December 29, 2005
A Natural Gas OPEC?
Peak Energy Blogspot
01-Apr-2005
The concept of a natural gas OPEC is becoming less far-fetched. On Apr. 25-27, a little-known, four-year-old organization called the Gas Exporting Countries Forum will meet in Port of Spain, Trinidad and Tobago. Although the organization says it wants to promote cooperation with gas-consuming nations and "does not seek to control...pricing and supply," in past meetings members have discussed mutual efforts to capture a bigger share of the wealth generated by their own natural resources. That's exactly the line of inquiry that led to the formation of the Organization of Petroleum Exporting Countries 45 years ago.
Natural gas meets one key requirement for price-fixing: a high degree of market concentration. In the last quarter of 2004 members of the forum accounted for 53% of the natural gas imported by the industrialized nations belonging to the Organization for Economic Cooperation & Development. That's in line with the 52% share of OECD oil imports that OPEC provided in the quarter, according to the International Energy Agency. The Trinidadian hosts list the countries invited as forum members as Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Oman, Qatar, Russia, Trinidad, United Arab Emirates, and Venezuela. Many are OPEC members and thus know a thing or two about price-fixing. Norway, Argentina, and Equatorial Guinea have been invited to observe.
Posted by Arthur Caldicott on December 29, 2005
December 16, 2005
Cancelled: Surrey & Vancouver Island
VITR&VIC Town Hall Meetings
BCTC-VITR & Sea Breeze-VIC Revised Hearing Schedule: Hearing now set for Mon, 06-Feb-2006
Tsawwassen meeting date changed to Jan 14 at 9:00 am to accommodate a large number of registrants
Wed, 21-Dec-2005
Intervenor Evidence with respect to the VIC Application
Fri, 06-Jan-2006
Hul'qumi'num Treaty Group rebuttal evidence
Sat, 07-Jan-2006
Town Hall Meeting (Salt Spring)
Mon, 09-Dec-2005
BCUC and Participant Information Requests to Intervenors with respect to the VIC Application
Sat, 14-Jan-2006
Town Hall Meeting (Tsawwassen)
Mon, 23-Jan-2006
Intervenor Responses to Information Requests with respect to the VIC Application
Thu, 26-Jan-2006
Staff Issue Hearing Issues List
Mon, 30-Jan-2006
Opening Oral Submissions
Wed, 01-Feb-2006
Proponent Consolidation of Hearing Issues List
Fri, 03-Feb-2006
Panel issues Hearing Issues List
Mon, 06-Feb-2006
Public Hearing commences
A-45 BCUC letter re BCTC VITR & Sea Breeze-VIC.pdf
Posted by Arthur Caldicott on December 16, 2005
December 15, 2005
Clean-Energy Frenzy in Washington State
As the Northwest struggles with soaring fuel and electricity prices, corporate executives and entrepreneurs are joining politicians and activists to develop cleaner, smarter, and self-reliant energy sources.
by George Howland Jr.
Seattle Weekly
December 14 - 20, 2005
Gov. Christine Gregoire is touring the state with a farmer who grows mustard seed used to make biodiesel. U.S. Sen. Maria Cantwell, D-Wash., is demanding that oil executives testify under oath about record profits. First District U.S. Rep. Jay Inslee's crusade for a clean-energy future has been embraced by the leadership of the Democratic Party as a central message for the 2006 elections. After a lengthy study of the cheapest way to generate electricity, Puget Sound Energy, the state's largest private utility, has bought two huge wind farms. Moses Lake Republican state Rep. Janea Holmquist is pushing a law to require the use of up to 10 percent biofuels to run vehicles in the state. Shell Oil has invested in a company building a cellulosic ethanol plant in Idaho. The Northwest Energy Coalition, an environmental group, is planning a voters' initiative to mandate use of clean energy by Washington utilities, because while public support for a policy is strong, legislators won't pass such a law.
Welcome to America's first energy crisis of the 21st century. Northwest politicians and activists are responding to the soaring prices of gas and oil by attacking the status quo, while corporate executives and entrepreneurs are embracing alternatives previously relegated to the fringe.
The latest energy crisis is due to a number of factors. The disastrous invasion of Iraq, of course, has highlighted the military and political costs of dependence on oil from the Middle East. Says Inslee, a Bainbridge Island Democrat: "We are addicted to oil from that region. That's unhealthy for our own security." Hurricanes Katrina and Rita disrupted oil and gas supplies, driving prices higher, and created opportunities for profiteering by big energy companies. "There is no valid reason our gas prices went up after Katrina," claims Democratic Gov. Gregoire. Scientific consensus has developed more strongly around the relationships among global warming, the burning of fossil fuels, and climatic changes. "We are a coastal state fighting desperately against global warming," says the governor.
In the short term, all of this protest and recognition of problems isn't going to do anything to change the high cost of energy or dependence on foreign oil. "Americans will spend over $200 billion more on energy this year than they did last year," says Cantwell, a member of the Senate energy committee. Washington consumers have seen the price of a gallon of regular gas soar from $2.09 to $2.91 in September and drop back to $2.33 last week, according to the American Automobile Association. The Northwest Energy Coalition estimates that the average Washington household will pay $700 more to heat their home this winter than last year.
Even if remedies are not immediate, clean-energy activists and sympathetic politicians hope to use public concern over high energy costs to promote alternatives to fossil fuels. At the federal level, Washington leaders like Inslee and Cantwell are unlikely to make much progress. "Congress is still in the thrall of the oil and gas industries," says Inslee.
At the state level, however, real progress has already occurred, and more is likely. This is no accident. It's the result of activists, politicians, and entrepreneurs working together to build a clean-energy future. Take the Apollo Alliance, named after President Kennedy's initiative to put a man on the moon. It's a broad coalition of environmentalists, organized labor, business executives, civil rights leaders, and politicians, and both Cantwell and Inslee are on the national advisory board. Gregoire is one of nine governors who have endorsed Apollo's call for energy independence within a decade by investing in $300 billion worth of clean-energy infrastructure. The alliance is promoting three areas of benefit that will flow from the clean-energy initiative. The first is energy independence, a goal endorsed by a broad political spectrum, from neoconservatives to greens. The idea is that if the United States can produce its own energy instead of relying on imported fuel, there will be geopolitical benefits, too. Energy independence would free us from the need for imperial wars in the Middle East. Second, clean energy addresses the planet's environmental crisis. It reduces pollution of air, land, and water. It reduces the climate-changing impacts caused by the burning of fossil fuels. Third, the alliance believes, such an undertaking would create 2 million to 3 million new, high-paying, permanent jobs.
That's a long way from where we are today. The nightly news brings flesh-and-blood reminders of the cost of our reliance on Middle East oil. Our national government is a pipeline of corporate welfare for environment-besmirching oil and gas companies. At the state level, Washington has a tiny clean-energy industry. Tony Usabelli, director of the Energy Policy Division at the state Department of Community Trade and Economic Development (CTED), says his department will soon release a report on the clean-energy sector, which employs only around 3,000 to 4,000 people and has annual sales of a mere $900 million. While Usabelli notes that the industry has grown from $750 million in sales in the past five years, "The numbers are smaller than I would have expected."
The sexy star of the industry is biodiesel. Although there is only one biodiesel refinery in the state, which employs 12 people, and no biodiesel crops are grown commercially in Washington, biodiesel has captured the media's, the public's, and the politicians' imaginations.
The rising star of the clean-energy industry is wind electricity generation, which is primed for major growth due to a convergence of technological improvement, federal subsidy, and the rapid escalation in price of its chief competitor, natural gaspowered generation.
The largest player in the clean-energy industry is efficiencyenergy conservation. Energy efficiency companies employing technologies like compact fluorescent lightbulbs are the sector's largest employers and save far more energyin effect, generate far morethan any "renewable" energy source except hydroelectricity generation. Renewable energy is that which comes from resources like water, wind, and crops. They cannot be exhausted. Oil and coal, on the other hand, are finite.
Biofuels, wind, and energy efficiency are worth exploring in detail, because they are emerging in the Northwest and illustrate where we are and how far we have to go before we can realize Apollo's vision.
What is happening on the shores of the Duwamish River in Seattle is either the start of an industrial revolution or the answer to a Trivial Pursuit question in 10 years. In a 7,000-square-foot warehouse next to a cement plant, Seattle Biodiesel has opened the state's first biodiesel refinery.
