August 31, 2009
BOMB: "It's Like the Wild West Out Here" (2/2)
By Chris Arsenault*
Inter Press Service News Agency
August 30, 2009
 Schoolteacher Rick Koechl worries about sour gas wells near his home. (Credit:Chris Arsenault/IPS) |
DAWSON CREEK, British Columbia, Aug 30 (IPS) - The once serene road to Tim and Linda Ewert's organic farm near Tomslake in northeastern British Columbia has become a mess of dust clouds, drilling rigs and hordes of pick-up trucks as the area transforms into the newest frontier of Canada's natural gas boom.
Someone, or a group of people, is unhappy with area's petroleum-fuelled transformation. In the last year, six attacks have blown up pipelines near the Ewert's farm, drawing attention to a region rarely discussed by Canada's urban chattering classes.
"Use your excessive earnings to install green energy alternatives instead," wrote the alleged bomber in a Jul. 15 letter, the most recent communique. "That can be negotiated here but there will be no negotiation with you on fossil fuel activities."
"The pace of the development hit us like a tsunami," said Tim Ewert, an organic farmer living near Tomslake.
"There were never any baseline studies done on air or water. They never checked to see what size or how deep the local aquifers were before starting the whole drilling programme," Ewert told IPS over hot coffee and hand-rolled cigarettes at his family farmhouse.
The lack of baseline data makes it difficult, if not impossible, to analyse the cumulative impacts of gas activity.
"We counted 82 trucks pass the house one day before noon," said Woody Ewert, Tim's son, who came into the house fresh from plowing the fields.
"The amount of dust that traffic generates on our gravel road is incredible. Our lawn would look like we were in a fog bank but it was just dust," Woody told IPS.
Farmers in the area frequently complain about excessive noise, dust, bullying from company land agents, environmental contamination and other irritants from the gas industry.
"It's like the Wild West out here," said Ken Vause, a farmer who says unlicensed land agents from a gas company are hounding him into accepting a sour gas pipeline on one of his fields that could pose harm and hurt the land's value.
"I don't condone what this person [the bomber] is doing," said Rick Koechl, a junior high school teacher living some 40 minutes from the bombed sites. "But at least it's bringing attention to the situation up here. We've had legal organisations help us with this fight, but that's not very sexy, is it?"
Koechl thinks new wells producing dangerous sour gas, which is contaminated with hydrogen sulfide, should have to be at least one kilometre from people's homes. He also wants the companies to stop flaring sour gas as the wasteful process creates carbon disulfide, a neural toxin, and other dangerous by-products.
"We have people in the neighbourhood who work in the industry, but they fought alongside us to keep companies at a reasonable distance," said Koechl. "They know how dangerous this stuff [sour gas] is."
While several gas companies operate in the region, the bomber has exclusively targeted EnCana. That company has been a better neighbour to the Ewerts than other firms, says Tim.
"We've put together a programne called 'courtesy matters' to deal with some of the nuisance issues residents have complained about," says EnCana's Brian Liverse. The company also sponsors plenty of charitable organisations in the area, including hospital associations; minor sports teams, youth groups, and the Salvation Army.
Farmers like Ewert and Koechl think the provincial government refuses to enact fair environmental legislation because it is dependent on gas revenue. Woody Ewert thinks British Columbia should double the royalties it charges gas companies.
"When I'm my dad's age, I'd like to be able to burn gas. At the rate we're going, there won't be a drop left," Woody Ewert told IPS.
"The B.C. government has some excellent programmes to stimulate their economy and oil and gas activity in the area," said EnCana's Liverse, noting that drilling rigs are moving to B.C. from neighbouring Alberta, the traditional heart of Canada's petroleum industry.
Alberta's environmental regulations are notoriously lax. An article in the Journal of Environmental Management argues that the province is a "first world jurisdiction" with a "third world analogue" in its treatment of the oil industry. That companies would move across the border in part because they find the political climate more favourable is troubling, say the Ewerts.
Attacks near Tomslake aren't the first case of high-profile sabotage against Canadian sour gas pipelines. On Apr. 20, 2000 an Alberta court convicted Wiebo Ludwig, a farmer and preacher, of bombing gas wells owned Alberta Energy Co. Ltd. (AEC). Ludwig claimed his wife miscarried a child because of sour gas exposure.
During their investigation of Ludwig and his associates, police admitted to blowing up a gas well themselves in order gain credibility for an informant. In 2002, AEC merged with PanCanadian to form EnCana, initially valued at 30 billion dollars. EnCana reps refused to comment on what, if anything, the company learned from the Ludwig saga.
In Alberta alone there were "more than 160 incidents of sabotage" against resource industries (oil, gas, hydro and forestry) between 1997-1999 causing "millions of dollars in damages", according to documents released to IPS from a freedom of information request to CSIS, the Canadian Security Intelligence Service.
The heavily censored documents did not provide figures for 21st century sabotage. Sources familiar with the issue say the numbers are far higher than 160 incidents.
While sabotage against EnCana has drawn significant attention to northeastern British Columbia, residents say the government is still listening to industry at their expense. Even Tom Flanagan, a conservative professor at the University of Calgary, the brain trust of Canada's petroleum industry, thinks grievances from farmers may be legitimate.
"My wife thinks so, she grew up in rural Alberta and says oil companies don't give farmers a fair shake," Flanagan told IPS.
* This is the second of a two-part series on the sabotage of gas pipelines in Northern Canada, and the impacts of energy development in the region. Part 1 is here.
August 30, 2009
Save Burrard Thermal, reduce greenhouse-gas emissions: Mark Jaccard
By Charlie Smith
Georgia Straight
August 27, 2009
A former B.C. Utilities Commission chair, Mark Jaccard, has said he supports the B.C. government’s decision to issue a directive to the BCUC. But in a phone interview with the Straight, the SFU professor of resource management added a caveat: he supports phasing out the burning of natural gas—which creates greenhouse-gas emissions—to generate electricity as long as there is no carbon-capture-and-storage facility. However, he added that B.C. Hydro should not sell the site, and he thinks Burrard Thermal should be kept ready to operate on natural gas in case this is needed in an emergency.
Jaccard emphasized that the plant should be retained because it might be possible to generate electricity without creating emissions by burning hydrogen. “Burrard is fantastic because of where it’s located,” he said. “It’s got transmission lines right there. It’s got a substation. It’s got loading terminals. There is no development around it.”
In the August 25 throne speech, Lt.-Gov. Steven Point stated that the BCUC—which is B.C.’s energy regulator—will “receive specific direction” and that “clean, renewable power generation will be integral to our effort to fight global warming.” On July 27, the BCUC rejected B.C. Hydro’s 2008 Long-Term Acquisition Plan, which undermined its plans to buy power from private companies operating run-of-river generating plants. The ruling also declined B.C. Hydro’s plan to reduce its reliance on Burrard Thermal’s 3,000 gigawatt-hours per year of firm energy.
Jaccard said he thinks it is appropriate for the government to issue a directive to the commission in light of the July 27 order. “I see nothing wrong if the throne speech is suggesting a special direction and that it be specific with respect to Burrard Thermal,” he said.
When Jaccard was the BCUC chair in the 1990s, the Glen Clark government issued a directive to the commission not to investigate B.C. Hydro or hold any hearings into the Crown utility as long as it didn’t seek a rate increase. “From 1996 to 2001, Hydro never came forward for a rate increase, so the BCUC had no authority to go in,” Jaccard recalled.
At the time, the B.C. Liberal critic for B.C. Hydro, Gary Collins, condemned the NDP government’s actions. Collins told the legislature that the NDP government’s move cleared the way for any government to make political decisions about electricity rates. “That’s wrong, and it’s wrong for all the reasons that we drafted a Utilities Commission to take those decisions to set rates outside the cabinet and put them on an independent body,” Collins said in 1996, according to Hansard.
The organization that represents many B.C. Hydro employees, Canadian Office and Professional Employees Union Local 378, issued a statement on August 25 describing the closure of Burrard Thermal as a “mistake” that threatens the security of energy supplies in Metro Vancouver. COPE 378 also stated that most run-of-river projects are unable to produce electricity in the winter because of their elevations and due to weather conditions. “This is an ideological decision that is bad for business, bad for industry, and bad for all of B.C.,” COPE 378 acting president David Black said in the statement.
August 28, 2009
BOMB: Pipeline Sabotage Blows Image of Stable Canada (1/2)
By Chris Arsenault*
Inter Press Service News Agency
August 27, 2009
 Unknown saboteurs have blown up six sour gas pipelines in northern Canada. (Credit:Chris Arsenault/IPS) |
POUCE COUPE, British Columbia, Aug 27 (IPS) - North America's largest natural gas corporation hopes a one-million-dollar bounty will take down the saboteur who is blowing up their pipelines in northern Canada.
Since October 2008, six controlled explosions have rocked sour gas pipelines operated by EnCana energy around the Tomslake area in the province of British Columbia. EnCana's reward is thought to be the largest in Canadian history.
While Calgary-based EnCana is the largest player in the area, a boom in unconventional gas extraction has transformed the rolling hills and sleepy farmland in this sparely populated region to a bustling hub of activity.
"We really ramped things up in 2003," Encana spokesperson Brian Liverse told IPS during an interview at the company's field office.
The corporation has several hundred wells in British Columbia, and between 150 and 200 in the area facing sabotage, says Liverse.
Much of the region's gas is sour, or contaminated with hydrogen sulfide, a "highly toxic gas" which can cause death within a few breaths, according to the U.S. Agency for Toxic Substances and Disease Registry.
"The gas rigs are like Christmas trees, they just dot the landscape," said Lyman Clark, the mayor of Pouce Coupe, the village nearest to attacked sites.
On Jul. 15, days after the most recent attack, the Dawson Creek Daily News received a handwritten letter, allegedly from the bomber, demanding that EnCana cease operations in area.
"Return the land to what it was before you came every last bit of it… before things get a lot worse for you and your terrorist pals in the oil and gas business," wrote the bomber.
In a rare move, the Integrated National Security Enforcement Team (INSET), a mix of top law enforcement officials tasked with investigating the attacks, have posted the bomber's handwritten letters on their website.
At least 250 members of INSET - including masked men with high-powered machine guns and a sniper flown back directly from Afghanistan - have descended on the Peace River region of northeastern British Columbia.
In the Jul. 15 letter, the saboteur promised to suspend attacks for three months so "We can all take a summer vacation including your security personnel and the RCMP who have not helped you to date anyway."
EnCana admits to hiring private security, but Brian Liverse wouldn't say how many or what kind of agents the company is employing.
The point of the attacks was "to let you [EnCana and the rest of the gas industry] know that you are indeed vulnerable, [and] can be rendered helpless despite your megafunds, your political influence, craftiness, and deceit," wrote the alleged bomber.
World demand for natural gas is expected to climb 51 percent by 2030 and British Columbia's provincial government, which owns subsurface petroleum rights, is pushing hard for increased investment. Since 2000, companies have drilled more than 10,000 oil and gas wells in the region.
In 2008, the province reaped a record 2.7 billion dollars from selling natural gas drilling rights. But as sour gas lines cut into fields of canola, companies flare toxic chemicals lighting up the night sky with an eerie glow, and trucks kick up dust on previously tranquil dirt roads, some local residents say increased production is coming at their expense.
"Billions of dollars leave our community every year, yet our elders have to travel to Vancouver when they get sick," said Cliff Calliou, Chief of the Kelly Lake First Nation, an indigenous community of some 500 residents 30 minutes from the bombed sites.
Industry's incursions are "changing the way of life in the community, our hunting, trapping, berry picking - even just going camping," Calliou told IPS during an interview at Kelly Lake's community centre, where several dozen residents attended a conference on strategies for dealing with the petroleum industry.
Despite the region's oil wealth, many houses in Kelly Lake are ramshackle trailers.
Unlike other native groups, there is no official treaty between Kelly Lake and the Canadian government. Natives say the gas is being stolen from unceded land and have launched a 5.2-billion-dollar claim for recompense.
After the first attacks last fall, police and media speculated - without evidence - that the bomber came from the Kelly Lake First Nation. "They [police] threw two people in jail with no charges," Calliou told IPS. He describes police actions in the community as a "witch hunt".
Natives aren't the only ones claiming police harassment. Members of INSET loudly accused local businessman Dennis MacLennan of being the bomber as he sat in a diner. The public accusations have severely impacted his business, according to media reports.
Police also accused 76-year-old Regina Mortensen, a grandmother recovering from hip surgery, of sabotaging the pipelines.
Police spokesperson Rob Vermeulen refused to comment on specific allegations of abuse. "One of our goals is to eliminate persons of interest and we can only do that by talking to people," Vermeulen told IPS. Some residents complain they have been interviewed more than four times.
At a July press conference, police accused the saboteur of "terrorising these communities of Pouce Coupe and Dawson Creek" and labeled the attacks "eco-terrorism".
But the mayor of Pouce Coupe, an ardent supporter of the gas industry, doesn't see it that way.
"I have discussed this [sabotage] with some pipeline workers," Mayor Lyman Clark told IPS at the village's office. "One just frankly told me 'I am more afraid of the bears.' "
Accessing gas in northern British Columbia isn't easy or cheap compared with other jurisdictions. Companies use a technique called horizontal drilling where rigs dig down around 2.3 kilometres and then sideways for another 2 kms, according to EnCana's Brian Liverse.
Geologically, Canada is at a disadvantage compared to other petroleum producers, but companies value political stability. That, more than anything, is what the bomber is attacking. And the companies are scared.
* This is the first of a two-part series on the sabotage of gas pipelines in Northern Canada, and the impacts of energy development in the region. Part 2 is here.
B.C. environment minister eyes Cache Creek landfill expansion
By Kelly Sinoski
Vancouver Sun
August 27, 2009
 The Cache Creek landfill site was earlier scheduled to close in 2010. (Photograph by: Handout photo, Vancouver Sun files) |
Environment Minister Barry Penner is pitching the Cache Creek landfill expansion as a possible alternative to exporting waste to Washington, setting the scene for another showdown with a local first nations group.
Nlaka’pamux Nation Tribal Council chief Bob Pasco said the first nations group will fight the expansion of the landfill, claiming it’s polluting local rivers and affecting salmon stocks.
The group has already filed a suit against the landfill operators, claiming it was excluded from the environmental assessment process.
“They continue to move in the direction of putting in a landfill that’s already leaking,” Pasco said. “Twenty years ago we told them this and they shoved it down our throats.”
Penner hasn’t specifically said B.C. will approve an expansion to the Cache Creek dump, but it’s an option as Metro Vancouver struggles with a garbage crisis.
Metro had applied for provincial approval to temporarily export 600,000 tonnes of waste annually to Washington state, but the province now says it will outlaw international exports of B.C.’s garbage.
This surprised officials in Cowichan Valley, which already exports trash to Washington. Powell River and Whistler also send their garbage south of the border.
Penner said he prefers a “made-in-B.C. solution” and noted the government is reviewing two environmental assessments on proposals to expand the Cache Creek landfill.
One of the proposals would see it expanded by seven hectares, which would keep it open until 2012, and the other by 45 hectares, which would allow it to remain open for another 20 years.
Metro could also consider sending the region’s waste to a proposed incinerator at Gold River on Vancouver Island, he said.
“Those opportunities are right there,” Penner said. “Those are two alternatives I’m aware of besides exporting garbage to the United States.
“It makes sense to deal with our environmental problems here in B.C., rather than exporting our problems to somewhere else.”
But Marvin Hunt, a Surrey councillor and chairman of Metro’s waste management committee, said Penner’s suggestions are hypothetical because neither the Cache Creek expansions nor the proposed Gold River incinerator has been approved.
The Gold River facility would only be built, he added, if Metro signs a deal to send its garbage there, while first nations are adamant about closing down the Cache Creek landfill.
The province halted the approval process for a new landfill at the Ashcroft Ranch site over concerns about aboriginal land claims.
“Bobby Pasco has basically said ‘over my dead body,’” Hunt said. “[Penner] is sort of tentatively defying [first nations] on the expansion, but that’s become his issue, not ours. We’re still going around the same mulberry bush.”
Hunt maintains Metro’s only option now is to strike a deal with Vancouver to temporarily dump the region’s trash in the city landfill, location in Delta.
But if the province is willing to defy the first nations and build a landfill in the Interior, he said, Metro is ready to go on the Ashcroft site.
But Pasco said “there are better ways than hiding” trash in the south Cariboo.
“We don’t like Metro Vancouver wanting to protect their environment down there and keep it clean and pure and export all the bad stuff up here,” he said.
“They’re going to try but I don’t think we’re going to sit back and let them do it.”
Cache Creek Mayor John Ranta, however, is hopeful the landfill will be expanded as it will keep 200 jobs in the community and bring Cache Creek $1 million in royalties every year.
Although the tribal council opposes expanding the Cache Creek landfill, first nations leaders for the Ashcroft and Bonaparte bands are in support of it.
© Copyright (c) The Vancouver Sun
August 27, 2009
So many new challenges for SE2 vanquisher
Brian Lewis
The Province
August 27, 2009
FVRD chair responsible for booming area twice size of P.E.I.
For someone who says she doesn't like fighting, Patricia Ross throws one heck of a punch (figuratively speaking) when Fraser Valley air quality is threatened.
And now the veteran Abbotsford councillor, who gained notoriety several years ago by leading a successful campaign to halt construction of the Sumas Energy 2 power plant in neighbouring Washington state, has entered a much bigger ring.
Elected last December as chair of the Fraser Valley Regional District, Ross is responsible for a rapidly growing region stretching between Abbotsford and Boston Bar.
At 13,900 square kilometres, the FVRD is more than twice the size of Prince Edward Island. Between 2003 and 2031, its population is projected to grow by 82 per cent to nearly 500,000.
Taken together, its massive size (seven electoral districts and six
municipalities) and the robust growth rate would be challenging enough for any first-term chair.
But, thanks to having heavily populated Metro Vancouver next door, and the Lower Mainland's prevailing westerly winds, Ross has inherited the added challenge of defending her region's air quality.
That task is complicated by Metro's dilemma of coping with the 3.6 million tonnes of solid waste its 2.3 million people produce annually.
While more than half its garbage is recycled, Metro must still dispose of the rest.
And now that the B.C. government announced in Tuesday's throne speech that exporting B.C. waste to the U.S. will not be allowed, the limits to Metro's waste-disposal options increase. And there is increased urgency for Metro to build up to six waste-to-energy incineration plants to burn roughly 600,000 tonnes of garbage annually.
Consequently, Valley politicians and taxpayers now see even darker shades of red.
Despite Metro's claims that these technologically sophisticated plants, which use the garbage as fuel to produce electricity, create only "negligible" pollution, many in the Valley don't accept that.
They say their counter-arguments are armed with equally strong scientific and technical claims that Metro's studies haven't counted all the toxins that such plants produce.
"Garbage is the dirtiest fuel on the planet," Ross says. "Metro's studies on this technology are flawed.
"They only talk about pollution averages but those plants will produce a wider variety of toxins than the natural-gas-fired SE2 would have. The plant byproducts must still be dumped in landfills."
She's disappointed that Metro backed the FVRD in its six-year fight against SE2 but now is taking the opposite position.
That mistrust may be reflected in other inter-regional district issues, such as transit.
The FVRD has no desire, for example, to merge with TransLink, even though Ross says co-operation between the two must be fostered.
And, as the new chair, she's closely following a Valley transit study by Victoria and the FVRD that includes the option of using the old Interurban rail line for modern light-rail transportation.
Promoting regional tourism, raising the FVRD's profile, and managing rapid residential, commercial and industrial development, so it doesn't overrun the Valley's key agricultural sector, are also major issues for Ross.
It's more than enough to keep Ross in her new political ring.
Victoria faces free-fall in resource revenues
Of Note:
- Natural gas/ Prices are now at $2.90 a unit, half the $5.87 a unit the shown in the February budget. The budget showed that every $1 change in the price of gas has an impact on revenues of $275 million to $325 million.
- Last year, the gas industry contributed $2.6 billion in land sales and
$1.3 billion in royalty revenues to the provincial economy. This year, both those figures will be off significantly
Gordon Hamilton
Vancouver Sun
August 27, 2009
The collapse of British Columbia's resource industries is expected to push provincial government revenue projections into a steep decline, far deeper than the $2.8-billion drop forecast in last February's budget.
Revenues from all sectors except mining are tumbling as global demand for many of the province's natural resources continues to drop.
"It's the great disappearing act," Jock Finlayson, executive vice-president of the Business Council of B.C., said of the province's resource revenues.
"The fact of the matter is, almost all categories of provincial revenue are going to be down significantly from what Finance Minister Colin Hansen forecast in his budget a few months ago."
The February budget forecast a $2.8-billion decline in resource revenues over the next three years.
Since then, natural gas prices have plummeted to half what they were and revenues from forestry, which would normally pump $1 billion a year into the budget's bottom line, have dried right up.
Hansen acknowledged the magnitude of the economic downturn on the province's revenue stream last Thursday when he told reporters it was "far beyond what we previously had anticipated."
The forest industry normally contributes $2 billion a year to revenues.
After costs of running the ministry of forests are deducted, the net contribution is $1 billion. This year, the net contribution is likely to be zero, despite a $100-million cut expected in ministry operations.
Stumpage payments collected on Crown timber have been hit by a double
whammy: Both log prices and harvest volumes are down. Ministry figures show stumpage revenues for the period March 31 to July 30 at only $34 million this year, down 72 per cent from $123 million collected in 2008.
Further, corporate taxes have vanished and taxes collected under the Softwood Lumber Agreement are down an estimated 40 per cent.
The clearest indicator of the revenue crunch facing Hansen comes from figures on lumber shipments to the U.S. and on revenue estimates from the natural gas sector, which are based on the price of gas.
Lumber shipments are down 28 per cent year-to-date from 2008, which was a poor year, and 45 per cent from 2007, according to Statistics Canada.
"There's nothing I can see out there that would reverse this slow downward trend," said John Allan, president of the B.C. Council of Forest Industries.
Rick Jeffery, president of the Coast Forest Products Association, said logging on the Coast is sporadic because of the collapse in demand and a prolonged forest-fire season. The manufacturing side is operating at about 50 per cent capacity. On top of that, stumpage payments are down 75 per cent, and other revenue streams are weak.
"Nobody is making any money, so we are not paying any corporate taxes."
Also, unemployed workers pay no income taxes, noted Finlayson.
In the energy sector, natural gas has also taken a hard hit. Prices are now at $2.90 a unit, half the $5.87 a unit the shown in the February budget. The budget showed that every $1 change in the price of gas has an impact on revenues of $275 million to $325 million.
B.C. will benefit once gas prices turn around, said David Pryce, vice-president of operations for the Canadian Association of Petroleum Producers. Interest is high in two new gas fields but low prices mean capital to develop them is difficult to raise.
Last year, the gas industry contributed $2.6 billion in land sales and
$1.3 billion in royalty revenues to the provincial economy.
