Tag Archives: Water and Energy

New Report from Canadian Centre for Policy Alternatives: Fracking Up Our Water, Hydro Power and Climate

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Read this vital new report from Ben Parfitt and the Canadian Centre for Policy Alternatives on the impacts of fracking technology and resource development in BC.

“A new study concludes that BC’s ballooning shale gas industry is the
natural gas equivalent of Alberta’s tar sands, placing the province’s
water and hydro resource at risk as well as jeopardizing climate change
policies.

Despite industry and government assertions that natural gas from
shale rock is a ‘green’ alternative to other fossil fuels, the study
released today by the Canadian Centre for Policy Alternatives and
Wilderness Committee finds the opposite, and lays much of the blame on
the controversial gas extraction technology known as hydraulic
fracturing, or ‘fracking.'” (Nov. 9, 2011)

Read report: http://www.policyalternatives.ca/fracking

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Talisman's water pipe from the Williston Reservoir - under construction this past October

Energy Minister Lied About Consulting Public on Frack Water Pipeline

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Did BC Energy Minister Rich Coleman outright lie in the Legislature when he promised public consultation for a massive new pipeline to draw billions of litres of water from BC’s biggest hydroelectric dam, the Williston Reservoir, to supply the natural gas industry? A new documentary from Global TV leaves little doubt he did just that.

This past weekend, Global TV’s national investigative journal, 16×9, aired a 16 min story titled “Untested Science”, on the exploding natural gas hydraulic fracturing (or “fracking”) industry in Northeast BC and Alberta. I assisted with the film, contributing a significant amount of footage from a forthcoming feature documentary project I’m working on with another Vancouver filmmaker, Fiona Rayher.

For me, the most poignant aspect of the must-see story was its coverage of the enormous use and contamination of fresh water for these fracking operations, which blast a mixture of high-pressure water, sand and toxic chemicals deep underground to crack open shale formations, thus releasing gases trapped within. The practice has become highly controversial everywhere it’s practiced around the world – generating a ban in France and moratoria in places like Quebec and parts of the Northeast United States. Meanwhile, BC, a global hotbed for the industry, has largely escaped public and regulatory scrutiny – but that’s starting to change, as this 16×9 documentary demonstrates.

The story clearly shows Minister Coleman, responding in the Legislature this past June to a question from Independent MLA Bob Simpson – who, along with fellow Independent MLA Vicki Huntington, has worked hard to put fracking under the microscope in Victoria – regarding the then-proposed water pipeline by fracking giant Talisman Energy and Canbriam Energy into the Williston Reservoir.

Mr. Simpson asked whether the proposal by Talisman Energy and Cambrian Energy to remove 7.3 Billion litres of water a year from behind the dam has in fact already been approved, without public consultation. Here’s how Coleman replied:

“There will be an extensive process of public consultation, discussion and negotiations with First Nations before anything would go ahead.”

Two months later, the companies got their approval – in the form of 20 year water extraction licenses from the BC Government – absent any public consultation. The highlight of Global’s program is the bumbling response of Coleman to their questions about why he lied in the Legislature when he promised “an extensive process of public consultation.” Here’s part of Coleman’s feeble answer: “…And that could have been a mistake in language by me…I mean, basically what I was trying to say is that we would do government process with regards to water licenses.”

By the time I was up in the Peace Valley in early October, the construction was already well underway, proceeding at a furious pace. I counted 3 different coupling machines at work, fusing together 50-60 foot lengths of black polyethylene pipe, approximately 10-12 inches in width – for two side-by-side pipelines.

A worker there described the process to me. The machine heats up one end of each pipe, then presses them together until they bond. Each machine can fuse a new length of pipe every half hour or so. With at least three machines running, the construction of the 37 mile pipeline from the edge of the reservoir to the companies’ nearby fracking leases was progressing rapidly.

I drove out to the end of the line, where the twin pipes will eventually plunge into the reservoir and begin hoovering out 10 million litres of water every day – mind you, before it gets turned into electricity for British Columbians by passing through the dam’s turbines (it’s of course also permanently removed from the Peace River’s downstream ecologies). While filming the work underway there, a silver truck from Talisman barreled up to me. The driver rolled down his window and began barking questions at me; as soon as he ascertained I didn’t work for the company he told me to “Take my pictures and fuck off.” He claimed it was private property, to which I replied that we’d have to agree to disagree on that point – in perfectly well-mannered, expletive-free speech (okay, maybe not quite). I finished my filming at a deliberately leisurely pace, packed up and left.