Biodiesel is made from vegetable oil and can be used in most car and truck diesel engines. Currently, Washington consumes around 1 billion gallons of conventional diesel fuel and 1.5 million to 2 million gallons of biodiesel annually, according to Usabelli of the state Energy Policy Division. Biodiesel has many advantages over its petrochemical cousin, conventional gasoline, explains Patrick Mazza, a researcher at Climate Solutions, an environmental group focused on the Pacific Northwest and Vancouver, B.C. Biodiesel is relatively simple to make and can be manufactured without creating significant toxic by-products. In vehicle engines, biodiesel burns cleaner than petrochemical diesel. "It offers really dramatic reductions in air toxicity," says Mazza. The one problematic emission from biodiesel-fueled vehicles is nitrogen oxide, which is not an air pollution concern in Washington but is in California and has kept the fuel from taking off commercially in the Golden State.
Biodiesel can be used alone or blended with conventional diesel. The latter is recommended if the temperature drops below freezing.
Since the fuel is made from vegetable oil, it can be produced domestically. While biodiesel can be made from waste vegetable oil and produced in a garage, the industry is not one of anticapitalist ecotopians. The fuel's source is produced by agribusiness cooperatives in the Midwest that grow soybeans conventionally and have banded together to build refineries to supply a new market. The National Biodiesel Board, an industry group, says last year 25 million gallons of biodiesel were sold in the U.S., up from 500,000 gallons five years ago.
Biodiesel's big disadvantage is that it costs more to buy than conventional diesel. Last week, at Laurelhurst Oil, a University District gas station, conventional diesel was selling for $2.79 per gallon, while biodiesel cost $3.17.
Seattle Biodiesel CEO Martin Tobias says his company's refinery can make 5 million gallons of biodiesel a year. Seattle Biodiesel started selling the product in May and, in the first six months, sold more than 360,000 gallons. The company started two years ago when commercial airline pilot John Plaza, now the company's president, mortgaged his home, sold his boats and cars, and borrowed against his 401(k) plan to get the alternative fuels venture up and running. Software entrepreneur Tobias, a former Microsoftie and founder of the streaming media company Loudeye, officially became the company's CEO in May. Seattle Biodiesel brings soybean oil from Iowa by rail. In huge tanks that have been recycled from the old Rainier Brewery on Interstate 5, the soybean oil is refined to a purer state.
Tobias says his company cannot fill all the orders it gets. Seattle Biodiesel hopes to have a second refinery up and running by the middle of next year. Tobias says the industry does not need a separate distribution infrastructure, because traditional tanker trucks can haul biodiesel and conventional diesel tanks can be easily converted to pump biodiesel at service stations. The National Biodiesel Board lists 29 service stations where biodiesel is currently available in Washington, all but one in the Puget Sound region.
Washington politicians are giddy about biodiesel. It's easy to see why. Gov. Gregoire quotes John Steinbeck: "The bank is more than men; it is a monster." Says the governor, "Replace bank with foreign oil." She sees biodiesel as an opportunity to tear down the Cascade Curtain and unite the red and blue parts of the state. "This is an opportunity for us to work together as a state," she says enthusiastically. Washington has the agricultural potential east of the mountains to grow oil-seed crops. Mustard seed and canola seed (aka rapeseed) are the most frequently mentioned. Oil-seed crops can be grown in rotation with otherswheat, for instancethroughout Eastern Washington. Western Washington consumers, with their liberal politics and environmental values, represent a great market for the producteven if it's more expensive.
Right now, it doesn't make economic sense, however, for Washington farmers to grow oil-seed crops, because the market won't pay enough to make it worthwhile.
On Jan. 9, the Legislature will convene for its annual session, and biofuels for vehicles are going to receive some kind of boost. "We need to seize the crisis as an opportunity," says Gregoire. "Maybe this time we can come together and seize a common agenda. If we wait another legislative session, the crisis may be gone and apathy will set in." Republicans and Democrats agree there will be a host of tax breaks for everything connected to biodiesel, but some legislators want to go further.
House Capital Budget Committee Chair Hans Dunshee, D-Snohomish, wants to use state money to build the big, expensive crushers that convert oil-seed crops into oil. Since the state constitution prohibits direct payments to private industry, Dunshee says the money would likely go to an Eastern Washington port district or some other governmental entity. "Canola will get grown," Dunshee predicts. "It will get crushed." He says farmers in the central Washington area of Odessa, in Lincoln County, have been working with Seattle Biodiesel and are the group that has most fully developed a business plan. "The economics are still iffy," Dunshee admits. But, "It's better than a stadium."
The most controversial idea is to require that a certain percentage of the state's gasoline and diesel supplies be biofuels by a certain date. Seattle Biodiesel CEO Tobias says these so-called fuel standards are the most important thing government can do for the biofuels industry. "If the government does these renewable fuel standards, that gives the investors a long-term reason to invest in these industries," he says. Last year, the Minnesota Legislature passed a law that requires gasoline there to be 20 percent ethanol by 2013. In Washington, Democratic and Republican lawmakers will push mandatory standards for both biodiesel and ethanol.
While the Democrats are extremely supportive of the idea and have plenty of votes in the House to pass such legislation, Republicans in the Senate are not as enthusiastic. Senate Minority Leader Bill Finkbeiner, R-Kirkland, who announced last month he is stepping down from his post, cautioned that his caucus doesn't like to see a lot of interference with free-market capitalism. Finkbeiner says, "I don't want to be knee-jerk against it, but if you just set an arbitrary standard, you haven't really done the job." Since the Democrats only control the Senate by three votes, and two conservative Democrats frequently vote with Republicans, fuel standards are not a sure thing. It should help that GOP legislators from Moses LakeHolmquist and Sen. Joyce Mullikenare in favor of standards. Oil-company lobbyists, however, have already been calling lawmakers to express their unhappiness. "We oppose mandates," says Frank Holmes of the Western States Petroleum Association.
Of course, diesel is not the dominant fuel in Washington or anywhere else. "Our biggest use of energy is petroleum4.7 billion gallons of gasoline in Washington's cars and trucks," says state economic development official Usabelli.
The current "green" candidate that can be blended with gasoline is cellulosic ethanol. Currently, corn-based ethanol dominates the market, but it is considered inferior because it takes more energy to make than it provides. Cellulosic ethanol uses agricultural waste like wheat straw to create ethanol and uses less energy to boot. Iogen, a Canadian company, with one of its investors, Shell Oil, wants to build the first American cellulosic ethanol plant in Idaho. The industry has potential but no reality.
While the Legislature has gone gaga over biofuels, members express no such enthusiasm for boosting renewable clean electricity. This is both good and bad news. It's good because it means that the clean-electricity industry is already doing well, so well that even key Democratic legislators, like House energy committee Chair Jeff Morris, D- Anacortes, are not convinced more needs to be done. It's bad news because "dirty" electricity from coal burning might see its market share rise in the Northwest because clean electricity isn't getting enough help.
The most dramatic evidence of clean electricity's strength is the enthusiasm of Puget Sound Energy (PSE), the state's largest electric utility with 1.2 million customers in eight counties. State regulators require utilities to extensively study what the lowest-cost alternative is for their future energy needs. PSE began energy acquisition planning in 2004, received 100 proposals from energy developers, and found that the best two projects were wind farms: Hopkins Ridge Wind Project in southeastern Washington's Columbia County and Wild Horse Wind Power Project in central Washington's Kittitas County.
In those breezy parts of the state, huge wind-driven bladeson towers up to 200 feet talldrive generators. Windmills are clean, quiet, ugly, and take up a lot of space. For instance, Wild Horse is being built on 9,200 acres of open rangeland, 11 miles east of Ellensburg.
PSE's two new wind farms will boost wind's tiny share of the state electricity market considerably. Washington uses around 10,500 average megawatts (aMW) of electricity annually. Hydroelectricity accounts for 66.6 percent of Washington usage, coal is next at 17.7 percent, natural gas is third at 9.8 percent, and nuclear power accounts for 4.6 percent. Wind is a mere 0.4 percent, or 42 aMW annually. PSE's wind farms will add 114 aMW to the mix.
