, we nonetheless felt that that was not good public policy and recommended otherwise. They of course gave us the back of their hand.[/quote]

The BCUC specializes in reviewing proposed projects and energy plans based on their need and value to the public. Swain’s panel was not as well equipped to review these issues, as he now acknowledges. “That requires much, much more time and expertise,” he noted to Gilchrist. “Moreover it is a job that the utilities commission is specifically set up to be able to do.”

Alternatives ignored

Swain calls the government and Hydro’s failure to investigate alternatives to Site C “a dereliction of duty.” While reports from the geothermal industry suggest this untapped energy source could provide for all of the province’s future needs, it has received little to no attention from a government hellbent on this antiquated dam.

“The province or the province and its wholly owned subsidiary BC Hydro should have taken to heart the admonitions of the utilities commission 32 years ago and done some of the basic work that would allow an industry to develop,” Swain told DeSmog Canada. “But they didn’t do it, so there we are.”

First Nations not going away

The panel’s terms of reference restricted it to merely cataloguing First Nations concerns about the project. “We were not to pass an opinion on them,” noted Swain. “We were not to say whether consultation had been adequate and so on and forth. If you are forbidden to talk about that, you can not come to a conclusion about the overall project.”

But the review panel and the governments which issued the project’s environmental certificates only delayed and intensified the threat from First Nations to derail the project. Site C now faces multiple provincial and federal lawsuits, already in progress, from First Nations and farmers. These legal challenges are based, essentially, on the BC Liberal government’s choice to ignore many of the panel’s most critical findings, relating to cost and need.

Recent attempts by BC Hydro to speed up hearings in order to facilitate a summer construction start failed to persuade a federal judge. Then, just last week, the Blueberry River First Nations upped the ante with an ambitious civil claim against the province over longstanding treaty violations. Central among their concerns is Site C, for which they acknowledged they may seek an injunction as part of this lawsuit.

This just doesn’t happen

The most striking fact of Mr. Swain’s recent interview is that it happened at all. I’ve been documenting environmental assessments at the provincial and federal level for close to a decade now and you simply don’t see this. Panel chairs don’t comment publicly on political decisions that relate to their recommendations after they’ve rendered them.

The fact that Mr. Swain felt compelled to unburden himself of his frustration with the government’s haste in building Site C should – on top of all the other noteworthy critiques from agrologists, economists, lawyers, citizens and First Nations – give us all pause. It should convince this government to take a deep breath and reevaluate the most costly capital project in the province’s history.

But then, a government that demands this kind of public chastising is probably the least likely to listen to it.

Suzuki: Time to end grisly trophy hunt

March 10, 2015Species At RiskfeaturedDr. David Suzuki

Suzuki- Time to end grisly trophy hunt — NHL hockey player Clayton Stoner posing with dead grizzly (Coastal Guardian Watchmen)

Watching grizzly bears catch and eat salmon as they swim upstream to spawn is an unforgettable experience. Many people love to view the wild drama. Some record it with photos or video. But a few want to kill the iconic animals — not to eat, just to put their heads on a wall or coats on a floor.

Foreign hunters bag BC bears

The spring grizzly kill starts April 1 and extends for several weeks, followed by a second fall season. By year’s end, several hundred will have died at the hands of humans, close to 90 per cent shot by trophy hunters — many of them foreign licence-holders, as the B.C. government plans to enact new regulations to allow hunters from outside B.C. to take 40 per cent of grizzlies slated for killing. The government also plans to allow foreign interests and corporations to buy and run guide-outfitting territories previously run only by B.C. residents. Local hunting organizations say the new rules put them at a disadvantage.

Government takes money from hunting lobby

According to the Vancouver Observer, hunting guide associations donated $84,800 to B.C. political parties from 2005 to 2013, 84 per cent to the B.C. Liberals.

In the controversy over regulatory changes, we’ve lost touch with the fact that the grizzly trophy hunt is horrific, regardless of whether bears are killed by resident hunters or big-game hunters who pay thousands of dollars for the chance to kill a bear here — often because it’s illegal in their home countries.

BC’s population in doubt

Grizzlies once roamed much of North America, from Mexico to the Yukon and from the West Coast through the prairies. Habitat loss and overhunting have since shrunk their range by more than half. In Canada, 16 subgroups are on the brink of extinction, including nine in south-central B.C. and Alberta’s entire grizzly population.

Just how many bears reside in B.C. is in dispute. The government claims more than 15,000 grizzlies live here, but Raincoast Conservation Foundation science director Chris Darimont, a University of Victoria conservation biologist, puts the number closer to the government’s earlier estimate of 6,600 — before it doubled that in 1990 based on a single study in southeastern B.C.’s Flathead area.

Government scientist’s work suppressed

According to a Maclean’s article, in 2000, the government “suppressed the work of one of its own biologists, Dionys de Leeuw, for suggesting the hunt was excessive and could be pushing the bears to extinction. De Leeuw was later suspended without pay for having pursued the line of inquiry.” The government then pursued a five-year legal battle with groups including Raincoast Conservation and Ecojustice to keep its grizzly kill data sealed.

Allan Thornton, president of the British Environmental Investigation Agency, which has studied B.C. grizzly management since the late 1990s, is blunt about the government’s justification. “The British Columbia wildlife department does not use rigorous science,” he told the Vancouver Observer. In 2004, the European Union banned imports of all B.C. grizzly parts into member countries after its analysis found the hunt to be unsustainable.

