Tag Archives: Water and Energy

Fort St. John Mayor Refuses to Take a Position on Site C Dam

September 15, 2012Hydropower, WATERSite C Dam, Water and EnergyCommon Sense Canadian

Read this story from The Georgia Straight on Fort St. John Mayor Lori Ackerman’s “neutral” position on the proposed Site C Dam near her community in northeast BC. (Aug. 29, 2012)

The mayor of Fort St. John has said her position on the Site C dam “entirely depends on the negotiations” that are ongoing surrounding the project’s environmental assessment.

“I’m staying neutral right up until we start negotiating,” Lori Ackerman, a city councillor prior to her election to the top seat in November 2011, told the Straight by phone.

Site C would be the third dam and hydroelectric-power generating station on the Peace River in northeastern B.C. According to B.C. Hydro’s website, it could have up to 1,100 megawatts of capacity and produce about 5,100 gigawatt hours of electricity per year. The $7.9-billion project is now being subjected to a joint federal and provincial environmental review.

“The Peace River is one of two major working rivers in the province…and it is our intention to ensure that we make them [the review panel] aware that this is going to impact our community,” Ackerman said. “So we’re asking our community to reflect on how it’s going to impact their life, their quality of life, the services that they rely on, the work that they do, and give us some feedback so we can go forward to the government, to B.C. Hydro, and the joint review panel.”

Bruce Lantz, the city’s previous mayor, told the Straight in 2009 that council had not taken a position on the project.

“The official city position, which occurred prior to my time on council, was that because it’s outside our area, it really has no particular bearing, and that the city would work with Hydro to see what kind of legacies they could get from the construction of Site C—if it goes ahead,” Lantz said in a sit-down interview at the time.

CETA Trade Deal, Jumbo Resort Proposal and Water Privatization

September 14, 2012WATERWater and EnergyCommon Sense Canadian

The following is reprinted with permission from Watershed Sentinel.

Ever since the BC Liberal government surprised residents of BC’s Kootenays with its March 20, 2012 approval for the controversial Jumbo Glacier Resort, people have been asking: Why now? After all, the Jumbo Resort proposal has been around since 1989 and has been successfully opposed by local people for more than twenty years.

Then, on May 1, the Liberals introduced Bill 41, which included an amendment to the Local Government Act buried in a miscellaneous list. That amendment allows for the “incorporation of a new mountain resort municipality…whether or not there are residents in the area,” as long as the proponent “has entered into an agreement with the government with respect to developing alpine ski lift operations, year-round recreational facilities and commercial overnight accommodation within the area…” Just days later, on May 16, Bill 41 passed third reading.

Invermere Mayor Gerry Taft recently told East Kootenay News Online Weekly, “Developers who wish to rezone land have to follow a process that includes public hearings and a final decision by officials who are accountable to the residents who elected them. This legislation would empower a [cabinet] minister to give developers a special status that bypasses the democratic process and undermines the ability of local citizens to control development. The ability of the proposed Jumbo Resort, and other potential developments, to bypass the land use process and get their own municipality status without residents is an affront to local communities. This is far beyond a bad idea. The loss of democracy is a slippery slope, even slipperier than some land speculators and receding glaciers.”

Columbia River-Revelstoke MLA Norm Macdonald said in a recent press release, “Despite the fact that the majority of residents in the area do not support the development of a ski resort in the Jumbo Valley, the BC Liberals are determined to push ahead. And they are willing to go to incredible lengths to make that happen.”

So, to the question of “why now?” we can add: Why quickly enable what Michelle Mungall, NDP MLA for Nelson Creston, calls a “ghost-town resort municipality,” whose mayor and council would be appointed by provincial cabinet to “govern no one and be accountable to no one as they [make] land use decisions impacting an entire region”?

Slippery Slopes

One answer to those questions is revealed here for the first time. A director of Glacier Resorts Ltd., the proponent for Jumbo, is directly involved in promoting the controversial Comprehensive Economic and Trade Agreement (CETA), being negotiated in secret between Canada and the EU since May 2009, with the goal of signing it in 2012.

Celso Boscariol, a Glacier Resorts Ltd. director since at least 2008, has, as President of the Italian Chamber of Commerce in Canada-West (ICCC-West), been a primary advocate for CETA since at least 2011. Boscariol, who ran unsuccessfully in New Westminster-Coquitlam-Burnaby in the 1997 federal election, has long been a BC Liberal Party insider.

Boscariol’s advocacy efforts for CETA are in part funded by the European Union through three grants for the ICCC-West’s EU-Canada Partnership project, which not only promotes “the enhanced EU-Canada Economic Partnership,” but (according to its website, http://eu-canada.com) is also “working with local business organizations and involving the provincial CETA negotiators and policy makers.” Along with the EU, the sponsors for the ICCC-West’s EU-Canada Partnership project include the Canadian federal government, the government of British Columbia, the government of Alberta, NCTM – a large Italy-based law firm, the Italian Chamber of Commerce in Brussels, and the PostMedia Network (which owns newspapers across Canada).

CETA (Canada-EU Comprehensive Economic and Trade Agreement)

Calling CETA “a de facto corporate bill of rights,” Paul Moist, national president of the Canadian Union of Public Employees (CUPE), on July 10, 2012, released a legal analysis of leaked CETA negotiating texts and said the trade deal would “trump provincial powers over natural resources and public services” and “override areas of provincial jurisdiction set in the Constitution.” Moreover, CETA would undermine provincial and municipal powers to ensure that local public procurement contracts go to local businesses.