Wind energy has become economically viable for a number of reasons. First, newer wind turbines are more efficient. Second, the cost of the most popular new source of electricity in Washington in recent yearsnatural-gas-fired turbineshas skyrocketed. Natural gas prices have increased from between $2 and $3 per million British thermal units (Btu) in 2004 to $8.50 per million Btu this year, and the price is expected to rise to $10 per million Btu next year. Finally, the federal government provides a subsidy to operators of wind farms that brings the cost down from between $40 and $50 per megawatt hour (MWh) to $32.
All of this has convinced the Northwest Power Planning Council (NWPPC), a regional planning entity created by the federal government, that wind can produce 100 new aMW per year over the next 20 years in Washington, Oregon, Montana, and Idaho. The NWPPC estimates that the region's use of electricity will grow by around 360 aMW per year, so wind will become a major player. Like biofuels, wind is not an anticorporate ecotopian industry. The major U.S. supplier of wind turbines is General Electric; they bought the business from Enron.
Also like biofuels, wind has competition from a cheap fossil-fuel alternative: coal. Environmentalists want to keep wind growing and limit coal's development by enacting a renewable energy portfolioessentially, the equivalent of fuel standards for electricity. Activists and legislators agree that mandatory goals for clean electricity will not pass the Legislature. Environmentalists, led by the Northwest Energy Coalition, have pushed the measure in Olympia for the past three sessions and have been unsuccessful. Democratic state House energy committee Chair Morris doesn't support the idea. He says the proposal he has seen would require that 20 percent of new energy be from renewable sources. "The folks who are acquiring resources are already acquiring 60 percent renewable resources," says Morris. So there's no need for a renewable energy portfolio, he argues.
Northwest Energy Coalition spokesperson Marc Krasnowsky says Morris is focusing on the positive steps taken by Puget Sound Energy in his analysis of the energy market. Not all utilities are behaving so well, says Krasnowsky. "Utilities in the Northwest have the potential of adding 2,000 megawatts of new coal in the next five to 20 years," he says. A renewable energy portfolio, Krasnowsky argues, would discourage the development of that industry. He agrees with Morris, however, that the measure cannot pass the Legislature. Instead, Northwest Energy Coalition is planning to put an initiative requiring a renewable energy portfolio on the ballot in 2006. Notes Senate Water, Energy, and Environment Committee Chair Erik Poulsen, DWest Seattle, who supports a renewable energy portfolio: "Olympia has shown itself to be resistant to a renewable energy standard for years. The environmental community has a better chance of convincing the public."
But Democrats think they have a winning issue in clean energy in general. Cantwell, who is facing a tough re-election fight against former Safeco Insurance executive Mike McGavick, has begun putting a clean-energy logo on her press releases. She has led the Senate fight against drilling in the Arctic National Wildlife Refuge in Alaska. She championed legislation that would have outlawed "gas-price gouging." Inslee says, "In November '06, energy will be one of the fundamental choices of the American people, because the Democrats are making it so. When the Democrats stand for optimism, we win. I've been arguing this for two and a half years!" Inslee says the leadership of the Democratic Party has finally figured out that clean energy is an issue with which they can win. Whether a clean-energy ballot measure will help boost wind remains to be seen.
Labor leaders in Washington have also signed on with the clean-energy push. Wind energy, however, is not a huge job generator. There are good jobs during the construction of the wind farms, but once the farms are up and running, they do not require a large workforce.
But there are jobs that emerge from wind in surprising places. Down in South Seattle's Georgetown neighborhood, the Gear Works is the best local illustration. The 49-year-old, 110-employee, family-owned business is a throwback. The Gear Works is housed in a pair of wonderful warehouses that were designed by the business' late founder, Ingwald Ramberg. A huge trellis with a rambling wisteria vine covers the three-story southern wall of the main warehouse, and there is a homemade fountain out front. Inside, original posters from Seattle's 1962 World's Fair complement the '60s feel of the architecture. While the place feels frozen in time culturally, Ingwald's son, Roland Ramberg, the firm's president, has made sure the business is on the cutting edge in equipment and pursuit of new markets. The Gear Works makes and repairs industrial gears for everything from draw bridges to race cars to wind turbines. Ten years ago, Ramberg says, the Gear Works did no work on wind turbines. Now it is 20 percent of the business. "We are not only repairing them but building new gear boxes," Ramberg says. "They keep putting up thousands of new machines every year. Those are future customers going up. They are making them more reliable, but sooner or later, they are going to need work," Ramberg says of the turbines. Most of his wind business is from California wind farms, but as the Pacific Northwest's wind sector expands, Ramberg should get plenty more business from nearer by. Ramberg says that's one of the reasons he has built a 20,000-square-foot test-and-repair facility with help from a grant from the U.S. Department of Energy's National Renewal Energy Laboratories. "When your wind turbine starts crapping out, we want to be the place you think of," says Ramberg. Even at the Gear Works, however, wind finds itself in competition with coal. Ramberg points out that 25 percent of his business involves conveyer belts for coal mines in China. Until coal is made to pay for harm from its emissions, wind will keep playing catch-up.
The state's largest industry for clean energy is invisible. That's because the energy- efficiency industry saves energy rather than generates it. In the 1970s, energy efficiency was known as conservation. Northwest Energy Coalition's Krasnowsky explains the reason for the name change: "Conservation creates an image of huddling under a blanket in the dark."
Whatever it's called, saving energy is the first choice of private utilities, environmentalists, and public-policy experts when it comes to dealing with an energy crisis. The Northwest has been very successful at employing energy-efficiency strategies over the past 20 years. Tom Eckman, the Northwest Power Planning Council's manager of conservation resources, says that from 1982 through 2002 the region met 40 percent of the need for new electricity. That's 2,500 aMW of energy savings. "You don't see that built," says Eckman. "It's one lightbulb, one piece of insulation, and one showerhead at a time." The NWPPC estimates that the Northwest will find new energy savings equivalent to 2,500 more aMW over the next 20 years. The biggest saver? "Changing the lightbulb," says Eckmanreplacing incandescent lightbulbs with compact fluorescent ones.
In industrial plants and office buildings, the latest technology for heating, ventilation, and air conditioning (HVAC), motor drives, conveyers, and pumps is providing precise computer control over everything from lighting to room temperature. "The direct digital control in commercial buildings is a real improvement in terms of creature comfort and energy efficiency," says Eckman. He notes that there is another technological revolution right around the corner as computer controls go wireless, reducing the cost of installing new systems by eliminating the need for stringing cables.
New digital controls are on display on the 37th floor of One Union Square, a 650,000-square-foot, 20-year-old office building in downtown Seattle. "I get so excited when I see this stuff," says Rick Mock, the director of facilities for Washington Real Estate Holdings, which manages One Union Square. As he shows me a computer screen displaying the "chiller system" with graphic and numeric elements, I can understand about one-tenth of what Mock is telling me. But there is no mistaking his enthusiasm. Mock's fascination with the latest gadgets and his zeal to improve the building's energy usage have translated into savings of $450,000 a year in electricity. Mock arrived at One Union Square in 1999 and noticed immediately that he received a lot of complaints from tenants about being too hot or too cold. He began to evaluate the building's HVAC and lighting systems and started to advocate for a major overhaul. "This building was a runaway train," he says. "We had to do something." After working with Seattle City Light and other managers at Washington Real Estate Holdings, the company undertook a $3.5 million renovation of HVAC and lighting. City Light kicked in $750,000 of the overall cost, reducing the time for the project to pay for itself to six years. "It's a neat initiative from a monetary standpoint and from the environmental standpoint," says Tim Holt, vice president at Washington Real Estate Holdings. As an added benefit, tenants are happier now. Mock fields far fewer complaints about temperature.
McKinstry, a 35-year-old, 650-person mechanical contracting company, did the work at One Union Square. Highly respected in the field, McKinstry is an example of a large energy-services firm that has a mature business in energy efficiency but does not rely on that sector alone. Stan Price, executive director of the Northwest Energy Efficiency Council, an 80-company trade group, says the industry includes Fortune 500 companies like Johnson Controls and Siemens as well as small specialty shops and midsized energy firms. Price has watched the industry expand and contract over the past 25 years as energy prices have risen and fallen. "We are in a marketplace more driven by energy prices than we would like," says Price. He predicts there will be no problem meeting the increased demand that the latest round of energy price spikes will engender. Price believes that the lion's share of employment and sales in the state's clean-energy sector are in energy efficiency. Yet he acknowledges that energy efficiency doesn't get the same kind of buzz that surrounds less-significant industries like biofuels. "It's a bit of a sleeper," he says.