Pryce said land sales are "down significantly" this year. Just how significantly is shown in the ministry of energy's August auction for natural gas and oil exploration rights. It attracted only $37 million in bonus bids. By comparison, the August, 2008 auction brought in $501 million.
Only mining remains profitable as demand for copper and coal from China have taken an unexpected surge. Payments from the industry to all levels of government in 2008 were $545 million, according to a PricewaterhouseCoopers report on the mining sector.
"No one expects it to be comparable to last year, but it's fair to say we are going to be paying because companies are making money," said Pierre Gratton, chief executive officer of the Mining Association of B.C.
ghamilton@vancouversun.com
WAY, WAY DOWN
Provincial revenues from stumpage fees paid by forest companies so far this fiscal year, compared to the same period in 2008.
2009: $34.4 million
2008: $123 million
-72%
Source: Ministry of Forests and Range
Falling energy revenues push Alberta $6.9 billion into deficit
Trish Audette and Archie McLeanCanwest News Service
August 27, 2009
Province still in better shape than others, finance minister says
The Alberta government tried to put a happy face on its dire budget outlook Wednesday as it released details of the record $6.9-billion deficit it's now projecting for this fiscal year.
The province unveiled a first-quarter update that predicts a massive drop in energy royalties and income-tax revenue.
The total shortfall -- $2.2 billion more than initially expected -- is largely due to energy royalties totalling only $3.9 billion, when the April budget had non-renewable resource cash pegged at $5.9 billion.
The state of the province's economy one quarter into the 2009-10 fiscal year shows a sharper period of recession than expected, Finance Minister Iris Evans said, but she added the province expects a stronger recovery next year.
"It's still a better news story in Alberta than anywhere else in the country," she said. The finance minister said interpreting the economic picture in "doom and gloom" terms would be "belittling the entrepreneurship of Albertans."
One of the few bright spots in Wednesday's financial update was the Heritage Savings Trust Fund -- Alberta's so-called RRSP -- which saw unexpected gains in the first quarter, bouncing back from a $3-billion loss by the end of last year.
The savings fund raised about $1.1 billion in the first quarter of the fiscal year -- but the province has no plans to lock in the savings.
"You can't really save money while you're spending your emergency savings," Evans said Wednesday.
The province plans to funnel about two-thirds of the increase directly into general revenues for future spending, leaving the fund with just a $328-million net increase to $14.3 billion. Wednesday's deficit announcement stands in stark contrast to the situation a year ago, when Premier Ed Stelmach's government was predicting an $8.5-billion surplus.
Once the envy of every provincial government, with record-high oil prices driving a massive expansion of public infrastructure spending, Alberta lost its grip on the boom when the global recession shattered the energy market.
As expected, tanking natural gas prices are eroding the government's revenue stream. The province predicts it will generate $1.9 billion in natural gas royalties during the 2009-10 year, well off the $3.7 billion identified in the budget.
Projected oilsands royalties are also much lower than expected, at only
$644 million compared to the $1 billion predicted in April. The government is also reeling from a $532-million hit to its personal income tax revenue, now pegged at $8 billion this fiscal year.
So far, there is no sign of how the province plans to head off an economy that's running red. The deficit puts Stelmach in a bind, politically. He has promised there will be no new taxes on his watch, which has led to speculation about layoffs or deep program cuts.
"As long as I'm premier of this province, there will be no tax increases,"
Stelmach told reporters at the Calgary Stampede last month. "You cannot tax your way out of a recession, and we're not going to do that."
Liberal deputy leader Laurie Blakeman blasted the government Wednesday.
"What is the plan? As a citizen of Alberta what does this mean for me?"
she asked. "The message we're getting is, 'Stay tuned; we'll tell you in six months.' But as a citizen of this province, I have to know."
The budget picture in Alberta is grim on several other fronts:
- Lower land sales for oil and gas production add up to a projected $153 million loss compared to budget expectations;
- Gambling revenue is expected to be down $84 million from budget predictions;
- Lower than expected fuel purchases make for a $20-million loss;
- Weak housing starts and lower vehicle registration numbers add up to a projected $10-million reduction; and
- A slowdown in hotel stays and rates make for a $3-million projected loss in tourism levy revenue.
Liberals' new energy moves draw mixed reaction
Scott Simpson
Vancouver Sun
August 27, 2009
The provincial government's plan to "maximize" B.C.'s green electricity sector drew cheers and jeers on Wednesday.
The B.C. Liberals announced in this week's throne speech that they will strike a "task force" to beef up renewable energy development -- including private sector projects -- with an eye to export electricity sales.
The Independent Power Producers association of B.C. was "very encouraged"
by the announcement, which comes a month after the BC Utilities Commission
(BCUC) rejected BC Hydro's plan to expand the private power sector.
BC Citizens for Public Power executive director Melissa Davis condemned the move, saying, "The government is well aware of widespread disapproval of their plan to privatize B.C.'s electricity sector.
"We can expect exorbitant profits to go to private power producers who are generating new sources of power to be sold to BC Hydro for grossly inflated rates," Davis said.
Private-sector power development has been a fundamental tenet of Liberal energy policy since the party took power in 2001, and the speech committed the government to giving the BCUC "specific direction" to continue that development.
"That task force will be asked to recommend a blueprint for maximizing British Columbia's clean-power potential, including a principled, economically viable and environmentally sustainable export development policy," Lt.-Gov. Steven Point said in the speech.
"It will review the policies, incentives and impediments currently affecting B.C.'s green-power potential, and it will identify best practices employed in other leading jurisdictions."
Harvie Campbell, chair of the independent producers association, said the government has been "rock-steady" in its commitment to new electricity generation and in Tuesday's speech, "reinforced" that vision.
"This gives us certainty," Campbell said. "This gives us clarity and it really instills that confidence, particularly in the investment community, that this province is going to move forward with its green economy.
"It stands out across North America in terms of the potential resource and the potential to grow that green economy."
The government said it will phase out BC Hydro's aging Burrard thermal generating plant, which is maintained at present as an emergency backup power supply.
It will also provide direction to the utilities commission to support development of new renewable power supply.
"Whether it is the development of Site C [hydroelectric dam], run-of-river hydro power, wind, tidal, solar, geothermal, or bioenergy and biomass -- British Columbia will take every step necessary to become a clean-energy powerhouse, as indicated in the B.C. Energy Plan," the speech said.
Blog: www.vancouversun.com/energy
Overruling utilities regulator puts Campbell in tricky spot
Robert Matas
Globe and Mail
August 26, 2009
"It's critical that we restore the independence of the utilities commission to properly do its job on behalf of utilities and consumers alike without political interference. We intend to do that." Gordon Campbell, as opposition leader in November, 2000
The B.C. government chipped away at the independence of the British Columbia Utilities Commission this week, announcing its intention to overrule a decision rejecting BC Hydro plans that included downgrading the Burrard generating plant.
The government initiative announced in yesterday's Throne Speech revives one of the most hotly debated issues in the recent provincial election campaign - private hydroelectric projects - and raises questions about the government's commitment to ensuring that the utilities regulator remains free of political interference.
The Burrard Generating Station is a conventional thermal plant fuelled by natural gas that provides power at peak times, such as last year's harsh winter storm. Reflecting government policy on greenhouse-gas emissions and energy self-sufficiency, BC Hydro had proposed scaling back reliance on the Burrard plant and shifting energy production to privately produced green power projects, such as independent run-of-river, wind power and biomass projects. Run-of-river projects involve diversion of water from streams through a powerhouse and then back into the river.
Some environmentalists have raised concerns about the impact of the projects on the streams, fish and habitat, while others have supported the projects as green alternatives to large-scale dams.
The utilities commission rejected the long-term plans after concluding that BC Hydro had inflated its demand for private power by underestimating how much electricity the Burrard plant could provide.
Energy Minister Blair Lekstrom said yesterday the government is not compromising the independence of the utilities commission by directing it to endorse the phasing out of the Burrard plant. The government has said "for some time" that the Burrard plant was not in its plan for clean renewable energy development, he said in an interview. The government intends to issue a directive to the commission on where the government is heading on the matter, he said. "If it was not clear enough for them before, it certainly will be following this directive that Burrard Thermal is not part of our future, in terms of electricity generation."
He dismissed a suggestion that the direction was political interference. "This is about clearing up something we thought was very clear," he said.
The B.C. government has issued directions to the utilities commission on four previous occasions since the Liberals succeeded the NDP in 2001.
John Horgan, the NDP energy critic, said the initiative contradicts comments by Premier Gordon Campbell in November, 2000, to Canadian Institute of Energy. "He made so much noise and brayed so loudly about non-interference with the regulator," Mr. Horgan said. "[Mr.] Campbell has now decided interference with the independence of the commission is okay. It is a result of [the commission] not giving the answer that he wanted to hear in July," he said.
Mr. Horgan called on the government to set out evidence that contradicts the utilities commission's findings. "Show me why you are better informed than the commission and I may agree. But they have not done that, they have not presented any evidence," Mr. Horgan said
Utilities watchdog gets choke chain
Tom FletcherBlack Press
August 25, 2009
The Burrard Thermal plant is unknown to many B.C. residents.
Tucked away on the north shore of Burrard Inlet, it’s part of a little outpost of the dirty energy industry that West Coast folks tend to associate with Alberta. Imperial Oil’s Ioco refinery was dismantled and sold in 1995, six years after the nearby IPSCO steel mill went cold for the last time. (Yes, B.C. was once a steel producer, or at least a recycler.)
Yellow piles of sulfur extracted from natural gas, some oil tanks and pipelines and the six boiler stacks of the gas-fired Burrard Thermal station are the main remnants of this industrial history seen by commuters on the Barnet Highway, as it winds its way into East Hastings Street.
In what may be its last loud bark, consumer watchdog B.C. Utilities Commission has said Burrard Thermal should fire up four of its six old boilers to help meet growing electricity demand. As one would expect, the NDP and its anti-environmentalist pals were ecstatic. It’s the death knell for Gordon Campbell’s “pirate power” scheme, they crowed.
The commission’s decision, a book-length broth of acronyms that only a lawyer could love, rejects parts of the B.C. Liberal energy plan. But it seems contradictory at times.
Self-sufficiency in electricity is a fine goal, they say, which is why the outmoded, 35-per-cent efficient Burrard Thermal kettle should be brought to boil. It’s also a valuable backup, so it shouldn’t be phased out by
2015 as B.C. Hydro intends. (It can either be a primary source or a backup source, but not both.)
Elsewhere, the commissioners admit they don’t expect B.C. Hydro will actually, you know, run the old smog factory flat out. Commissioners are sensitive to the “social licence” of government in this matter, which one insider explained to me is “code for riots in the streets.” They say Hydro would likely end up importing dirty power instead of making it.
I caught up with Energy Minister Blair Lekstrom in his hometown of Dawson Creek, where he was presiding over the opening of B.C.’s first commercial wind energy project. (That would be one of those pirate power schemes we don’t need.) With the BCUC now under orders to revise its energy forecast, I asked him, can they overrule the government on private power, or anything else? The short answer seems to be no.
“They’ll continue to play a very important role in British Columbia, I can tell you that,” Lekstrom said. “We want to make sure that, you know, if the direction that was given wasn’t clear enough on Burrard Thermal, we’re evaluating that.”
Compared to the BCUC, Lekstrom is clear enough. The old watchdog has been sitting on the porch for so long that its barking doesn’t make sense any more. No need for a one-way trip to the vet, just a choke chain and maybe some nice medication to help it sleep away its autumn years.
Environment Minister Barry Penner is less diplomatic than Lekstrom. In addition to being B.C.’s point man on greenhouse gas emissions, he is the MLA for Chilliwack-Hope, the area that would collect most of the pollution from Burrard Thermal. This was all debated in great scientific detail during the successful fight to stop Sumas Energy 2, a Washington state project that would have been twice as efficient as Burrard.
“The people I have talked to can’t believe it,” Penner said when I asked him about Burrard Thermal.
Oddly, the BCUC went along with B.C. Hydro’s current position that those newfangled plug-in cars are just a flash in the pan.
Here boy, here’s a nice cookie.
Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com.
August 26, 2009
Throne speech focuses on cost-cutting measures as revenues plummet
By Jonathan Fowlie
Vancouver Sun
August 26, 2009
VICTORIA — The Liberal government warned in a grim throne speech Tuesday that costs must be dramatically cut, requiring everything from public-sector wage freezes and possible layoffs to significant reviews of health authorities, boards of education and Crown corporations.
“The fiscal cupboard is bare and currently hangs on a wall of deficit spending,” said the speech, delivered by Lt.-Gov. Steven Point.
“We must minimize spending on non-essential services and target discretionary spending where it is needed most: to help patients, students, children and families and to create a new economic framework, new revenue and new jobs while protecting public services that are indispensable,” the speech said.
Saying B.C. is caught in an “economic maelstrom” and the province’s “worst recession in 27 years,” the speech shows Premier Gordon Campbell’s government now is focused on cost-cutting.
It foreshadows a return to the type of line-by-line spending reviews Campbell launched after he was first elected premier in 2001.
The government has already initiated a review of BC Ferries and TransLink to ensure public dollars are not “used to subsidize unreasonably high compensation levels or administrative costs.”
In the throne speech, the government said not only that it may change those organizations as a result of the review, it also promised similar reviews for all health authorities, boards of education and Crown corporations.
“Where Crown agencies or functions delivered by them can be more cost-effectively administered directly by line ministries, they will be,” the speech said.
“Where service-delivery mechanisms can be improved at a lower administrative cost, they should be.”
Early in Campbell’s first term, the government launched the “core services review,” which scrutinized all programs and services offered by government. It resulted in major restructuring of various government programs.
The government said last week it is closing Tourism BC and rolling its operations into the ministry of tourism.
Campbell said after Tuesday’s speech he did not have any specific plans for other organizations, but that it is important that every government dollar is scrutinized.
“When the government is the single shareholder, we have responsibilities to our taxpayers and we intend to exercise those responsibilities,” Campbell said.
“We’re focusing on what is critical. What’s critical is to focus on those health and education services as we move ahead. And in a tough economic time like this, it is important to make difficult decisions,” he said.
In the speech, the government also promised cuts in other areas.
“Significant reductions in controllable costs, including government funding for discretionary grants and contributions, will be necessary,” it said, adding that all ministries will face similar scrutiny.
In its February budget, the government announced plans to cut $1.9 billion in administrative and other costs over three years, and projected a deficit for this year of $495 million.
More recently the government said revenue dropped by more than $2 billion during the last three months alone, and costs have risen by more than $500 million to fight forest fires and provide additional social assistance.
It says that will mean larger deficits for a longer period of time, and more savings will have to be found.
The speech said rising public-service wage and benefit costs “only put more pressure on government to find savings through layoffs and other workforce reductions.”
“That is something that our government is working very hard to minimize. As long as we are mired in deficits, there is simply no money available for public sector wage increases.”
The government has said it will need to run a deficit for four years instead of two, suggesting it may propose a four-year wage freeze when talks begin with public-sector unions next year.
Darryl Walker, president of the B.C. Government and Service Employees’ Union said Tuesday he had been expecting a two-year freeze and was surprised by the apparent shift in position.
Walker said he was frustrated that the government used the throne speech to push its collective bargaining position. But he said he will reserve judgment until next Tuesday’s budget to see exactly what the government has in mind.
“We’re waiting until Tuesday to really see the budget so we can go line by line and see what it will mean for our members,” he said, adding he is mostly concerned about potential job losses.
The speech included a defence of the government’s plan for a harmonized sales tax, which it said “places us on a stronger job-creation and investment footing,” said the speech, adding that moving on the tax now — and taking the $1.6 billion being offered by Ottawa as an incentive — will help spur investment and avoid heavier debt costs.
“As difficult and rapid as this decision was, it was critical to our economic future,” the speech said.
Campbell’s government has faced heavy criticism from some business sectors, including tourism, homebuilders and restaurant owners.
In the speech, the government acknowledged some will be asked to make “significant adjustments,” but for the first time promised it will “work to help mitigate negative impacts.”
It did not elaborate on what measures might be considered.
New Democratic Party leader Carole James was immediately critical of the speech, saying it was a “disappointment” and offered no real solutions.
“There’s not a plan here to deal with the pressures that families are facing,” James said. “There isn’t an economic plan to deal with the downturn and the fiscal challenges we face in British Columbia.”
James said the reviews promised by Campbell are meant as a distraction to ease some of the public pressure he is facing over issues such as the HST.
“Let’s remember this government set up those agencies,” she said. “They set up the health authorities, they set up TransLink, they set up ferries in a private corporation.
“Now they are saying they are going to review them and maybe there is a problem.
“Well, the government created the problem. They set up those entities.”
Click here to read the entire throne speech
© Copyright (c) The Vancouver Sun
Energy in the Throne Speech
ExcerptsSpeech from the Throne
August 25, 2009
This government will implement an aggressive strategy to turn the challenge of climate change to our citizens' economic advantage.
Green energy will be a cornerstone of British Columbia's climate action plan.
Electricity self-sufficiency and clean, renewable power generation will be integral to our effort to fight global warming.
The BC Utilities Commission will receive specific direction.
Phasing out Burrard Thermal is a critical component of B.C.'s greenhouse gas reduction strategy.
Further, this government will capitalize on the world's desire and need for clean energy, for the benefit of all British Columbians.
Whether it is the development of Site C, run-of-river hydro power, wind, tidal, solar, geothermal, or bioenergy and biomass — British Columbia will take every step necessary to become a clean energy powerhouse, as indicated in the BC Energy Plan.
Government will use the means at its disposal to maximize our province's potential for the good of our workers, our communities, our province and the planet.
While these forms of power require greater investment, in the long run, they will produce exponentially higher economic returns to our province, environmental benefits to our planet and jobs throughout British Columbia.
High-quality, reliable, clean power is an enormous economic advantage that will benefit every British Columbian in every part of this province for generations to come.
Ready access to clean, affordable power has been a huge strategic incentive to industrial development in British Columbia.
We will build on past successes with new strategies aimed at developing new clean, renewable power as a competitive advantage to stimulate new investment, industry and employment.
New energy producers will be looking for long-term investments leveraged through long-term power contracts that give them a competitive edge in our province.
B.C.'s multiple sources of clean, renewable energy are far preferable to reliance on other dirtier forms of power.
We will open up that power potential with new vigour, new prescribed clean power calls and new investments in transmission. New approaches to power generation, transmission and taxation policies will create new high-paying jobs for British Columbia's families.
A new Green Energy Advisory Task Force will shortly be appointed to complement the work of the BCUC's long-term transmission requirement review.
That task force will be asked to recommend a blueprint for maximizing British Columbia's clean power potential, including a principled, economically-viable and environmentally-sustainable export development policy.
It will review the policies, incentives and impediments currently affecting B.C.'s green power potential, and it will identify best practices employed in other leading jurisdictions.
We will promote biomass power solutions and convert landfill waste into clean energy that reduces harmful methane gas emissions.
We will act to outlaw the international export of British Columbia's garbage and landfill waste.
The government has mandated methane capture from landfills to ensure we deal responsibly with our own waste and convert it to clean energy where practicable.
We can be leaders in the commercialization of cellulosic ethanol and other biofuels, as we are in hydrogen and fuel cell technology.
Low-carbon gas development is the key to maximizing B.C.'s energy potential where it can occur with minimal environmental impact.
A new comprehensive Asia Pacific Gateway Authority will be pursued with the federal government. Through it, government will redouble its efforts to open up the critical Northern Corridor with its massive potential as a trade and transportation corridor. That will generate billions of dollars in economic activity and thousands of jobs for Canada's and B.C.'s workers.
Together, we are opening up our transportation gateways, with new investments in our roads, bridges, ports, railways, airports, border crossings and ferries.
A new transmission line along Highway 37 will replace dirty diesel power in First Nations communities, open new opportunities in mining and clean power production and create job opportunities throughout the Skeena Region.
A new Northern Energy Corridor will open up our ability to export liquefied natural gas from the Northeast through the Port of Kitimat to the massive Asian marketplace.
Speech from the Throne, August 25, 2009
Natural gas prices in Canada could fall below $1, report warns
COMMENT: Back in 2000, after years of natural gas prices trundling along around $2 per thousand cubic feet (mcf), BC Hydro introduced its plan to build a gas pipeline to Vancouver Island and build gas-fired generation plants on the island. Then the California energy crisis happened (brought on by greed unleashed by deregulation in wholesale markets there), and gas shot up as high as $10 mcf.
We mocked when BC Hydro's expert gas economist said that he expected the long term price of gas to level out around $3. As North America careened into diminishing supplies, and high prices drew dozens of proposals for LNG import terminals, we cheered.
High and volatile gas prices were a big factor in the eventual decision by BC Hydro's board to kill the pipeline and the gas plants and BC Hydro's entire natural gas strategy.
And now, with global economies in the dumpster, gas demand off, and North American supplies ramping up from huge shale gas plays, I'd be surprised if that economist isn't having a laugh of his own.
Quote to note: "You need to stop incenting producers to drill." That's the last sentence on this page. Yet the BC government is "incenting" the blazes out of the gas industry in northeast BC. (Earlier comments on this subject here and here.)
Fact check: This article says the AECO price has fallen below $2, but the NGX site says the last AECO spot trade was at $2.26. Henry Hub prices are around $3.28, according to Stockwatch.)
By John Morrissy
Financial Post
August 25, 2009
 The U.S. natural gas market may be set to turn the corner, says Reuters columnist John Kemp. (Photograph by: Herald Archive, Canwest News) Service |
Natural gas in Canada, already scraping along at prices below $2, a low not seen since 2002, may fall below $1 in the coming weeks, according to a report from FirstEnergy Capital.
"The market is trying to rationalize all of the gas that is piling up and there are fewer and fewer places to put it. We expect that a $1 handle on prices will start becoming more common in the next few weeks," said analyst Martin King.
The Calgary-based energy advisory said that although Canadian natural gas supplies "continue to drift lower," there is yet no evidence of large-scale shut-ins taking place.
In fact, inventory levels in Western Canada, at 492.46 billion cubic feet as of Aug. 23, now exceed the 489 billion cubic feet of existing storage capacity, prompting King to suggest that some dormant storage sites have been reactivated.
"At this stage, we still believe that shut-ins on the scale of 0.5 (billion) to 0.8 billion cubic feet per day may be needed for a short period of time for some kind of balance to be achieved in this market," the energy advisory's report said.
"If this does not occur, then protracted extreme price weakness is likely in store for the middle to late part of September to prices below $1 per gigajoule," the report said. A gigajoule is a standard measure equal to the amount of energy consumed by a 100-watt light bulb in approximately four months.
Average prices at the AECO natural gas hub in Alberta dipped below $2 Cdn to about $1.90 Cdn this past weekend, FirstEnergy said.
Prices have been on a downward spiral since the middle of 2008, driven lower by the economic downturn as well as surging supplies from liquefied natural gas producers, and new "resource-play" gas fields that have come on stream in recent years.