Business case questioned

Even the economic case is shaky. Studies by the Centre for Responsible Travel and Raincoast Conservation conclude revenue from bear-viewing is far higher than revenue from grizzly hunting.

Grizzlies play important ecological role

Grizzly population health is an indicator of overall ecosystem health, and bears are important to functioning ecosystems. They help regulate prey such as deer and elk, maintain forest health by dispersing seeds and aerating soil as they dig for food, and fertilize coastal forests by dragging salmon carcasses into the woods. Hunting isn’t the only threat. Habitat loss, decreasing salmon runs, collisions with vehicles and other conflicts with humans also endanger grizzlies. Because they have low reproduction rates, they’re highly susceptible to population decline. Hunting is one threat we can easily control.

First Nations, citizens oppose hunt

According to polls, almost 90 per cent of B.C. residents oppose hunting grizzlies for trophies, including many Frist Nations and food hunters. Scientists say it’s unsustainable. The Coastal First Nations coalition has banned grizzly hunting in its territories, but the government doesn’t recognize the ban. The Raincoast Conservation Foundation has bought hunting licences in an attempt to reduce bear kills on the coast.

Simply put, most British Columbians — and Canadians — are against the grizzly trophy hunt. It’s time for the government to listen to the majority rather than industry donors and ban this barbaric and unsustainable practice.

Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington.

$Joe Oliver says fracking is safe, so it must be$

Joe Oliver says fracking is safe, so it must be

March 6, 2015Energy and Resources, Fracking, Oil&GasfeaturedRafe Mair

Joe Oliver says fracking is safe, so it must be — Finance Minister Joe Oliver (Adrian Wyld/CP)

I must apologize for being an alarmist. I now discover there is no reason for concern about hydraulic fracturing, commonly called “fracking”. I have been alleging that this process of “mining” natural gas is dangerous not only to the atmosphere and the people around the process, but to the water used and the potential damage thereafter to the water table.

I now understand that there are no problems whatsoever with this process and that the scaredy-cats in places like New York and Quebec that have banned “fracking” – and the United Kingdom and the European Union that have limited it – are simply wrongheaded.

How do I arrive at my volte face?

I have examined the evidence carefully.

Harper govt gives seal of approval

First of all, we have our own fatuous Finance Minister, Joe Oliver, who insists that fracking is safe – chastising Nova Scotia for its recent ban – and then all you have to do is look up “safe fracking” on the Internet and you’ll see that he is right.

Further proof of my egregious error comes from the fact that the Prime Minister, in giving away bundles of cash to the LNG industry, mentions not a word about the “fracking” that would fuel it. And we know that if it were any concern at all for his beloved flock, he would say so and take steps to shelter them, just as he is doing with the threat from women who wear veils.

See no evil, hear no evil

The Fraser Institute, which is, they allege, a “think tank” says nothing on the subject. Neither does the Canadian Taxpayers’ Federation, which normally can’t keep their mouth shut about anything. If these two honest, independent sources of the absolute truth are silent on “fracking”, we can be certain that all is well.

Rumours of LNG’s demise greatly exaggerated

There have been three very comforting reports in the press lately. We can start with the head of the BC LNG Alliance, one David Keane, who tells us that LNG is alive and well in BC and in a speech to Calgary energy barons (obviously a tough audience) makes no mention whatsoever of “fracking” – and you could be sure that he would have if it were a problem.

In the Toronto Globe & Mail, we are informed that the consortium led by Petronas assures us that LNG is alive and well in British Columbia and that it will proceed. This is enthusiastically seconded by Rich Coleman, the premier’s pet poodle on the project, although neither of them say just when this will happen. The encouraging news, though, is that not a word is mentioned about the massive increase in “fracking” required to power the industry – so we can assume from these unimpeachable sources that there is no problem there.

Exxon CEO bullish on fracking’s future

In the Vancouver Sun of March 5, there is an article containing an interview with Rex Tillerson, the CEO of ExxonMobil. In this interview, Mr. Tillerson is extravagant in his praise of shale mining and paints a very rosy future for this source of oil and gas. Again, encouraging to all, is that Mr. Tillerson doesn’t make any mention whatsoever about “fracking” so we know from the authority of ExxonMobil, that there’s no problem. (This is the same guy who infamously protested fracking-related infrastructure planned, literally, for his own back yard)

Fracking absent from BC LNG discussion

In our own province, the said Mr. Coleman makes no mention of “fracking” in any of his many statements, so knowing how trustworthy he is, we can assume that “fracking” is no problem in British Columbia.

Neither does Mr. John Horgan, Leader of the Opposition, and we surely know that if there were a problem with “fracking”, this talented opposer of wrong, would turn the full fury of his well-known temper on the government and the industry.

This evidence of the safety of “fracking” is fortified by the fact that our premier, known for her strict adherence to the facts, her candour and honesty, also doesn’t mention “fracking” – in fact calling BC LNG “the cleanest fossil fuel on the planet” – so we can assume by that omission that her credibility is behind the safety of this harmless process.

Science, Schmience!

It’s embarrassing to have to admit that I have relied upon scientific presentations from all over the world and actions taken by other jurisdictions. I cannot, for the life of me, understand how they can all be just as wrong and stupid as I have been.

It can be taken, then, that hydraulic fracturing or “fracking” for oil and natural gas is harmless to the people and to the environment.

It follows from this that suggestions I have made about the release of methane gas by this process are nonsense. So are suggestions that it pollutes water. It can also be assumed that statements from scientists to the effect that, taking everything into consideration, fracked natural gas is as harmful to the atmosphere and contributes as much to global warming as does oil or coal, are unprofessional rubbish.