Politicians are not clamoring with new proposals to encourage energy efficiency. Last year, the Legislature did pass the nation's first "green building" standards for new construction of public facilities. Mandating new energy efficiency for private construction would be a welcome innovation, but no legislative champion has emerged. Many utilities, though, both public and private, offer grant programs to encourage conservation. Washington state Apollo Alliance coordinator Rich Feldman would like to see Gov. Gregoire launch an ambitious $100 million, zero-interest loan program for retrofitting public buildings with the latest energy- efficiency equipment. The improvements would pay for themselves with the savings, he claims. So far, Gregoire has not adopted the proposal, but she hasn't rejected it, either.
The task facing clean-energy advocates is daunting. The industrial and political challenges ahead are huge. But if we need any flesh-and-blood reminder of how disastrous our nation's current energy policy is, just turn on the nightly news and be reminded of the cost of our reliance on Middle East oil. While a clean-energy future seems a challenge, it's unimaginable that a dirty, blood-soaked energy future will be possible to bear.
Posted by Arthur Caldicott on December 15, 2005
Dec 15 - Last day to register for VITR & VIC Town Hall Meetings
The BC Utilities Commission (BCUC) is conducting a consolidated review of two cable projects being proposed to bring mainland power to Vancouver Island. Part of the proceeding includes four "Town Hall Meetings" in communities on the routes of the proposed transmission lines. These are Surrey, Tsawwassen, Salt Spring Island and Duncan, on Vancouver Island.
Presenters must pre-register with the Commission Counsel. The registration deadline is Thursday, 15 December, 2005.
THAT'S TODAY!
To register, contact Mr. Gordon Fulton, Commission Counsel by email at gfulton@boughton.ca or by telephone at (604) 687-6789.
Other important things to know:
- Presentations are limited to ten minutes.
- A presentation projector will be provided if you wish to use a computer.
- If fewer than six presenters register for any specific town hall meeting, that meeting may be cancelled.
- Intervenors who choose to present at a town hall meeting will not be permitted to make a further presentation during the oral hearing.
More information and guidelines about these specific town hall meetings is available in three documents issued by the BCUC.
A-39 Notice of Town Hall Meetings
http://tinyurl.com/dfnag
A-41 What can I expect at the Town Hall Meetings and Oral Public Hearing?
http://tinyurl.com/bqwua
A-44 More rules about Town Hall Meetings
http://tinyurl.com/d64ca
BCTC-VITR & Sea Breeze-VIC Hearing Schedule
Action Date
Mon, 19-Dec-2005 BCUC and Participant Information Requests to Intervenors with respect to the VIC Application
Fri, 06-Jan-2006 Intervenor Responses to Information Requests with respect to the VIC Application
Fri, 06-Jan-2006 Hul'qumi'num Treaty Group may file rebuttal evidence to BC Hydro/BCTC evidence relevant to consultation and accommodation
Sat, 07-Jan-2006 Town Hall Meeting (Salt Spring)
Tue, 10-Jan-2006 Town Hall Meeting (Tsawassen)
Thu, 12-Jan-2006 Staff issue Hearing Issues List
Sat, 14-Jan-2006 Town Hall Meeting (Vancouver Island - Duncan)
Mon, 16-Jan-2006 Opening Oral Submissions
Wed, 18-Jan-2006 Proponent Consolidation of Hearing Issues List
Thu, 19-Jan-2006 Town Hall Meeting (Surrey)
Fri, 20-Jan-2006 Panel issues Hearing Issues List
Mon, 23-Jan-2006 Public Hearing commences
The BCTC-VITR and Sea Breeze-VIC cable projects are being reviewed in a consolidated hearing by the BC Utilities Commission.
BCTC-VITR: BC Transmission Corp. - Vancouver Island Transmission Reinforcement, 230 kV AC cable from Delta to Duncan
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=78
Sea Breeze-VIC: Sea Breeze Pacific Regional Transmission System Inc. - Vancouver Island Cable, 300 kV HVDC Light cable from Surrey to Victoria
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=90
Posted by Arthur Caldicott on December 15, 2005
December 14, 2005
Victoria, Hydro drag heels on alternative energy
By Don Whiteley
Vancouver Sun
14-Dec-2005
The provincial government's abrupt decision a week ago to send BC Hydro back to the drawing board on its 20-year Integrated Electricity Plan (IEP) is one more indication that this province is suffering from a severe case of constipation when it comes to future electric power needs.
The move comes only a couple of months after Hydro itself abruptly withdrew its application to build a natural gas-fired power generating station at Duke Point on Vancouver Island. Given today's natural gas spot price of $14 per thousand cubic feet, perhaps that's a blessing in disguise. But at the time, it was a serious slap in the face to the province's independent power producers.
Further to that decision, Hydro's call for additional power supply from independent producers, originally scheduled for the fall, is now going to happen in the new year. Hydro just posted the terms of the call on its website last week.
And there's growing evidence that B.C. is falling well behind almost every other jurisdiction in the country -- if not in North America -- when it comes to promoting the use of alternative energy supplies such as wind or tidal power. While other provinces are installing wind turbines, B.C. is still putting roadblocks in the way.
All this is coming when it is now clearly recognized that the province can't meet its energy needs through conservation alone, and as Hydro's reliance on external power sources -- it now imports more than 10 per cent annually -- continues to grow. Less than a month ago, the B.C. Progress Board chastised the province for twiddling its thumbs on this issue for the past 20 years.
Depending on whom you speak to, the fault lies either in Victoria through a provincial government that won't issue clear directions, or at Hydro where the utility has not yet built a good financial case for its marquee Site C dam project.
David Austin, speaking for the Independent Power Producers of British Columbia, thinks the Site C project is the reason Victoria balked at the IEP. In a letter to Hydro, Austin states: "If BC Hydro generating resources are to be included in some way as part of the IEP, then at a minimum, BC Hydro should have prepared and made public for scrutiny the corresponding financial models. The IPPBC has repeatedly asked for BC Hydro's Site C financial model and none has been received. As a result, the IPPBC has absolutely no confidence in the price information that BC Hydro has provided to date with respect to Site C."
Guy Dauncey, president of the B.C. Sustainable Energy Association, sees the main problem as a planning "vacuum" in Victoria, where electricity policy-making has been abandoned in favour of letting the B.C. Utilities Commission call the shots.
"There's a very clear policy vacuum," says Dauncey. "Last year we missed the opportunity to have a major wind-assembly plant built in B.C. -- probably Squamish -- because of the policy vacuum. They were looking for a place at the end of a rail line to put a wind-assembly plant. They wanted B.C. to put 1,000 megawatts of wind power into the grid to show there's a local market."
Dauncey's association produced a recent report that document's the potential for alternative energy potential in the province.
"Wind, solar, tidal, geothermal and other technologies, combined with energy savings from efficiency measures, would produce 84,000 gigawatt hours a year," his report states. "This is 50 per cent more than BC Hydro's current total generation, and enough power for 8.4 million homes."
In an interview, Dauncey said no jurisdiction in North America is better situated for the advancement of "green" technologies: "We are the most favourably placed jurisdiction in the whole of North American for having 100 per cent green power."
But while Alberta, Manitoba, Quebec, New Brunswick and Prince Edward Island are in the forefront of developing wind power, B.C. has yet to build its first commercial projects, although two have been approved -- Sea Breeze Power Corp. for a project on northern Vancouver Island, and Nai Kun Wind for a project on Haida Gwaii
Sea Breeze has approval to build a 450-megawatt wind farm, but hasn't been able to reach an agreement yet with BC Hydro to buy the power.
Instead, the company last month applied to the National Energy Board for permission to build a 550-mw undersea power cable from Victoria to Port Angeles so it can sell power into the U.S. market.
Tidal power has huge potential too, with three companies on Vancouver Island in various stages of development, one only months away from a pilot project at Race Rocks designed to prove the concept. But there is unhappiness in this area, too.
"That's our Niagara Falls," says Michael Maser, communications director at Blue Energy Canada Ltd. "But we're not pumping a single kilowatt of tidal energy in this province. That's staggering."
Blue Energy hopes to tap tidal power with a project in Johnstone Strait north of Campbell River.