By July, more than 40 municipalities – including Victoria, Burnaby, North Vancouver, Saskatoon, Toronto, Mississauga, Hamilton, Ottawa, and Montreal – have formally asked to be excluded from CETA, especially from its restrictions on public spending and delivery of public services.

Blair Redlin, a Burnaby-based researcher with the Canadian Union of Public Employees, last year told the Georgia Straight (July 7, 2011), “What the Europeans want is just simply an open-tender, free market approach,” noting that CETA would give the EU access to federal, provincial and municipal procurements worth more than $100 billion per year. “What that means,” Redlin said, “is that they want to prohibit local governments from being able to prefer local suppliers and local businesses.”

Redlin also said that CETA could provide an opening for huge European water companies, like French multinationals Suez and Veolia, to push for the privatization of Canada’s public water system.

As a European organization called Corporate Europe Observatory has revealed, by 2009 the EU was asking that 72 countries would have to “liberalize” their public water services and give unlimited market access to European companies in order to trade with the EU. According to the Council of Canadians, after Mexico signed a comprehensive trade deal with the EU, it saw the takeover of electricity and water utilities by EU companies, as well as the doubling of its bilateral trade deficit.

Calling the scope of CETA “mind-boggling,” the Globe & Mail’s Gary Mason wrote (July 15, 2011) that “60 per cent of municipalities in BC have economic-development strategies that include local procurement and hiring. This is why the Union of BC Municipalities passed a motion at its annual meeting last year [2010] opposing CETA – a vote that mostly went unreported by the media.”

CUPE, the Council of Canadians, the CAW, the Canadian Centre for Policy Alternatives, the Trade Justice Network and others have been trying to alert Canadians to the dangers of CETA since at least 2010. Apparently, it was because of this activism that the ICCC-West’s EU-Canada Partnership initiative was launched.

Their website states: “Media coverage of the CETA negotiations in Canada has been mixed with increasingly negative viewpoints appearing in proportion to coverage of recent political and financial crises in some [European] member states and of vociferous lobbying by a few anti-CETA groups. By undertaking a media campaign in partnership with Postmedia Newspaper Network, ICCC will ensure objective coverage.”

On March 7, 2011, Boscariol hosted and moderated a discussion on “EU-Canada Relations: Recent Developments” at the Vancouver Club, with the EU Ambassador Matthias Brinkman, Canada’s Deputy Chief Trade Negotiator Ana G. Renart, and a provincial official. By November 2011, Boscariol was hosting International Trade Minister Ed Fast for a Vancouver speech on CETA at the ICCC-West, with Boscariol telling Fast, “Our members welcome the government’s efforts to strengthen the transatlantic linkages that make our economies stronger.”

Meanwhile, thanks to “bankster” bailouts and other factors, Italy’s economy was starting to spiral into crisis, along with much of the EU, with unemployment levels skyrocketing to record levels.

Junket to France

Then, in February 2012, even before the approval of Jumbo’s Master Plan was announced, a junket of Jumbo backers, led by Kootenay East MLA Bill Bennett, flew to France to discuss possible investment in Jumbo (and another ski resort planned for Valemont) with European companies. The junket members reportedly met with France Neige International – a ski resort association representing dozens of ski resorts in the French Alps; Compagnie des Alpes – a French government-controlled ski resort operator for resorts in France, Italy and Switzerland; and the Caisse des Depots et Consignations (CDC).

The CDC describes itself as “a fully French state-owned financial institution” with $322 billion in assets. It invests in some 400 private equity funds and is a major shareholder in a variety of multinationals, including (according to one of its websites) “the following companies which focus on construction of infrastructure for transport, water and environment: Veolia, Eiffage, Vivendi and France Telecom.” Clearly, the Caisse des Depots et Consignations is one of the most powerful financial institutions in all of Europe.

When the junket returned to BC, Glacier Resorts Ltd. vice-president Grant Costello told the Invermere Valley Echo (Feb. 23), “In a short period of time we were able to build new relationships with a diverse group of French government officials, mayors, entrepreneurs, and corporate executives all of whom are interested in exporting their knowledge and experience to North America through the gateway of the Kootenays.”

Business Forum

Just days later, March 14-16, the GLOBE 2012 businessfest met in Vancouver. Part of the conference included the “EU-Canada Business Forum on the Environment,” which the EU-Canada Partnership website calls its “very first event.”

The description of that event reads: “The business forum brings together Canadian and European SMEs [small and medium enterprises] in the environmental sector to discuss the state of the industry and developments arising from the Comprehensive and Economic Trade Agreement (CETA) currently under negotiation by Canada and the European Union.”

Giving the Welcome Remarks were Celso Boscariol (as President of the ICCC-West), Anna Biolik, Regional Director for Foreign Affairs and International Trade Canada, and Janet Quiring, Director of International Trade at BC Ministry of Jobs, Tourism and Innovation.

The event was co-sponsored by the Government of British Columbia (which has subsequently been hosted by the EU-Canada Partnership project at an event in Milan touting the province’s “opportunities” for investment in areas such as “green energy, conventional and offshore oil/natural gas, coal and coal-bed gas”).

Less than a week later, on March 20, the BC government announced its approval for Jumbo Resort.

Trade Barriers

The busy Celso Boscariol then went to Montreal. From April 13-17, the 2012 World Summit/National Spring Conference of the Canadian Corporate Counsel Association met in Montreal to discuss “how global legal issues will influence domestic cases and vice-versa.”