What I didn’t get into with this fellow from Talisman was the fact that my family’s ranch, Goldbar at 20 Mile, sits beneath that there reservoir. It was flooded years ago to provide the people of BC with affordable electricity – not for the fracking industry to get its water. And therein lies the problem with this whole scenario – or one of them, anyway.

British Columbians are being told by Coleman and his government that we need to flood yet another section of the Peace River Valley for Site C Dam; and yet all of the power from that dam is destined not for BC households and small businesses, but to power the fracking industry and up to six new mines in the region (BC’s electrical demands are on a steep decline, to the point we’re currently abundantly self-sufficient in electricity).

Meanwhile, we’re sucking unmade electricity – in the form of water – from an existing hydroelectric reservoir, to provide another vital resource for fracking. And all this electricity and water go to industry at a fraction of what it’s worth. We’re currently selling power to big industry for about half what you and I pay on our residential bills – and that gap is only set to widen.

So here is the question facing British Columbians, when it comes to the fracking industry and the matter of Site C Dam:

Do you support subsidizing the oil and gas and coal industries with endless amounts of fresh water – including taking it from our public hydroelectric dam – plus building a $10 Billion new dam, to be paid for by your tax dollars and much increased power bills, all so these industries can get their power for half to a third what you pay for it?

That’s the deal Energy Minster Rich Coleman and Premier Christy Clark would have you do. Just don’t expect them to ask you this question. They’ve made their position on public consultation abundantly clear.

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Times-Colonist: Hydro Execs Paid Bonuses for Fake Profits

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Read this story from the Victoria Times-Colonist on more revelations from the BC Auditor General on Hydro’s shady accounting practices – this time involving hundreds of thousands in executive bonuses paid on non-existent profits.

“B.C. Hydro executives have taken home hundreds of thousands of
dollars in bonuses based on profits the province’s auditor general says
didn’t really exist. Senior Hydro officials have their performance bonuses determined in part by the corporation’s ability to turn a profit. But
auditor general John Doyle’s scathing report on the Crown corporation’s
finances, released Friday, showed Hydro actually lost money recently,
and managed to show a profit only by deferring hundreds of millions of
dollars in expenses to the future using debatable accounting methods. Nonetheless, the corporation paid out sizable incentive-plan bonuses to its CEO, vice-presidents and chief financial officer.” (Nov. 1, 2011)

Read article: http://www.timescolonist.com/business/Hydro+paid+bonuses+existent+profit/5635771/story.html

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BC Auditor General John Doyle recently caught Hydro covering up $2.2 Billion in liabilities, with no plan to pay it back except jacking up your power bills

Kicking the Can Down the Road, BC Hydro Style – Billions in Bogus Accounting Revealed

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This month (October 2011) The Auditor General of British Columbia presented his report to Government titled “BC Hydro: The Effects of Rate-Regulated Accounting”. For most folks this is not be a gripping story they will want to master. That of course is exactly what your Government is counting on.
 
To get everyone’s attention here are in his words the financial dimensions of the issue. “As of March 31, 2011, a net total of $2.2 billion in expenses had been deferred and, by government’s own estimate, the balance is predicted to grow to nearly $5 billion by 2017”. Since this is a total of deferred expenses one could add current total liabilities and get per capita liability for everyone in BC in 2017 of $4,600 at a minimum. That is for BC Hydro liabilities alone.
 
The Auditor General’s Report describes what the “Regulatory Asset Account” is about. Theoretically it is about smoothing large incomes and expenses across several years. As used by BC Hydro it has been about exaggerated use of credit to fund questionable expenditures.
 
Perhaps a personal analogy might help. Let’s say that in 2006 your house was assessed at $124,840 and you were carrying a mortgage of $65,420 plus credit card/overdraft debt of $42,350. Your real job produced $27,270 before income tax and HST. Your creditors knew that your dad was a good credit risk and in fact had co-signed your mortgage and credit lines.