Dauncey concurs, pointing out that the United Kingdom is pouring millions of pounds into the development of tidal energy in recognition of its value as an emerging technology.
"Tidal is the firmest of the non-firms because you can predict it, and you know exactly when it's coming in," he said "At the moment, we're losing the race. Britain is jumping ahead and throwing money at tidal energy."
All these developments lead to serious concerns that neither Hydro nor the province are moving quickly enough, nor are they prepared to provide sufficient catalysts to get alternative energy projects moving.
A provincial Task Force on Alternative Energy was recently struck and is expected to issue a report in the new year, while at the same time the Ministry of Energy Mines and Petroleum Resources is revising its overall energy policy.
Other jurisdictions are building things.
Posted by Arthur Caldicott on December 14, 2005
December 13, 2005
Government yanks BC Hydro's chain
Political squeamishness sinks Hydro's plans to talk about electricity
Vaughn Palmer, Vancouver Sun, 08-Dec-2005
Government concern about Site C dam stalls power plan
Scott Simpson, Vancouver Sun, 08-Dec-2005
Hydro's a political animal once again
Paul Willcocks, Times Colonist, 09-Dec-2005
Cabinet says it needs time to review Hydro energy plan
Scott Simpson, Vancouver Sun, 09-Dec-2005
We need bright lights to develop hydro projects
Editorial, Vancouver Sun, 10-Dec-2005
Victoria finally notices Hydro's bumbling
Brian Lewis, The Province, 11-Dec-2005
Hydro needed to have its plug pulled
Les Leyne, Times Colonist, 13-Dec-2005
Political squeamishness sinks Hydro's plans to talk about electricity
By Vaughn Palmer
Vancouver Sun
08-Dec-2005
VICTORIA - The B.C. Liberals have intervened directly in the management of BC Hydro, forcing the giant utility to pull the plug on a major announcement about the development of electrical power.
The announcement, set for today at 10 a.m., would have seen the release of Hydro's long-in-the-works integrated electricity plan.
CEO Bob Elton, flanked by business leaders, was scheduled to "reveal B.C.'s path to energy self-sufficiency for the next 20 years" as well as "outline the future of the highly debated Site C dam."
But even as the media advisory for those coming attractions circulated in provincial newsrooms, the Liberals were at work derailing it.
Though the plan had been in the works for months and the announcement for weeks, the politicians only got wind of the details Tuesday afternoon.
They didn't like what they'd heard, especially regarding Site C. Hydro was proposing to move to full-blown public consultations on the enormous and controversial third hydroelectric dam on the Peace River.
The public wasn't ready for this discussion. Heck, the politicians weren't ready, and some of them hoped to see the dam built in their lifetimes. Given the lack of extensive groundwork, the debate would surely be dominated by the critics. The premature launch could eliminate any chance to develop public support, and doom the project once and for all. In the space of a couple of hours, the Liberals decided to order Hydro to back off.
Though the decision was ultimately driven by Premier Gordon Campbell, it fell to Energy Minister Richard Neufeld to deliver the message.
It must have been tough for him. Neufeld has represented the Peace River region for more than a decade and has long advocated building a dam at Site C.
But the experience must have been far more bruising for Elton. The Hydro CEO had reason to think he'd gone about this in the right way.
Preliminary consultations with stakeholders and the public throughout the fall. Extensive planning. No big secret about Site C being one of the options.
Hydro even tried to keep the premier's office in the loop. But a briefing at the senior official level did not result in a briefing for the politicians on where this thing was headed -- until it was too late for them to do anything but slam on the brakes.
That, in turn, translated into a second media advisory from Hydro, sent out Wednesday afternoon.
"As you know, we intended to release our integrated electricity plan on Thursday," it said. "In consultation with government, we have now decided to postpone this release."
The "in consultation with government" was a nice euphemism. As opposed to "after having our chain yanked by Victoria" or "because the politicians weren't ready for a public debate on this issue now or maybe ever."
Hydro phrased it differently in a memo that went out to a committee of stakeholders who'd been invited to participate in a conference call before the release of the plan. "We apologize for the short notice but we will be cancelling the call," it said. "At the present time we are still engaged in an internal review process and in consultations with the shareholder."
The shareholder being me and thee, since Hydro is publicly owned. But in this instance we are represented, like it or not, by the politicians.
Cryptic as it was, the brief notice left no doubt that the electricity plan has been overtaken by a political agenda.
"Both government and BC Hydro have a strong desire to ensure the plan is fully reviewed in the context of government's energy policies," it said. "This will be accomplished in the coming months."
That raises a concern about the fate of a process that has, up to now, been monitored the B.C. Utilities Commission.
"We will bring forward the integrated energy plan in the new year, as required by the utilities commission," vowed Hydro, even as its scrubbed today's release.
But the whole point of delegating the planning process to the commission, is that the BCUC functions as an independent regulatory body.
The Liberals repeated that theme ad nauseam during the recent debate over a U.S. firm's purchase of Terasen gas.
The government wasn't going to step in and block or even delay the takeover. The decision was up to the utilities commission, which would render a verdict ("Yes," as it turned out) without political interference.
The Liberals said the same thing about Hydro. Decisions would be governed by the province's energy needs, by markets for power, and the public interest.
"The days of political interference are over," -- the Liberals said it again and again.
Perhaps Bob Elton and his team at BC Hydro believed them. Which must have made this week an important learning experience for all concerned.
Government concern about Site C dam stalls power plan
By Scott Simpson
Vancouver Sun
08-Dec-2005
BC Hydro's ambitious 20-year plan for a multibillion-dollar makeover of British Columbia's electricity system hit a major snag Thursday when the provincial government ordered Hydro to back off out of concern about the controversial Site C dam project.
Hydro officials had little to say. Bob Elton, Hydro president and CEO, issued a brief statement by e-mail that the plan, which was to be unveiled today, would be delayed until an unspecified date next year.
Hydro's "Integrated Energy Plan" was expected to include a mix of small, private sector hydroelectric projects, electricity conservation initiatives, upgrades to large government-owned facilities -- and a decision to proceed with the controversial Site C dam on the Peace River near Fort St. John.
It was not immediately clear if the province's concerns were attributable to soft cost estimates for Site C -- which would cost taxpayers a minimum $3.5 billion -- or strong opposition from first nations in northeast B.C., or a conflict with independent power producers who were promised in 2002 that all new power projects in British Columbia would be developed by the private sector.
"In consultation with government, we have now decided to postpone this release and will be doing further work to ensure that this plan meets the needs of ratepayers," Elton said.
Earlier this week, some B.C. Liberal MLAs told Vancouver Sun political columnist Vaughn Palmer that they had concerns about Hydro's ability to shepherd the controversial Site C hydroelectric project -- the cornerstone of the new plan -- through to completion.
NDP energy critic Corky Evans said the province's 11th-hour involvement casts a shadow across more than a year's worth of community consultation and preparatory work by BC Hydro.
"What I find really bizarre is that it flies in the face of the Liberal mantra, maintained all through the public debate about the sale of Terasen Gas and the controversy about the [CN] railroad and all kinds of stuff, that it was not their intention to manipulate public processes or commissions or Crown corporations," Evans said.
Energy Minister Richard Neufeld was tied up in a series of meetings and could not be reached for comment.
Hydro goes through a similar planning exercise very two years, submitting details to the B.C. Utilities Commission as per its regulatory requirements.
However, this year's version of the plan was considered to be its most ambitious effort in more than a decade, in light of British Columbia's growing dependence on imported electricity to supplement a provincial resource that has not grown significantly in volume since the Revelstoke Dam was built in the early 1980s.
Earlier this month, Treaty 8 first nations in northeastern B.C. advised Hydro that they "adamantly" oppose Site C.
The construction of two earlier dams on the Peace, the W.A.C. Bennett and Peace Canyon dams, led to flooding of millions of acres of traditional hunting and fishing territory for the bands.
A BC Hydro summary of a meeting with the aboriginals reported that they "made it clear that they are adamantly against the development of Site C."
Hydro's a political animal once again
By Paul Willcocks
Times Colonist (Victoria)
09-Dec-2005
The Liberals' big commitment to keep politicians' hands off Crown corporations like B.C. Hydro is fading fast.
B.C. Hydro's brightest and best have been labouring away on a long-term energy plan, with the Site C dam as the centrepiece. This week was supposed to be the big unveiling.