Rest assured

The lesson I take from this is that we are fortunate indeed in this province and this country to have men and women of such integrity and honesty looking after our industries and our governments. It would be sad, indeed, to ever think that captains of industry or leaders of government would shade the truth, much last tell lies, in order to feather their own nests or advance their own political prospects.

We are, in truth, lucky people and we should think about that once in a while.

I must say that the Captains of Industry and our political masters and mistresses hope we don’t think about it too much or too often.

Suzuki: Bill C-51 could treat fossil fuel critics like terrorists

March 4, 2015Canada, PoliticsfeaturedDr. David Suzuki

84 year-old retried librarian Barbara Grant getting arrested at Burnaby Mountain (Burnaby Mountain Updates/facebook) — 84 year-old retried librarian Barbara Grant getting arrested at Burnaby Mountain (facebook)

A scientist, or any knowledgeable person, will tell you climate change is a serious threat for Canada and the world. But the RCMP has a different take. A secret report by the national police force, obtained by Greenpeace, both minimizes the threat of global warming and conjures a spectre of threats posed by people who rightly call for sanity in dealing with problems caused by burning fossil fuels.

Anti-terrorism bill threatens free speech

The RCMP report has come to light as federal politicians debate the “anti-terrorism” Bill C-51. Although the act wouldn’t apply to “lawful advocacy, protest, dissent and artistic expression,” its language echoes the tone of the RCMP report. It would give massive new powers to the Canadian Security Intelligence Service to prevent any person or group from “undermining the security of Canada,” including “interference with critical infrastructure” and the “economic or financial stability of Canada.” And it would seriously infringe on freedom of speech and expression. The new CSIS powers would lack necessary public oversight.

The RCMP report specifically names Greenpeace, Tides Canada and the Sierra Club as part of “a growing, highly organized and well-financed anti-Canada petroleum movement that consists of peaceful activists, militants and violent extremists who are opposed to society’s reliance on fossil fuels.” The report downplays climate change, calling it a “perceived environmental threat” and saying members of the “international anti-Canadian petroleum movement … claim that climate change is now the most serious global environmental threat and that climate change is a direct consequence of elevated anthropogenic greenhouse gas emissions which, reportedly, are directly linked to the continued use of fossil fuels.” It also makes numerous references to anti-petroleum and indigenous “extremists”.

First Nations targeted

Language in the RCMP report and Bill C-51 leaves open the possibility that the act and increased police and CSIS powers could be used against First Nations and environmentalists engaging in non-violent protests against pipelines or other environmentally destructive projects.

As University of Ottawa law professor Craig Forcese points out, with its reference to “foreign-influenced activities within or relating to Canada that are detrimental to the interests of Canada,” the anti-terrorism law could be used in the case of a “foreign environmental foundation funding a Canadian environmental group’s secret efforts to plan a protest (done without proper permits) in opposition to the Keystone Pipeline Project.” Considering that government ministers have already characterized anti-pipeline protesters as “foreign-funded radicals”, that’s not a stretch. The RCMP could consider my strong support for greenhouse gas emissions reductions and renewable energy as “anti-petroleum”.

Who’s an “extremist”?

Combatting terrorism is important, but Canada is not at war, and we already have many laws — and enhanced police powers — to deal with terrorist threats. More importantly, the RCMP report fuels the legitimate fear that the new law could be used to curtail important civil liberties, affecting everyone from religious minorities to organized labour and First Nations to environmentalists.

If, for any reason, someone causes another person harm or damages infrastructure or property, that person should —and would, under current laws — face legal consequences. But the vast majority of people calling for rational discussion about fossil fuels and climate change — even those who engage in civil disobedience — aren’t “violent anti-petroleum extremists.” They’re people from all walks of life and ages who care about our country, our world, our families and friends and our future.

Core Canadian values in jeopardy

Canada is much more than a dirty energy “superpower”. Many people from different cultures and backgrounds and with varying political perspectives have built a nation that is the envy of the world. We have a spectacular natural environment, enlightened laws on issues ranging from equal rights to freedom of speech, robust social programs and a diverse, educated population. We mustn’t sacrifice all we have gained out of fear, or give up our hard-won civil liberties for a vague and overreaching law that, as Forcese and University of Toronto law professor Kent Roach point out, “undermines more promising avenues of addressing terrorism.”

Pollution and climate change caused by excessive burning of fossil fuels are real threats, not the people who warn that we must take these threats seriously. And while we must also respond to terrorism with the strong tools already in place, we have to remember that our rights and freedoms, not fear, are what keep us strong.

Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington.

$Rafe- Federal leaders out of touch on LNG, fracking$

Rafe: Federal leaders out of touch on LNG, fracking

February 23, 2015Energy and Resources, Fracking, LNGfeaturedRafe Mair

Rafe- Federal leaders out of touch on LNG, fracking — Thomas Mulcair, Stephen Harper and Justin Trudeau

Prime Minister Stephen Harper has thrown down the gauntlet with his promise of federal tax giveaways for LNG enterprises.

I expected this sort of nonsense – just one look at the smug sneer of power on the face of James Moore, Minister of Industry, over the last few months, indicated that this decision was coming and that the opinions of the people of British Columbia didn’t matter a tinker’s dam.

This I think is one of the central points.

When it comes to industry and the people with whom this government are philosophically aligned, the people lose every time.

It may well be, when one thinks about it, that Mr. Harper takes few if any risks with this policy.