Celso Boscariol gave a major power-point presentation called “Bilateral Ambition: Canada, the EU and the Comprehensive Economic and Trade Agreement (CETA)” where he spelled out the “current obstacles” to a successful trade agreement and to fully liberalized trade: provincial regulations; public procurement; supply management; market access; intellectual property; monopolies and state enterprises, among others.
While Boscariol was enlightening his fellow corporate lawyers on CETA, the Harper government dispatched 18 cabinet and deputy ministers to hold press conferences across the country on the “benefits” of CETA; it also created a new webpage about the deal.

Then on May 9, ICCC-West announced that it “is organizing an 18-month long programme of business forums, seminars, conferences and convivial events across Canada and in Europe to promote business opportunities for SMEs and the creation of a platform for cooperation in anticipation of CETA’s finalization.”

Just days later, the controversial Bill 41 was passed, creating the opportunity to incorporate mountain resort municipalities with no residents.

All this has been unfolding against the backdrop of the Harper government’s Bill C-38, which gutted the Fisheries Act, repealed and rewrote the Canadian Environmental Assessment Act, and passed most environmental responsibilities to the provinces. The CETA would then, in turn, trump provincial and municipal regulation – leaving the corporate sector fully in charge.

No wonder it’s being called “a corporate bill of rights.”

“Capital Flight”

Oberto Oberti, the President and CEO of Glacier Resorts Ltd., kindly emailed to me the names of Glacier’s board of directors (The list with other details about the Board of Directors can be found HERE). Oberti also emailed “Quick Facts” about Jumbo, including this statement: “Employment Equity Plan has been proposed to ensure preferential treatment of local residents and First Nations members.”

But according to the Calgary Herald (June 14, 2012), CETA would “enable trained professionals and tradespeople to cross borders and work.”

Indeed, Glacier Resorts Ltd. director Celso Boscariol specializes in immigration law at Vancouver law firm Watson Goepel Maledy LLP.

Oberto Oberti also emailed a document that shows how relatively small in size Jumbo would be by comparison to other BC ski resorts like Panorama, Sun Peaks, Whistler, and a second document containing a 2007 published statement by Glacier’s Grant Costello: “At build-out, in 20-30 years, the [Jumbo] resort will have only a handful of permanent residents just like Panorama has now after 40 years.”

It’s hard to interpret the word “handful” here, but it’s a very curious statement, given that Jumbo’s government-approved water supply from groundwater sources amounts to an “ultimate extraction rate” of 20 litres per second. That works out to 1,728,000 litres per day.

Assuming a generous 250 litres per person per day, by my calculations 1,728,000 litres is sufficient to provide the daily needs – drinking, bathing, laundry, cooking, washing the limousine – of some 7,000 permanent residents. But if there are to be only “a handful of permanent residents” at Jumbo, and 3,000 daily visitors, why would Glacier Resorts Ltd. need the approved 20 litres per second of water?

The answer may lie with the CETA trade deal, and with that “mountain resort municipality” status that Jumbo, and other BC ski resorts being planned, can obtain.

According to the New York Times (June 10, 2012), the EU is currently experiencing “capital flight,” with money leaving the region. “From Italy, Greece, Spain and other countries in the European currency union, the affluent these days are moving money into hard assets valued in something other than euros, which have been plunging in value.” What better “asset” than water?

Having an incorporated municipality with no residents, the proponent and its investors, under CETA, could do just about anything they want with the groundwater – privatize it, form a private utility, sell the water by pipeline across the border. What’s to stop them? And if somehow they were stopped, under CETA they could sue: not just for compensation, but (potentially) for compensation for lost future profits.

Stopping CETA & Jumbo

Oberto Oberti told the Times Colonist (March 21), “My hope is we will see the opening day for Christmas 2014.”

Business In Vancouver (April 10, 2012) reported that Grant Costello “doesn’t expect any brush to be cleared to make way for the project until mid-2013 at the earliest. He said the company’s environmental certificate [which expires in 2014] has 195 conditions, some of which are preconstruction requirements.”

Opponents to Jumbo – including the Ktunaxa First Nation, local conservation group Wildsight, and many others – have clearly drawn a line in the snow on this project. If they were to team up with CETA opponents, they would be even more formidable.

NDP MLA Norm Macdonald told The Tyee (March 21) that if the NDP wins the election scheduled for May 2013, it would be possible to reverse the decision on Jumbo.

One of the reasons the Harper government is pushing for CETA to be signed in 2012 is that it fears the results of provincial elections in BC and Quebec. As Sean Smith, a community-based organizer with the CAW, has written (CCPA Monitor, Sept. 2010), “…before CETA can be officially signed and sealed, it requires the approval of every provincial government. So it is particularly vulnerable to public pressure – just one Premier can derail it.”

Similarly in Europe, 27 member-nations of the EU would have to approve CETA. Currently, the leaked chapter on intellectual property is causing controversy because of potential threats to internet use, privacy, free speech and other issues.

The same CETA chapter proposes to raise pharmaceutical drug costs in Canada by $3 billion per year, which reportedly bothers some Canadian premiers.

Sean Smith puts it well: “Canadians need to learn that the CETA talks have nothing to do with giving Canadians a good alternative to American markets and forging closer ties with happy Swedes and Danes and other progressive Europeans. That mythical EU is disappearing faster than a Greek pension and is being replaced by a corporatist continent that thrives on things like Bulgaria’s minimum pay of 97 Canadian cents an hour. (No, that’s not a typo.) It’s up to us to break through the veil of secrecy and fantasy that has been thrown over these trade talks, expose the deceptive spin, and tell Canadians what CETA is really about.”

CETA and Jumbo Glacier Resort could expire together. The next few months will be crucial.