Now fast forward to 2011. Your house has an assessed value of $194,790 and you have used your new equity and your dad’s credit standing to re-mortgage to $106,320 plus you now have $59,000 of short term debt. In that 5 years you have managed increase your income from your day job to $34,380. Over the five years you have also managed to run up extra expenses of $22,000 which your dad is on the hook for and you have to tell him the amount will increase for certain by $30,000 more 5 years out. Your creditors are okay with this because you have convinced them that the $22,000 and extra $30,000 of future income will materialize because you own a business that is in fact a monopoly.
 
The above values are taken from BC Hydro’s Annual Reports, only the decimals are moved. The guarantor (AKA dad) in BC Hydro’s case is every citizen of BC.
 
Since 2005 when the “Regulatory Asset Account” was zero, about $4.4 billion of expenses have been designated as accounts receivable from rate payers in BC. As the Auditor General mentioned about $2.2 billion remains today. Brace yourselves for higher rates needed to pay this off and more.
 
Erik Andersen; Economist
 

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BC Auditor General Blows Whistle on Hydro’s $2.2 Billion in Voodoo Accounting

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Read this story from the Vancouver Sun on Auditor General John Doyle’s new report, which slams BC Hydro’s bad accounting practices – which will add enormous upward pressure to Hydro’s already skyrocketing power rates.

“Questionable bookkeeping methods by BC Hydro have put ratepayers on
the hook for $2.2 billion in public debt — with no apparent plan in
place to recover the money, Auditor General John Doyle warned in an
audit report on Wednesday. Doyle said that if BC Hydro
stays with the practice of deferring large debts rather than paying them
back and balancing their books each year, the total debt will swell to
$5 billion by 2017.

At $2.2 billion, BC Hydro would need a
one-year rate increase of 60 per cent to pay off the debt. At $5
billion, the increase would be 150 per cent.” (October 27, 2011)

Read full article: http://www.canada.com/news/Hydro%20bookkeeping%20creates%20billion%20risk%20ratepayers%20auditor%20general%20warns/5619234/story.html?mid=51435

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Dr. Marvin Shaffer in Vancouver Sun: BC Will Lose Millions on LNG

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Read this essential op-ed from SFU’s Marvin Shaffer in the Vancouver Sun, exposing the real cost to British Columbians of a heavily subsidized liquid natural gas boom on BC North Coast.

“A striking feature of the government’s jobs strategy is the number of
very electric-intensive projects it entails. The strategy calls for the
development of new mines and liquefied natural gas (LNG) facilities,
all of which will require very large amounts of electricity.

The
first phase of the proposed LNG plant at Kitimat in itself will
reportedly consume some 1.5 million megawatt hours of electricity per
year, or roughly one-third of the entire output of the proposed Site C
dam project.

Media commentators have questioned whether BC Hydro
will be able to supply these large new requirements for electricity.
Some worry that it will not be able to do so because of the capital
spending and other constraints that were recommended in the government’s
recent review of BC Hydro’s rapidly rising costs and rates.

However,
the real issue here is not whether BC Hydro can supply the electricity
these projects will need. It no doubt could by acquiring or developing
new sources of electricity supply. The issue is whether, or at least
under what circumstances, it should.

One thing is certain. It will
be very bad for BC Hydro and consequently all of its existing customers
if it does supply electricity to the new mines and LNG facilities at
its standard industrial rate. Under that rate, which averages less than
$40 per megawatt hour, the amount BC Hydro would receive would be less
than half the costs it would incur for the new sources of supply it
would have to acquire.” (October 205, 2011)

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Jimmy Pattison recently plucked Dave Cobb from BC Hydro

Could Jimmy Pattison Have an Eye on BC Hydro? Rafe Speculates Wildly

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How about a bit of totally nonsensical speculation of the order of “Hitler is alive and well living in Argentina”. Something utterly absurd. I bring to this speculation a very unique history – I’m the only person in captivity who’s been fired twice by Jimmy Pattison.
 
I rather like Jimmy – going out for dinner with Mary and him on his yacht, Nova Spirit, tells you a lot about the way Jimmy’s mind works, for the guests are from different genres and, as often as not, don’t speak with one another. It’s clear that Jimmy enjoys watching the way they interrelate or don’t interrelate at all. Certainly a big man in accomplishments, Jimmy carries with him, dare I mention it in this age of politically correctness, the usual symptoms of, shall we say, height challenge, which accounts for his need to be the big guy at all times, even as he is over 80, to succeed.