© Copyright (c) The Vancouver Sun
Natural gas prices can't find a bottom
David ParkinsonGlobe and Mail
Thursday, Aug. 20, 2009
The slip-sliding natural gas market plumbed new seven-year depths Tuesday, and industry watchers warned that overflowing storage facilities and tepid demand could push prices still lower.
The New York Mercantile Exchange's benchmark U.S. natural gas contract, for September delivery, closed at $3.10 (U.S.) per million British thermal units, down 6 cents on the day and their lowest settlement price since August, 2002. It marked the ninth consecutive decline for Nymex gas futures, during which the September contract has tumbled nearly a dollar.
September prices at Alberta's AECO natural gas hub fell 13 cents (Canadian) to $2.54 a gigajoule, down nearly 25 per cent in the past two weeks.
Slumping demand for natural gas due to the economic downturn has been compounded by swelling supplies, from new large-scale shale gas fields that have come on stream in the United States, and by unusually cool summer weather that has tempered the usual strong summer gas-fired electrical demand for air conditioning. The combination has left natural gas storage facilities in both Canada and the U.S. bursting at the seams, and the overflow is landing in the spot market, depressing short-term prices.
“Short term, there's just too much gas and there's nowhere to put it,” said Henry Cohen, president and chief executive officer of energy-focused money management firm Full Cycle Energy Investment Management Ltd.
Although temperatures in many major North American markets have heated up in the past week, market watchers said it has come too late to make much difference. Traders realize that there won't be enough hot days to make a dent in the serious oversupply.
Analysts said that as summer winds up and the market moves into the slower-demand autumn season, prices could slide further – perhaps as low as $2 (U.S.) per million BTU. Even the hurricane season is unlikely to change that, as short of catastrophic-level storms, any production disruptions could be easily made up by ample supplies from other regions, analysts said.
“ Short term, there's just too much gas and there's nowhere to put it”
Prices have fallen to uneconomic levels for producers in both Canada and the U.S., yet production has been stubborn to pull back, and has actually been rising in many U.S. producing regions. Mr. Cohen noted that American producers were encouraged to continue drilling in shale deposits in order to avoid losing property leases, which led to significant new production coming on stream even as prices fell.
Tight credit conditions have caused many producers to maintain output despite unprofitable prices, because they need to generate cash flow to cover their financial needs.
Analysts noted that still-strong prices for longer-term natural gas futures are also encouraging producers to maintain their output levels; the futures curve continues to signal prices north of $5 by the end of this year, and nearly $6 by next fall.
Analysts said that if prices dip toward $2 in the short term, it could convince many producers to shut in some production – especially in Canada, where break-even costs for many natural gas fields are in the $7 range, compared with less than $5 for most U.S. producers. Already, some big producers have been scaling back their output, including Canadian giant EnCana Corp.
But as long as forward-curve price expectations remain high, those supply issues may well persist, said Randy Ollenberger, energy analyst at BMO Nesbitt Burns in Calgary.
“The [forward] strip is still reasonably high,” he said. “I think you need to see the whole curve move lower. You need to stop incenting producers to drill.”
August 24, 2009
BC Hydro: EPAs from Clean Power Call to be awarded in Fall 2009
Clean Power Call Update
BC Hydro
August 24, 2009
Proposals Evaluation Status Update and CEAP Application
The purpose of this notice is to provide Proponents who have submitted Proposals in the Clean Power Call with information concerning:
1. The status of BC Hydro’s evaluation of the Proposals, including BC Hydro’s assessment of the status of First Nations consultation; and
2. BC Hydro’s application for relief from certain requirements of the CEAP.
1. Status Update
In light of recent decisions of the B.C. Court of Appeal, including The Carrier Sekani Tribal Council v. British Columbia Utilities Commission et. al., for Proposals submitted in the Clean Power Call BC Hydro will be assessing the status of First Nations consultations to determine whether adequate consultation has occurred with respect to the proposed sale of power to BC Hydro. Further information may be required from certain Proponents to enable BC Hydro to complete that assessment.
Additional information regarding the evolved requirements of BC Hydro’s First Nations consultation assessment will be posted shortly to BC Hydro’s Clean Power Call website. Please be advised that BC Hydro will contact Proponents in respect of any additional information that may be required concerning projects submitted to the Clean Power Call.
With respect to the future timing of the Clean Power Call process, we anticipate that any EPA awards will occur in the Fall of 2009.
2. CEAP Application
Given BC Hydro's ongoing assessment of the status of First Nations consultation in relation to the Clean Power Call, BC Hydro has filed an application with the British Columbia Utilities Commission (BCUC) requesting relief from section 4.10 of British Columbia Transmission Corporation's (BCTC) Competitive Electricity Acquisition Process (CEAP). The requested relief is with respect to the date by which BC Hydro is required to select successful Clean Power Call Proponents and submit an application to BCTC for a corresponding modification of network transmission service. If this application is not submitted to BCTC by the specified deadline, all Interconnection Requests for the Clean Power Call are deemed withdrawn. BC Hydro has requested that the CEAP deadline be extended to December 31, 2009. As per Order G-96-09 issued on August 20, 2009, the BCUC has agreed to this request to extend the CEAP deadline for the Clean Power Call only.
Clean Power Call update, BC Hydro, 24-Aug-2009
August 23, 2009
COAL: Raven Underground Coal Project - New coal mine on Vancouver Island
Compliance Coal Corporation, 60% partner in the Comox Joint Venture with Japanese and Korean partners each holding 20%, is proposing to open a new underground coal mine in the Tsable River watershed between Parksville and Courtenay on Vancouver Island.
The mine is estimated to produce 2.2 million tonnes of coal per year (reduced to 1.5 million tonnes of "clean coal" per year), or 44 million tonnes over the 20 year expected life of the mine.
Options for shipping the coal (to Japan and Korea) include truck or rail to Port Alberni; truck or rail to Buckley Bay or Campbell River, then barge to Texada Island; truck or rail to Duke Point, truck to Gold River.
The project triggers both a provincial and federal environmental review.
A project description has been filed with the BC Environmental Assessment Office (EAO) and the project is now in Pre-Application status with the EAO. It will be reviewed, draft Terms of Reference (TOR) for a project review will be published, and the public will be given 30 days to comment on the draft Terms. When the final Terms will be issued, and the proponent will disappear for a while, preparing its formal application and environmental impact statement.
When the application is submitted, the project review will move into Application status. This is unlikely to happen for a year or more.
Two of the biggest issues with the Raven project are water and carbon:
Water - impacts on groundwater and the Tsable River drainage, water used for washing the coal, water produced in the mining operation, impacts on salmon - these are perhaps the biggest environmental impacts and concerns with the project. The project description says nothing of any substance about water - that will have to wait for the project application.
Carbon - greenhouse gas emissions when this coal is burned - this is an issue the government will eventually have to address, given how much coal BC mines and exports. So far, it has not been an issue government is willing to confront, neither with the existing mines (virtually all TeckCominco operations), nor with applications for new coal mines (Raven is one of a number, not unique). But there always has to be a first, and there is eventually a right time - this may be the time, and the mine.
Folks concerned about this project have very few opportunities to intervene in any substantial way through the formal regulatory process.
This is an issue that will have to be dealt with on the streets, in media, and with elected representatives.
There is no indication that the company will require any zoning or permits from the Comox Regional District. Many authorizations are required from the province - including a mine permit and a lease for surface lands from the Integrated Lands Management Bureau (ILMB) - and from federal agencies (section 7.2 of the pre-application)
Project home at the BC Environmental Assessment Office:
http://a100.gov.bc.ca/appsdata/epic/html/deploy/epic_project_home_351.html
Project Description
http://tinyurl.com/lqkkl7
Screaming coal prices and a new mine on Vancouver Island?, 01-Feb-2008
August 22, 2009
The big drill
By Scott Simpson
Vancouver Sun
August 21, 2009
B.C.’s natural gas sector is poised for an unprecedented boom
 B.C.’s shale gas resources, including those in the Horn River Basin and the Montney Shale Zone, are estimated to be between 250 trillion cubic feet and1,000 trillion cubic feet, according to the Ministry of Energy, Mines and Petroleum Resources. (Photograph by: Graphics, Vancouver Sun) |
What energy crisis? Despite what you may be hearing about a global peak in oil production, waning reserves, and $100-plus oil prices, North America is suddenly awash in fossil fuel.
Sophisticated new drilling methods and a shared epiphany among exploration companies about the vast potential for new natural gas production from deep underground shale deposits have overturned decades of gloom about waning gas supplies.
“Natural gas will displace coal. It will displace oil,” said Mike Graham, Canadian foothills division president for Calgary-based gas giant EnCana. “There is no reason North America shouldn’t be energy self-sufficient if we can displace a lot of the oil with natural gas.”
British Columbia is emerging as a major player in this new enterprise.
Gas exploration and development companies, all the way from obscure juniors to global giants like ExxonMobil, have scrambled into northeast B.C. in the past three years, desperate to reserve a piece of the Horn River and Montney shale plays (or underground geologic formations) that are perceived as two of the most lucrative on the continent.
Since 2006, at least 19 companies have paid B.C. $3.65 billion to lock up large land positions in one or both of those areas, and the price per hectare has climbed three- to five-fold.
The total estimated volume of shale gas in B.C. is as much as 1,000 trillion cubic feet — enough to supply all of North America for 40 years, although the volume of gas that can be economically extracted is likely to be substantially lower.
“These plays rank up there with the best in North America. The more holes that are punched, and the more information we have, the better people are feeling about these plays,” Energy Minister Blair Lekstrom said in an interview.
“This definitely allows us the opportunity to become an energy powerhouse in British Columbia. Most importantly, it generates revenue to invest into health care and education, programs that are pretty tight as we look at the economic situation.”
Most of the focus has been upon Horn River, but Lekstrom noted that Montney, which is located near Dawson Creek and encompasses both shale gas and tight sandstone gas formations, could be even bigger.
Indeed for B.C., the only energy crisis is that there is suddenly too much of the stuff on the market. There is several months’ worth of gas already in storage. “I’ve seen it a few times in my career where storage gets very full, and you can get some brutal pricing in late summer and fall. This is going to be one of those years,” EnCana’s Graham said.
Across North America, companies are slashing production as prices tumble below the level at which it is economic to produce the gas — thanks to booming production from about 20 shale and “tight” gas fields scattered across the U.S.
Gas generates royalty income for B.C. and an ongoing decline in gas prices is cutting hundreds of millions of dollars out of revenue projections — $500 million this year alone.
This week, the trading price for natural gas reached its lowest point in seven years on the New York Mercantile Exchange, and analysts think it will creep even lower before making a modest recovery this winter.
On Friday, gas was trading as low as $2.80 US per unit for September delivery, and the February 2010 price was $5.35 — both numbers are well below the estimated price the B.C. government assumed when it released its deficit-destined budget last February.
Gas was $13.30 in July 2008.
“Industrial demand for natural gas has declined, Scotiabank Economics commodity analyst Patricia Mohr said in an interview. “It certainly declined in the first half of this year because of the recession and also because of the development of new, quite low-cost natural gas shales and what are called tight sands basins, in the U.S.
“Supplies have become much more ample in the United States and the cost curve has also dropped. Some of these shales are fairly low cost to produce.”
You can’t get this gas out of the ground with a conventional drilling rig. The gas is locked tight into the surrounding rock, which must be fractured, or ‘fraced’ in the industry vernacular, with high pressure injections of a sand-water compound.
Wet sand forcing its way into the rock causes fractures that open up a route for trapped gas to escape to the surface, often at high pressure.
The other key technique is to drill a conventional hole down into the deposit and then veer the well off at a series of right angles, like spokes on a wheel. These horizontal spokes allow for a wider distribution of mud, and the capture of gas from a bigger underground area than a single vertical well could reach.
Calgary-based EnCana, the biggest gas producer in B.C., has been lethally effective with these techniques in the Montney over the past five years, developing productive wells with the precision of an industrial assembly line. The company expects to apply the same techniques in Horn River as well.
It’s worth noting that EnCana got in early at both Montney and Horn River, and occupies central positions on both of those resources.
“We can drill thousands of wells in the Montney, and it’s similar in the Horn River. So we have decades of drilling out in front of us,” EnCana’s Graham said.
EnCana’s production cost at Montney is $3.50 US per unit of gas (a Terasen residential customer is currently paying $5.96 Cdn for approximately the same volume) and expects Horn River will be the same when fully developed over the next four or five years.
The break-even cost for a conventional, shallow, vertical well in Alberta, by contrast, is $7.50 according to a recent analysis by BMO Capital Markets.
Graham noted that the B.C. government has made the province “more competitive” with royalty schemes that exact lower payments upon companies willing to invest in unconventional resources. EnCana, he added, is exclusively focused on unconventional plays.
“To be successful in the natural gas industry you’ve definitely got to think long term.”
EnCana’s success in the Montney sandstone region has fuelled optimism about the shale portion of the basin, whereas expectations for Horn River come from spectacular gas flows from just 81 wells spread over 11,500 square kilometres.
The nearest town is Fort Nelson, which is preparing for a surge in activity by opening up new industrial land.
“We anticipate increased growth and we are experiencing moderate impact right now,” said Tyler Mattheis, Fort Nelson community development officer. Mattheis said “nothing explosive” is happening right now, but he noted that there’s more activity than might reasonably be expected to accompany depressed gas prices. “We haven’t seen really seen the dip that we expected.”
Nexen Inc., one of the Canadian participants at Horn River, said companies jumped into the area as they sensed a boom was coming, in order to lock up contiguous land blocks that would help keep exploration costs down.
“We’re at a stage where we’ve proved the resource is there. We’ve proved we can produce it out of the ground. Now the focus is, can we do it in a cost-effective manner,” said Tim Chatten, a Nexen’s investor relations analyst.
© Copyright (c) The Vancouver Sun
August 19, 2009
Peace River region rejects another hydro dam
By Scott Simpson
Vancouver Sun
August 18, 2009
 Parts of the Peace River valley would be flooded if BC Hydro’s Site C dam and reservoir were established. (Photograph by: Ian Lindsay, Vancouver Sun files) |
Northeast British Columbia won’t yield to BC Hydro’s Site C mega-hydroelectric project without a fight.
Directors of the Peace River regional district have voted to recommend the B.C. government reject Hydro’s request to undertake geotechnical surveys of potential locations for the estimated $6-billion Site C dam and its reservoir.
Hydro needs the studies — which will investigate the stability and composition of the earth in the vicinity of the proposed dam site — as part of preparatory work prior to any decision about whether or not to proceed with the estimated 900-megawatt project.
It is asking B.C.’s integrated lands management branch for a 10-year licence of occupation for the area. Hydro already has two dams and reservoirs upstream of Site C.
The district wants “compensation, mitigation and monitoring program measures” undertaken before Hydro is allowed to proceed with any investigative work — including consideration for the loss of several regional parks, farmland and archaeological sites that would be inundated by the creation of a reservoir with a 9,300-hectare surface area.
That’s the same position the district took in 1981 when Site C was previously studied in detail — and Fort St. John Mayor Bruce Lantz noted that although Hydro is engaged in a public consultation process, there has been no action on the region’s concerns in the 28 years since that position was taken.
“Nothing has really changed, and Hydro hasn’t done anything about it,” Lantz said in a telephone interview on Tuesday. “They’ve not come forward and talked about mitigation or compensation or any of those issues, and those are fairly important to the people who live and work in the area.”
Lantz, a director on the regional district board, said the projected dam and flood areas are “littered with historic, recreational and cultural situati ons that need to be addressed.
“I’m amazed in this day and age with concerns about food security we are wiping out 5,200 hectares of ‘class-one’ and ‘class-two’ agricultural land.”
Lantz said a Hydro promise to create a recreational area on the ensuing Site C reservoir is dubious — noting that during public information meetings last year Hydro representatives acknowledged that it would take at least 20 years for the slopes of the reservoir to stabilize enough to allow public access.
Peace River South MLA Blair Lekstrom, minister of Energy, Mines and Petroleum Resources, said he was “a little surprised” that regional district members didn’t simply “pick up the phone” to ask him about Hydro’s intentions.
“This is not about building the dam. This is about the ability to get in on some land and do some test holes, look at core samples to see if there is proper material if the decision ever was made to go ahead,” Lekstrom said.
He said it was a “reasonable request” for regional district board members to raise the issue of compensation for the impact of Site C, should it proceed, and that “there are opportunities to look at that.”
Lekstrom noted that the region gets compensation for resource extraction, notably oil and gas activity, through B.C.’s Fair Share program, but said there is nothing in the northeast that matches the Columbia Basin Trust program to assist communities in southeast B.C. for the impact of dams on the Columbia River system.
“I think it’s definitely a discussion we want to hold with the region if a decision is made to move on this.”
Visit Scott Simpson’s energy blog here.
© Copyright (c) The Vancouver Sun
August 18, 2009
LTAP: Commission ruling leaves private power producers crying a river
Melissa Davis
Vancouver Sun
August 18, 2009
You can bet your bottom dollar that the July 27 ruling by the BC Utilities Commission on BC Hydro's 2008 Long Term Acquisition Plan sent a jolt through the premier's office, the provincial energy and environment ministries, and their friends in the private power industry.
After examining the evidence from almost a full year of hearings, the government's own independent regulatory body determined that the LTAP was "not in the public interest."
Without a doubt, the BCUC ruling represents a fundamental challenge to the government's energy plan, which called for the province to achieve energy "self-sufficiency" and "insurance" of supply through the purchase of large quantities of electricity. To realize these objectives, the plan prohibited BC Hydro from generating any new sources of energy (excluding Site C, presently part of a five-year review process) and, instead, directed its Crown utility to negotiate long-term Energy Purchase Agreements with private power producers.
To date, BC Hydro has negotiated more than $30 billion in contracts -- the specific terms and conditions guarded in secrecy -- to purchase electricity for the province at rates that dramatically exceed market prices ($80 to $125 per megawatt hour).
The result has been a manufactured competitive energy market and soaring electricity costs for residential consumers.
Not surprisingly, following the May provincial election, the Liberal government interpreted their third consecutive leadership win as a licence to proceed in their plans to privatize BC's electricity sector -- despite widespread opposition by community and environmental groups, first nations, and tens of thousands of citizens.
John Calvert, Simon Fraser University professor and author of Liquid Gold:
Energy Privatization in British Columbia, remarked that the BCUC decision raises legitimate concerns about the government's unrealistically high projections of future electricity requirements and its direction to BC Hydro to meet these projections by purchasing more and more electricity from private power developers.
"The government should not be forcing ratepayers to subsidize the construction of private power projects by requiring BC Hydro to sign outrageously expensive long-term energy purchase agreements," Calvert said.
Ultimately, the provincial government will need to seriously examine the content of the BCUC ruling with respect to their energy policy.
Essentially, they are left with two options: either accept the decision of the Commission and concentrate their efforts on conservation and public renewable energy projects that are needed, or disregard their own independent regulatory body altogether in order to further advance their privatization agenda. As a government elected by the people of this province, one can only hope that that they will act -- as the BCUC has -- in the public's interest.
Melissa Davis is the executive director of BC Citizens for Public Power.
Gas plant must curb emissions, watchdog says
Scott Simpson
Vancouver Sun
August 18, 2009
A proposed $500-million natural gas processing plant in northeastern British Columbia will become the province's single-largest source of carbon dioxide unless the government tightens the rules for greenhouse gas emissions, the Pembina Institute said Monday.
EnCana and a consortium of gas producers are seeking approval from the B.C. environmental assessment office to build the Cabin gas plant 60 kilometres northeast of Fort Nelson, to process large volumes of gas that are expected to be produced from the sprawling Horn River Basin.
Horn River has been cited as one of North America's largest potential gas plays and in the past two years has fattened the provincial treasury with hundreds of millions of dollars in bonus bids for drilling rights.
When fully operational, the plant will annually emit 2.166 million tonnes of carbon dioxide -- about twice the CO2 output of B.C.'s largest emitter, Rio Tinto Alcan's aluminum smelter in Kitimat, and equivalent to 3.27 per cent of B.C.'s total industrial emissions.
Cabin would rank approximately as the 25th-largest CO2 emitting facility in Canada. It will produce 800 million cubic feet of gas per day.
The Pembina Institute, a Calgary-based fossil-fuel watchdog group, said emissions from the Cabin gas plant "would be the equivalent of adding almost 450,000 cars to B.C. roads."
Matt Horne, B.C. energy solutions program director for Pembina, said in an interview that emissions from Cabin would be "significant on a North American basis" because the Horn River gas resource is considered one of the single-largest gas plays on the continent.
In a recent letter to the environmental assessment office, Pembina staff asks that approval for the Cabin plant include a requirement that it be equipped with low- or zero-emission technology that captures CO2 and stores or processes it for disposal, rather than discharging it into the atmosphere.
"We think there needs to be a binding requirement for that level of emissions, and how the company achieves it should be up to them."
EnCana is leading the project on behalf of a group of producers who are now exploring Horn River and looking for a processing venue to commence operation within two years as gas production ramps up.
Cabin will provide 267 person-years of employment during the initial 18-month construction phase, and 40 to 50 full-time jobs when the plant becomes operational. Plant operations at Cabin are expected to continue for 25 years.
EnCana notes in its submission to the environmental assessment office "a strong possibility" that ramped-up gas production in B.C. could cause North American CO2 emissions to drop if it displaces existing fossil fuel consumption. Natural gas is 20- to 50-per-cent cleaner per unit of energy compared to higher-carbon fuels such as coal and oil. EnCana vice-president Mike Forgo said the plant will be designed in such a way as to accommodate carbon capture and storage technology.
"We've got the facility capture-ready," Forgo said. "You could come in and hook into the system without a whole lot of trouble and you could capture the CO2."
But Forgo said that until the provincial and federal governments enact legislation providing direction on carbon capture to industry it is difficult to act.
Climate Change Implications of the Proposed EnCana Cabin Gas Plant
Media ReleasePembina Institute
August 17, 2009
Vancouver, August 17, 2009 — The EnCana Cabin Gas Plant proposed for northeast British Columbia is currently under review by the provincial Environmental Assessment Office. At full operational capacity, the proposed plant would emit 2.2 million tonnes of greenhouse gases per year — the equivalent of adding almost 450,000 cars to British Columbia roads.
The climate issues surrounding the EnCana Cabin Gas Plant proposal are significant. British Columbia has legislated a commitment to reduce provincial greenhouse gas emissions. If approved, the EnCana Cabin Gas Plant would increase British Columbia’s emissions by 3.27% (based on 2006 emissions).
"As the province moves towards a low carbon economy, responsible long-term infrastructure and sustainable resource development decisions will be essential," says Matt Horne, the Director of British Columbia Energy Solutions at the Pembina Institute.
The Pembina Institute has submitted a letter to the Environmental Assessment Office with recommendations for addressing the climate change implications of the EnCana Cabin Gas Plant during the project's environmental assessment. The four recommendations are
1. Include the greenhouse gas emissions from the facility in relation to British Columbia’s provincial emissions reduction targets.
2. Require the proposed facility to meet emissions standards equivalent to a gas processing facility equipped with zero or low emissions technology such as carbon capture and storage.