Other Responses to CETA

“One of the aspects of CETA most worrying for local leaders is the deal’s potential to undermine public control over water and other key municipal services. The leaked initial offer showed that the EU companies want access to contracts in Canadian local government services, going so far as to name specific local utilities, public transit agencies, and other public services in dozens of municipalities across the country… It’s interesting to note that many EU municipalities have taken their own water back under public control after problems with privatized water systems (often privatized under the same EU firms that are trying to get into the Canadian market).”

— Rob Duffy, Director of the Columbia Institute, CCPA Monitor, June 2012

“The Harper government sees CETA as a way to further deregulate and privatize the Canadian economy while increasing corporate power and undermining our democratic options for the future. The EU trade deal could: unfairly restrict how local governments spend money and [could] ban ‘buy local’ policies; add up to $3 billion to the price of drugs; increase Canada’s trade deficit with Europe, leading to significant job losses; empower European corporations to attack environmental and health measures; undermine protections for health care and culture in past trade deals; create pressure to increase privatization of local water systems, transit and energy; strip farmers of their rights to save seed.”

— The Council of Canadians

“With most of our private sector already owned by US corporations, the planned privatization and sale of much of our public sector to European business firms will complete our country’s transformation into a foreign-controlled vassal-state.”
— Sean Smith, CAW activist now with Trade Justice Network, CCPA Monitor, September 2010

***

Joyce Nelson is an award-winning freelance writer/researcher and the author of five books.

BC NDP Must Come Clean on its Full Energy Policy

September 9, 2012Energy and Resources, Hydropower, Oil&Gas, Pipelines and Supertankers, WATER, Water and HydrocarbonsBC Oil Pipelines and Supertankers, Enbridge, KinderMorgan, LNG, Oil and gas, Site C Dam, Water and EnergyRafe Mair

The NDP are getting a free ride – at least they certainly are on the energy file.

I must ask again: Why are they not condemning the proposed twinning of Kinder Morgan’s Trans Mountain Pipeline from the Alberta Tar Sands to Vancouver? All the arguments that prevail against the Enbridge line apply to Kinder Morgan, so to say that you’re waiting for the Kinder Morgan applicationto be filed is a flimsy excuse which waters down their general position on energy.

Speaking of a program, just what is the NDP energy policy? We’d better find out soon or it will be too late.

Some questions.

The NDP is wholly supportive of multiple liquified natural gas (LNG) plants in Kitimat, so far as can be told without any real consultation with the public on either the plant itself or the pipeline that would cross the same mountains and forests that Enbridge does.

My feeling is that the NDP don’t want to appear to be against everything. Yet the party was much opposed to an LNG plant on Texada Island a few years ago, mainly on dangers it posed. There are not too many examples of plant failure in the past but when they do have one, the destruction of property and human life is extensive.

I don’t say that this project ought to be banned – I just ask when the public process took place. When was the public, including First Nations, consulted on both the need for such a plant and, if passed, what were the technical and environmental concerns, and, again, where was the public process?

John Horgan, the NDP Energy Critic, seems to favour, without reservations, the obtaining of natural gas through the process now called “fracking”, which is a technique whereby natural gas, trapped in shale beds within the earth’s crust is “mined” by forcing it out by the use of huge quantities of water and chemicals. British Columbia has lots of this natural gas and there’s a sort of “gold rush” mentality amongst those who want to get into the act.

There are huge environmental questions, not least of which is the chemical-laden water getting into the domestic water supply and ecosystems. Moreover, where is the water being taken from?

There are also very real worries for the security of the land under which the “fracking” takes place, namely earthquakes being caused by the controversial practice.

The concerns here are not just picky little matters brought up by traditional boo birds but very real worries.

There is a very big economic question involved: BC and Alberta are not the only places in the world where there are lots of potential fracking areas.

With a huge overabundance of natural gas available, can BC compete? Where are the markets? China, which itself has huge trapped natural gas resources?

Normally one might say, that’s the concern of the companies, not us.

But we know that’s not necessarily so, for corporations discount a good part of the downsides by expecting government bailouts if big trouble comes, for the same reason the US government bailed out the stockbrokers – the cost of not bailing out sinking corporate ships was higher than the subsidies. Moreover, the public is a shareholder in this resource and is receiving reduced dividends from it at these historically low market prices.

There is a further question that has been raised but not dealt with, either by the government or the opposition – why are we devoting energy from water resources, that belong to the public to create energy which then will be used by corporations to make new energy?

The nature of BC Hydro, since W.A.C. Bennett’s days, was to create cheap power for both the public and industry but not to be a partner in the industry, thus liable to losses concerned.

The proposed Site “C” Dam is not needed for domestic energy supply – as our resident economist Erik Andersen has amply demonstrated – but day by day looks more like a scheme to subsidize the untested abilities of fracking companies to do so without environmental damage, in questionable markets. And if not for fracking, then to subsidize comparably questionable new mining operations in northern BC – in any event, the power from Site “C” is patently not for the public that would be paying some $10 Billion to build it.

These are some of many questions being raised by everyone accept the Liberals, who are joined at the hip to industry, and the NDP who are not.

It’s bad enough to have a government of a gaggle of nincompoops, but without an Opposition to ask serious and penetrating questions because they fear the voters won’t like it is a potential tragedy which may well lead to an environmental and fiscal mess not only caused by an incompetent government but an incompetent Opposition as well.