Trudeau and Mulcair fuzzy on LNG

Liberal leader Justin Trudeau is extremely “wet” on this issue. He wants more science involved on the fracking issue and then cautions premier Christy Clark that she shouldn’t put all her eggs in the LNG basket.

Tom Mulcair, the leader of the NDP, has also been pretty fuzzy. He talks about better environmental assessment – and who could argue with that – but he’s obviously leery of opposing the provincial NDP’s support of LNG.
That leaves the Greens, and while I believe that they will get some seats in British Columbia, they will not be forming the federal government.

The elephant in the room

There is an elephant in the room, which the Tories want nothing to do with, the Liberals want something but not too much to do with, while the NDP seems happy to feed the pachyderm as long as he behaves. This is, of course, is the “fracking” issue.

On this question, the science is pretty clear. Not only is hydraulic fracturing, “fracking”, highly toxic to the atmosphere and unhealthy generally for human beings, it creates increased earthquakes where it is practised and it can poison the water system. Interestingly enough Andrew Nikiforuk, a true energy expert, has just written an interesting article in the tyee.ca on the stability issue in the Netherlands, where dangerous earthquakes, both in frequency and intensity, are occurring in the Groningen area where intensive fracking takes place.

Again, it would seem that Mr. Mulcair is handicapped by the position taken by his provincial colleague, John Horgan. Mr. Trudeau talks about science but doesn’t want to deal with the clear science that is already here and pretty definitive on the matter – and, of course, Mr. Harper and his local marionette, James Moore, simply don’t give a good goddamn about the issue.

For British Columbia is this is a pretty sad scenario.

Economics are LNG’s Achilles’ Heel

It brings into focus the one tool we have at our disposal namely civil disobedience. Now it would seem that with Bill C 51, the anti-terrorism the bill, that the federal government will throw us all in jail as terrorists if we physically protest a project.

The saving grace is, of course, economic. Unless there is a miraculous return of prices, which would mean that somehow the glut of natural gas in the world disappears, LNG plants will be unfeasible.

It is sad, indeed, to contemplate that when it comes to the serious environmental and health concerns surrounding LNG, none of our elected representatives or those who wish to be elected – with the clear exception of the Green Party – care about us, the people.

Some day, some way, the people are going to have a say on this.

Harper slashes federal taxes for BC LNG industry

February 20, 2015Energy and Resources, LNG, Oil&GasfeaturedDamien Gillis

Harper slashes federal taxes for BC LNG industry — Stephen Harper announces federal tax support for BC’s LNG industry in Surrey, BC (PMO)

Prime Minister Stephen Harper jumped on the BC LNG ship this week with the announcement of federal support for the embattled industry during a speech in Surrey, BC.

A PMO press release trumpeting the commitment stated:

[quote]Prime Minister Stephen Harper today announced the Government’s intent to support the creation of new and well-paying jobs in the emerging liquefied natural gas (LNG) industry.[/quote]

Give ’em what they want

The move follows BC Premier Christy Clark’s pattern of caving to the demands of foreign energy titans like Malaysia’s Petronas – slashing local taxes to counteract the failing economics of the Asian LNG market. Petronas CEO Shamsul Abbas has been vocal in demanding reductions in BC’s planned export tax regime, as well as more favourable federal capital cost allowances. With this week’s announcement from the Prime Minister, he has received essentially everything he asked for – including the fast-tracked approval of environmental permits for its controversial gas plant in the midst of the Skeena River estuary.

“In order to ensure that Canadian natural gas can reach new and growing international markets, and make it accessible for new domestic uses, the Government intends to establish a capital cost allowance rate of 30 per cent for equipment used in natural gas liquefaction and 10 per cent for buildings at a facility that liquefies natural gas,” the PMO’s statement noted. “This tax relief will be available for capital assets acquired after February 19, 2015, and before 2025.”

The Conservative Government is also helping the LNG industry with the proposed weakening of environmental regulations for fossil fuel ports in its latest Omnibus bill.

What jobs?

Harper touted the job benefits from supporting the industry, yet many of the potential local jobs have already been promised to China, India and Malaysia through government agreements to import cheaper foreign temporary workers.

Meanwhile, even the enormous tax benefits the industry has already been granted can’t make up for the fact that Asian LNG prices have plummeted a record 61.7% over the past year – to a point well below the profitability line for BC exports. No wonder companies like Petronas, Chevron, BG Group, Apache, EnCana and EOG have already stalled on their final investment decisions or altogether abandoned ship on the fledgling industry.

It is a mark of sheer government incompetence – or utter neglect for the public benefit – to give an industry everything it asks for and still get nothing in return for the citizens of BC and Canada.

Asian LNG prices take record 60% plunge from last year

February 18, 2015Energy and Resources, LNG, Oil&Gas, UncategorizedfeaturedDamien Gillis

Asian spot market prices for liquefied natural gas (LNG) have plunged by a single year record of 61.7% since February 2014, according to Platts JKM (Japan/Korea Marker) – a leading source of benchmark prices for the industry.

Average prices for March delivery peaked at a historic high of $20.20 per million British thermal units (MMBtu) on February 14 ,2014. By February of this year, prices for March delivery had tumbled to$7.44/MMBtu – representing the largest year-over-year drop since Platts began tracking the market in 2009, and the lowest benchmark price for Asian LNG since 2010.