3. Include the greenhouse gas emissions that would result from the expanded upstream gas production needed to supply the processing capacity of the proposed facility.
4. Include the greenhouse gas emissions of the end use of the gas processed by the EnCana Cabin Gas Plant.
The Environmental Assessment Office is accepting comments on the EnCana Cabin Gas Plant proposal until August 21, 2009.
-30-
For more information:
Read the backgrounder, “EnCana’s Proposed Northeast British Columbia Cabin Gas Plant: Accounting for the Climate Change Implications,” at:
http://bc.pembina.org/pub/1873
Read the Pembina Institute’s letter to the Environment Assessment Office at:
http://bc.pembina.org/pub/1867
Contact:
Matt Horne
Director, British Columbia Energy Solutions
The Pembina Institute
Cell Phone: (778) 235-1476
Office Phone: (604) 874-8558 ext. 223
Email: matth@pembina.org
Media Release
Matt Horne, Pembina Institute, 17-Aug-2009
LiveSmart's death wounds companies
Ann Hui
Times Colonist
August 18, 2009
Demise of rebates for 'green-energy' leaves support sector out in the cold
The phones at City Green have been ringing since Friday.
The calls have mostly been about the sudden end of LiveSmart B.C., a rebate program for energy-efficient homes. And about 15 to 25 per cent of them, said Peter Sundberg, executive director of City Green, have been calling to cancel their energy assessment appointments. The program's demise might be hurting homeowners, he said, but it's hurting those in the "green economy" even more.
"The energy advisers, the window gal and the home renovation guy were all being supported through this program. The impact is huge," he said.
LiveSmart allowed homeowners to receive hundreds of dollars of rebates on home energy assessments, as well as energy-efficient upgrades such as heating, windows and appliances.
Just 15 months into the program, however, Energy Minister Blair Lekstrom announced on Friday that the $60-million budget has been fully committed.
Due to the current economic climate, he said, additional funds would not be injected into the program.
Federal grants such as those under its ecoENERGY program still exist. But in some cases, they are not as extensive as what LiveSmart offered.
Energy advisers said they've already started to feel the hit.
Dave Smith, a certified energy adviser with Ridge Energy Consultants, has had half his appointments this week already call to cancel.
Jeff Murdock, vice-president of Building Insight Technologies, said that about a quarter of existing appointments were cancelled, and that at least one of the company's newly trained energy advisers has been told to prepare to move to Ontario since the announcement.
Energy-efficient contractors are taking a hit as well.
Clay Crust, spokesman for Foster Air Conditioning, said heat pumps make up a large portion of the company's sales. The Live-Smart program, coupled with federal grants, covered almost 20 per cent of the cost of a heat pump for homeowners.
Now, he said, people have begun to call the company to cancel planned installations.
"There was no warning. There wasn't even any grace time," Crust said.
August 13, 2009
Haida take $240-million stake in NaiKun wind project
COMMENT: And to all those First Nations out there still settling for a piddling 1% or 2% or even 10% or 20% equity stake in these power projects - set your sights higher! The Haida Nations have just negotiated a 40% equity stake. Even that is the short end of a potentially very lucrative stick - how about the 72% equity in the China Creek project which Chief Judith Sayers pulled off for the Hupacasath First Nation. Dam fine stuff, so to speak.
The Haida interest in Naikun will be funded, not surprisingly, by federal (and perhaps by provincial programs. That's all part of a fairly recent scheme on the part of the two governments to ensure that native opposition does not impeded the development of energy projects. (link to earlier related comments)
By Scott Simpson
Vancouver Sun
August 13, 2009
 We are putting this project through a rigorous environmental assessment, and it is looking good,’ says Guujaaw, president of the Haida Nation. (Photograph by: Bill Keay, Vancouver Sun files) |
VANCOUVER — The business arm of the Haida Nation announced Thursday an agreement with NaiKun Wind Energy Group to acquire a 40-per-cent equity stake in a $2-billion green power project on British Columbia's north coast.
The announcement further bolsters NaiKun's ambitious plan to establish a 396-megawatt wind park in Hecate Strait off the eastern coast of Queen Charlotte Islands (Haida Gwaii).
Haida Enterprise Corporation (HaiCo) said it has signed a memorandum of understanding with NaiKun, and the first nation said future income from part ownership of the wind energy project "could provide the catalyst to enable the Haida Nation to create a sustainable economy for Haida Gwaii in areas such as forestry products, fisheries and aquaculture and tourism and recreation, as well as community infrastructure."
The $2-billion project will be financed with 70 per cent debt and 30 per cent equity. The Haida equity share is $240 million.
HaiCo and the Haida Nation said in a news release they will seek federal government support for their participation in the project.
"This initiative is in line with the objectives of the new Federal Framework for Aboriginal Economic Development, announced in June 2009," the Haida said in the release.
“Our people have always put our lands, waters and culture first,” Guujaaw, president of the Haida Nation, said in the release. “We are putting this project through a rigorous environmental assessment, and it is looking good. The next logical step is to work out the business case for our people, who could see this project as the centerpiece for our economic strategy.”
“This is a great opportunity for the Haida people, we see this as redirecting the earnings that would have normally gone to outside investors and is keeping them here at home” said Thomas Olsen, managing director of HaiCo.
“Not only will the proposed NaiKun Wind project create a significant number of jobs in the North Coast initially, but it allows us to invest the returns from our equity in a wide range of sustainable economic development opportunities on Haida Gwaii” he said.
“We look forward to working with the federal government on this initiative and are encouraged by the direction they have taken in the new Federal Framework for Aboriginal Economic Development.”
NaiKun Wind president and CEO Paul Tayor called the deal an "an important step" for the project.
“Having the Haida Nation with an ownership interest in the proposed project company underscores their support and commitment," Taylor said in a news release.
NaiKun Wind and Enmax Green Power Inc. currently each own 50 per cent of the project company.
Visit Scott Simpson’s energy industry blog at www.vancouversun.com/energy
© Copyright (c) The Victoria Times Colonist
B.C. awards $120 million in credits for roads and pipelines
By Scott Simpson
Vancouver Sun
August 12, 2009
The British Columbia government has awarded $120 million in royalty credits to support 31 new road and pipeline projects, Energy Minister Blair Lekstrom announced on Wednesday.
The money will be provided to 19 companies for 31 oil and gas infrastructure projects, improving access to underdeveloped areas of northeast B.C., Lekstrom said in an interview.
Since the government created the program three years ago, it has led to development of 58 new roads and road upgrades, and 52 pipeline projects.
The most recent call for projects attracted 68 bids with a total value of $760 million.
B.C. does not provide the funds for the projects — instead, oil and gas drilling companies finance them and recover their investments by foregoing resource royalty payments to the government until they’re fully paid back.
The projects are spread across northeast B.C. — although there are notable concentrations in the Horn River and Montney areas which are two of North America’s hottest natural gas exploration plays.
“These projects represent new and improved infrastructure that will provide more jobs and opportunities for British Columbians,” Lekstrom said in a government news release. “This increased activity and new production will generate additional royalty revenue to the province.
“Roads and pipelines deliver economic stability and the opportunity to develop the oil and gas industry which, in turn, brings revenues that help to fund education, health care and social programs for everyone.”
August 12, 2009
Hope is blowing in the wind for British Columbia
Tzeporah Berman
Vancouver Sun
August 12, 2009
Standing under the mesmerizing blades of the new wind energy park up at Dawson Creek last week was a moment to celebrate: The gentle giants at British Columbia's first wind farm are now feeding clean electricity onto the grid.
The most striking thing about the new wind farm is how utterly normal it all seems. Looking out over Mike's Steak House to the ridge in the distance, the wind park is simply a quiet symbol of hope in a world addicted to fossil fuels.
I also couldn't help but think: frankly it's about time. Given all the chatter about B.C.'s climate leadership, you would think windmills and solar panels would be as common as in Germany.
We're often lulled into thinking we're "green" because of the big hydro dams built by previous generations. But three-quarters of the energy used in B.C. -- to move us around, heat our homes and run our economy -- still comes from fossil fuels. And whether B.C. will catch up to our neighbours is now in question since the regulators, government and BC Hydro are tangled in a quasi-judicial conflict at the BC Utilities Commission. Will future clean energy projects get bogged down in a swamp of legal-sized paper?
We really can't allow that to happen. With record temperatures and fires raging, British Columbians are seeing the dangers of a hotter planet first hand. The blanket of heat trapping gases already in the atmosphere means we've only seen the beginning. It is imperative that we do our part to eliminate fossil fuels as quickly as possible.
We are among the luckiest people on the planet and B.C. has enviable advantages. With the base load power from the big hydro dams backing up a modern renewable grid, B.C. can build a model for a fossil fuel-free world. It will take aggressive action by government, the private sector and all British Columbians to promote efficiency, clean energy and switch off fossil fuels by deploying technologies like electric transit and vehicles.
Similarly, our federal representatives need pressure. Canada has become known as one of the "bad boys" of international climate negotiations and Ottawa is allowing incentives for renewable power to run dry. The next climate negotiations are coming up this December in Copenhagen.
A clean energy economy is within our grasp, but it needs focus. The Obama administration is outspending Canada 14-1 (per capita) in its green jobs surge towards a new energy economy. The Europeans are out ahead. And now China, South Korea and other Asian nations have joined the clean energy race in a massive way.
It's not as widely known as it should be that B.C. has some of the most innovative and promising clean-tech companies in the world. We can make massive cuts in our energy consumption. We can green buildings and urban planning. We can take our homes and factories and transportation off fossil fuels. There is reason for hope but no time to waste.
And we have our own contradictions to deal with. Ramping up fossil fuel production in the North is a huge source of carbon emissions. We are still mining and exporting coal. And we should not even be considering pipelines from the tar sands to tanker ports on our west coast.
Instead we can focus on using energy much more wisely. I know this sounds dull but it is hugely important and the gains are impossible without public acceptance of conservation policies -- through voluntary programs, sure, but we also need to support changes to our cities, more dynamic pricing and harnessing the potential of a "smart" grid. And legislation like Japan's "top-runner" law, where the most inefficient products are regularly removed from the market, driving companies to be ever more efficient.
The transition off fossil fuels also requires effort and acceptance from all of us. We can match legislation like Ontario's new Green Energy Act to spur clean energy development. We can demand that our governments impose ever stricter caps on carbon pollution as well as constantly stricter mandates on buildings and vehicles.
Did you know that China has stricter vehicle standards than the new ones proposed for Canada? Or that Warren Buffet is betting his fortune on electric cars made in China? Clearly we can raise our game.
British Columbians can be justifiably proud that our province broke the Canadian logjam of inaction on global warming and clean energy. But we shouldn't underestimate the scale of the challenge ahead. It is time for a renewed leadership effort.
- Tzeporah Berman is executive director of PowerUP Canada.
LTAP: Private power comes with a huge cost
COMMENT: Note the footnote: "Energy Minister Blair Lekstrom called some ... analysts ... who track the private power companies operating in the province .... The ministry won't say who got the chats with the minister. No transcript exists of the briefing, the ministry says."
By Paul Willcocks
Times Colonist
August 12, 2009
The B.C. Utilities Commission deserves a slap upside the head for its ruling on B.C. Hydro's plans to sign deals with private power companies that will cost consumers billions of dollars.
Not for its substance. As far as I can tell, the murky, acronym-laden swamp of a decision makes sense.
But its incomprehensibility -- not just to dabbling journalists or interested readers, but to energy experts -- is appalling.
The utilities commission exists to protect the public interest. B.C. Hydro is a monopoly. It sold $2.8 billion worth of electricity within the province last year -- about $650 for every person in the province.
The commission, among other things, scrutinizes B.C. Hydro's operations and plans to make sure it isn't making mistakes that result in unnecessarily high electricity costs.
This decision ruled on B.C. Hydro's long-term plan to meet energy demand in the province.
And the utilities commission had some big doubts.
It had to look at several components of the plan, starting with B.C. Hydro's forecast of future energy demand. That was OK.
Then it reviewed B.C. Hydro's plans for reducing demand, through increased efficiency and conservation and off-peak power. Curbing demand can be cheaper than adding new dams or wind turbines.
Those didn't pass the commission's scrutiny. The corporation wasn't doing enough, it ruled.
Next the commission looked at how B.C. Hydro proposed to meet the province's energy demands in the coming decades. That matters because wrong decisions mean unnecessary costs for consumers and companies. If B.C. Hydro enters into a long-term deal to buy electricity from a company developing a big power project on a B.C. river system, for example, when it's not needed, consumers pay the price.
The utilities commission rejected B.C. Hydro's long-term energy acquisition plan.
The Crown corporation, acting on government direction, has set three criteria for new power. It has to be green -- hydro, wind or burning wood waste. It has to come from private companies, not B.C. Hydro's own projects. And the capacity has to be so great that no imports would be needed.
That's consistent with the government's decision, two years ago, that climate change was an over-riding issue.
But it comes at a cost. New, green energy from private companies is expensive. If B.C. Hydro commits to paying too much, or buying too much, energy prices will be higher than necessary.
The commission -- based on my reading of an opaque 200-page decision -- thought B.C. Hydro could be planning to buy more power than was necessary, building a large cushion into its plans.
And the corporation had reduced the potential capacity of Burrard Thermal, the gas-powered plant in the Lower Mainland. Burrard is old and inefficient and produces a lot of greenhouse gases. But it can provide cheap standby insurance power, an alternative to costly contracts with private power corporations.
The ruling baffled everyone. It didn't order a halt to the current call for new green power projects from private corporations. But it did reject B.C. Hydro's plans to reach power deals with those companies.
Plutonic Power, one of the big IPPs, saw its share price fall 19 per cent on the day after the decision's release, making it worth about $35 million less.
The bottom line, I would say, is the utilities commission judged that B.C. Hydro is trying to buy too much expensive energy from private companies, at consumers' expense.
The Crown corporation is in an interesting spot.
The government and the well-connected private power companies want it to go ahead with more long-term deals.
But the utilities commission has served notice that B.C. Hydro will be taking a risk if it goes ahead.
The commission might not allow those costs to be passed on to consumers, which would threaten the $500 million -- more or less -- the government expects in profits from B.C. Hydro.
Unless, of course, the government abandons its commitment to an independent utilities board and opts for political interference.
Footnote: Energy Minister Blair Lekstrom called some of the analysts for the big investment houses who track the private power companies operating in the province in the wake of the ruling. The ministry won't say who got the chats with the minister. No transcript exists of the briefing, the ministry says.
© Copyright (c) The Victoria Times Colonist
Plutonic's EIS will be delayed until early 2010
By Dan MacLennan
Courier-Islander
August 12, 2009
It's going to take longer than first thought for Plutonic Power to submit an environmental impact statement (EIS) for its massive Bute Inlet Hydroelectric proposal.
Plutonic must submit an EIS to the federal and provincial environmental review agencies laying out anticipated impacts and mitigation requirements stemming from the 1,027 megawatt project proposing to use 17 run-of-river generating plants on the Homathco, Southgate and Orford rivers feeding Bute Inlet. Plutonic had originally suggested the EIS would be ready by the fall, but that timeline changed in the latest Plutonic newsletter.
"This is a great opportunity to address concerns that have been raised about the Bute Inlet Project, as review at this level is comprehensive and extensive, with public hearings," CEO Donald McInnes said. "We look forward to this process which will officially begin when re submit our environmental impact statement guidelines to the Canadian Environmental Assessment Agency early in 2010."
Plutonic spokesperson, Elisha McCallum, admitted Friday that early 2010 is considerably later than Plutonic had planned.
"We made the decision to extend our submission because we need some more time to do some more study work," she told the Courier-Islander.
"Bute is a very complicated area in terms of multi-use, looking at what's being used in the valley now, what could potentially be used in the future, what is all the flora and fauna that is going on in that area, so we need more time to do more study work, a longer period of time to extend that study."
She said Plutonic had left its earlier EIS submission estimate rather loose "because we wanted to see where we had gotten with our studies to date."
"If we want to be very clear and comprehensive on the work going forward, we need some more time to add some more data to that mix," she said. "So if people ask us 'how long have you been studying Dolly Varden in this area' we can be definitive and say 'it's been this amount of time and we believe that that's the right amount of time to depict the historical information that we've got.'"
The political ground shifted beneath independent power producers (IPPs) late last month when the BC Utilities Commission (BCUC) refused to endorse B.C. Hydro's long-term call for 3,000 gigawatts of power from public and independent power producers because it was not "in the public interest."
The commission took issue with several areas of BC Hydro's plan, including whether they met the provincial government's requirement to meet self-sufficiency in electricity by 2016. BC Hydro has gone back to the drawing board to come up with a new Long Term Acquisition Plan (LTAP).
McCallum said the EIS decision was not related in any way to the BCUC decision.
"It certainly doesn't have anything to do with any of the decisions that have happened recently, definitely no," she said.
She said the later EIS release date isn't a problem for Plutonic.
"It doesn't impact us negatively in any way," she said.
"We're obviously still waiting for the call results from BC Hydro, so until we have a bunch of these decisions all lining up, we don't have an idea of timeline so we're making it fluid at this point.
"Given the LTAP decision, we're just sort of waiting to see which direction BC Hydro's going to go. We would be extremely optimistic in thinking that the call would move forward, but we don't know yet, so we're waiting to see what's happening on that front," she added.
But opponents say the BCUC decision clearly challenges the validity of BC Hydro's June 2008 call for clean power generation proposals.
Plutonic and other proponents were hoping BC Hydro would receive BCUC LTAP approval and name the successful proponents at the same time.
© Copyright (c) Canwest News Service
August 11, 2009
Opposition to dams reaches high-water mark
Mark Hume
Globe and Mail
Aug. 10, 2009
When a public information meeting on a proposed power project was held in the small village of Kaslo earlier this year, nobody was clear about what to expect.
In the West Kootenays, where a string of huge hydro dams were built during the 1960s and 70s as part of the Columbia River Treaty, would anybody really care about a relatively small proposal to dam Glacier and Howser Creeks?
The B.C. Environmental Assessment Office apparently didn't think so, and held the public information session not in the centrally located, much larger centre of Nelson, but in tiny Kaslo, population 1,029.
When Gwen Barlee, national policy director of the Wilderness Committee, pulled into town on the evening of the meeting, she cast a nervous eye at the sparse gathering.
“Lee-Ann Unger from the West Kootenay Eco-Society, a local organization which had worked hard to raise awareness about the event looked a little dejected,” she later wrote on the Wilderness Committee website. “There were just a few cars sprinkled about, and several people milling around outside.”
The meeting was to be held in a local school gymnasium, and for a while it seemed as if it might be one of those events where you have a cavernous hall and a few listless officials watching flies buzz around.
“Gradually, though, people started to trickle into the parking lot: young families with children, kayakers from Nelson, concerned Kaslo residents, local BC Wildlife Federation members, loggers, fishers, hunters, hippies and business people,” Ms. Barlee wrote.
And the crowd kept growing. Soon it had spilled out of the parking lot, down the street and onto the grass.
Just before the public meeting started a cheer went up, reported Ms.
Barlee, as three buses rolled in, jammed with people from Nelson.
For more than three hours, people voiced their opposition to the project and the official attendance count was 1,100 – more than the entire population of Kaslo.
It was a clear sign of the enormous interest in and opposition to the proposed Glacier/Howser independent power proposal, or IPP. The project would see five dams built on the two thundering creeks to generate about 90 megawatts of power for Purcell Green Power Inc., a subsidiary of AXOR Group.
That was in June. But the public interest has not waned.
For several weeks the EAO accepted written submissions from the public.
That process ended July 27, but it took until the end of last week for officials to process and post all the submissions.
Ms. Unger has counted the comments – and there are 1,012 of them.
EcoSociety volunteers have read through about three-quarters of them and report “the vast majority” are opposed to the project.
If the first and last comments posted on the EAO site are any indication of the mood, people are more than a little opposed.
The first submission logged, June 14, is from Josh Milligan. It states in
part: “This project is preposterous. Given the terrain they plan to work in and the expense required to operate within acceptable safety margins it simply doesn't make sense. It's inevitable that corners will be cut and environmental impacts will be greater than projected.”
Fast forward to July 27, for the last of the submissions, and you have David Lancaster telling EAO officials: “I pay your salary with my tax dollars. I expect you to do your job, and protect the environment for me, my loved ones, and future generations … I want you to wake up fast, and hear the cries of fearful, angry B.C. citizens.”
A lot of IPPs are running into opposition in the province. People don't seem to much like the idea of a lot of small rivers being dammed by private developers, who will then sell the power to BC Hydro.
In the Kootenays, that opposition has hit a new high water mark.
In Victoria, the government continues to insist its shift to IPPs is a good idea. But a lot of people clearly disagree.
To read the comments, go to the EAO home page, and open the section headed Public Comment Period Closed – Application, Glacier/Howser Project.
This may be the writing on the wall that spells the end of another IPP.
B.C. emerges as natural gas player
David Ebner
Globe and Mail
Tuesday, Aug. 11, 2009
 As gas supplants forestry as the province's economic driver, key industry players such as Korea Gas are lining up to grab their share |
For four years, Alfred Sorensen and his tiny team at Galveston LNG Inc. worked to develop a natural gas import terminal on B.C.'s northwest coast, but were unable to court international producers to support the project.
Then, a year ago, the seven-person company came up with a new idea: Export gas to Asia. It seemed improbable, but Mr. Sorensen saw great potential in British Columbia's far northeast, where new drilling technology was unlocking vast shale gas reserves in the Horn River region.
Now, his proposed $3-billion Kitimat liquid natural gas project has the backing of some of the biggest names in the business – including the world's largest gas importer, Korea Gas Corp., and U.S. gas producers EOG Resources Inc. (EOG-N74.90-1.30-1.71%) and Apache Corp. (APA-N86.67-1.73-1.96%) , two key players in the Horn River.
The change from an import to an export facility is emblematic of the changing B.C. economy and the province's emerging role as a significant gas producer on a global scale.
British Columbia currently produces 2.5 billion cubic feet of gas a day – less than a quarter of rival Alberta's output – but the potential at Horn River alone is huge. Companies such as Apache, EOG and EnCana Corp. believe Horn River itself could eventually produce more than four billion cubic feet a day, similar to what is generated at a giant field in Texas called the Barnett Shale.
Beyond Horn River, northeastern B.C. appears to be rich with gas trapped in barely porous rock.
This is a resource that industry is only now able to extract profitably. The Montney play south of Horn River has also sparked serious interest.
“The scale of the resources is enormous,” said Jock Finlayson, executive vice-president of the Business Council of British Columbia.
“It's a big piece of the future here.”
The ascent of natural gas in B.C.'s economy comes alongside the decline of forestry, the province's traditional cornerstone industry. The value of gas exports in the past decade has almost tripled, standing at $3.2-billion last year, while softwood lumber has fallen by more than half, to $3.6-billion.
For gas producers, an export terminal is an attractive option because gas prices in Asia are often significantly higher than in North America, making up for the extra cost to move the commodity a far greater distance than to producers' usual customer, the United States.