Advocates seek action on hydro projects

August 24, 2012WATERprivate river power, Vancouver Sun, Water and EnergyCommon Sense Canadian

Read this article by Larry Pynn in the Vancouver Sun. Excerpt: “Environmental charity Ecojustice went to B.C. Supreme Court to seek a judicial review of the province’s failure to conduct a formal environmental assessment on the Holmes hydro power project near McBride.

“The legal action, taken on behalf of the David Suzuki Foundation and Watershed Watch Salmon Society, argues that 10 linked hydro plants will together generate 85 megawatts of electricity.

“But because no individual plant would generate more than 50 megawatts – the threshold for triggering an environmental assessment – none were ordered.” (August 23, 2012)

Paddle for the Peace Puts Site C Dam in Focus This Weekend

July 13, 2012Hydropower, WATERSite C Dam, Water and EnergyCommon Sense Canadian

Read this story from Fort St. John’s Alaska Highway News on this year’s “Paddle for the Peace”, in which hundreds are expected to take part in opposition to the proposed Site C Dam. (July 12, 2012)

Hundreds will canoe down the Peace River on Saturday.

Some are coming to show their opposition to Site C, such as David Suzuki, while others simply want to enjoy the natural serenity of the river.

“Originally it was started seven years ago because we just wanted to bring the community to the river,” said organizer Danielle Yeoman. “We thought it was a good way to bring people…(to canoe) on the river.

“The river is for everyone,” she said.

The event is organized by the Peace Valley Environmental Association (PVEA) and the West Moberly First Nations.

“The PVEA’s sole purpose is to stop Site C; that’s why the organization was created,” said Yeoman. “However, it (was) on the back burners, and so truly, when we started this, it wasn’t to do what we’re doing now.

“Now we are actively, obviously, trying to stop Site C again,” she said.

Site C is a controversial project that would see BC Hydro build a third dam on the Peace River to produce power to accommodate future energy needs for this growing province, according to BC Hydro.

Yeoman said that though the PVEA’s intent is to stop Site C, the event is truly about celebrating the river.

“Everyone is welcome,” she said. “In fact, we’d like people that are pro-Site C to come because it usually takes tow minutes to convert them if they’re sitting on the fence.”

She noted that Suzuki “supports” their cause.

“Everybody just thinks he’s a tree hugger – well, he’s that too – but he’s wise,” she said. “He’s only kept a handful of things he wants to fight and Site C is one of them.”

Yeoman noted that Suzuki has been up here on the Peace in the past, and she’s excited for him to speak.

“One of the things that’s really important, since Site C resurfaced three or four years ago, we didn’t have anybody on our side,” she said.

She noted that having people like Suzuki, The Wilderness Committee and others join PVEA’s cause has been positive.

“They’re coming up and they’re actively fighting Site C too,” she said.

She noted that the event has grown steadily since it began seven years ago.

From Moran Dam to Enbridge: The Danger of Focusing on Economics Over Environment

July 7, 2012Energy and Resources, Oil&Gas, Pipelines and Supertankers, WATERBC Oil Pipelines and Supertankers, Enbridge, Oil and gas, rafe mair, Salmon, Water and EnergyRafe Mair

Robyn Allan is the former President and CEO of the Insurance Corporation of BC and is an economist by trade. I have enormous respect for Ms. Allan and concur with her conclusion, stated frequently and as recently as July 6 in The Vancouver Sun, that the proposed Enbridge Pipeline will have a deleterious impact on the Canadian economy generally and that of BC in particular.

The economics of this huge issue are, of course, very important to the decision making process and to the decision itself. My caveat is, however, to dwell on the economy brings with it great risks.

The argument is the same one respecting dams and fish. If one were to debate a dam on the Fraser River near Lytton, the economic argument is all in favour of the dam. While the salmon runs to be ruined will cost the province and those who fish a lot of money, that is offset by the enormous financial gains from the dam itself many, many times over. In fact such a dam, called the Moran, has been on the drawing board since late in the 2nd World War when it was pushed by the federal government. Premier WAC Bennett raised this issue again in the 1960s and was only stopped by the outcry of those who put the heritage of our salmon ahead of the incredible profits that would come from a huge dam.

Here are the stats according to Wikipedia:

The dam would have been 261 metres (856 ft) high, generating as much power on average as Grand Coulee Dam and twice of Hoover Dam combined – much of this energy would have been sold to the north-western United States. It would form a gigantic reservoir 260 kilometres (160 mi) long, containing some 35.4 cubic kilometres (28,700,000 acre·ft) of water at maximum pool reaching almost to the town of Quesnel. A significant portion of this capacity would be reserved for flood control.

The argument that our Pacific salmon are worth more than money prevailed then – would it prevail today if the issue was revived, which I’m certain will happen?

With the proposed Enbridge Pipeline, the financial benefits are not worth the candle, as Ms. Allan so clearly and accurately says. The trouble is that the governments won’t pay the slightest attention to her or to The Common Sense Canadian’s economist, Erik Andersen. There will be a barrage of one-liners about progress, jobs, blah blah blah, so that economic truths will be trumped by public relations.

The environmental implications of the proposed pipeline are serious beyond belief. We’re talking 1,100 km, over 1000 rivers and streams. My point to Robyn is that before we get to economics, let’s see what this pipeline will do.

Enbridge has an appalling environmental record – about one rupture or spill per week. There is no question that if the pipeline goes through there will be multiple spills. And as Ms. Allan astutely points out, due to the shell corporation structure Enbridge has set up to own and operate the pipeline, their liability for a spill will be severely limited (by design, of course), leaving British Columbians holding the bag for cleanup costs.