Said Stephanie Wilson, managing editor of Asia LNG at Platts:

[quote]Moderate temperatures and high buyer inventories continued to cap demand for spot cargoes in northeast Asia, despite the lower prices in March. Exacerbating the oversupply were cheaper competing fuels, which many utility power generators opted to burn rather than LNG.[/quote]

Taking its nuclear reactors offline post-Fukushima, Japan drove up LNG prices from 2011 on, sparking a global race to supply the Asian market with LNG. But subsequent weakening demand, increased competition and lower oil prices – to which Asian LNG prices are indexed – have all exerted significant downward price pressure on the resource.

What is the Clark government thinking?

This should leave British Columbians doubting the wisdom of betting the province’s economic future on Asian LNG exports – underscored by one after another global energy player backtracking on its investment plans.

These prices match up perfectly with predictions of two years ago by business news leader Bloomberg, which foresaw precisely a 60% drop in Asian LNG prices – the only difference is the speed at which the drop has occurred. Bloomberg saw it coming by 2020. In the same story, Bloomberg calculated this would mean a $6 million loss per tanker, pegging the break-even point for shipping LNG from North America to Asia at around $9/MMBtu (in some of Northern BC’s shale gas plays, this figure can be as high as $10-13/MMBtu). With current Asian LNG prices, we are already well below that point, calling into question the entire business case for BC LNG.

Yet, somehow the Clark government remains bullish on the industry, leaning heavily on future anticipated revenues in its recent Throne Speech.

Fossil fuel era drawing to a close…except in Canada

February 17, 2015Economics, Energy and Resources, Oil&Gas, RenewablesfeaturedWill Dubitsky

The following is the sequel to an earlier story by Will Dubitsky on the growing green economy and Canada’s failure to take advantage of it.

In the first part of this story for The Common Sense Canadian, I discussed how Canadian and Quebec leaders are largely ignoring the potential of high job creation, high growth green sectors, while China, Europe and the US are showing real leadership. Here, I will dig deeper into the policies and organizations that are foolishly banking on the Canadian resource-based economy as the key to economic development. Sadly, while President Obama sits poised to veto the Keystone XL pipeline, signalling the accelerating transition into a new era, Canada is being left behind.

Up to a trillion dollars in stranded fossil fuel investments

In keeping with Einstein’s definition of insanity, nearly all the economic experts will tell you we must keep doing the same thing over and over again and expect different results. Yet the signs are that the fossil fuel era is approaching its demise.

First, long-term energy and energy-related investments already favour the green economy – largely because the costs of clean tech are coming down.

Second, in the Summer of 2014, long before the recent plunge in oil prices, it became apparent that unconventional resources such as the tar sands, shale and offshore oil cannot be supported by market prices. As a result, Big Oil has already started to withdraw from major unconventional investments around the globe, otherwise known as stranded assets. This trend is becoming more and more evident .

The growing order of magnitude of stranded fossil fuel investments are very telling. Of the$2 Trillion invested in oil development in 2014, $930 Billion may never reach the return on investment stage – the makings of an investment bubble.

Considering the 20% return on equity for oil and gas in 2008 and the projection of a mere 5% return for 2015, it would appear that the most of the financial community has got it all wrong – especially when you factor in the increased volumes of stranded assets to come with oil at less than $70/barrel.

Unfortunately, financial institutions are not as diversified as they claim to be, totally bypassing the high growth, high job creation green sectors while maintaining the resource economy as integral to the majority of investment products/strategies.

Doubling down on unconventional energy

Meanwhile, Goldman Sachs has warned that the oil companies’ capital expenditures for investments in unconventional resources have “gone through the roof” and that their Reserve Replacement Ratio, the measure which investors use to rate oil companies, is not encouraging. (New Internationalist, November 2014)

Similarly, a UBS study concluded that the rapid decline in the costs of clean energy, clean transportation and green economy integration technologies – such as energy storage technologies – together suggest that the writing is on the wall for fossil fuels and point to a full-scale shift to a green economy by 2020. (Ibid)

Leaving it in the ground

This is about more than economics though. Governments around the globe are adopting strong climate policies which favour the green economy, acknowledging that 80% of fossil fuels must remain in the ground to avoid catastrophic climate change. That means that of the 12,000 gigatonnes of fossil fuel reserves, only 936 gigatonnes can be used.

$26.4 Billion/yr in subsidies to Canadian fossil fuels: IMF

Another issue is the fact that fossil fuels remain one of the most heavily subsidized sectors in the global economy. According to the International Monetary Fund, in US 2011 dollars, Canada spends $26.4B/year in direct and indirect subsidies (including health, climate change costs, etc.) for its fossil fuel sectors. This means that the unraveling of short-term thinking on fossil fuels will accelerate over time as the international community increasingly engages in addressing climate change. Put another way, the idea of shifting subsidies away from fossil fuels to the green economy will become increasingly attractive for policy makers.

Oddly enough, the representatives of the fossil sectors complain about subsidies for clean energy. The response of the European Wind Energy Association is that the wind sector could compete without any subsidies if it weren’t for the subsidies fossil fuels receive.

Renewables lead new energy mix

In the US, wind energy is now cost competitive with natural gas. Indeed, the change in the US energy paradigm is now well-entrenched, with renewables representing 47% of new electrical generation capacity installed in 2014, natural gas at 50% and coal, nuclear and oil combined only accounting for a little over 2%.

Consequently, from an investment perspective, clean technologies are the safer bet, free of the fluctuating, speculative prices we see with fossil fuels and destined to be favoured by increasingly aggressive government policies, further driving down prices.

Yet in Canada, only the NDP has committed to end fossil fuel subsidies, transfer the savings to clean technologies and introduce a cap and trade system.