Hydro CEO Bob Elton announced a press conference where he would be flanked by business types, and vice-presidents were fanning out to meet with the media. And then 20 hours before the big announcement, the politicians pulled the plug.
"In consultation with government, we have now decided to postpone this release and will be doing further work to ensure that this plan meets the needs of ratepayers," Elton said in a terse news release.
Hydro's future also needs to be "fully reviewed in the context of government's energy policies."
The order was not well-received in Hydro. The 20-year Integrated Energy Plan has been more than a year in the making, with a high-profile advisory committee, public meetings and lots of consultants and studies. It was to be the definitive look at energy needs for the next two decades, and the best way to meet them.
The B.C. Utilities Commission was set to review it.
Something has gone seriously wrong when the politicians step in at the last minute, stepping all over Hydro's board and management. Energy Minister Richard Neufeld said the government wanted more time to review the plan, which was presented to Liberal MLAs at a caucus meeting this week.
The Crown corporation just got a little ahead of itself, he said. But Neufeld didn't rule out changes before the plan goes to the utilities' commission.
The explanation leaves a few questions. The government has known for a year that the plan was going to the utilities commission this month, and for days that the announcement was scheduled for this week. There were no big surprises in the document, as energy ministry officials have been involved with the process all along.
So the last-minute cancellation suggests someone -- the caucus, the premier's office -- got nervous.
There's lots to get nervous about. Hydro's assessment of energy needs and the solutions it backs will have huge implications for the provincial economy.
If it underestimates demand, B.C. will need to buy more expensive power from the U.S. If Hydro overestimates, the corporation will build power plants it doesn't need. Both would cost consumers money. If it makes the wrong choices on issues like big coal-fired plants vs. small hydro projects, the province's economy is affected.
Hydro's preferred plan is likely based on building the Site C dam across the Peace River near Fort St. John, as well as energy conservation measures and additional power from private producers.
Site C makes a lot of people nervous. The $3.5-billion project was already scuttled by opponents once, in 1991.
Independent power producers don't like the proposal, because they want to supply the electricity. First Nations have issues about lost hunting land when thousands of acres are flooded. And the accuracy of Hydro's cost projections have come under fire.
The Liberals have made much of the need to let Crown corporations operate without political interference, never missing a chance to talk about the $460 million lost thanks to the NDP's half-baked fast ferries project. But there's been increasing recognition that leaving Crown corporations to their own devices carries its own risks and missed opportunities.
The B.C. Progress Board, a business panel appointed by the premier, weighed in last month with a report saying government, not B.C. Hydro, should be setting energy policy.
"B.C. Hydro is seen by many concerned parties to heavily outweigh the ministry in staff and resources, which puts the government in the position of not being able to provide adequate oversight and direction," said the panel, chaired by Victoria newspaper mogul David Black.
The last-minute scuttling of the launch of B.C. Hydro's energy plan suggests the government has come to the same conclusion, and is reining in the Crown corporation.
Footnote: Things will get complicated quickly if the government wants significant changes to the plan. Hydro is supposed to present it to the utilities commission within the next three months. Any major reworking could make it tough to meet the deadline -- especially if B.C. Hydro's co-operation is less than enthusiastic.
Cabinet says it needs time to review Hydro energy plan
By Scott Simpson
Vancouver Sun
09-Dec-2005
British Columbia's increasing dependence on imported electricity was behind the provincial government's decision to order a halt to BC Hydro's plans for a multi-billion dollar system makeover, Energy Minister Richard Neufeld said Thursday.
Neufeld says the government cancelled Hydro's announcement of an Integrated Energy Plan because of a general concern that the B.C. Liberals haven't had enough time to mull all the implications of Hydro's plans.
He says Hydro has done laudable work in preparing the plan, which is supposed to outline a 20-year effort to restore British Columbia to a position of independence from U.S. electricity suppliers who now serve about 12 per cent of B.C.'s annual electricity consumption.
But he added that cabinet was not willing to green-light the plan on the basis of a 30-minute briefing on Tuesday afternoon by senior Hydro officials.
Neufeld noted that Hydro had spent "well over a year" preparing its plan, "but we didn't see it in its complete form until late Tuesday afternoon."
A proposal to build a major new dam at the Site C location on the Peace River near Fort St John, at a cost of at least $3.5 billion, was expected to be a major component of the new Hydro plan.
That project is expected to attract opposition, particularly among first nations and non-aboriginal residents of northeast B.C. who say the region already contributes more than its share of power to the provincial electricity grid.
Opponents of Hydro's plan for a gas-fired electricity generating plant at Duke Point on Vancouver Island helped kill that project, at a cost to taxpayers of $125 million.
Neufeld said cabinet believes it is important for all B.C. residents to fully appreciate the pros and cons of all proposed new major projects so that they can make an informed choice about how the province should proceed to lessen its dependence on import power.
He said the government does not want to begin to address the situation without the public first understanding what's at stake -- and does not believe most residents are aware of the problem or the government's desire for energy self-sufficiency.
"We are facing some significant challenges and I don't think that on the basis of a half hour presentation by the crown [corporation] that provides almost all the electricity in the province, that you just run with it. I think that's a recipe for some real disaster," Neufeld said.
"I don't think I want to be tied to imports for 12 per cent of our energy like we are this year. I think to be perfectly honest that's nuts because it holds us ransom -- maybe not today but at some point in time.
"We buy most of it from south of the border, and when they get to the point where they are consuming all of that electricity themselves and perhaps they haven't built any new generation, they're not going to sell to us."
Hydro had informed the media earlier this week that it would announce the plan on Thursday, but instead issued a brief statement on Wednesday to say that the announcement was cancelled.
Hydro did not elaborate.
Neufeld said he regards Hydro's plan as one of four contributing reports that will guide cabinet deliberations about a possible revision of its 2002 energy plan -- and added that cabinet is still awaiting two of those reports, one on B.C.'s alternative energy options and the other from the province's competition council.
We need bright lights to develop hydro projects
Editorial
Vancouver Sun
10-Dec-2005
The Liberal government and B.C. Hydro have stumbled badly in the development of a crucial plan to maintain an ample supply of electricity for the next 20 years.
At the last minute this week, the government ordered Hydro to cancel the unveiling of its Integrated Energy Plan, which has been under development for more than a year.
The government's intervention is disturbing at a number of levels. First, it flies in the face of the Liberals laudable promise to end political interference in Crown corporations.
If government officials have no confidence in the executive and board of directors of B.C. Hydro, they should replace the board with one in which they can have confidence. By undercutting the board, the government has further damaged Hydro's reputation as a stable partner for private sector investors in energy projects.
Hydro's credibility in that regard was already in some doubt following its astounding decision last year to pull the plug on the Duke Point project, leaving its private partner in the lurch and its customers with a bill of $125 million for which they will get nothing in return.
Just as importantly, this debacle comes on the heels of another report last month from the B.C. Progress Board that pointed out the urgent need for developing new electrical production capacity to protect our standard of living.
In the past, we've been been pretty smug about our energy resources, especially our hydro dams. But no significant new capacity has been added in the past two decades while our population has grown by a third.
B.C. still makes money by exporting power during peak demand periods in the U.S. and importing it when spot rates are lower. But we are now in a slow squeeze, with the imported portion of our electricity supply growing more costly every year. More urgently, as is happening in Ontario, any dependency on external power generation can lead not only to inconvenience and expense for consumers, but also sabotage the economy.
After a record-hot summer tested the limits of supply in Ontario, the president of Canadian Manufacturers and Exporters Association warned that firms will simply move elsewhere if they can no longer be assured of a reliable and affordable supply of electricity.
One controversial component of the new B.C. Hydro plan was to have been an examination of the possibility of building a major dam at Site C on the Peace River near Fort St. John. Energy Minister Richard Neufeld says cabinet wants the public to have a better understanding of the looming electricity shortfall before the government starts discussing major new projects so it will understand what's at stake.
Fair enough, but more than 18 months have already passed since Hydro started talking about Site C and Neufeld has been energy minister for almost five years. How much time does he need?
The dams that produce our clean, cheap electricity now were built by leaders who could see not only what British Columbia was, but what it could be.
We need that kind of leadership again today, before the lights go out.
Victoria finally notices Hydro's bumbling
By Brian Lewis
The Province
11-Dec-2005
Somewhere deep within the B.C. Legislature's stone walls last week a light bulb suddenly burst into brightness, thus illuminating a growing problem this province has with electricity and B.C. Hydro.