The substance being transported is not crude oil as we understand it, but bitumen, a near solid, which unlike other oils, sinks like a stone, and is infinitely more toxic. Enbridge has shown in the Kalamazoo River case that it simply cannot completely clean up, even when it can easily bring workers and machinery into the area.

The Northern Gateway pipeline goes through some of the least accessible places it the world, where the only way to get in is by helicopter. There is no way in the world that workers and equipment could be brought to the site and even if they could, the damage from the spill could never be properly cleaned up.

It’s interesting to note that Enbridge and its supporters sneer at the possibility that they would have to file plans for crossing 1000 rivers and streams – this, they say, is absurd.

I ask why is it absurd? The common environmental requirement for pipelines is that they must file plans for crossing watercourses – why should that not be the case just because there are a lot of watercourses?

In conclusion, I thoroughly agree with Robyn Allan but simply say we shouldn’t let ourselves get to the spot where the economics are considered.

BC Hydro’s $30 Billion Blind Gamble

June 25, 2012Economics, Hydropower, WATERBC Hydro, ipp, private river power, Site C Dam, Water and EnergyErik Andersen

I was astonished to read, “A new forecast by BC Hydro shows electricity demand in the province is expected to grow by 50 per cent over the next 20 years,” in a recent article from the Vancouver Sun. To understand why I use the term “astonished”, one must delve deeper to see that this statement is not supported by Hydro’s own data and other global economic data. Rather than taking everything at face value, I’ve learned it’s critically important to question the statements made by BC Hydro and the current provincial government. After watching a documentary on the collapse of Enron and how wild forecasting and lack of genuine oversight led to one of the largest financial failures in modern history, the resounding statement was, “ask why” – wise words to follow to avoid repeating history.

It will be of help to the reader to understand some of the financial implications of BC Hydro’s forecasting. Discussion should start with the understanding of the unit used to measure and report about electrical energy. It is the Gigawatt hour (GWhr) per year, as you can see in the chart that follows. Using the public values associated with the proposed Site C generation plant, it takes $2,000,000 of borrowed money to produce one GWhr/year of usable energy. Keep in mind as you read what follows, your Government and BC Hydro are apparently intent on borrowing and spending, in your name, $30,000,000,000 by 2017. If left to follow the path set out in the most recent BC Hydro forecast, the corporation’s total liabilities will explode to $80,000,000,000! As a shareholder, ratepayer and guarantor of the debt are you ready for this experience?

This is an evidence-based discussion, which means looking at actual domestic demand from BC Hydro’s annual financial reports in concert with various historical demand forecasts by BC Hydro. This data is shown in Graph 1, below.

It can be seen from this graph that the domestic demand had a significant downturn starting in 2008 and that we are currently at pre-2005 levels. Comparing BC Hydro’s forecasts with the actual demand clearly indicates how poorly they match up, even failing to predict any degree of decline.

What is arguably even more striking than BC Hydro’s apparently poor forecasting skills is the trend in their forecasting. According to their predictions, the rate of increase in demand is greater for each forecast, illustrated by a sharper rise for each subsequent forecast. This begs the questions as to why this would be the case and if there is any justification for it.

BC Hydro has previously stated that this increasing domestic demand is based on increasing population. However, population growth, plotted in Graph 2, can be seen to be fairly linear from 2003 onward. With the population increasing at a fairly steady rate, one would similarly expect domestic demand to increase at a constant rate, if modelled on population growth. Added to this is the growing recognition that per capita demand for electricity has been declining since 2008. An increasing rate would result from accelerated population growth, which is not the case. This becomes most troublesome with the 2010/2011 forecast, which portrays a dramatic rise in the forecasted rate of increase without the associated population growth to warrant it. What is the justification? There is none – it is a deliberate exaggeration of provincial demand.

Graph 2 includes BC Hydro’s longer term forecast to 2030. In addition, it shows a projection by Erik Andersen that utilizes a per capita demand value for residential plus commercial customers coupled with an expectation of industrial demand. The latter is reflective of new industrial customers having to pay higher than the “legacy rates” that are available to some established large customers.

By presenting an exaggerated need for more domestic generation capacity BC Hydro is giving cover for its call for new Independent Power Producer contracts and for projects like Site C. This is a continuation of a corporate culture documented in the book White Gold by Karl Froschauer.

What BC Hydro and the current government are ignoring is the present state of the global economy. Of the many global business indicators available one of the best is the Baltic Dry Cargo Index. This historical index combines dry cargo shipping charter rates with volumes. It is considered by professionals as the only uncontaminated global index because it is not subjected to speculative “gaming”. It is also considered one of the best leading economic indicators available to the public. Graph 3, below, adds the Baltic Dry Cargo Index to Graph 1 (above).

It is interesting to note how closely the BDCI matches the trend in domestic BC electricity demand. To ignore the current global economic climate, which domestic demand appears to parallel, is a seriously large financial gamble.

BC Hydro has a well-documented history of exaggerating demand to serve corporate interests and that pattern is repeating. There is no evidence to support their claim and BC citizens need to start asking “why?” to avoid the blunders of the past reoccurring. In terms of the current state of the global economy, there is trouble out there and you don’t go stepping out into new debt at a time like this.

A recent article in the New York Times has shown that Asia has been “falsifying economic statistics to disguise the true depth of the troubles”, which is why a global indicator such as the BDCI is so important. Folks who aren’t making their “numbers” resort to “Enron-style” information flow. China’s sputtering economy is facing tumbling electricity demand, yet that is largely being hidden.

We must insist on evidence-based projections of demand that take into account the global economy as opposed to wishful thinking on BC Hydro’s part. The latter has the tendency to produce stranded assets at the expense of the citizens of BC.