NEB locking us into yesterday’s economy

As a result of the Harper administration’s changes to legislation on environmental impact analyses, the National Energy Board does not have the mandate to consider the biggest issue among all issues associated with TransCanada’s Energy East and other pipeline proposals – that is, the emissions stemming from tar sands development and downstream consumption of these fossil fuel products.

Compounding the limitations of the NEB mandate, the regulator has an “attitude problem”. This is very evident from the NEB’s rejection of oral cross-examination regarding certain types of questions, such as those submitted by distinguished energy expert Marc Eliesen on Kinder Morgan’s TransMountain pipeline expansion proposal.

Marc Eliesen is a former CEO of BC Hydro and Chair of Manitoba Hydro and served as a deputy minister in seven different federal and provincial governments. Since the NEB did not see it as necessary for TransMountain to address most of Marc Eliesen’s written questions, he withdrew as an intervenor/participant in theNEB Kinder Morgan review circus.

One can expect more of the same for the NEB hearings on Energy East.

Changing our laws to suit oil and gas

Just as it restricted the NEB’s environmental review mandate, the Harper government gutted the habitat protections in the Fisheries Act, at the request of Canada’s pipeline industry.

Harper has also ensured that the NEB reports directly to the Prime Minister’s office.

In other words, Canada is painting itself into a corner.

Both Justin Trudeau and Harper view Canada as a resource export economy and both revert to the denial of science to increase Canada’s dependence on resource exports.

The new energy paradigm

As alluded to my Jan 23, 2015 Common Sense Canadian article, yesterday’s economists, Harper and Trudeau and most of mainstream media, much like the climate change deniers would like us all to believe in a fairly tale that presents economic and environmental considerations as opposing forces for which there is a need for reconciliation.

This economy versus the environment spin is comparable to the debate of 100 years ago on the reconciliation of woman’s rights with the need for economic development.

Yet the world’s largest energy consumer, China, is already changing the global economic-energy-environmental paradigm in through a rather schizophrenic war on coal. Consider that: 1) China is the world’s largest investor in green technologies, with $89.5B in clean energy technology projects in 2014; 2) China’s coal imports will be down by 15% by the end of 2014 compared to 2013; 3) China’s pilot cap and trade systems in Beijing and Shenzhen have reduced emissions by 4.5% and 11% respectively; 4) China is thinking of introducing a national cap and trade system in 2016.

Europe on track for big emissions reductions

Nearly all of the EU members are on track for their 2020 targets for a 20% reduction in GHGs, 20% energy from renewables and a 20% improvement in energy efficiency. Not resting on their laurels, in October 2014, the European heads of state agreed to a 40% GHG reduction target for 2030.

Then there is the incredible case of Germany, which outdid its own Kyoto Protocol objective of a 21% reduction of GHGs by 2012, having achieved a 25.5% reduction instead. But Germany is not an exception to the rule. For the same Kyoto period ending in 2012, the UK, Sweden and France reduced their emissions respectively by 23.4%, 18% and 10.5%.

At this point, Ban Ki-moon’s 2007 remarks on green economics seem highly appropriate:

[quote]We have witnessed three economic transformations in the past century. First came the Industrial Revolution, then the technology revolution, then our modern era of globalization. We stand at the threshold of another great change: the age of green economics.[/quote]

How long is it going to take for today’s economists to catch up?

Obama Keystone veto’s global ramifications

In closing, with Obama on the verge of applying his veto to Keystone, it may be helpful to read the article referred to below, which specifically deals with the matter of Keystone but could easily be recast as the case against TransCanada’s Energy East, Kinder Morgan’s TransMountain and Enbridge’s Line 9.

In a nutshell, this article in The Guardian speaks of the increased path dependencies generated by new pipelines and concludes that an Obama rejection of Keystone would be a clear signal to the US, Canada and the entire world that the time has come for putting the emphasis on developing clean energy and clean transportation alternatives – and the weaning off of our dependence on fossil fuels.

This is precisely the point President Obama made in his January 20, 2015 State of the Union speech, when he indicated that a rejection of Keystone would send a signal to the world that we must get serious about migrating to a green economy; whereas approving it would constitute a setback to the climate action agenda.

One can say “ditto” for TransCanada’s Energy East and the other major Canadian pipeline projects.

What is happening is that China, Europe, the US and other nations – not Canada – are becoming increasingly aligned for a future that functions on a green economy paradigm, the path to higher job creation, stronger economic development, avoidance of catastrophic climate change and the embracing of environmental stewardship – in other words, the path to tomorrow’s economy.

With the aforementioned science and economic considerations in mind, Mark Carney, the current Governor of the Bank of England and former Governor of the Bank of Canada, recently wrote to British Members of Parliament, advising them that the Bank’s officials are reviewing whether or not the majority of fossil reserves are burnable.

Change is clearly afoot – if only Canada’s leader could see and embrace it.

Suzuki: Bees matter, so restricting neonics is the right thing to do

February 15, 2015Species At RiskfeaturedDr. David Suzuki

No matter how you feel about Ontario’s proposal to restrict use of neonicotinoid insecticides on corn and soybean crops, we can all agree: bees matter. But as important as bees are, there’s more at stake. Neonics are poisoning our soil and water. This problematic class of pesticides needs to be phased out globally to protect Earth’s ecosystems. By implementing restrictions now (the first in North America), Ontario will have a head start in the transition to safer alternatives.

Pesticide industry stung by proposed regulations

Not surprisingly, Ontario’s proposal has drawn the ire of the pesticide industry.