Stories about employees abound – the late Bill Sleeman, to whom he gave a new Rolls Royce on his retirement. Long term employees like Enzo (sorry, Enzo I’ve forgotten your surname), Bud Eberhart and Maureen Chant, to name a few, feel or felt a great loyalty to Jimmy who, when concentrating on his car company, routinely fired the month’s lowest salesman saying, “I do them no favour keeping them in a job they can’t succeed in” was his theory.
 
You know the saying, “When a husband sends his wife flowers for no reason, there’s a reason.” Enter Dave Cobb, retiring from BC Hydro after 17 months as CEO; I have no trouble understanding why Cobb would leave. You will remember Cobb’s leaked conference call to employees, in which he slammed independent power projects (IPPs); his predecessor Bob Elton evidently bit the dust on the same subject.
 
In assessing this unfolding story we must know that the BC government is bankrupting BC Hydro, and in fact have already done so. As economist Erik Andersen has explained, if  BC Hydro was in the private sector it would be in bankruptcy protection now! The reason they are not is that they can keep raising their rates.
 
From the outset, the government’s IPP policy has been to force Hydro to buy power it doesn’t need thus must either sell it at half to a quarter the price they paid for it or use it instead of their own power at a huge loss.
 
Why would a government do so silly a thing?
 
There are only two reasons: The Campbell/Clark government wants to bankrupt BC Hydro because of The Fraser Institute’s embedded “values” in the right wing unassailable tenet that there should only be private corporations because they are better business people; or, I suppose, they’re dumb as a sack full of hammers and don’t know what the hell they’re doing (I suppose we must admit of the possibility of both being true!).
 
This is the point I take leave of my senses. Jimmy Pattison has bought the services of Dave Cobb, for whom he must be paying a pretty penny – I mean this guy’s in the million a year range. What reason is there for this? (NDP leader Adrian Dix got off a good one saying that perhaps Cobb has found a Premier Clark he can work with!)
 
What if Pattison has an eye on BC Hydro? Yes, that’s what I asked – what if Jimmy Pattison, an acquisitor par excellence, buys out the jewel of the BC Crown!
 
If Jimmy were planning that, he would need someone close to home that knew where the bodies were hidden and Cobb squarely meets that criterion.
 
In the first place, Cobb is the only man in Hydro today who has admitted that these IPPs are going to wipe out Hydro’s assets. Knowing this and being the sort who can see the writing on the wall, saying, “Get the hell out before you’re tossed out”, he decided to do that.
 
Taking over Hydro is not a money-winner – at least not now – and won’t be as long as it has liabilities like $50 billion for money-losing (big time) IPPs. But what if Pattison could buy Hydro’s hardware and longstanding customers only, leaving the IPPs in the lurch with no legal rights against the government (the IPP deals were, after all, made by Hydro), nor the new BC Hydro which has no legal connection to the original one.
 
I’m admittedly groping in the dark here – I’ve never seen these private contracts. But what if the government said, “We’re expropriating your companies. Here’s the deal – take it or leave it, thanks a lot and good-by”?
 
Who better than Dave Cobb to help the lawyers and bankers to sort all this out?
 
Probably simply fantasy, idiotic conjecture. Certainly it’s just guesswork. But there have been worse conjectures…I think!
 
This for the closer – Jimmy Pattison has never winced from taking on an unusual proposition.
 
And what was that about the husband and the flowers?
 
 

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Hydro CEO Dave Cobb Quits to Work for Pattison Following Scathing Criticism of Liberal Energy Plan

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Read this story from the Province on the unexpected resignation of BC Hydro CEO Dave Cobb to work for Pattison Group.

“B.C. Hydro president Dave Cobb is stepping down after just over a
year in the job, in the latest example of the troubled relationship
between the government and the Crown corporation. In an interview
Wednesday, Cobb said it was a difficult choice to leave after just 17
months, but he has a ‘oncein-a-lifetime’ opportunity to work directly
with Jim Pattison in senior management of the Jim Pattison Group. Cobb said he will stay at B.C. Hydro until Nov. 30 to help with the organization’s transition to an interim CEO.” (Oct. 20, 2011)

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Private Power by the Numbers: Hugely Overpriced IPP’s Mean Soaring Hydro Bills

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This article was originally published in the Alaska Highway News.