Sandra Hoffmann is a Ph.D chemist specializing in water chemistry and is the former coordinator for the Peace Valley Environment Association. Erik Andersen is an independent economist and regular contributor to the Common Sense Canadian.

Feds Scrap Bute Inlet Private Power Project’s Environmental Assessment

June 22, 2012WATERBC Hydro, Bute Inlet, ipp, Water and EnergyDamien Gillis

The Canadian Environmental Assessment Agency announced earlier this week that it is terminating the environmental assessment of the massive proposed Bute Inlet private river diversion project.

The Agency explained the decision in a short media release:

Bute Hydro Inc. had proposed to construct 17 run-of-river hydroelectric facilities in the vicinity of Bute Inlet. The project was referred to a panel review in May 2009 and the Panel appointed in the summer of 2009. In March 2011, as Bute Hydro Inc. did not intend to move forward with the environmental assessment process, the Minister of the Environment disbanded the Panel and released the Panel members from their obligations under the Canadian Environmental Assessment Act.

Given that the proponent (currently Alterra Power Corp.) has indicated that it does not plan to proceed with the environmental assessment process in the near future, Fisheries and Oceans Canada, Transport Canada, and Aboriginal Affairs and Northern Development Canada, the responsible authorities, have confirmed that they will not exercise a power or perform a duty or function in relation to the project.

The proponent may apply to commence a new environmental assessment process if and when it determines that it wants to proceed with the project proposal.

The news is somewhat surprising, given the announcement by proponent Alterra Power earlier this month that it has signed a deal with the local Sliammon First Nation to build transmission lines for the project through its traditional territory.

It is not clear whether the withdrawal of the project from the environmental process is connected to a recent announcement by the Harper Government to eliminate thousands of environmental assessments and to “streamline” the assessment process via changes enacted through the government’s omnibus budget bill.

As the above statement from the Canadian Environmental Assessment Agency notes, “the proponent may apply to commence a new environmental assessment process if and when it determines that it wants to proceed with the project proposal.”

However, private power projects and BC Hydro’s accounting practices have come under considerable scrutiny over the past several years from the province’s Auditor General, a former Hydro CEO, and independent economists. Serious concerns have also been raised about the environmental impacts of these projects – with revelations of widespread fish kills from several projects in operation.

The Bute project proposal has lingered at the environmental assessment stage for 3 years, held up in part due questions about impacts on fish – concerns which are heightened in light of the above new evidence of fish kills from similar projects.

Given the size of the anticipated purchase contract the project would require – more than double Hydro’s current plan to purchase an additional 2,000 Gigawatt hours a year of private power – and the NDP’s repeated vow to put a moratorium on new projects, it is difficult to conceive how the project could be revived at this stage, even if the Harper Government were to waive its environmental assessment requirements.

Dear Mr. Dix: A Letter From Rafe Mair to BC’s Future Premier

June 20, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, WATER, Western CanadaAdrian Dix, BC Oil Pipelines and Supertankers, Enbridge, ipp, KinderMorgan, Oil and gas, Politics, private river power, Salmon, Water and EnergyRafe Mair

Dear Adrian Dix,

The recent polls show that you and your party have a wide lead over the Liberals and Conservatives – something which gives many of us who care deeply about the environment encouragement, including thousands of us who are not usually supportive of the NDP. It is those people whom I have in mind today.

The political spectrum has altered substantially in recent years with a wide gap in centre, which your party is clearly occupying. To do this with success you must address concerns about the nineties when the NDP was in office. Apart from the fact – a big one – that the NDP had, ahem, leadership problems, in fact the NDP had a much better track record in fiscal matters than painted by the “right”, especially when one considers the sudden trauma of the “Asian ‘flu”, which all but ground our forest sector to a halt.

The Campbell/Clark Government has, with some success, painted the NDP as a government that bankrupted the province.

I believe that you should deal with those issues – though not at length, because voters want to know what you will do, not what you have done. The fact is, however, that the Liberals will present themselves as steady stewards of the public purse, which they clearly are not, and in my view you must be able to match allegations with facts.

Before I get to the environment, one other issue. When we sit around the fire relaxing with a toddy, we often muse that it would be wonderful if the federal and BC governments could just get along. The fact is that we are a federated state which sets out – not always with clarity – the powers, rights and obligations of each government. The system is built on tension, not ass-kicking, and the Premier and her party ought to know this.

Premier Clark is presently dealing with the Kitsilano Coast Guard issue with kid gloves. That may be a good policy in issues like this but in the larger sense, the people of BC, I believe, want the provincial government to stand up boldly to the Ottawa bully, especially in these days where the Harper government wishes to devastate BC’s environment.

This segues neatly into the environment issue. This issue does not lend itself to compromise. One of the “weasel” words from the developer is “mitigation”. You either protect the environment or you don’t, and three obvious issues come to mind: fish farms, private power and the pipeline/tanker debate.

On the first, you simply must force them to go on land. I believe it was a mistake to turn that power over to the Feds but that’s been done and we must deal with what we have. I suggest a protocol which requires farms to move on shore within a reasonable time or their licenses will not be renewed. The fish farmers have all denied they do to harm the environment for over a decade and they must be brought to heel. You cannot simply pawn the issue off to Fisheries and Oceans Canada – the people expect you to act.

Your position on private power (IPPs) is more than a bit hazy. You seem to be opposed to them but will, after you make the contracts public, still honour the contracts. I realize this is a tricky issue because if you go further, you will be painted as anti-business. Can you not declare that any licenses granted but not acted upon will be taken away? On other proposals, and I especially refer to the Klinaklini, surely you must say to them, “Proceed at your peril”.