Neonics have only been around for a couple of decades, but annual global sales now top $2.6 billion. They were initially embraced because they are less directly toxic to humans than older pesticides and are effective at low levels, reducing the volume used. They can be applied to seeds and are absorbed into the plant, which then becomes toxic to insect pests, reducing the need to spray.

We now know these characteristics are the problem. These chemicals are nerve poisons that are toxic even at very low doses and persist in plants and the environment. They affect the information-processing abilities of invertebrates, including some of our most important pollinators.

Bee die-offs related to neonics: federal agency

Bees have borne the brunt of our unfortunate, uncontrolled experiment with neonics. Beekeepers report unusually high bee death rates in recent years, particularly in corn-growing areas of Ontario and Quebec. Virtually all corn and about 60 per cent of soybean seeds planted in Ontario are treated with neonics. A federal Pest Management Regulatory Agency investigation concluded that planting neonic-treated seeds contributed to the bee die-offs.

Europe reached a similar conclusion and placed a moratorium on the use of neonics on bee-attractive crops, which took effect last year.

Critics emphasize that other factors — including climate change, habitat loss and disease — affect pollinator health. But these factors are not entirely independent; for example, chronic exposure to neonics may increase vulnerability to disease. A comprehensive pollinator health action plan should address all these factors, and scaling back the use of neonics is a good place to start.

Neonics threaten other species

Apart from the immediate and lethal effects on bees, neonics represent a more subtle threat to a wide range of species. The 2014 Worldwide Integrated Assessment of the Impacts of Systemic Pesticides, the most comprehensive review of the scientific literature on neonics, pointed to effects on smell and memory, reproduction, feeding behaviour, flight and ability to fight disease. Jean‐Marc Bonmatin, one of the lead authors, summarized the conclusions:

[quote]The evidence is very clear. We are witnessing a threat to the productivity of our natural and farmed environment equivalent to that posed by organophosphates or DDT. Far from protecting food production the use of neonics is threatening the very infrastructure which enables it, imperilling the pollinators, habitat engineers and natural pest controllers at the heart of a functioning ecosystem.[/quote]

Precautionary Principle should apply

Is there some uncertainty involved in calculating these risks? Absolutely. Uncertainty is at the heart of scientific inquiry. The precautionary principle requires that where there is threat of serious or irreversible harm to human health or the environment, the absence of complete scientific certainty or consensus must not be used as an excuse to delay action. In the case of neonics, the weight of evidence clearly supports precautionary action to reduce — or even eliminate — them.

Ontario proposal is common sense

Ontario’s proposal to restrict the use of neonic-treated corn and soybean seed, starting next year, is far from radical. The idea is to move away from routinely planting neonic-treated seeds and use neonics only in situations where crops are highly vulnerable to targeted pests. The government expects this will reduce the uses of neonic-treated corn and soybean seed by 80 per cent by 2017.

It’s no surprise that the pesticide industry and its associates oppose even this modest proposal and are running expensive PR campaigns to obscure the evidence of harm. The industry’s objection to restrictions on neonics is eerily similar to big-budget advertising campaigns to create a smokescreen thick enough to delay regulatory responses to the obvious harm caused by cigarettes.

Let’s hope today’s decision-makers have a better grasp of the precautionary principle and a stronger commitment to protecting the public good, because bees really do matter.

Written with contributions from David Suzuki Foundation Ontario and Northern Canada Director-General Faisal Moola.

Christy Clark’s LNG-fueled Fudge-it Budget…and the enabling NDP

February 13, 2015Economics, Energy and Resources, LNGfeaturedRafe Mair

Christy Clark's LNG-fueled Fudge-it Budget — Premier Christy Clark made big election promises about managing BC’s economy (CP)

Welcome to Ruritania! Where is Peter Sellers when we need him?

We now have a legislature pretending to act like big kids do, leaders acting as if they really are in charge, a government out of control, and an opposition dedicated more to supporting the government than to raising issues.

Through the looking glass: Clark’s surreal throne speech

The Throne Speech was really quite funny when you think of it. The more LNG companies withdraw their undertaking, the more money we make. The fewer the LNG plants developed, the more jobs we’ll have. The worse our environmental record is in fracking for LNG, the less it matters.

If we go on having companies withdraw from LNG in BC, God knows how much money we’ll all make and how rich we’ll all become!

Thanks to Christy Clark, Alice in Wonderland has become not a fairy tale, but a documentary!

LNG looked bad from the beginning

BG Group recently pulled the plug on BC LNG — BG Group is one of many companies to abandon ship on BC LNG

In looking back at the history of LNG in BC, one is reminded of Casey Stengel, managing “them amazing Mets”, in 1962, when he asked “can’t anyone here play this game?”

From the outset, Common Sense Canadian publisher Damien Gillis and I have raised questions about the viability of an LNG economy, given the global situation. Our concerns arose because we did simple research, largely using government and industry publications. We also were much helped by our resident economist, Erik Andersen.

It was abundantly apparent that there would be a glut of natural gas on the world market, that the United States, long so dependent upon the Middle East, was going to be self-sufficient and competing with us on exports, and that the cost of getting our LNG to China was – surprise, surprise – much higher than shipping gas from China to China.

We weren’t rocket scientists, just ordinary people like you who had learned early on how to read.

It didn’t take a crystal ball…

Our predictions steadily came true and if anything more quickly than we thought. Each time one came true, Christy Clark, and her poodle, Rich Coleman, had even more money rolling in to British Columbia. As time went on, and more companies withdrew their support, Christy Clark’s view of things got even rosier.