And for a company such as Korea Gas, a connection with B.C. gives it one more option as it works to ensure future supplies.
Mr. Sorensen said it was Korea Gas that turned heads. The company's chief executive officer, Kang-Soo Choo – who regularly deals with the likes of Russia's OAO Gazprom, the world's biggest natural gas company – personally worked on the deal, braced by the view that B.C. can deliver on a promise of long-term supply. A memorandum of understanding specifies that Korea Gas would buy 40 per cent of the facility's planned 700 million cubic feet a day of capacity.
“They brought the real credibility,” Mr. Sorensen said.
Deals with Spain's Gas Natural, EOG and Apache quickly followed.
The export terminal is to be located near Kitimat, B.C., and Galveston is now focused on securing financing for the project and formalizing the preliminary deals with Korea Gas and others. A final decision on building is set for next June and the facility could be in operation in late 2013.
Gas for export is liquefied by super cooling the commodity to -160 degrees. It is then moved to its destination by ship and, once there, turned back into gas at a regasification terminal.
The B.C. government has actively marketed the province's natural gas potential, including to Korea Gas, which Mr. Sorensen said helped the process advance.
Last week, the province again displayed the importance it places on natural gas, introducing a one-year, ultralow royalty for new wells drilled from September through next June to encourage companies to keep working even with the current low gas price and weak economy.
Apache to supply Kitimat LNG
By Shaun Polczer
Calgary Herald
August 11, 2009
The prospects for liquiefied natural gas(LNG) exports off the West Coast took another step forward Monday, after Calgary-based Kitmat LNG signed an agreement with Houston-based Apache Corp. to supply its proposed liquifaction facility in northern British Columbia.
Kitimat said Apache has agreed to supply up to 40 per cent, or 200 to 300 million cubic feet (mmcf) per day of the terminal's proposed 700 mmcf capacity. Kitmat president Rosemary Boulton said the deal would allow the company to proceed with engineering and design work to begin initial construction later this year.
"It's very positive," Boulton said in an interview. "It feels like we've got a lot of traction and forward momentum. We now have the minimum volume we need for the terminal to go forward."
Apache is the second producer to express interest to ship gas into the terminal, which is expected to come into service in 2013. In July, Kitimat signed a similar agreement with Texas-based EOG Resources for an unspecified amount of gas supplies.
The company has also been signing up buyers to take the gas to markets in Asia and possibly South America. In June it reached a memorandum of understanding with Korea Gas Corp. to buy about 300 million cubic feet per day and on July 5 added Spain's Gas Natural as a potential buyer for about 200 million cubic feet per day.
Boulton said at least one more supply deal is pending for the balance of the facility's total capacity.
Apache is partners with Calgary-based En-Cana Corp. at Horn River in northeastern B. C., where they jointly hold about 170,000 hectares.
On July 30 Apache said recent wells at Horn River strengthen its optimism for the potential of Horn River to rival big shale plays in the U. S., with new wells coming on as high as 16 million cubic feet per day. Thus far, the two companies have drilled 28 wells and brought 10 horizontal wells on production, and expect to have 32 producing wells by the first quarter of 2010.
Unlike EOG, which is a big player in several U. S. shale plays, including the Barnett near Dallas--and EnCana which has dominant positions in shale deposits in Texas and Louisiana --Horn River is Apache's only North American unconventional gas development.
"It clearly is a big part of Apache's growth strategy," spokesman Bill Mintz said from Houston.
© Copyright (c) The Edmonton Journal
August 10, 2009
Big oil confronts big wind in Hecate Strait
Shell Canada and Chevron Canada claim their pre-existing rights in Hecate Strait will be infringed upon by Naikun.
In a joint letter to the BC Environmental Assessment Office, regarding the NaiKun Offshore Wind Energy Project, the oil companies state that they are "opposed to the project moving forward without first resolving issues associated with our pre-existing rights." "... it will infringe on our pre-existing offshore oil and gas tenure rights in the area. This partial sterilization of our tenure rights..."
Sterilization? Good grief. What, like Naikun's project is some sort of corporate vasectomy?
The letter is copied to Naikun and to the Haida Nation - one nation among these bickering corporations which really does have pre-existing rights.
Specifically, the oil companies are concerned that construction and operation of the offshore wind farm will interfere with their right to perform seismic testing ("seismic acquisition" they call it) and to "construct infrastructure and conduct drilling and production operations"
The "mitigative measures" sought by Shell and Chevron are:
- "Shooting high-quality seismic" prior to Naikun building anything
- for Naikun to redesign the farm to accomodate future seismic and production
- for Naikun to shut down the wind farm when the oil companies want to do seismic surveys
The letter is here:
http://tinyurl.com/njvmjb
The EAO review of the Naikun project is here:
http://a100.gov.bc.ca/appsdata/epic/html/deploy/epic_project_home_230.html
The public comment period on the application closed on July 12, 2009
August 09, 2009
LTAP: Squamish Nation lashes out at energy decision
Sylvie Paillard
Squamish Chief
August 7, 2009
SQUAMISH – The Squamish Nation has lashed out against the B.C. Utilities Commission (BCUC) following a ruling that refuses to endorse B.C. Hydro’s massive call for clean energy.
The decision creates regulatory roadblocks to B.C. Hydro’s long-term call for 3,000 gigawatts of power from public and private power producers.
The ruling was seen by most as a challenge to the B.C. Liberals’ Energy Plan, and a blow to the independent power industry, which has signed some $31 billion in private power contracts with B.C. Hydro to date.
Chiefs Gibby Jacob and Bill Williams signed off on a strongly-worded letter, which arrived to the BCUC July 31. According to Jacob, the band’s potential private partners on 10 run of river power proposals have already spent approximately $300,000 in preliminary studies.
“If they [the projects] don’t go, that’s money down the tubes for us,” said Jacob in an interview with The Chief. “It’s one thing that we’ve been able to accomplish is to get some opportunities with them. Plus enhance fisheries values. There’s a lot of positives in it for us.”
The band’s letter makes the point more dramatically.
“You have, with the stroke of your pen, undermined our opportunities and unilaterally and arbitrarily taken off the table those benefits and opportunities that we were negotiating, on behalf of our people, with green energy companies undertaking responsible developments on our territories,” it states.
The commission’s 236-page ruling, followed several months of hearings on the merits of B.C. Hydro’s long-term acquisition plan. The commission argues the power won’t be needed if more is done to promote conservation, and that Hydro can increase its reliance on power from Burrard Thermal, the “brown field” natural-gas power generating station near Port Moody. The greenhouse gas emissions the plant emanates led to accusation the commission is “turning back the clock.”
“The cheapest power is not always the best,” said Jacob. “We were informed that they were kind of hamstrung on what kind of decision they could make on the value of power. So I don’t know if there needs to be a change to the act or not.”
Jacob said the fight isn’t over.
“If you have no hope, you have nothing,” he said. “I’m pretty hopeful we’ll get to the point where the decision that was undertaken to could be mitigated somewhat.”
Meanwhile, opposition NDP politicians proclaimed the ruling as a victory for ratepayers, while government officials – most notably Energy Minister Blair Lekstrom – disagreed, and vowed to continue pursuing what they believe is the best long-term course of action not only on energy but on reducing greenhouse gas emissions.
The share prices of companies working on independent power projects in B.C. (including Plutonic Power, which is working on a $4 billion, 1,027-megawatt project at Bute Inlet near Powell River), fell in response to the BCUC ruling.
The Western Canada Wilderness Committee (WCWC), which has been railing against the “gold-rush” B.C. Liberal energy policy for the past decade, hailed the BCUC decision as being best for the ratepayers and the environment but also raised concerns with portions, most notably its support for the continued use of the fossil-fuel Burrard Thermal power plant.
Merran Smith, climate director with ForestEthics, strongly disagreed, saying, “Shutting the door on renewable energy and locking our province into an uncertain future dependent on fossil fuels doesn’t seem very safe or reliable. The BCUC needs to be an enabler of B.C.’s green energy future, not a brick wall.”
It remains to be seen what the government will do in response to the ruling, but it seems that either a legal challenge or an end run around the BCUC ruling may be in the works.
In an opinion piece submitted to B.C. news outlets, Lekstrom steadfastly denied that the government plans to increase the province’s reliance on Burrard Thermal, as the BCUC suggests.
First nations fume over BCUC's sudden coolness to green power
By Vaughn Palmer, Vancouver Sun, August 1, 2009Native leaders insist clean energy is the way to go
Several first nations have challenged the B.C. Utilities Commission for putting up a regulatory roadblock to development of wind and water power within their traditional territories.
They were reacting to the commission's decision to withhold endorsement of B.C. Hydro's latest call for proposals to build wind farms, run of the river developments and other "clean power" projects.
Instead, the commission ruled that Hydro could make do with increased reliance on power from Burrard Thermal, the seldom-used-because-polluting, natural-gas-fired generating station near Port Moody.
This apparent preference for "brown power" over "green power" provoked a major push-back from the leaders of the Squamish and Sechelt nations, both of whose territories included projects that were submitted for consideration as part of the clean-power call.
"Burrard Thermal and similar greenhouse gas emitting facilities represent the past," wrote Squamish chiefs Gibby Jacob and Bill Williams in a letter that went out Thursday to BCUC headquarters in Vancouver. "Wind, solar and micro-hydro represent the future and you have fundamentally disadvantaged them."
"For all intents and purposes, you have attempted to turn the clock back a generation," read a similar missive from chief Garry Feschuk and councillors Jordan Louie and Tom Paul of the Sechelt Indian Band.
"(You are) completely ignoring both provincial government direction and the current reality of global warming and the need to move towards clean, green and renewable sources of electricity."
The native leaders were particularly incensed that from a list of more than $600 million worth of spending proposals from Hydro, the commission rejected only the funding for the clean power call, budgeted at $2 million.
"The paltry $2 million expenditure represented the one and only opportunity in the entire proposed mix that had ... direct and specific benefits to those first nations who were engaged in private power opportunities with B.C.'s emerging green energy industry," wrote the Sechelt leaders.
"You have, with the stroke of your pen, undermined our opportunities and unilaterally and arbitrarily taken off the table those benefits and opportunities that we were negotiating, on behalf of our people, with green energy companies undertaking responsible developments on our territories," continued the Squamish natives.
It must be galling to those and other native leaders. After years of relying on government handouts, they get actively involved in private investment and job creation, only to have the door slammed on them by a government-appointed regulator.
Their frustration was evident in an over-the-top comment from the Sechelt leaders:"This is unacceptable and appears to be nothing less to us than regulated racism."
The Squamish letter was probably closer to the mark when it speculated: "We strongly question if you were aware of these implications when your decision was made."
Probably not. The commission did not say anything one way or another about the merits of native involvement in development of the province's electrical potential. Likewise it did not specifically veto clean power, green power, run of the river power or privately generated power.
The three commissioners who issued Monday's lengthy decision simply said they were not persuaded of the need for the current clean power call at this time. Hydro was invited to resubmit its energy acquisition plan next spring, presumably with better arguments.
The commission is straitjacketed by a legislated mandate that requires it to consider cost ahead of most considerations in deciding whether to green-light Hydro's plans to acquire new sources of power and upgrade older ones.
Those economic considerations can readily trump concerns about greenhouse gas emissions, witness the commission's expressed view, elsewhere in this week's decision, that Hydro should encourage people to heat their homes with natural gas as an alternative to electricity.
Whatever one thinks of a museum piece like Burrard Thermal, it might be cheaper to operate (though some experts dispute this) than taking a flyer on intermittent sources of power like run of the river and wind farms.
But the commission's terms of reference do not incorporate the government's preference for giving first nations an expanded role in developing emissions-free power in partnership with private operators.
"You have essentially pulled the rug out from under those first nations throughout B.C. who are seeking accommodation and opportunity through private power green energy partnerships," as the Sechelt leaders put it.
"These green power private partnerships form the basis of our ability to create a future running our own businesses within our traditional territory using a sustainable and clean resource," was the view from Squamish.
How to incorporate those worthy objectives into future BCUC decisions? The Liberals, having vowed to protect the commission's independence, should proceed with caution.
But they might consider appointing a native representative to the commission. Or they could direct Hydro to prepare a new call for clean power proposals, this time directly tailored to partnerships with first nations.
© Copyright (c) The Vancouver Sun
August 08, 2009
A flood of fears over U.S. dam plans
By Larry Pynn
Vancouver Sun
August 8, 2009
Valuable Canadian wildlife habitats, aboriginal and private lands could all be at risk
You couldn't ask for a more deceptive location for a hydroelectric dam to flood southern B.C.'s rarest and most productive grassland landscape.
The shallow Similkameen River flows languidly across the international border southeast of Keremeos near Osoyoos into Washington state's Okanogan County, slicing through tawny semi-arid hills flecked with sage and ponderosa pine that rise sweet and warm on the morning air.
Motoring along the less-travelled Loomis-Oroville Road shadowing the Similkameen River, one can look down at the curiosity of modern-day miners dressed in wetsuits positioned on small platforms mid-river while employing hoses and generators to scour the gravel bottom for gold.
"They're pretty tight-lipped," offers Dan Boettger, director of regulatory and environmental affairs of the Okanogan County public utility district No. 1.
Not far away, Boettger points to orange flagging tape on a wooden stake barely visible on the hillside across the river that marks the maximum high-water mark under a proposal for a dam here that would back water up into Canada's portion of the Similkameen.
"We don't take it lightly," Boettger insists. "We understand there are a lot of concerns. It's typical human nature."
Even further downstream is Shanker's Bend, a lazy turn in the river where you could imagine yourself inner-tubing on a hot summer's day or sleeping on a beach towel on one of the exposed gravel bars.
At the moment the bars are occupied by a flock of Canada geese, the hillsides by more serious wildlife.
"Watch where you step," warns Boettger, parking his SUV on the roadside. "We've got lots of rattlesnakes."
The rock bluffs rising from the river at Shanker's Bend make this stretch of the Similkameen the perfect place to build a dam. "Less infrastructure to put in," he confirms.
Although there have been proposals for dams in this area dating back to the 1920s, the latest and perhaps most serious incarnation results from a special state funding initiative for water issues in eastern Washington.
The dam is touted as providing numerous benefits on the U.S. side: hydro-electric power, water for irrigation, flood control, and a reservoir from which water could be drawn in summer during low flows to raise water temperatures and benefit fish downstream of Similkameen Falls.
A lingering drought is part of the issue, as is the concern in some parts of the county that not enough water is flowing from B.C. "There is that concern," Boettger says. "Less water is making it to the border."
A preliminary engineering report released in July on Shanker's Bend detailed three potential options:
• A high dam, with a maximum water surface elevation of 1,289 feet, would have 1.3 million acre-feet of storage and produce up to 74 megawatts of hydro power and up to 2,000 cubic feet per second of additional water during the traditional low-flow period between July and September.
• A medium dam with a depth of 1,175 feet would have a capacity of 138,000 acre feet and produce up to 23 megawatts of power, while yielding up to 500 cubic feet per second of additional water July to September.
• A lower dam standing 1,155 feet would yield 20,000 acre feet and 19.6 megawatts, while supplying minimal in-stream flows beyond what would occur naturally.
The utility district has yet to decide its next move in response to the engineering report.
The largest of three potential options would inundate rare and important land on the Canadian side of the Similkameen, including Crown, aboriginal and private lands. On the U.S. side it would flood largely federal Bureau of Land Management property, along with some private lands.
"All it is is a study, and it hasn't been done in a vacuum," Boettger emphasizes. "There have been lots of discussions on both sides of the border. And no decisions have been made."
Formal opposition
On Thursday, the Regional District of Okanagan-Similkameen voted unanimously to write the Okanogan public utility district and the U.S. Federal Energy Regulatory Commission to formally oppose the high-dam proposal, and to urge the provincial and federal governments to do the same.
"They need to continually be aware we're not in favour of this," said director George Hanson, the owner of Seven Stones Winery, whose eight hectares of vineyards would be flooded by the high dam.
"It seems absurd to me, actually, that one country would flood another country. And absurd that our provincial and federal governments aren't jumping all over this."
The Vancouver Sun first wrote about the Shanker's Bend dam proposal in October 2007, but it wasn't until March 2009 -- two months before the provincial election -- that Environment Minister Barry Penner sought intervenor status, a request refused because it came too late for the initial permitting process.
In fact, only the B.C. chapter of the Canadian Parks and Wilderness Society took the issue seriously enough to get its act together and achieve intervenor status on behalf of any Canadian group or government agency.
"Nobody believed this could be a possibility," executive director Chloe O'Loughlin said Friday of the dam proposal. "This is real. People need to pay attention."
Penner wrote in a six-page letter to the U.S. Federal Energy Regulatory Commission seeking intervenor status that the largest dam proposal would flood at least 3,600 hectares of Canada, including two aboriginal reserves, two provincial protected areas, a potential national park, and high-quality agricultural land.
At least 20 blue- and red-listed animal and plant species would be impacted, Penner wrote, as well as 16 listed species at risk under Canada's Species at Risk Act, "which prohibits any action which threatens, damages or destroys a threatened or endangered species or its habitat."
Said Penner: "These potential impacts are unacceptable to the province."
High-water implications
The minister also expressed concerns that even the proposed lower dams could have implications for B.C. during years of unusually high water. "We believe careful consideration and environment scrutiny is required before any decision is made regarding the low dam proposal."
On Friday, Penner said he would resubmit a request for intervenor status should the project continue to move ahead, but suggested that any further development could be 18 to 24 months away.
O'Loughlin said her group remains opposed to any dam, saying it would pose a threat to the migration of rare grassland species and its cold reservoir would alter the area's unique micro-climate.
Hanson sits on a cross-border steering committee related to the dam proposal and believes that the project would not go ahead against Canada's wishes, given international obligations under the International Joint Commission.
But O'Loughlin cautioned against leaving the matter to the IJC, warning that may be too late in the game for Canada to take a strong position in opposition. "The dam has to be stopped now."
Boettger countered that killing the public utility's efforts may not prevent a private developer from coming forward in future with another dam proposal.
Asked if the U.S. could change opponents' positions through cash compensation, Hanson said: "I don't think this can be bought, this particular issue. It's a very beautiful part of Canada ... and I don't think it's for sale."
Speaking of the potential to prostitute one's values, it's worth noting that one plausible theory explaining how Shanker's Bend got its name dates back to the area's mining heyday and refers to chancre (pronounced shanker), the ulcer associated with the primary stage of syphilis.
"I heard it had something to do with prostitution for one thing," Oroville historian Dorothy Petry said with a laugh. "A side effect of the trade. I don't think you want to put that in the paper."
Told of the explanation, Hanson, too, chuckled. "This project is similar to that. They want to create a disease that spreads. Oh my goodness, I'm gonna have some fun with that."
© Copyright (c) The Vancouver Sun
LTAP: B.C. Utilities Commission ruling creates uncertain future for private power
COMMENT: Earlier this week, Minister Lekstrom announced royalty reductions to attract drilling investment in BC's northeast. Now he's raising the dreadful spectre of a "green energy" investment exodus if the BCUC's rejection of BC Hydro's Long Term Acquisition Plan (LTAP) is not dealt with. Cue: rumblings from the upset bowels of MEMPR.
But there's something else disturbing about this news article, and that's the parroting of the fear tactic - that capital will flee the province if enviros (or others, apparently now including the BCUC) don't stop whatever they are doing which might impede environmentally harmful projects. The threat is is usually a gambit employed by government. This time it's coming from Tzeporah Berman of PowerUp Canada. It's an eerie echo of the drum-beating she and other enviros were doing for the Liberals during the election.
The LTAP decision had created uncertainty with the Clean Energy Call, but it didn't reject it. And all the Chicken Little reaction from various corners of the energy discussion in BC is certainly shrill and heartfelt. But it isn't helpful.
Besides, investment capital does not have a lot of glamourous opportunities to rush to these days, and it's very clear that BC is a safe place to be doing renewable energy. "Capital" may be whining, but dollars to donuts it isn't going very far.
By Scott Simpson
Vancouver Sun
August 7, 2009
‘Surprise’ decision nixed BC Hydro contracting-out plan of 3,000 gigawatt hours
 A worker inside a water pipe at Plutonic Power’s run-of-river project in Toba Inlet north of Powell River on the Sunshine Coast. (Photograph by: Handout photo, Vancouver Sun files) |
VANCOUVER — A new layer of uncertainty has been added to the business plans of green energy proponents in British Columbia.
Billions of dollars of potential investment are at stake, according to Energy Minister Blair Lekstrom, and some commentators worry that any misstep by the B.C. Liberal government or BC Hydro could chase jobs and revenue right out of the province.
There is no quick fix.
The Liberals, BC Hydro and independent power producers are still pondering a “surprise” June 27 decision by the B.C. Utilities Commission that rejected Hydro’s plan to contract about 3,000 gigawatt hours of new private-sector power supply to meet future demand for power on the B.C. grid.
It had been widely assumed that the commission would approve Hydro’s “long-term electricity acquisition plan” — or LTAP in the abbreviation-focused world of utility regulation.
A favourable decision would have conformed with directives from the Liberals to Hydro and BCUC to expand B.C.’s green-power sector in order to meet presumed growth in domestic use and demand from utilities in the western U.S. for B.C. renewable power exports.
Two previous Hydro LTAPs were granted perfunctory approval by the commission.
This time, despite thousands of pages of documentation and months of public hearing and deliberation, the commission told Hydro to come back in a year with better estimates for future electricity demand.
The commission also denied Hydro’s request for $2 million for ongoing work to refine its 2008 Clean Power Call — which has attracted 68 bids from independent power producers.
Projects already contracted with Hydro, such as Plutonic Power’s ambitious set of run-of-river power projects in Toba Inlet, can continue, as will about 40 other run-of-river projects around the province.
It’s fair to describe some sections of the commission’s ruling as confusing.
On one hand, the commission suggests Hydro should consider moving more quickly to bring new power resources on the grid, in the interests of assuring customers a secure supply of power.
But the commission also suggests Hydro engage in a paper exercise in which the aging and unreliable Burrard Thermal generating plant be accorded even greater responsibility as a source of backup power in the event of demand spikes.
The decision apparently fails to consider the risk that independent power producers, who have already invested $40 million to compete in Hydro’s 2008 Clean Power Call, may simply pull their projects.
Hydro customers have been well-served by the commission since the Liberals moved the Crown corporation back under the BCUC’s authority in 2003.
The BCUC has overwhelmingly focused on the impact that any Hydro action will have on the province’s electricity rates, and a number of Hydro program applications have been revised or even rejected when the commission sniffed out an opportunity to shave even a hundredth of a cent from a proposed rate increase.
The commission’s decision last week appears to continue that practice, saying Hydro can still bring independent projects to the BCUC for final acceptance or rejection based on the cost of the power they will provide, albeit in a more protracted, regulatory forum.
BC Hydro president and CEO Bob Elton said the Crown corporation will bring new power projects forward on that basis, but acknowledged he is “very interested” to know what the government may choose do to about the situation.