And, of course, you must revive the British Columbia Utilities Commission – with teeth, as in days of yore.

This leads to BC Hydro which, if in the private sector, would be in bankruptcy protection. Much of that unhappy situation results from the IPPs from whom BC Hydro was forced to buy electricity at hugely inflated prices. Hydro has some $40 BILLION dollars in future payments for power it does not need. How can an NDP government deal with this without taking action on these contracts? Isn’t this analogous to the mayor elected on a reform ticket still honouring sweetheart deals between the former mayor and his brother-in-law? These IPP contracts are scandalous payments to the government and its political pals and cannot be protected by “sanctity of contract”

Your position on pipelines and tanker traffic is, in my view, pretty solid but must be restated at regular times. I understand that you have postponed your decision on the Kinder-Morgan line until you see what their new proposal is. That probably made sense in the Chilliwack by-election but otherwise makes no sense at all. It is a time bomb now – how can that situation be improved by increasing the line’s capacity?

The 2013 election will largely be fought on environmental issues – for the first time in my long life.

You must walk the tightrope of support of our environment and the rightwing allegations that you are anti-business. You must expect that, well before the election, the federal government, with a sweetly smiling Premier Clark, will announce big contributions to the province so that we, too, can get rich out of the Tar Sands and be prepared for that. The answer is like the joke where a man asks a woman to go to bed with him for $50,000. She muses about her obligations to her kids, etc. and blushingly agrees. The man then asks if she will go to bed with him for $50 to which the indignant woman exclaims, “What do you take me for, a common prostitute?” to which the man replies, “We’ve already established that, madam; now we’re dickering over the price.”

The lesson is our province is not for sale at any price.

Sincerely,

Rafe Mair

The Profiligate BC Hydro

June 18, 2012Economics, WATERBC Hydro, ipp, private river power, Water and EnergyErik Andersen

Most of us, whether we live in Newfoundland, Ontario or on the North side of Burrard Inlet, are required to live in the world of financial reality and discipline; reality as to our incomes and debts.
In recent days, a number of articles have featured BC Hydro and its proposed increase in electricity rates. Perhaps it would be useful for readers to have additional context.

Prior to 2008, most citizens of our developed world participated in the biggest global credit bubble ever seen. In 2008, that financial fantasy ended.

One of the most dramatic indicators of that event, the collapse of international dry cargo shipping, was captured by the Baltic Dry Cargo Index.

The BDCI was designed to record international trade volumes in combination with shipping contract prices.

In June of 2008, the index showed a level of about 12,000 units. A mere six months later it was struggling at about 1,000 units and has not recovered since.

Prudent managers have known of this index for decades. They should also know it provides a leading indicator of international trade; not so at BC Hydro or in Victoria.

A corporate forecast can be considered the statement of investment intentions for its business and a credible forecast incorporates a sense of economic situational awareness.

In its 2003/04 forecast, BC Hydro managed to hit the forecast numbers for electricity sales in 2008; but the exaggeration of future demand included in its 2007/08 forecast showed corporate thinking was still contaminated by the bubble years.

As a result, despite the evidence of decreasing domestic demand for electricity from 2009 on, the 2010/11 forecast indicated that this bullish attitude continued to prevail. And despite the evidence of that shrinking demand, BC Hydro is planning for 14,000 units of new electricity by 2017 and for double that by 2031.

The amount of capital it takes to produce a unit of service or commodity is regarded as a good measure of operating efficiency. In the case of BC Hydro, the extent of its capital deployment is yet another indicator of trouble ahead for the corporation and for ratepayers.

Prior to 2008, Hydro managed to meet the electricity needs of its provincial customers with about $12 billion in deployed capital. The 2007 level of demand was about 53,000 units.
Since then, following directions from the provincial government, the corporation has increased its deployment to nearly $20 billion, to provide only 50,600 units.

In summary – BC Hydro used 67 per cent more capital to produce and deliver 5 per cent less electricity when it is normal to gain efficiencies from new investments, not lose them.
What have the bubble era and provincial policies produced in liabilities for BC Hydro?

Since 2007, liabilities increased by $6 billion. Additional liabilities for ratepayers reached $2.2 billion in 2011 and, according to B.C. Auditor General John Doyle it will not be long before that amount doubles.
The present value of the secret contracts BC Hydro has with independent producers is estimated to be a further obligation of more than $40 billion.

Using the costs and productivity of the proposed Site C dam as a metaphor for new power generation, to get 14,000 units of new electricity means a further $30 billion of liabilities.

It seems pointless to ask the perpetrators why this disconnect with the real world exists but perhaps the answer can be found elsewhere.

In 2006, President Bush granted a group of undisclosed people dominion over all electricity production in North America. The North American Electricity Reliability Corporation (NERC) was launched and immediately recognized in Canada with a Memorandum of Understanding between it and the National Energy Board. Since then NERC has secured enforcement status in several provinces including Ontario. Enforcement means the legal right to fine electricity producers large amounts of money for non-compliance.

This may help the reader understand why our government has pushed aside the BC Utilities Commission. NERC is about serving private interests ahead of the public interest of B.C. citizens.

It is way past time for BC Hydro to throw out the anchor but maybe it never was the game plan to curb itself before it was beyond saving as a public asset.

I leave it to you to judge whether this period of exaggerated demand forecasting and Hydro’s attendant spending was, or is by accident or design.

Whichever is your answer there is no avoiding the certainty that you will be called upon to pay up big time.