Word is that the "somewhere" was the premier's office, where it suddenly dawned on the backroom that its policy of letting Crown corporations like B.C. Hydro run their own show is flawed.
A policy of no political interference is laudable given what the NDP did with Fast Ferries, but the Liberals' response also holds risks, as we're now seeing with Hydro.
Here's the background: Since the mid-1980s B.C.'s abundant domestic electricity surplus steadily declined to the point where in 2000 we became deficient and now must import about 12 per cent of our electricity to meet domestic demand.
This means that one in eight houses on your block runs on higher-cost electricity imports. The last major domestic power generation project came on-stream in 1984.
The problem began under the NDP, who used Hydro as a cash cow, siphoning off mega-dollars for other flights of fancy instead of upgrading and expanding the B.C. electricity grid to keep pace with growing demand.
But the Liberals have failed too, by allowing the province's largest Crown corporation too much independence without offsetting accountability.
As the recent Premier's Progress Board report on B.C.'s energy future noted: "B.C. Hydro is seen to set its own policies on electricity supply or responding to matters of public interest, such as the Energy Plan, in its own time and manner . . ."
Consequently, Hydro's track record on increasing power supply has been dismal indeed. Witness the now-shelved Duke Point/Vancouver Island natural gas pipeline fiasco that cost ratepayers $120 million.
Late last week Hydro was supposed to release its much-touted Integrated Electricity Plan, a 20-year blueprint for bringing B.C. back into a surplus electricity position, which the utility had been working on for a year.
Less than 24 hours before this plan was to be unveiled with all the pomp and circumstance of a B.C. budget, it was unexpectedly killed by Victoria.
The official explanation was that a review of the government's existing Energy Plan is awaiting a number of reports so that all of them, including the IEP from Hydro, can be studied together.
The energy ministry also said it didn't have enough time to study Hydro's plan before its scheduled release last Thursday.
Believing the latter explanation is akin to believing in the Tooth Fairy, since energy ministry officials have been involved in the IEP all along.
The real reason for pulling the plug, I'm told, rests with the 20-year-plan's central plank -- the Site C hydro-electric project.
Simply put, if Victoria allowed Hydro to proceed with this Peace River project as outlined in its IEP, there's a high risk that it would become another Fast Ferries fiasco -- only one with much higher cost consequences for taxpayers.
The problem is that Hydro's cost-estimates for Site C are not only all over the map, they're incomplete, sources say.
Last May, the utility was touting Site C at a construction cost of $2.26 billion with electricity costs of about $48 per megawatt hour. Last week it was talking about a $3.5 billion capital cost with electricity costs of $43 per megawatt hour. A higher capital cost with a lower cost for the electricity?
Nor have many other costs including transmission-line upgrades to the Lower Mainland, inflation or First Nations treaty costs, been included in the costing, sources say.
Realistically, they add, electricity costs in the $60-$70 per megawatt hour range are more likely.
Add up all these deficiencies and no wonder the premier pulled the plug. Even with transparent costing, Site C is going to be a very tough sell politically.
In the meantime, as B.C. power planning stumbles and bumbles along, the need to import electricity increases and that means much higher electricity bills are in store for everyone.
Brian Lewis is Money Editor of The Province. He can be reached at blewis@png.canwest.com
Hydro needed to have its plug pulled
By Les Leyne
Times Colonist (Victoria)
13-Dec-2005
Full marks to the provincial cabinet for embarrassing B.C. Hydro by putting a last-minute hold on the utility's grand release of its 20-year-plan.
They should have done it sooner.
The Liberal move has provoked some alarm about political interference in the highly technical field of electricity supply. But if there's one area where a dash of political meddling would go well right now, it's in the area of energy policy.
B.C. Hydro has a huge reservoir of technical expertise and a headquarters full of experts who know what they're talking about. There's no doubt the integrated electricity plan they've been working on for more than a year will be a comprehensive document.
But writing a good plan is one thing. Executing a plan is another. And that's where B.C. Hydro has been falling down lately, and that's why the politicians stepped in.
It would be very surprising if they actually interfered in the plan itself during the delay period imposed on the release, which could last six months.
What they're planning to meddle in is the communication plan leading up to the execution of the long-range vision.
And looking at Hydro's record of executing plans and building things over the last while, it's clear they badly need some help on that front.
There's no clear record of whether it was that or something else on the government's mind. But something prompted them last week to blow a very abrupt whistle on Hydro's long-awaited release of the plan.
At the last minute, Hydro CEO Bob Elton said that after "consultation with government," it was all postponed until spring.
"Further work" is needed to ensure the plan meets the needs of ratepayers, said a statement put out in his name.
Behind the scenes, it's been reported that the Liberal cabinet looked at the plan's recommendation to proceed with another big-league dam on the Peace River and decided that a lot more prep work has to be done before that socially complicated project can proceed.
That's essentially what the Progress Board report said the week previously. It urged that B.C. become self-sufficient in electricity -- a luxury lost about five years ago. And it recommended the government step up and start, well ... interfering.
"It is the role of the B.C. government to speak for the public in this regard, and it is the role of B.C. Hydro to follow the direction of government."
But the report said exactly the opposite is the norm: Hydro has the government out-gunned in any energy discussions, and sets its own policy "in its own time and manner."
Elton's statement last week after the rug was pulled out from under him tried to smooth everything over, saying both government and Hydro have a strong desire to ensure the plan is fully reviewed in the context of the government's energy policies.
You'd think that's exactly what they've been spending the last year doing, but apparently the master plan was a big surprise full of new revelations to the provincial cabinet. It's obvious there's a gulf now between the government and Hydro. It's not about whether to build that multi-billion dollar dam, though.
It's about how.
First Nations and other residents in the area have to be brought on side, much firmer cost estimates have to be established and the need for the power has to be explained to people before the bulldozers move in.
In the back of the politicians' minds is Hydro's track record when it comes to embarking on major projects. The problem is that they don't have one any more. The days of the utility's mega-projects are far behind us. Hydro has made incremental increases to its generating capacity, but it hasn't made a major addition to the energy supply since 1984.
And even when it comes to building smaller projects, like the Vancouver Island Generating Project, the utility got bogged down in a wild-goose chase up and down the Island that cost 10 years and $120 million before it fizzled out last summer with nothing to show for it.
If an outfit like that showed up at the door with a 20-year plan for the province's energy future, you'd want to think twice about it, too.
The danger in some minds is that -- now that the ice is broken -- the politicians will take to this new policy of intervening and start throwing their weight around on technical questions, as well.
That's the habit previous New Democrat governments fell into, and let's just say it doesn't work out.
Cabinet is expecting two more substantial reports on energy, one on alternative energy prospects and one from the competition council.
They need to digest those early next year, get a better idea from Hydro on how to pitch the Site C Peace project as doable, make some informed guesses and then get out of the way.
But there's no harm so far in jerking B.C. Hydro's chain.
Also of interest: Leyne's 24-Nov-2005 column, "Who's got the power with our power?" (link)
Posted by Arthur Caldicott on December 13, 2005
December 10, 2005
United Nations Climate Change Conference
Montreal, November 28-December 9, 2005
Guy Dauncey of the BC Sustainable Energy Association (www.bcsea.org) has been at the conference, and his blogs from Montreal are a rewarding read. You can find them all at www.bcsea.org.
Here is his last blog and summary of proceedings:
Saturday, December 10th
Well, it is all over, and the story is: SUCCESS!
The last two days have been full of ups and downs, which I have tried to follow and interpret (and occasionally mis-interpret) through a mixture of conversations and following the latest media interpretations via Google News (a recent discovery: if you set up a personal Google News page http://news.google.ca/, you can personalize it to send you only the news stories that carry a particular phrase, such as ‘climate change’ or ‘flying giraffes’. Very handy).
The final deal, which was gaveled down by Stephane Dion at 6.17am this Saturday morning, is (1) that the Kyoto nations have agreed to start discussions to draft a new long-range plan to combat climate change, to start in 2012 when Kyoto expires; and (2) that the larger group of world nations, including the USA, China and India, which signed the 1992 Convention but which have not ratified Kyoto, will hold an open-ended dialogue to discuss ways to reduce greenhouse gas emissions, but with the specific inclusion of a clause that the Americans demanded insisting that the dialogue for these nations not include any talk about new commitments. The world’s delegates cheered when the deal was finally done.