The decision raises questions about the commission’s interpretation of recent government revisions to its mandate. Those revisions require the BCUC to incorporate environmental, social, economic and aboriginal concerns into its deliberations.
The intent of the government’s order was to instruct the commission to facilitate greater green-power development.
However, the decision appears to double the amount of regulatory scrutiny — and paperwork — to which independent power producers, or IPPs, are subject.
Most projects are already reviewed through B.C.’s environmental assessment office, a process that can last several years.
Now, IPPs may face additional months of preparation and scrutiny in the context of a BCUC regulatory review that could be as protracted and in-depth as the ones in which Hydro itself is regularly involved.
Groups worried about the environmental impacts of run-of-river projects have apparently gained an opportunity to debate their merits in a quasi-judicial setting.
But that extra work could raise the cost of developing small-scale generation projects, and ultimately rebound onto the price their proponents charge for the electricity they sell to Hydro.
“We’ve got grave uncertainty now in British Columbia about the future of this industry. If we are not careful, what we are going to see is investment and jobs and Canadian companies heading south,” PowerUp Canada executive director Tzeporah Berman noted.
The industry needs certainty to attract investors, and last week’s events are disrupting that process, said Steve Davis, president of the Independent Power Producers association of B.C.
“Investors don’t like this situation,” Davis said. “IPPs need a buyer, and we’ve continually urged BC Hydro to be a more steady buyer. The last call was in 2006, and here we are three years later in 2009. It’s tough, not just on suppliers, but on other stakeholders in the industry, whether it’s first nations or other interested parties, to have this boom and bust stuff — a big call followed by silence for years.
“That’s awkward.”
Lekstrom perceives a genuine risk that some IPPs will balk at additional regulatory review.
“I think that’s a reality. I’m not directly receiving the calls from the CEOs, but I think their concern was reflected in the share prices that [fell] significantly [after the decision]. There are billions of dollars of potential investment that our province could reap, through jobs, through capital investment.”
Lekstrom said there are some “mixed messages” in the BCUC’s ruling, and he believes that the government may have to provide some clarity to the industry — and to the commission.
The government could respond with a revised directive to the commission or to Hydro, but Lekstrom would not divulge any specific actions.
“We are right in the middle of those discussions right now. There are a couple of options open to us. I’m just not sure where we are going to go,” Lekstrom said.
“There are some mixed messages [in the BCUC decision]. They’ve done a big job going through all of that [deliberation] but there are some things ... that we’ve got to be clearer on.
“What I have made clear in every discussion I’ve had so far is that our commitment to a clean and renewable energy industry is there, and we are not wavering from it.”
© Copyright (c) The Vancouver Sun
August 07, 2009
Incentives aim to boost gas exploration in northeastern B.C.
COMMENT: In terms of climate change and greenhouse gas reduction, these new royalty giveaways are utterly contradictory and counterproductive, as they only serve to getting more natural gas out of the ground and more carbon into the atmosphere.
And in terms of the best use of the resource, the market is saying, "we've got more gas than we need to meet demand" so British Columbia should take the cue and leave it in the ground, until the markets turn. Wait at least until no royalty discounts are necessary to attract drillers, better still to wait until no royalty will be too high, and best of all, from the carbon emissions standpoint, wait forever.
But no, desperate to keep cash coming into the treasury, this government has decided to forego the long term revenue stream from gas production (the royalty) in favour of the short term cash hit (drilling and lease auction sales).
If the new giveaways are at all successful, they will only serve to attract investment dollars primarily out of Alberta. Is this the kind of self-serving pissing match that was envisioned as "investment mobility" in TILMA? Indeed, this must be the model the government would like to see with labour too.
Short-sighted, un-strategic, incompatible with GHG reduction goals. BC already has the lowest or nearly the lowest royalties in North America, with numerous "incentive" programs that reduce royalties even further. This is bad policy.
Scott Simpson
Vancouver Sun
August 7, 2009
Stimulus package designed to encourage growth despite relatively low gas prices
The British Columbia government is discounting some of the royalties it collects on natural gas and oil resources in a bid to drive new investment in the northeast.
On Thursday, Minister of Energy, Mines and Petroleum Resources Blair Lekstrom announced an "oil and gas stimulus package" the government hopes will attract investment at a time when low North American gas prices have the industry in the doldrums.
The province didn't estimate a value for the package, which will ultimately depend on how vigorously gas exploration drillers respond, but suggested that for every $1 of forgone royalties, B.C. will yield $2.50 in revenue growth from the industry.
The program does not entail any direct government spending.
The Canadian Association of Petroleum Producers (CAPP) said B.C. is already a competitive jurisdiction for gas exploration, and believes the new offerings will further enhance its profile.
B.C.'s largest gas explorer, Alberta-based EnCana, lauded the timing of Lekstrom's announcement, noting that drillers are in the initial stages of planning for the coming exploration season -- and low gas commodity prices for natural gas mean activity will be subdued and competition for investment fierce among jurisdictions across the continent.
"If you look at oil and gas activity around the world, it's taken a bit of a slowdown," Lekstrom said in an interview from his Dawson Creek constituency office. "We've managed to weather that quite well. This stimulus package is based on bringing things back to a higher level of activity."
The package includes four royalty-based incentives and two regulatory changes -- all of which are intended to get more gas flowing out of the ground so B.C. can collect additional royalties to help offset a projected $500-million revenue shortfall in the current fiscal year.
Wells drilled from September 2009 through June 2010 will enjoy a one-year royalty rate of two per cent -- compared to the average rate of about 19 or 20 per cent.
That would be a resource giveaway for a conventional gas well in Alberta -- where the greatest volume of gas flows out in the initial months after a well is tapped, and the gas and royalty opportunities quickly ebb.
But in northeast B.C., where unconventional gas plays now dominate -- particularly in booming new areas such as Horn River and Montney -- the initial bump is comparatively modest and substantial gas volumes flow for anywhere from 15 to 30 years.
B.C. is providing further incentives for deep well development with a 15-per-cent royalty deduction for natural gas deep drilling, and is expanding its definition of deep gas royalty credits to encompass resources tapped in more shallow regions 1,900 metres to 2,300 metres underground.
The province is also boosting by $50 million its existing $120-million infrastructure royalty credit program -- which encourages development of oil and gas roads and pipelines.
Industry knew the program was coming, but not the specific details of the incentives, said Richard Dunn, EnCana Canadian foothills division vice-president for regulatory and external relations.
"There was a fair bit of consultation over the last several months by British Columbia in terms of the design of the program," Dunn said. "Certainly I have heard from other folks in the industry, who have noted that it will attract investment."
Dunn described timing of the announcement as "ideal.
"Industry right now is pulling together its drilling programs principally for [fall 2009] and into 2010. This program will be taken into account in terms of making those decisions."
Industry investment in drilling rights has boomed in B.C. in this decade and reached record levels in the fiscal year just past.
In some cases, drilling companies paid record amounts to secure the rights to explore and develop new gas resources.
But many companies did not follow through when the global economy sagged last year. Some opted to shut down exploration programs while others stepped away after drilling, leaving the gas in the ground until prices recovered.
Rather than wait for that to happen -- and modest gas futures prices on the New York Mercantile Exchange suggest a price jump could be several years distant -- the province chose to give it a nudge.
"In the short term they are looking for ways to maintain jobs, and to ensure that the local contractor structure is maintained and in place," said David Pryce, Western Canada operations vice-president for the Canadian Association of Petroleum Producers.
"They're also looking to position the industry to help lead B.C. out of the downturn when gas prices turn around.
"It also considers the resource and the stage its development is in. You've got the Horn River and the Montney primarily attracting huge capital investment in land sales but industry stumbled a little bit in terms of generating activity around that."
- - -
Read Scott Simpson's blog at www.vancouversun.com/energy
© Copyright (c) The Vancouver Sun
B.C. and Alberta in a natural gas poker game
By Carrie TaitFinancial Post
August 6, 2009
CALGARY -- British Columbia fired the latest round Thursday in the North American battle to woo natural gas producers, unveiling miniscule royalty rates and millions of dollars in fresh infrastructure incentives in a move that may force neighbouring Alberta to respond to in kind.
In an effort to prod natural gas production in its Montney and Horn River shale plays, B.C. reduced the royalty rate on wells drilled between September and June 2010 to 2% for one year. Producers now pay an average royalty rate of about 20%.
“The oil and gas industry’s capital is mobile -- it can be invested anywhere in the world, so if you want to be a part of that, you want to ensure you have a competitive jurisdiction,” Blair Lekstrom, B.C.’s minister of energy, mines and petroleum resources, said in an interview. “We want to secure the future of the oil and gas industry in British Columbia.”
Alberta and B.C., Canada’s top natural-gas producers, have traded royalty announcements this year. In March, B.C. rolled out royalty breaks, extending a program it launched in 2004. Alberta unveiled its own incentives a day later, reducing royalties on some new conventional oil and gas wells to 5% or less for at least a year. It later extended that program in June.
While the two provinces are in fierce competition with each other, the royalty rate war extends beyond Canada’s borders. Prolific natural gas basins such as the Barnett shale in Texas and the Marcellus in Pennsylvania are sponging up billions of dollars worth of investments.
“I really do see it as more of a North American-wide commodity and competition for investment,” said Richard Dunn, EnCana Corp.’s vice-president of regulatory and external relations for its Canadian Foothills division. “The Canadian jurisdictions have to be competitive.”
Mr. Dunn said he believes B.C.’s latest move will spark drilling activity, and that Alberta will take it “into account” as it wades its competitiveness review.
Laura Lau, an energy and resources fund manager at Sentry Select Capital Corp. in Toronto, said B.C.’s new program is “generous” and will make it more competitive with U.S. plays such as the Marcellus, which has an advantage over its Canadian counterparts because of its proximity to major markets like New York.
But Alberta, she said, will have little choice but to follow suit to remain in the game. “Alberta will have to look at its royalty regime yet again,” she said.
Jerry Bellikka, a spokesman for Alberta’s energy department, said his government will not make “knee-jerk” policies based on what its neighbours do. However, he said B.C.’s regulatory framework will be factored in to Alberta’s ongoing competitiveness review.
B.C’s latest royalty rules are expected to generate $2.50 in net incremental revenue for every $1 of royalty credit they provide, the government estimated. The stimulus package will not require direct government spending.
Revenue from the new plan will go to education, health care and social program funding and development.
In addition to the 2% royalty rate and growing infrastructure kitty, B.C.’s initiatives include an increase of 15% in the existing royalty deductions for natural gas deep drilling and extending the deep royalty credit program to include horizontal wells drilled between 1,900 and 2,300 metres.
“[Natural gas] is far and away our largest contributor to the economic well being to the province of B.C.,” said Mr. Lekstrom.
© Copyright (c) National Post
OIL AND GAS STIMULUS TO BOOST PROVINCIAL ECONOMY
News ReleaseMinistry of Energy, Mines and Petroleum Resources
August 6, 2009
VICTORIA – The Province has developed an oil and gas stimulus package designed to attract investment and produce immediate economic benefits for British Columbia, including jobs and infrastructure projects, announced Blair Lekstrom, Minister of Energy, Mines and Petroleum Resources.
“B.C. is one of the most competitive oil and gas jurisdictions in North America, and this stimulus package will further strengthen the sector while increasing provincial revenues,” said Lekstrom. “In this day and age capital investment is very fluid and we want to encourage the oil and gas sector to invest in British Columbia.”
This stimulus package has the advantage of not requiring direct government spending to increase activity and investment, while generating positive revenue to the Crown. In a conservative scenario, after three years the program will generate $2.50 in net incremental revenues for every $1 of royalty credit provided. Since these are royalty credits and not expenditures, the Crown benefits from the activity in addition to royalty revenue generated from wells that would likely not have been drilled.
The package includes four royalty and two regulatory initiatives that will enhance B.C.’s competitive business climate, creating momentum in the industry and attracting significant new investment into the province.
Royalty initiatives included in the package are:
· A one-year, two per cent royalty rate for all wells drilled in a 10 month window (September 2009 - June 2010).
· An increase of 15 per cent in the existing royalty deductions for natural gas deep drilling.
· Qualification of horizontal wells drilled between 1,900 and 2,300 metres into the Deep Royalty Credit Program.
· An additional $50 million allocation for the Infrastructure Royalty Credit Program to be offered this fall to stimulate investment in oil and gas roads and pipelines.
Regulatory initiatives included in the package are:
· Commingling in the plains area, to be announced by the Oil and Gas Commission in the near future; and,
· Amendments to the drilling licence regulation to create flexibility that will allow industry to move wells to production while not losing privileges to convert drilling licences to leases.
The package is projected to increase drilling activity, generate substantial industry investment, and provide incremental royalty revenues to the Crown.
Crown revenue from the stimulus package will go to education, health care and social program funding and development.
-30-
Contact:
Jake Jacobs
Public Affairs Officer
Ministry of Energy, Mines and Petroleum Resources
250 952-0628
250 213-6934 (cell)
August 06, 2009
Pollution charges laid in dramatic Burnaby oil pipeline rupture
Larry Pynn , Vancouver Sun, October 5, 2009
METRO VANCOUVER -- The B.C. Ministry of Environment has laid charges in connection with the dramatic rupture of a crude oil pipeline in Burnaby in 2007.
Kinder Morgan Canada and Trans Mountain Pipeline are each charged with seven counts, and B. Cusano Contracting and R.F. Binnie & Associates each with six counts under the federal Fisheries Act, federal Migratory Birds Convention Act, and provincial Environmental Management Act.
Scott Norris, a provincial conservation officer with the commercial environmental investigation unit, said in an interview Monday that the investigation was conducted in cooperation with Environment Canada.
Each count carries a maximum potential fine of $1 million.
The case was remanded Monday in Vancouver provincial court until Jan. 13, 2010.
A federal transportation safety board report last March concluded that failure to verify the accuracy of 1957 design drawings indicating the location of the pipeline led to a contractor's excavator bucket causing a massive rupture.
That oversight was among a series of errors leading to the July 24, 2007, spill of 234 cubic metres of crude oil on Inlet Drive.
The board found that no one determined ahead of time that the drawings were inaccurate; rather than running in a straight line, the 610-millimetre-wide pipeline actually snaked its way to the Westridge terminal.
The pipeline, which was operated by Kinder Morgan and owned by Trans Mountain Pipeline, ruptured at 12:31 p.m. during digging of a parallel trench for a new City of Burnaby storm sewer line on Inlet Drive.
The 1957 design drawings showed a "constant offset of 8.5 metres from the east property line of Inlet Drive" but in fact the offset varied between four and almost 10 metres, the board found.
It was assumed by all parties that the sewer line would maintain a distance of 2.8 metres from the oil pipeline.
The report said that Burnaby and Kinder Morgan signed an agreement allowing for the sewer construction that required in part for a Kinder Morgan inspector to verify the depth and location of the 4.1-km pipeline, which delivers crude oil from above-ground tanks to tankers at Westridge dock.
A Kinder Morgan inspector using a radio-detection hand-held pipeline locator verified the location of the oil pipeline along only about a 30-metre stretch on July 16, 2007.
The contractor did not ask for a greater area of the pipeline to be checked, and the inspector did not offer to do more, even though an alignment discrepancy had been noted between the 1957 drawings and another construction drawing from previous work.
The report also found that "inadequate communication" within Kinder Morgan and between Kinder Morgan and the consultant and contractor on the project resulted in "no common understanding or acceptance of the project work plan and the contractor's construction schedule."
Burnaby hired B. Cusano Contracting and engineering consultant R.F. Binnie & Associates for the job.
The board found that the amount of oil released was greater than necessary because the flow was cut off to a tanker after the rupture and "was not in conformity with standard emergency shutdown procedures."
Crude oil spewed up to 15 metres in the air for about 25 minutes before the oil flow was stopped, affecting 50 homes and properties and the waters of Burrard Inlet.
The report said 210 cubic metres of oil were recovered. There was no explosion or fire and no injuries in the rupture, although several people were sprayed with oil.
About 250 residents voluntarily left their homes.
lpynn@vancouversun.com
Wind-generated electricity finally feeds B.C.'s power grid
COMMENT: Whew, that took long enough!
By Scott Simpson
Vancouver Sun
August 6, 2009
$200-million Dawson Creek project will power 31,000 homes when it's completed this year
 B.C.'s first fully operational wind farm goes online with the BC Hydro power grid on Thursday, Aug. 6, at Bear Mountain. (Photograph by: Vancouver Sun, Handout) |
The initial trickle of electricity from British Columbia's first successful wind-power project will feed BC Hydro's provincial grid, beginning today.
AltaGas Income Trust's Bear Mountain wind park, located on the outskirts of Dawson Creek in northeast B.C., is a $200-million project that will provide enough electricity to power about 31,000 homes annually when it's fully built out later this year.
Bear Mountain wasn't the first wind project awarded an electricity supply contract by Hydro, nor was it the first out of the starting gate when the provincial government finally got serious about attracting wind-powered green-energy investment to British Columbia.
But as other projects were abandoned or stalled by financial and technical issues, AltaGas was able to work through them all, on budget and ahead of schedule.
"This is our first wind project," AltaGas chairman and CEO David Cornhill said Wednesday in a telephone interview. "There were challenges. There were learnings. My team did a great job in moving this project forward, where others have failed.
"We had days where we were wondering how we would get things together, whether the timelines would make it, [how to solve issues around] construction costs. We found out that the ridge was narrower, unstable in certain areas. So we had technical challenges, but [AltaGas senior vice-president] Jim Bracken was able to bring this project forward, we hope a little ahead of schedule, and right on budget."
Bear Mountain was conceived as the project of a local cooperative in Dawson Creek, and was further developed by Victoria-based Aeolis Wind Power Corp. before AltaGas took it on.
AltaGas is installing 34 state-of-the-art wind turbine generators from German manufacturer Enercon. The 78-metre turbines are set in a single row along a 25-hectare ridge that is a local landmark for residents of Dawson Creek. Concrete foundations were poured last year in the first stage of construction.
Today, most of the towers have been erected and four have turbines attached. Two are fully operational and commencing power deliveries today.
All 34 generators will be commissioned and shipping power to Hydro before the end of November, Bracken said.
"There were a lot of challenges, but they were pretty much the normal course of business for a large infrastructure project," he said.
"We had some help from local governments in particular, and a great deal of community support. Obviously, there are always some people that don't like seeing large, visible infrastructure built close to them, but for the most part we had a great deal of active support from the community."
Energy Minister Blair Lekstrom can see the Bear Mountain towers from his Dawson Creek home.
"I watched the development of it from my deck, actually, in town. I watched the towers go up.
"These are three miles out on the ridge, but they are pretty significant structures. They have done a good job up there."
Bear Mountain's success stands in contrast to the high-profile failure of a rival wind park in the same region of the province, Earth First Canada Inc.'s Dokie wind project near Chetwynd.
Work was halted on Dokie last October in the wake of the global financial meltdown after its first eight towers -- but no turbines -- had been erected.
Earth First sought creditor protection when its financial supporters balked at providing more funds after a consultant's report downgraded Dokie's potential wind output and projected a $35-million increase in construction costs.
Dokie may be revived by B.C.-based Plutonic Power and its partner GE Energy Financial Services, who have been reviewing Earth First's books.
A decision on a possible buyout is imminent.
Canada ranks 11th in the world for installed wind power capacity, although it was described this year in the Proceedings of the National Academy of Sciences to have the world's second-largest wind-energy potential.
Wind power is the fastest-growing segment of the global energy sector.
B.C. is the last major Canadian province to add wind power to its electricity grid, largely due to its focus on hydroelectricity. However, industry representatives said a year ago that the introduction of more attractive incentives -- including a 10-year wind royalty holiday -- is changing the situation.
Green power advocate Tzeporah Berman, executive director of PowerUp Canada, described the nation's untapped wind power resources as a huge opportunity for economic development.
"What we need to remember is that three quarters of B.C.'s total energy still comes from fossil fuels, and if we are going to get our factories and our cars onto a greener grid, then we need to hope this is the first of many wind farms in British Columbia," Berman said.
Blog: www.vancouversun.com/energy
WE'RE #11!
Here's how the Global Wind Energy Council ranked wind-producing countries in 2008.
1. United States with installed capacity of 25,150 megawatts
2. Germany (23, 903 MW)
3. Spain (16,740 MW)
4. China (12,210 MW)
5. India (9,587 MW)
11.Canada (2,389 MW)
In Canada, B.C. is behind other large provinces in introducing wind-generated power:
2008
Ontario 781 MW
Quebec 531 MW
Alberta 524 MW
Saskatchewan 171 MW
Manitoba 103 MW
Nov. 2009
B.C. 102 MW
Source: Canadian Wind Energy Association
Canada has the second largest wind energy potential in the world after Russia.
Source: Global Trends in Sustainable Energy Investment, 2009 UN report
© Copyright (c) The Vancouver Sun
August 05, 2009
Biomass projects to join Hydro grid
By Scott Simpson
Vancouver Sun
August 5, 2009
Four projects that will burn wood waste to generate electricity have the green light to join BC Hydro's power grid, the Crown corporation announced on Tuesday.
The biomass projects, which will generate enough to power more than 52,000 homes, were the winners in Hydro's phase one bioenergy call for power, and have now received formal approval from the B.C. Utilities Commission, Hydro said in a news release.
The projects are Canfor Pulp Ltd. Partnership's project in Prince George; PG Interior Waste to Energy Ltd.'s project also in Prince George; Domtar Pulp and Paper Products Inc.'s project in Kamloops; and Zellstoff Celgar Ltd. Partnership's project in Castlegar, Hydro said.
The bioenergy facilities will use forest-based biomass, including sawmill residue, logging debris, trees killed by mountain pine beetle and other residual wood to generate electricity. Two of the projects -- Canfor's and Domtar's -- are expected to begin supplying electricity shortly, while the other two projects are under development, the release said.
© Copyright (c) The Vancouver Sun
Bioenergy projects given green light to start producing clean, made-in-BC energy
News Release
BC Hydro
August 4, 2009
VANCOUVER – The British Columbia Utilities Commission has accepted the utility's electricity purchase agreements with four biomass projects, BC Hydro announced today.
The four projects were successful proponents in phase one of BC Hydro's Bioenergy Call for Power. They are: Canfor Pulp Ltd. Partnership's project in Prince George, PG Interior Waste to Energy Ltd.'s project also in Prince George, Domtar Pulp and Paper Products Inc.'s project in Kamloops, and Zellstoff Celgar Ltd. Partnership's project in Castlegar.
Together, the four projects will generate a total of 579 gigawatt hours of electricity annually, or enough to power more than 52,000 homes.
"Bioenergy will contribute to the province's goal of achieving electricity self-sufficiency by 2016, while at the same time provide an opportunity to create new jobs and diversify the forest economy through the better use of residual wood that currently goes to waste," said Blair Lekstrom, Minister of Energy, Mines and Petroleum Resources.
"These bioenergy projects will provide firm electricity year-round by utilizing a carbon-neutral fuel – giving us another reliable, clean energy supply option to help serve our customers," said BC Hydro president and CEO Bob Elton.