Dave Cobb is president and CEO of BC Hydro. In August, he confirmed what Hydro watchers have been saying for some time: that provincial energy policy is forcing Hydro to buy electricity it doesn’t need at prices higher than it needs to pay. Mr. Cobb said that if the government’s policy doesn’t change, BC Hydro would be “spending hundreds of millions of dollars per year of ratepayers’ money with no value in return” and that Hydro would be required “to buy far more long-term power than we need.”

That means that without changes, your BC Hydro bill will be going up – a lot – when it doesn’t need to.

Cobb was talking about restrictions imposed on BC Hydro by the province’s policies, especially electricity self-sufficiency. Legislation passed last year requires that Hydro hold enough electricity by 2016 to meet all BC needs. By 2020 it must hold 3000 gigawatt hours extra. It must be able to do that in the lowest water year on record. That means BC will have surplus electricity in all years except the very worst one, which might occur once every fifty or more years.

The theory, apparently, was that all the surplus power could be sold to the United States and Alberta. But abundant low-cost natural gas has allowed them to develop their own gas-fired generation, so the export market isn’t as large as anticipated and what market there is won’t command the prices that Hydro needs to cover off the cost of what it’s committed to buy.     

Besides having to acquire more electricity than needed, Hydro is also required to buy that electricity from private independent power producers (IPP’s) operating in BC. Hydro could buy it cheaper on the open market both now and in the foreseeable future.  

Purchases are classified as non-firm, meaning electricity that isn’t available all the time such as wind or run-of-river; and firm, meaning electricity that’s always available.  

Bids from IPP’s to supply electricity to BC Hydro recently came in at an average of $100 per megawatt hour for non-firm and $124 for firm.  Recent spot market prices ranged from a low of  $4.34 for non-firm to a high of $52.43 for firm. Firm power with delivery in 2012 was recently listed at $27-35 on the Pacific Northwest wholesale market. The further into the future you go, the less reliable the price predictions. Keeping that in mind, the 2030 price is suggested to be in the range of  $81-85 per megawatt hour. So relying on the best information available, it seems BC Hydro is being forced to pay artificially high prices for electricity.  

Buying high and selling low doesn’t work for long. So who will pick up the shortfall between what Hydro is paying and what it can sell the electricity for?  

Well, that would be you, BC Hydro customers.

That Energy Act requires that the electricity rates be high enough that Hydro can recover the costs of that electricity it is required to buy.  So your rates go up to cover “spending hundreds of millions of dollars per year of ratepayers money for no value…”

Although rate-payers are on the hook for the costs, they have been noticeably absent from creating the policy that’s pushing up Hydro rates. If there’s to be a change in provincial electricity policy, then rate-payers will have to stand up and insist that seeing as they’re footing the bill, they want their interests to be protected.  

Gwen Johansson has served on numerous energy-related endeavours. She co-chaired the Northeast Energy & Mines Advisory Committee; served on  BC Hydro’s Integrated Electricity Planning Committee; is a former BC Hydro Director and a former member of the BC Energy Council. She lives in the Peace Valley near Hudson’s Hope.


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Site C About Highly Subsidized Industrial Power, Not Powering BC Households

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Read this article from the Globe and Mail, revealing the fact that Site C and other big power projects in BC are really about supplying highly subsidized electricity for shale gas and coal mine development.

“The industrial megaprojects that provide the backbone of Premier
Christy Clark’s jobs plan will require a huge increase in British
Columbia’s electricity capacity – the equivalent of nearly three new
Site C dams. BC Hydro, in the midst of a cost-cutting exercise
after the Premier demanded the Crown corporation rein in rate increases,
is now under orders to ensure enough energy for three new liquefied
natural gas plants and eight new mines.” (Oct. 11, 2011)

http://www.theglobeandmail.com/news/national/british-columbia/bc-politics/clarks-jobs-plan-needs-huge-power-hike-bc-hydro-says/article2196954/

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