This ridiculous situation continued until the present day and I shudder in excitement thinking of all the money we’ll make when the last LNG company abandons us.

The Opposition that refuses to oppose

This article today, is not really about Christy Clark. It’s about leadership in general.

There is no nice way to say it – John Horgan, the NDP leader, has done an appalling job. Given the Christy Clark/Coleman saga, any decent opposition would have a field day.

It’s indeed ancient times but in my day the leaders were Dave Barrett and Bill Bennett, as unalike as chalk and cheese, yet each, in his way, hugely effective. Barrett was the master of the instant put down. On the government side, you were constantly on the defensive and, as I quickly learned, woe betide anyone who heckled him.

Bennett, always better informed, though no orator, was a plodder with the ability to come up with a killing comeback instantly.

They heartily disliked each other and for those who know them well, it is so sad to see them both seriously ill. Two great guys, two great leaders.

The point is that both sides of the legislature and those that supported them outside knew they had a leader. That may not sound like much but it is hugely important, especially for the opposition. The government, without an opposition ready to take over, is able to coast. For an opposition to be effective it must be a government in waiting, with policies ready to implement. That requires leadership that is both ready to lead and appears to be.

The NDP response to the Throne Speech, where the premier assured us again of the riches to come from vanishing LNG producers, was that the government talked too much about LNG and should move on to other subjects. This particularly came from Mike Farnworth, who ought to know better and that the point was that Clark has nothing else to talk about except failure.

Clark has nothing

Think about it for a second. Apart from the phoney LNG business, Clark has no policy whatsoever. They have nothing whatever concrete to offer in terms of the economy and, of course, are bankrupt on such matters as the environment. There is, therefore, a huge political vacuum.

It’s not brain surgery to realize that this is the spot the NDP step in. The first thing they do is to kill what remains of the LNG enthusiasm falsely raised by the Liberals. It’s sheer idiocy for them to proceed into the next election, just over two years away, allowing the Liberals to sail on promising another Umpty-dump billion dollars for LNG projects.

LNG threatens environment

Before moving on, one must observe that the NDP also has a huge obligation to expose the environmental concerns surrounding LNG – I dare say the majority of people in British Columbia have those concerns and in some areas, Squamish particularly, it is a very real impending threat. Their doughty city Council has had no encouragement whatsoever from the Opposition to plans that would materially and adversely alter the lifestyle of that lovely town and the surrounding area.

In order for the NDP to complete its apparent suicide commitment, it should stop shilly-shallying and just support the Liberals’ LNG policy, being that these foreign companies may do as they please as they are used to doing; cheat on their taxes and utterly ignore environmental concerns as just an avoidable nuisance.

Both parties either underestimate the public’s feeling about the environment or don’t give a damn.

Public hungry for change

I’ve watched that feeling develop over a good many years. Much of what people generally feel now was espoused by the NDP 40 years ago – their problem being that then their opposition was more whining than practical. Moreover, it is always very difficult to be ahead of public opinion.

The public has dramatically changed. Even when I was in government it would be unthinkable to try to stop an interprovincial pipeline, let alone two of them. Alberta was looked upon as a pal to be envied.

But, in 25 years, the world has dramatically changed, as we all know. The question of fossil fuels has become first a very serious scientific one and then, logically, a political one. Global warming is for real and the vast majority of the public knows that – the exception being some politicians.

We’ve reached the position, then, where the public is far, far ahead of its political masters who would have us believe that the environmentalist is against all development and wants to crawl into a cave, chew on the leg of a sabre-toothed tiger and spend the rest of his life drawing pictures on walls.

I consider myself an environmentalist. So does Damien and a great many other people I know, who not that long ago wouldn’t have considered supporting the NDP and wouldn’t today if it weren’t for the Clark/Coleman Neanderthals.

Making a living and enjoying a living

The growing concern, which has enveloped all of us, is for the air we breathe, the water we drink, and the surroundings in which we live. We’re convinced that making a living and enjoying a living are compatible ambitions. Of course it requires some sacrifice – anything of importance does.

What environmentalists have done, however, is to annoy the hell out of the establishment because we no longer believe a word it says. This isn’t cynicism – it’s bitter experience. One only has to look at the Woodfibre LNG’s Indonesian owner and their tax-cheating overseas, to say nothing of their wanton environmental destruction, to realize that when they tell us that they will be good corporate citizens, care for our environment and pay their taxes that they’re lying through their teeth.

The trust just isn’t there

This is a huge societal dichotomy, no doubt about that. There was a time when most of us looked at the captains of industry and political leaders and thought that deep down they really cared about the people and the environment in which we live.

Experience has taught us that this is a load of crap. We’ve learned about hugely expensive internal and external public relations exercises devoted simply to deceiving the public.

Naively, we expected our politicians to reflect our feelings but have learned that they reflect only the interests of the establishment. As it always has, money talks.

Out of all of this comes a sense of keen frustration.

I no longer have the faintest hope that the Liberals will do anything but reflect those who invest money in them.

Where does that leave us?

I had hoped that John Horgan would be able to offer the kind of leadership the public could listen to and perhaps follow. Unfortunately this has not proved to be the case.

I’ve expressed hopes for the Green Party, however I am realistic enough to know that they won’t be forming a government in the near future.

It’s obvious that choices are severely limited and that if the Throne Speech proves nothing else, it’s that the government is bankrupt, lacking a semblance of moral compass, and the opposition are useless.

If the Green Party has nothing else going for it, at least the alternatives are far worse.