The bioenergy facilities will use forest-based biomass, including sawmill residue, logging debris, trees killed by mountain pine beetle, and other residual wood, to generate electricity. Two of the projects – Canfor's and Domtar's – are expected to begin supplying electricity shortly, while the other two projects are under development.
The first phase of the Bioenergy Call for Power was open to projects that did not need new forestry tenure. In March, BC Hydro launched the second phase of the Bioenergy Call, which will include projects utilizing wood waste sourced from new forest tenure.
Contact:
Susan Danard
Media Relations
Phone: 604 623 4220
Link: http://www.bchydro.com/news/articles/press_releases/2009/bio_energy_projects.html
August 03, 2009
LTAP: Kibosh on province's clean-energy call fuelled by logic
Mark Hume
Globe and Mail
August 3, 2009
If humans were wired with electric circuits, a lot of fuses would have been blown last week when the British Columbia Utilities Commission rejected BC Hydro's long-term acquisition plan.
Usually, commission rulings are ignored by the public, not because they don't deal with important issues, but because they are complex regulatory matters discussed in technical terms. A relatively small number of stakeholders watch the British Columbia Utilities Commission intently, but for most of us, as long as the lights go on and the hydro bills stay stable, everything is okay.
That changed dramatically last week, because the commission's ruling provided a tipping point in an emotional battle that has been raging for the past few years over power generation in B.C.
Some environmentalists opposed them as projects that would privatize, and dam, wild rivers, but Premier Gordon Campbell's government argued independent power projects, or IPPs, were needed to avert an energy crisis in B.C. and fight global warming.
The commission's ruling made it clear, however, that there is no energy crisis - and that when there are energy shortfalls, such as during droughts or the period of peak demand in December, BC Hydro has a solid backup system in the Burrard Generating Station, an old, mostly idle plant fuelled by natural gas.
The ruling sent a shock wave through the IPP market, especially when Dow Jones reported BC Hydro would likely put its entire clean-energy call on hold.
Even some environmentalists were alarmed, with Merran Smith of ForestEthics declaring the commission was "locking the province into an uncertain future dependent on fossil fuels."
B.C. Citizens for Green Energy called it a "shocking and totally bewildering decision."
The ruling was widely portrayed as one in which the British Columbia Utilities Commission told BC Hydro to fire up dirty, old Burrard in order to keep rates down.
But that isn't what the commission's decision states.
"The commission is not saying we should run the Burrard plant, or that Burrard is a better source of energy than clean resources," said economist Marvin Shaffer.
What the commission determined is that Burrard is valuable as a backup facility, and that in that role it has the capacity of at least 5,000 gigawatt hours, not the 3,000 GWh estimated by BC Hydro.
By refusing to accept the lower capacity, the commission called into question the need for BC Hydro to purchase backup power from IPPs.
"When you downgrade it to 3,000 as BC Hydro proposed, you do two things. You force yourself to buy power that generally you don't need ... [then] you have to sell that power at a loss," said Mr. Shaffer, who appeared at commission hearings on behalf of a union representing BC Hydro workers.
The downgrade proposed by BC Hydro (which was surprisingly low given that the plant is given a capacity of over 7,000 GWh on the corporation's website) would have kept the clean-energy call alive, and that would have suited Mr. Campbell's agenda of promoting IPPs. But that would have been bad for ratepayers, and it would not have - despite what some environmentalists claim - done much to fight global warming.
The IPPs would mostly produce power in the spring, when BC Hydro reservoirs are full and the extra generation isn't needed - so it would not have been displacing dirty energy produced in B.C.
Had the British Columbia Utilities Commission not intervened, B.C. would have been damming its wild and scenic rivers, not in a noble fight against global warming, but in order to run air conditioners in California.
IPPs aren't dead in B.C. because of the ruling. BC Hydro can come back to the commission and argue for individual clean-energy purchases on a case-by-case basis. Projects deemed to be in the public interest will be approved. That approach makes a lot of sense, both for the environment and for ratepayers.
"When you step back from it, I find the controversy so funny," Mr. Shaffer said. "It's a logical answer the commission gave."
Logical, yes, but that doesn't make it politically acceptable. The provincial government must now be looking for a way to short-circuit the British Columbia Utilities Commission's decision. Stand by for more shocks.
LTAP: Watch for Libs to rein in run-of-river spoilers
Michael Smyth
The Province
August 2, 2009
Last week's regulatory smackdown of Premier Gordon Campbell's clean-energy plan threw the government for a loop, not to mention the private power producers set to pump billions of dollars into B.C.'s green energy revolution.
The B.C. Utilities Commission shocked the industry and its government backers by declaring B.C. Hydro's long-term plan for private run-of-river hydro and wind projects to be "not in the public interest" and told the Crown corporation to come back with a new plan by next year.
I doubt the government will wait that long, only to risk being sent packing by the independent regulators again. That's why I'm told the government is considering all its options, including a possible cabinet override of the BCUC decision.
This would be a risky political move for Campbell, who bragged about empowering the utility commission to function at arm's length from government.
But this is the same government that last week launched massive reviews of supposedly independent B.C. Ferries and TransLink, too. Get set for more meddling.
A key concern for government is the potential flight of private-power investment capital from B.C. after years of courting the industry. The power companies took a beating on the stock market last week and I'm told the investment capitalists that bankroll them have put the government on notice: Fix this or our money goes elsewhere.
With nearly $7 billion set to be poured into independent power projects, it's no wonder Campbell and company are considering drastic action. But, ironically, the upstart utilities commission may have thrown the private power companies a lifeline by including a bizarre directive in its decision: That B.C. Hydro ramp up the generating capacity of its Cold War-era Burrard Thermal power plant to an astonishing 5,000 gigawatts a year.
That would make the 1962-built Port Moody dinosaur the biggest single belcher of greenhouse gases, pollution and smog in the entire province -- at the very time air quality and climate change are among the planet's top environmental challenges.
It would also require the clunking plant to rev its engines at a higher rate than ever before.
To put that 5,000 gigawatts into perspective, the last time Burrard Thermal broke the 2,000-gigawatt threshold was 2002 -- the same year a hydrogen tank exploded and blew a five-metre-wide hole in a wall and started a fire. B.C. Hydro was lucky no one was killed.
The government had slated the aging, inefficient plant to cut back production and eventually shut down. Cranking it up in the other direction would pump two million tonnes of carbon dioxide into the atmosphere along with smog and pollution -- an insane proposition when B.C. has vast untapped stores of clean, zero-emission energy.
In other words, the commission has given the government the perfect excuse to bring the hammer down. Watch for Campbell to once again don his green cape and play environmental superman -- and pull the choke chain on his "independent" utility watchdog.
© Copyright (c) The Province
LTAP: Why the BC Utilities Commission Rejected BC Hydro’s Long Term Plan
George Hoberg
Research Assistance by Lisa Jung
Green Policy Prof
August 1st, 2009
 Equipment at Toba Inlet |
On July 27, 2009, the British Columbia Utilities Commission stunned the BC energy sector by rejecting the Long Term Acquisition Plan (LTAP) of BC Hydro. The LTAP forecasts future electricity demand growth and details how BC Hydro plans to meet its future electricity needs.
The Commission made six major determinations. It approved two major parts of the LTAP – BC Hydro’s “load forecast” for future electricity demand, and the reliance on the Burrard Thermal natural gas generating plant for 900 MW of dependable capacity. But the commission rejected four parts of the LTAP:
1. The Commission ruled that BC Hydro “has not adequately addressed the self‐sufficiency obligation established” by the BC government.
2. The Commission rejected BC Hydro’s plan for “Demand-Side Measures” – the efforts to reduce demand by increasing efficiency – because they were not adequately supported by analysis.
3. The Commission rejected BC Hydro’s plan to reduce its reliance on energy from the Burrard Thermal unit for planning purposes.
4. The Commission did not endorse a specific target amount of electricity for the “2008 Clean Power Call,” the process through which BC Hydro acquires new power from private producers.
Because the four issues were so fundamental to the overall plan, the Commission rejected the LTAP as a whole.
The BCUC decision has provoked significant reaction from interest groups and the media. Critics of private power projects, including the BC New Democratic Party, have declared victory, claiming the decision is a rejection of the BC government’s plan to rely on private power for future electricity supply. Climate activists have blasted the recommendation to increase reliance on the fossil fuel fired Burrard Thermal plant, calling it “a serious blow to the clean energy transition and climate leadership in British Columbia.” First Nations denounced the Commission for creating roadblocks to their ability to use green power projects to promote economic development.
A closer look at the details of the decision suggests quite a different interpretation, however. For the most part, the Commission is critical of the lack of evidence or analysis underlying BC Hydro’s plan. The decision is best viewed not as a challenge to government policy, but as a criticism of BC Hydro for not providing sufficient evidence that it was complying with government policy. The one exception to this conclusion is the refusal to endorse BC Hydro’s desire to reduce reliance on Burrard Thermal. That decision is harder to understand and seems more at odds with government policy.
Failure to adequately address self-sufficiency obligation
Arguably the most important part of the Commission’s ruling is that BC Hydro did not adequately address the self-sufficiency obligation described in law. All the other negative decisions can be linked to this core finding.
The self-sufficiency requirements arise from the BC Government’s 2007 Energy Plan, and are legally articulated in Special Direction 10 (SD 10) under the Utilities Commission Act. The policy requires that the province achieve energy and capacity self-sufficiency by 2016. In addition, the government also requires “insurance” by requiring BC Hydro to become capable of “exceeding, as soon as practicable but no later than 2026, the electricity supply obligations by at least 3,000 gigawatt hours per year and by the capacity required to integrate that energy in the most cost‐effective manner.” BC Hydro’s LTAP did not address how this additional 3,000 GWhr/yr would be acquired, claiming that it was too early to plan for that. The Commission disagreed with what it referred to as BC Hydro’s “just in time” approach. It ruled that BC Hydro had not adequately addressed this requirement, and requested that BC Hydro focus on developing a phased in approach to meeting the requirement for self sufficiency with insurance in its next submission (p. 45). This is a clear case of the Commission applying government policy to BC Hydro’s LTAP and finding the utility’s rationale insufficient.
Inadequately supported demand-side measures plan
The 2007 Energy Plan requires that BC Hydro “acquire 50 per cent of BC Hydro’s incremental resource needs through conservation by 2020.” In its LTAP, BC Hydro proposed to go well beyond this target – it proposed to meet 72% of the increased demand through demand-side measures (DSM) (p. 74). But the Commission rejected the DSM plan because “it cannot determine whether BC Hydro’s DSM Plan complies with section 44.1 of the Act.” The relevant part of section 44.1 of the Utilities Commission Act states that the LTAP needs to contain ”a plan of how the public utility intends to reduce the demand… by taking cost‐effective demand‐side measures.”
The Commission was not satisfied with the level of analysis behind the DSM plan for two reasons. First, the Commission criticized BC Hydro for not having a plan for DSM after 2020, raising additional concerns about how the self-sufficiency requirement would be met. Second, the Commission criticized the way that BC Hydro assessed the cost-effectiveness of DSM. BC Hydro justified its choice to go as far as 72% by arguing that anything less would forego substantial cost savings. It justified the choice not to go beyond 72%, even though there would be cost savings over new supply sources, because it considers the deliverability of DSM at that level to be too uncertain to rely upon (p. 73). The Commission found this style of analysis insufficient. The Commission argues that to be consistent with the cost-effectiveness test in the Act, BC Hydro needs to compare the relative cost-effectiveness of DSM by calculating the unit energy costs of DSM programs on a program‐by-program basis, and then compare those to “supply‐side alternatives on an equivalent basis” (p. 85). Here again, the Commission is requiring more thorough analysis in order to make a determination about whether the LTAP is consistent with government policy.
Rejecting the proposal to reduce reliance on Burrard Thermal
BC Hydro uses the natural gas-fired Burrard Thermal plant only when needed to meet peak demand. The plant is old and expensive to run, and the air pollution impacts on the Lower Mainland of BC are significant. The LTAP proposed to continue to rely on the plant for 900 MW of dependable capacity, and to reduce its reliance on Burrard Thermal to 3,000 GWh/year of energy for planning purposes, less than half of the 6,100 GWh/yr it had relied on previously.
The Commission agreed with the plan to rely on 900 MW of capacity, but rejected BC Hydro’s proposal to reduce reliance on Burrard to 3,000 GWh/yr. Again, the Commission was very critical of the type of analysis BC Hydro presented: “BC Hydro acknowledges that this conclusion was not derived from simple factual analysis and includes its professional judgment and careful consideration of context.” A big part of that professional judgment was an analysis of “social license” – BC Hydro argued that relying on the plant for more than the 3,000 GWh/yr would provoke so much public opposition that it would be unsustainable. The Commission rejected this argument, and recommended BC Hydro improve its “stakeholder engagement management” (p. 115). The Commission recommended BC Hydro plan for 5,000 GWh/yr, less than the 6,100 in the previous plan, but significantly more than the 3,000 proposed by BC Hydro.
The logic for this part of the Commission’s decision is more elusive than in the other areas in which it rejected BC Hydro’s proposals. However, it is consistent with the core finding that BC Hydro has not adequately provided for self-sufficiency (with insurance) as required by law, and that it might be premature to wind down Burrard Thermal as quickly as BC Hydro proposed. If that was the Commission’s rationale, it did not state it very clearly. This is also a case where the Commission decision seems to fly directly in the face of government policy. The 2007 BC Energy Plan, policy action 22, states the Government supports BC Hydro plans to phase out Burrard Thermal. The Commission maintains, and BC Hydro concurs (p. 105) that the language in this policy action is non-legislated and advisory, and lacks the force of law.
Refusal to endorse specific target for 2008 Clean Power Call
Given its forecast of future demand, its proposal for demand-side measures, and its assessment of existing and committed resources, BC Hydro argued there was a supply gap that needed to be addressed, and that it should do so in part by soliciting proposals for clean energy from private power producers. While there was some fluctuation in numbers throughout the process, BC Hydro’s formal request was that the Commission endorse a Clean Power Call target of 3,000 GWh/yr (p. 122). The Commission refuses to endorse any specific target for the Clean Power Call. It bases this decision on the fact that the other parts of the plan that provide the basis for the amount of new resources needed are so flawed — the failure to provide for self-sufficiency, the inadequate demonstration of cost-effectiveness of the DSM plan, and the lack of evidence for the reduction in Burrard Thermal – that it has no basis to decide what the amount of new resource should be.
While the Commission rejects a specific magnitude for the call for new power, its decision should not be read as a rejection of the government’s policy to rely on private power producers, whether for run of the river or other sources, for new electricity generation. The entire analysis by the Commission is done within the framework of the government’s 2007 Energy Plan, and the Commission makes clear that BC Hydro continues to have the authority to enter into energy purchase agreements with private power producers (p. 127).
Concluding Thoughts
As this analysis suggests, the Commission’s rejection of the LTAP is best viewed not as a challenge to government policy, but as a criticism of BC Hydro for not providing sufficient evidence that it was complying with government policy. In most cases, the logic of the Commission argument seems quite clear. In one important case, the rejection of BC Hydro’s proposal to reduce reliance on Burrard Thermal, the Commission’s logic is harder to follow. Indeed, it is surprising that the Commission was so harsh on BC Hydro’s reasoning in many areas, yet so weak in its own supporting analysis on such a critical issue before it.
It is possible that the Commission’s insistence of more rigorous analysis is merely a cloak for policy disagreements with the government. While I doubt this is the case, even if it is, the government has the opportunity and the means to clarify policy by issuing more specific direction to the Commission. Indeed, the government has already signaled that it has no intention of increasing reliance on the Burrard Thermal plant.
While the decision certainly creates short term confusion, it may have valuable benefits in the medium and long term. BC Hydro will be forced to provide more rigorous and transparent justification for its decisions – the Commission requires that a new LTAP be submitted by June 30, 2010 (p. 151).
In my view, one lesson of the decision, and the controversy over it, is the illustration of the limitations of using quasi-judicial proceedings to make public policy decisions so crucial to the province. Perhaps the BC government will take this opportunity to engage in a more open, public dialogue about BC’s energy future, an argument this blog has promoted several times before.
August 02, 2009
BOMB: The bomber dividing Tomslake
Nathan Vanderklippe
Globe and Mail
August 1, 2009
 Feelings toward the EnCana blasts are split in Tomslake, B.C. Some residents welcome the industry's influx of wealth, while others quietly support the person responsible for six explosions since October. |
Bill Mazanek will not soon forget the time, two years ago, when his peaceful ranch in northeastern British Columbia turned into a little slice of Texas.
He could walk to his front yard and see six drilling rigs and a dozen natural-gas flares, their flames licking high into the sky. When the wind wasn't blowing, the air bore a metallic tang.
“Have you ever been to a welding shop when everybody's quit welding? There's still that little taste in the air,” he said. “That's what it would be like first thing in the morning.”
Mr. Mazanek's home was in the throes of a huge transformation. Tomslake, his community of 375 households, was no longer the backwoods cattle-and-canola country it had long been.
It began in 2003, when EnCana Corp., a Calgary-based oil and gas company, announced a record-breaking $500-million purchase of 200,000 hectares – about one-third the size of PEI. The rest of the industry flocked to the area, and drilled hundreds of wells, many near Tomslake. In the past six years, EnCana alone has drilled 185.
Mr. Mazanek loves it. As the local fire chief, he is the closest Tomslake has to a mayor, and he has made his own 461 acres of land a welcome mat for industry. Thirteen wells have been drilled on his ranch; nine more are in the works.
The smell worried him, though, so he had an air-quality monitor installed at the fire hall, to test for anything that could be dangerous.
“It's never tripped,” he said. “So far, everything's hunky-dory.”
But as anyone here will tell you, it's no longer the air they're worried about. It's everything else – including their lives.
Not everyone likes the oil and gas industry, which has brought clouds of dust, a barrage of noise, and the threat of deadly sour-gas leaks to a once-tranquil part of the country. Some murmured their displeasure, some fought the gas companies in court.
Almost no one noticed.
Then, last October, local news outlets received an anonymous letter that demanded the “terrorists” of industry pack up and leave. Two days later, a blast damaged a sour-gas pipeline in the area. In the following 10 months, five more blasts followed. RCMP labelled the bomber a “terrorist” who was attacking critical energy infrastructure and endangering lives.
The country took notice. And Mr. Mazanek grew angry.
“I believe in vigilante justice. There's a whole bunch of us that do. Our necks are kind of red down here,” he said. “I wish I knew where the bomber was from, believe me. He would be in one of my muskeg holes.”
But in Tomslake, not everyone agrees.
On a warm summer evening, a steady stream of cars trickled onto the gravel parking lot at the old Tomslake Community Cultural Association hall.
Inside, 30 people gathered. Farmers wearing mesh ball caps and plaid shirts sat next to women in Gap sweatshirts. They are Rural Crime Watch volunteers. Many have dedicated unpaid hours to patrol local roads to find the bomber.
They listened as RCMP Staff Sergeant Stephen Grant outlined his plans to catch whoever is responsible, which includes a new temporary detachment in Tomslake. This crowd has a personal stake in putting the bomber behind bars, and many were happy to hear it. Their meeting fell on the same day police revealed the contents of a second anonymous letter from the person they believe to be the bomber, who warned that if EnCana did not begin to pull back from the area in three months, “things will get a lot worse.”
Then a woman raised her hand to speak. She feels differently. She has watched natural-gas wells form an unwanted perimeter around her land, company helicopters spook her cattle, and equipment shatter the silence on a road to her home that, in the past, rarely saw more than a vehicle a week.
She wants the industry gone.
“The bomber is at least giving us a bit of a voice,” she said.
Staff Sgt. Grant, commander of the detachment at Dawson Creek, 30 kilometres to the northeast, has heard this before. While the explosions could easily kill someone, there are plenty who feel more sympathy for the bomber than the infrastructure he or she has damaged.
“This person would like to think they're Robin Hood,” he said. “But they're endangering the people that live here.”
 Click here to go to the interactive mapping page on the Globe and Mail site.(Tonia Cowan and Derek York/The Globe and Mail) |
The regular morning crowd at the Dawson Creek Tim Hortons rises early, and sips coffee late. Pulp workers, businessmen and pipeliners, they have a lot to say about the energy industry, especially the evils of what John Miller calls “the flipping oil field mentality.”
Mr. Miller, a welder and long-time resident, outlined the many ways the industry has shown disregard for long-established community protocols. The oil and gas companies take too long to pay their bills. Their semis dangerously speed down local highways. Their pickup trucks block driveways. They fly up high-powered lawyers to fight ranchers looking for small increases in land access fees. “Their attitude, it stinks,” Mr. Miller said.
Sitting next to him, Fred Lumnitzer, a construction worker, pointed to EnCana as the worst offender. “They remind me of a sandbox where all the kids are playing and a bully comes along and says, ‘I'm going to play with that truck,'” Mr. Lumnitzer said.
Both he and Mr. Miller know the industry has brought new wealth. Houses have tripled in value in the past decade. The roads are full of shiny pickups. The recession has skipped over this place.
EnCana has worked diligently to win local hearts. It began a Courtesy Matters campaign, aimed at making the company more responsive to complaints about traffic, noise and garbage. Its most visible presence in the community is its large logo on the Dawson Creek EnCana Events Centre, an arena and swimming-pool complex it sponsored.
“With the vast majority of our relations with surface land owners and stakeholders, we work through the challenges and their concerns,” said company spokesman Alan Boras. “And a measure of that is in the probably 200 leases that we have in place up there: Only two have gone to mediation or third-party arbitration.”
The company also offered a $1-million reward for information leading to the bomber's capture.
Still, mistrust of EnCana runs deep. Mr. Lumnitzer and many others see the bomber as a vandal attacking the companies that have damaged the area. They refuse to call the bomber a terrorist – they say they don't feel terrorized, and don't believe he is out to hurt anyone.
But if the bombs don't much frighten the Tim Hortons crowd, they've cast a tremor through many in the community who live near the energy infrastructure – and especially among those work in it.
“If the idiot keeps going, somebody's going to get hurt or killed,” said one EnCana employee, worried he would lose his job if he were identified. A well-placed hit on one of the many natural-gas compressor stations in the area would “be like a little atomic bomb,” the employee said.
Doug Harper got a preview of what that might look like when, early on July 4, his usually calm neighbour banged on his door, looking terrified. Not far from Mr. Harper's house, a huge explosion had ripped through the night followed by the sound of natural gas roaring into the air. “I went out practically undressed,” he said. “I told my wife, ‘Jesus Christ Get a move on Let's go or we'll die'”
The explosion, set on a pipeline, was the bomber's sixth. It was set just 500 metres from where crews were working to fix the fifth explosion.
Mr. Harper, whose ancestors were among the first to settle the area, acknowledges that industry has damaged the landscape. Some of his favourite grouse-hunting trails have vanished beneath oil and gas roads, and his 194 hectares are no longer as peaceful as they once were.
But he has little but praise for EnCana. One snow-heavy winter, the company dispatched a bulldozer to help clear his driveway, unprompted, and at no charge. In summer, when the dust starts to build on nearby gravel roads, he places a call and the company sends someone to water the road.
“They do really make an effort,” he said. “Although there's a lot of people that have resentment towards them, I think they really try to be a good corporate citizen.”
The disturbance is the price to pay for a society that depends on hydrocarbons, he said. And while he doesn't have a well on his land, he wishes he did.
Tomslake is filled, said Mr. Mazanek, with a silent majority that has tallied the gains and losses of natural-gas production, and come out in favour of industry. He is one of them.
Where others protest, Mr. Mazanek profits. He has signed contracts with companies such as EnCana to bulldoze land for roads and wells. He grinds straw, erects fences, digs water dugouts – and pulls in good margins on it all.
Agriculture, once the lifeblood of this area, is dying. Mr. Mazanek has sold all but 16 of a cattle herd that once numbered 165. “It's just not worth it,” he said.
Now he makes $4,000 a year to lease out land for a single 1,600-square-metre oil lease.
“My great- great- great-grandkids could farm that sucker, and they aren't going to make that much,” he said.
Industry, he concluded, arrived just in time.
“Not all of us are against the oil companies,” he said. “To the ranchers and farmers that have oil and gas on their land, it's a lifeline.”
First came the energy boom. Now, the bombs
Pete McMartinVancouver Sun
August 1, 2009
Few in Peace River country back violent action against oil and gas companies. But there is a deep well of discontent
Since 2000, when the boom really got going, just over 10,000 gas and oil wells have been drilled in the Peace River region. Three of them are on Ken and Loretta Vause's 1,200-acre spread.
The boom transformed the Peace. The tangled infrastructure of the energy industry was set down amid farmland and forest. In the space of a decade, the bucolic nature of the landscape changed.
Locals had little say in the pace of that change. Under provincial law, subsurface mineral rights superseded the surface property rights of landowners, and if an oil or gas company wanted access to a farm or acreage, there was little a landowner could do about it. Leases and rents could be negotiated, and sometimes the location of wells, but that was about it.
The only recourse a landowner had if he or she disagreed with the terms being offered was appealing to the provincial government's Mediation and Arbitration Board, an arm of the Ministry of Energy, Mines and Petroleum Resources. If mediation failed, disputes went to arbitration. Arbitration involved a formal hearing, and the arbitrator could direct compensation to either of the parties.
Many landowners, however, quickly came to mistrust the MAB. Many felt its only purpose was to grease the way for the oil and gas companies.
"There's no doubt about it," Ken Vause said. "They're a kangaroo court.
All they're there for is to facilitate the oil and gas industry getting on our lands."
The MAB became such a standing joke among landowners that one disgruntled audience member at a hearing showed up wearing a kangaroo costume.
There were more extreme expressions of dissatisfaction. In 2008 and 2009, a series of bombs damaging pipelines and property belonging to EnCana Corp. made national headlines. Despite hundreds of police officers and investigators being put on the case, no arrests have been made.
The case appears to parallel that of Wiebo Ludwig, an Alberta man and eco-activist who campaigned against sour-gas wells, arguing they harm human health. He was sentenced to 28 months in prison for possession of explosives and mischief in connection with blowing up one well and vandalizing another.
On the B.C. side, EnCana, desperate to put a stop to the attacks, on Thursday doubled its offer of a cash reward -- to $1 million -- for information leading to the arrest and prosecution of whoever is responsible for the current bombings.
Meanwhile, some officials have admitted there were problems with the mineral rights issue that had to be addressed.
When Cheryl Vickers, the MAB's new chairwoman, took over in July 2007, she found an organization, she said, that "did not have a positive reputation."
"It was a mess," Vickers admitted. "[The MAB] had no credibility."
Many landowners felt bullied, and when she ventured north to Fort St. John to hear their concerns they told her so. Oil and gas companies were going to the board to get entry to landowners' properties even before the technical aspects of drilling and well sites were worked out.
"What was happening," Vickers said, "was we were being put in the position of making entry orders without resolving the issues of entry and location of where a well was supposed to go. . . . It was all sort of ass-backwards, if you like."
Vickers tried to improve the board's relationship with landowners by drawing up a memorandum of understanding with the province's Oil and Gas Commission, the body responsible for regulating the industry. The memorandum sought to coordinate the two boards' work, and improve "relationships" with the landowners by simplifying the process and being more open.
But problems persisted. Some landowners felt the companies were offering pittances for leases and rents. The companies not only had teams of lawyers to back them up, they had a provincial government and urban population happy with the wealth the industry was generating. Landowners and farmers not only felt their way of life was being changed, but that the windfall the province and industry were enjoying was at their expense.
Despite this, landowners weren't necessarily anti-oil-and-gas. The Vauses, for example, had not only accommodated the industry, they had been a part of it. Ken worked on drilling rigs himself. It helped pay for his farm, he said. And the relationship he had with the company that owned the three wells on his property had been a cordial one.
But the Vauses still found themselves in the fight of their lives with oil and gas.
Another company, Spectra Energy Midstream Corp., wanted access to their land to lay a pipeline. At first, the Vauses thought they could live with it, but then they found out it would run straight through one of their working fields. When the Vauses expressed concern about the pipeline's route, and the fact that they didn't know the amount of compensation Spectra was offering, they ended up going to mediation, then arbitration.
The Vauses hired a lawyer: Spectra brought a battery of lawyers and industry professionals to the table. Both stages went against the Vauses.
Spectra was granted access to the Vauses' spread. The couple then asked the B.C. Supreme Court for a judicial review of the MAB decision, but were refused because of time limitations. The Vauses were ordered to pay 90 per cent of Spectra's legal costs for the judicial review application.
FUNDS DIDN'T COVER COSTS
The money the Vauses ended up getting from Spectra for access to their land -- about $19,000 -- didn't cover half their legal fees and expenses.
The pipeline has since been built and, Ken said, is a mile in length, takes up seven acres and "greatly restricts" what he can do in that section of his land. They are now considering what their next step might be, he said.
(Spectra spokesman Rosemary Filba said the Vauses had "a somewhat unrealistic idea what fair compensation would be" and that Spectra has good relationships with the thousands of other landowners it deals with in the region. "It's an unfortunate situation," she said.)
It was during that time, while the Vauses were embroiled in their battle with Spectra that something happened to unnerve the entire industry.
In early October 2008, someone set off a bomb in the Tomslake area, south of Dawson Creek. It damaged a 30-cm EnCana pipeline carrying sour gas to its Steep Rock gas plant.
A handwritten letter arrived at a Dawson Creek newspaper on Oct. 10. The script was shaky, as if the author was arthritic. (It has been speculated that the writer did not use his or her dominant hand to write them.)
Addressed to "EnCana and all other oil and gas interests in the Tom's Lake Area," the letter was blunt and threatening:
"You have until Oct. 11 of 2008 (Saturday 12:00 noon) to close down your operations (including the Steep Rock plant) and leave the area until further notice. We will not negotiate with terrorists which you are as you keep on endangering our families with crazy expansion of deadly gas wells in our home lands."
There were five more explosions in the months following. All targeted EnCana property. The last, three weeks ago, ruptured a pipeline. A second letter, again sent to a Dawson Creek newspaper and addressed only to EnCana, North America's largest natural gas producer, arrived July 15.
It upped the ante, and the rhetoric. Demanding that EnCana and its "terrorist pals" dismantle their plants, leave the area within five years and use their "excessive earnings to install green energy alternatives instead," the bomber wrote there could be no negotiation, "FULL STOP!!"
There was also something in the tone of the second letter that had not been in the first: hubris.
Noting that the RCMP and security personnel had not been able to stop the bombings, the letter writer rubbed their faces in it. The six "minor and fully controlled explosions" were demonstrations of their vulnerability, and that they could "be rendered helpless despite your megafunds, your political influence, craftiness, and deceit."
The bomber was enjoying the game.
"He really wants to impress upon these people that he's the man in charge," said B.C. criminal psychologist Mike Webster. "This is sometimes called 'duping delight.' This is a kind of person who is torn and conflicted between staying at large and fencing with the oil companies and police."
By this time, the police were referring to the bomber as an eco-terrorist, with the implication that he or she was a crazed loner.
SYMPATHY FOR THE BOMBER
But an unexpected dynamic had developed in the area. Many people -- mostly those rural landowners whose lands the oil and gas wells sat on -- publicly expressed sympathy with the bomber's anger.
While none condoned the violence, and few expressed any sentiment like demanding the industry withdraw from the region, they did say they understood the sense of frustration the bomber had with the oil and gas industry and with the government boards that oversaw it. Some wanted the pace of industrialization to slow. Some, like the Vauses, wanted the industry to be more conciliatory.
"I don't agree with his method," Ken Vause said of the bomber, "but I understand where the frustration comes from. If there wasn't a lot of frustration up here, that person who was lighting those firecrackers . . .
could have been found out by now."
That fact, that 250 police officers and special intelligence squad members had not been able to catch the bomber, and that no one had responded to a $500,000 reward that had been offered, was suggested as an indication that perhaps the region's residents weren't as terrorized by the "eco-terrorist" as the police thought they should be.
Criminal psychologist Webster concurred.
"He's not a terrorist," Webster said. "Terrorism is a strategy of violence to instill fear in the general public. But he doesn't want to instill fear in the general public. He wants to instill fear in the oil and gas companies, and I'd say he's done that.
"I think that the people in the community are more afraid of the police than they are of the bomber, because of [the police's] heavy-handed tactics."
Landowners in the rural areas complained of what they considered intimidating and threatening tactics by police and the security personnel of the oil and gas companies -- of being stopped on the road and questioned, of having lights shined into their homes, of being interrogated up to eight times. In late 2008, the RCMP set up a website (www.dawsoncreekbombings.com) which initially included photographs of people who police said were of interest to the case. The photographs were removed after a letter threatening legal action was sent to the RCMP from a lawyer for one of the people. One man complained that members of the Integrated National Security Enforcement Team, brought into the area for the investigation, followed him into a café and publicly accused him of being the bomber.
"They sat down at my table," said Dennis MacLennan, who runs a 160-acre tree nursery in Tomslake, "and accused me, in a raised voice, 'You're the bomber, you're the bomber, you're the bomber,' three times, like that. To which, I got up and left the restaurant."
That scene in the café, MacLennan believed, came about because of a lengthy letter he had written to several newspapers, including The Vancouver Sun, and to the Oil and Gas Commission. In it, MacLennan detailed his own fight with EnCana over the placement of a gas pipeline on his property, and the subsequent arbitration hearing he had at the MAB.
The initial compensation EnCana offered him, MacLennan said, was laughably small -- $399.07 -- and he considered the arbitration hearing a farce.
The judge granted EnCana access to MacLennan's land.
"I'll probably have to try and seek some satisfaction in a higher court,"
MacLennan said. "I'm consulting a lawyer at this time, and I'm also consulting a lawyer about the harassment I received."
It hasn't, he said, left him anti-industry.
"It isn't Us against Them. One person [the bomber] has a grievance with one company. That doesn't mean we're all against the industry. We're not against oil and gas development."
His problem, he said, was with the government boards overseeing the industry. "If you look at the system, it probably would work, if it were administered correctly. But it's not."
MacLennan said he is now considering selling his inventory and property.
"There's nothing for me there. This is a farm that has been in my family for 40 years. I'm played out. I'm tired of the situation."
pmcmartin@vancouversun.com
August 01, 2009
LTAP: Commission accused of "regulated racism"
Sean Holman
Public Eye Online
July 30, 2009
The Sechelt Indian Band has accused the British Columbia Utilities Commission of "regulated racism." In a letter sent today, the band told the commission its refusal to endorse BC Hydro Corp.'s 2008 Clean Power Call, has "undermined our people and directly caused a breach in the negotiations and opportunities between our Nation and specific IPP projects and proponents."
The Sechelt also stated they're not the only indigenous group impacted by the commission's decision, accusing the regulator of having "pulled the rug out from under those First Nations throughout British Columbia who are seeking accommodation and opportunity through private power green energy partnerships."
Last year, the Sechelt signed an agreement with Plutonic Power Corporation Inc. to facilitate the development of transmission infrastructure for the company's East Toba and Montrose Creek hydroelectric project within their traditional territory. The following is a complete copy of their letter, which was exclusively obtained by Public Eye.
***
SECHELT INDIAN BAND
July 30, 2009
Commission Secretary, BC Utilities Commission Elizabeth Hamilton
Commissioners, BC Utilities Commission
A.J. Pullman, Commissioner and Panel Chair
R.J. Milborne, Commissioner
M.R. Harle, Commissioner
Regarding BC Hydro's Long Term Acquisition Plan and Commission Decision Dated July 27, 2009
Commissioners and Staff:
The decisions and determinations in your ruling of July 27, 2009, must be responded to in a manner that reflects the shock, frustration and disappointment that we experienced upon its receipt.
For all intents of purpose, you have attempted to turn the clock back a generation through regulation - completely ignoring both provincial government direction and the current reality of global warming and the need to move towards clean, green and renewable sources of electricity.
Further, you have essentially pulled the rug out from under those First Nations throughout British Columbia who are seeking accommodation and opportunity through private power green energy partnerships.
The $631 million in expenditures that you approved must be questioned in the following context. First, none of those funds provide direct, specific and targeted benefits to BC's First Nations. Second, you have chosen a "brown" energy acquisition path at the expenses of viable and proven green energy opportunities. Burrard Thermal and similar greenhouse gas emitting facilities represent the past, and yet that is the direction you have sanctioned. Wind, solar and micro-hydro represent the future, and you have fundamentally disadvantaged them. Third, Demand Side Management (DSM) and conservation, while important, cannot form the backbone of near and medium term needs. Fourth, you have included electricity imports into your calculations - including those from coal and gas fired greenhouse gas producing plants - in spite of specific government policy direction to achieve energy self sufficiency. Fifth, while the merits of Site C will surely be debated, it represents a longer term and risk laden venture at the expense of immediate and alternative green energy options.
Of the total requested funding of $633 million - the only item not approved by the Commission was the paltry $2 million expenditure that represented the one and only opportunity in the entire proposed mix that had the potential to provide not only a cleaner and greener approach to future energy needs, but direct and specific benefits to those First Nations who were engaged in private power opportunities with BC's emerging green energy industry.
By not specifically endorsing BC Hydro's current Clean Power Call, you have, with the stroke of your pen, undermined our opportunities and unilaterally and arbitrarily taken off the table those benefits and opportunities that we were negotiating, on behalf of our people, with green energy companies undertaking responsible developments in our territories. You have with this decision undermined our people and directly caused a breach in the negotiations and opportunities between our Nation and specific IPP projects and proponents. This is unacceptable and appears to us to be nothing less that regulated racism and a complete disregard for the time, energy and investments that formed the basis of these quality partnerships and the green energy future all, except the BCUC, seem to aspire to.
We strongly support the opportunities associated with a green energy future and green private power partnerships. And we will strongly and publicly support any policy that provides those opportunities for our people and for all of British Columbia.
Yours truly,
shishalh First Nation
Chief Garry Feschuk
Councillor Jordan Louie
Councillor Tom Paul
Posted by Sean Holman at 05:52 PM
http://www.publiceyeonline.com/archives/004114.html
First nations fume over BCUC's sudden coolness to green power
Vaughn PalmerVancouver Sun
August 1, 2009
Native leaders insist clean energy is the way to go
Several first nations have challenged the B.C. Utilities Commission for putting up a regulatory roadblock to development of wind and water power within their traditional territories.
They were reacting to the commission's decision to withhold endorsement of B.C. Hydro's latest call for proposals to build wind farms, run of the river developments and other "clean power" projects.
Instead, the commission ruled that Hydro could make do with increased reliance on power from Burrard Thermal, the seldom-used-because-polluting, natural-gas-fired generating station near Port Moody.
This apparent preference for "brown power" over "green power" provoked a major push-back from the leaders of the Squamish and Sechelt nations, both of whose territories included projects that were submitted for consideration as part of the clean-power call.
"Burrard Thermal and similar greenhouse gas emitting facilities represent the past," wrote Squamish chiefs Gibby Jacob and Bill Williams in a letter that went out Thursday to BCUC headquarters in Vancouver. "Wind, solar and micro-hydro represent the future and you have fundamentally disadvantaged them."
"For all intents and purposes, you have attempted to turn the clock back a generation," read a similar missive from chief Garry Feschuk and councillors Jordan Louie and Tom Paul of the Sechelt Indian Band.
"(You are) completely ignoring both provincial government direction and the current reality of global warming and the need to move towards clean, green and renewable sources of electricity."
The native leaders were particularly incensed that from a list of more than $600 million worth of spending proposals from Hydro, the commission rejected only the funding for the clean power call, budgeted at $2 million.
"The paltry $2 million expenditure represented the one and only opportunity in the entire proposed mix that had ... direct and specific benefits to those first nations who were engaged in private power opportunities with B.C.'s emerging green energy industry," wrote the Sechelt leaders.
"You have, with the stroke of your pen, undermined our opportunities and unilaterally and arbitrarily taken off the table those benefits and opportunities that we were negotiating, on behalf of our people, with green energy companies undertaking responsible developments on our territories," continued the Squamish natives.
It must be galling to those and other native leaders. After years of relying on government handouts, they get actively involved in private investment and job creation, only to have the door slammed on them by a government-appointed regulator.
Their frustration was evident in an over-the-top comment from the Sechelt leaders:"This is unacceptable and appears to be nothing less to us than regulated racism."
The Squamish letter was probably closer to the mark when it speculated:
"We strongly question if you were aware of these implications when your decision was made."
Probably not. The commission did not say anything one way or another about the merits of native involvement in development of the province's electrical potential. Likewise it did not specifically veto clean power, green power, run of the river power or privately generated power.
The three commissioners who issued Monday's lengthy decision simply said they were not persuaded of the need for the current clean power call at this time. Hydro was invited to resubmit its energy acquisition plan next spring, presumably with better arguments.
The commission is straitjacketed by a legislated mandate that requires it to consider cost ahead of most considerations in deciding whether to green-light Hydro's plans to acquire new sources of power and upgrade older ones.
Those economic considerations can readily trump concerns about greenhouse gas emissions, witness the commission's expressed view, elsewhere in this week's decision, that Hydro should encourage people to heat their homes with natural gas as an alternative to electricity.
Whatever one thinks of a museum piece like Burrard Thermal, it might be cheaper to operate (though some experts dispute this) than taking a flyer on intermittent sources of power like run of the river and wind farms.
But the commission's terms of reference do not incorporate the government's preference for giving first nations an expanded role in developing emissions-free power in partnership with private operators.
"You have essentially pulled the rug out from under those first nations throughout B.C. who are seeking accommodation and opportunity through private power green energy partnerships," as the Sechelt leaders put it.
"These green power private partnerships form the basis of our ability to create a future running our own businesses within our traditional territory using a sustainable and clean resource," was the view from Squamish.
How to incorporate those worthy objectives into future BCUC decisions? The Liberals, having vowed to protect the commission's independence, should proceed with caution.
But they might consider appointing a native representative to the commission. Or they could direct Hydro to prepare a new call for clean power proposals, this time directly tailored to partnerships with first nations.
LTAP: BC’s Summer of Energy Discombobulation
by Guy Dauncey
BCSEA Blog
July 31st, 2009
There’s nothing like a BC Utilities Commission (BCUC) ruling to get our heated brain cells overworking. For a start, they don’t just say “yes” or “no”. They take evidence from witnesses, record cross-examinations, and sum it all up in 180 pages of technical argument, at the end of which they conclude, “Better to burn dirty gas than green power”.
Say, what?
When the climate change alarm bells have never rung louder around the world, and nations are rushing to produce more green power, is BC to go backwards, deliberately spend hundreds of millions of dollars to extend the life of the inefficient gas-burning Burrard Thermal power plant in Port Moody?
The Utilities Commission’s ruling was in response to BC Hydro’s Long Term Acquisition Plan, which lays out how they plan to meet BC’s future power needs through energy efficiency, upgrades to existing hydro dams, and the purchase of new green power. This is rational planning at its best, leaving aside the partisan debate about private versus public power.
Because the Burrard Thermal plant is old, expensive, and polluting, BC Hydro only uses it when it really has to - it is usually cheaper to import dirty power than to fire up our own dirty plant. The government wants to see it phased out, and BC Hydro planned to reduce its back-up dependency on the plant from 6,000 gigawatt hours per year to 3,000, while purchasing up to 3,000 GWh/yr of green power to replace it. What could be more rational?
Electricity from the Burrard Thermal plant will be cheaper, was the nub of the BCUC ruling. That may seem logical if your thoughts are grounded in the energy flat world of the 1970s, before we knew about climate change, and its potential to bring our civilization to a painful and grinding halt before the century is out.
The BC Utilities Commission is required to serve “the public interest”, but until 2008 it had always equated “public interest” with “cheap power”. This has always been the BC fixation, even though our power is the third cheapest in all North America.
In 2008, however, the government passed the Utilities Commission Amendment Act, which is very specific: “In determining … whether to accept a long-term resource plan, the commission must consider the government's energy objectives”, which it defines as including, at the top of the list, “encourage public utilities to reduce greenhouse gas emissions.” What could be more clear? If the Burrard plant is used as proposed, it will be the single largest point-source of greenhouse gas emissions in the province.
The government’s stated objectives also include generating and acquiring electricity from renewable sources - not from the greenhouse gas producing, smog inducing Burrard Thermal plant.
“But ah,” the Commissioners reply in their report, “BC Hydro will simply buy carbon offsets for the greenhouse gases produced beyond 2016.” There is not a single paragraph in the 180-page report that addresses the problem of climate change.
Is this what things have come to? That whenever climate change crops up, we parrot the words “buy offsets”? Will tree planting in Maple Ridge make up for greenhouse gases in Port Moody? This was never the intent of BC’s Climate Action Plan. The commitment to a 33% reduction in our greenhouse gas emissions was never intended to be sugar coated with the easy purchase of “get out of jail” carbon indulgences.
All around the world, nations are accelerating their drive to replace fossil-fueled power with renewable energy from the wind, sun, tides, and other sources. This is the future - our planet is embarking on a huge civilizational shift that will see the total abandonment of fossil fuels in favour of safe, green energy. Yet here in BC, the BCUC has sent the opposite message to the green energy industry - don’t waste your time and money on an innovative energy future, for we’d rather spend ratepayers money on fixing up fossil fuels. COPE, the BC Hydro workers union, is in happy agreement, since the fossil-fueled jobs will be unionized.
Some will argue that since BC Hydro hardly ever uses Burrard Thermal, it being so inefficient and expensive to run, the decision doesn’t matter. But if we deliberately stop green energy and pour more money into Burrard, surely we are increasing the likelihood that it will be used more rather than less? It’s a strange, discombobulated world we live in. One day, we’re at the head of the pack on climate change, and the next, we’re dragging our feet with the dinosaurs.
Guy Dauncey is President of the BC Sustainable Energy Association