The NGO community is jubilant, full of hugs and tears. The deal is done, and the world can get down to work to tackle the really big task: implementing the actions, as well as the words. In addition to those two agreements listed above, there were also successful conclusions to a lot of side-agreements regarding the detailed implementation of the existing Kyoto Protocol. The best news coverage I’ve seen so far is from Peter Gorrie, in the Toronto Star (link)
My Google News indicator says there are 1,533 related news stories, which tells you how busy the world’s media is with this issue. The Reuters story is also good. (link)
But there was also a second, really significant outcome from the talks. A new informal world standard has emerged for a 30% reduction in emissions by 2020, and an 80% reduction by 2050. The new C20 group of major world cities (including London) has signed onto this goal, as has the European Parliament. This was also the goal set by the youth delegation, which has received a LOT of attention. California has adopted the 80% by 2050 goal, and President Chirac has said that France and the other developed nations should strive for a 75% reduction by 2050.
Personally, given what I know of the science, I don’t think this is good enough: I believe we should aim for an 80% reduction by 2025, but for what’s politically achievable right now, that places me in cloud cuckoo land. I’ll still hold to that goal, while trumpeting the 30% by 2020 and 80% by 2050 goals as fantastic.
These are not legally binding goals, of course; but they set the tenor of the direction in which we should be heading. What’s great about them is that the small numbers, such as a 6% reduction, allow people to think that we can continue with business as usual, while just fiddling with a few details. An 80% reduction calls for a complete rethink of the way we use energy, travel, and live, and opens the door to a future designed entirely along the lines of green sustainability (unless it’s done with nuclear, which is still in play).
Friday was full of excitement, as it seemed as if everything might come off the rails, at some points. Six months ago, when we knew that COP-11 would happen in Montreal, Elizabeth May of the Sierra Club invited various high-level people to attend, with the hope and intention that it would involve the mainstream American media and others, and awaken the USA to what was happening. The Sierra Club’s strategy worked brilliantly, not only because there has been a very strong presence from US city mayors, California State, and other leaders, who have made it quite clear that they are behind Kyoto, and more (195 US cities have now signed onto the full Kyoto goals), but also because Elizabeth’s trump card came up good when Bill Clinton decided just 3 days ago that yes, he would attend.
This threw everyone into an excited tizzy, and when the big moment arrived, around 2pm on Friday, everyone went into the big plenary room, where all of the chairs had to be turned round, so that Clinton would not speak under the formal UNFCCC logo. Then we all had to leave the room while it was ‘swept’ (not for litter, but for aliens from Mars), and then we all trooped back in, and Clinton immediately received a big standing ovation, before he’d even opened his mouth.
In his speech, he showed his normal flair with numbers, examples, policies and practices (it is just impossible to imagine George W giving a similar kind of speech), and really emphasized the economic benefits of greenhouse gas reduction, saying that the opponents of Kyoto were ‘flat wrong’ when they said that it would kill jobs and destroy the economy, which is one the US government’s main excuses for not signing on. (see here for a full report).
When he said that ‘"We know from every passing year we get more and more objective data that if we had a serious, disciplined effort to apply on a large scale existing clean energy and energy conservation technologies that we could meet and surpass the Kyoto targets easily in a way that would strengthen, not weaken, our economies’, he received spontaneous cheers and full applause (in which I was a very vocal participant). This is really important, since if we can persuade people on the economic arguments, the remaining few ‘skeptic’ doubts on the science arguments suddenly don’t matter.
The US delegation was really miffed at Clinton showing up and stealing the show, and they subsequently walked out of the negotiations, threatening to veto the whole thing. All that they were being asked to do under the existing text for the 1992 Parties to COP was agree to a dialogue, but no, even that was too much. The NGO community held a contest, as to what better word might please them, such as a ‘thingy’. Someone suggested ‘lunch at the ranch’, but the US delegates weren’t up for lunch with anyone, unless it was on their terms.
However, their walk-out did not play well in the US media, and after having a call to the White House, they came back into the play, and finally agreed to participate in the dialogue as long as it did not discuss commitments. As one NGO leader put it, in the stand-off over the planet’s future, the US blinked first. They caved in to the almost unanimous global pressure from all the other countries, and as a result, we now have a twin-track process which allows us to chart our way into a safer, more sustainable world.
On a personal level, Thursday was a wild day for me, and very rewarding. I was invited to speak to the youth delegation, which got them very pumped, and then I did a 15’ web-cast for the UNFCCC about the BCSEA, and a ’12 Step Process to make BC 100% free of Fossil Fuels’. This went down really well, and I had a big crowd listening at the end.
This lead to a meeting with the South African Minister of the Environment (who is trying to fight off the pressure to go nuclear), and with David Walsh, the Environment Critic for the opposition Liberal Party in the Alberta Legislature (who is trying to get a voice of sanity into Alberta politics), a radio interview for a German station and a film interview for a future film on activism and climate change. I ended up in conversations from 3:30pm till 10pm that night; and enjoying every moment of it.
Friday was equally busy, as I shared in presenting a seminar on Green Heat with Bill Eggertson in the morning, which was poorly attended, but successful nonetheless. And there have been many other highlights, such as listening to the City of London’s presentation by their Deputy Mayor Nicky Gavron. But that’s going to have to wait till I do a final wrap-up blog, since now I’ve got to get my skates on, and get organized for my flight back to Victoria.
So over and out!
Guy
Read Guy's other blogs from Montreal at www.bcsea.org
Posted by Arthur Caldicott on December 10, 2005
UN talks set road map for Kyoto beyond 2012
By David Fogarty and Mary Milliken
Reuters
10-Dec-2005
MONTREAL (Reuters) - Environment ministers agreed on Saturday to a road map to extend the Kyoto Protocol climate pact beyond 2012, breaking two weeks of deadlock at UN talks aimed at curbing global warming.
Ministers also agreed to launch new, open-ended world talks on ways to fight climate change that will include Kyoto outsiders such as the United States and developing nations. Washington had long resisted taking part in the talks.
"This is a watershed in the fight against climate change," European Environment Commissioner Stavros Dimas told reporters of the accords after talks that dragged on till nearly dawn. The conference was attended by 10,000 delegates.
"There is still a harsh road in front of us," Dimas said about the long-term drive to cut emissions of carbon dioxide and other gases released by burning fossil fuels and blamed for heating the atmosphere and oceans.
Environment activists cheered, hugged and some even cried after the delegates passed what they hailed as historic decisions to brake catastrophic changes ranging from desertification to rising sea levels.
"There were many potential points at this meeting when the world could have given up due to the tactics of the Bush administration and others but it did not," said Jennifer Morgan, climate change expert at the WWF conservation group.
The United States, the world's largest emitter of greenhouse gases, pulled out of Kyoto in 2001, saying a fixation on emissions targets would harm economic growth, a view challenged on Friday in Montreal by former U.S. President Bill Clinton.
WATERED DOWN
Washington agreed to join the open-ended dialogue only after Canada and the European Union watered down the text and spelled out that it would not lead to formal negotiations or commitments or the type of emissions caps enshrined in Kyoto.
"The text that was adopted recognises the diversity of approaches," said U.S. climate negotiator Harlan Watson.
Washington favours voluntary measures and big investments in technology like hydrogen or carbon storage. Other countries are seeking to engage Washington for the long haul, hoping President George W. Bush's successor will be less sceptical of UN-led action on the environment.
The Montreal talks followed a twin track -- one pursuing negotiations to advance Kyoto and the other under the broader UN Framework Convention on Climate Convention, Kyoto's parent treaty ratified by Washington.
"We are delighted," said Margaret Beckett, environment secretary for Britain, head of the rotating European Union presidency.
Stephane Dion, Canada's environment minister and chair of the Montreal talks, was relieved. "Finally, we have achieved what many claimed was unattainable," he told delegates at the final session.
"Facing the worst ecological threat to humanity, you have said: the world is united, and together, step by step, we will win this fight," he said.
The Kyoto decision urges rich nations to decide, as early as possible, new commitments for the period starting in 2013 so that there is a seamless transition when the current phase ends in 2012. Beckett said that this would reassure traders in carbon dioxide markets.
Under Kyoto, about 40 industrialised nations have to cut their emissions by an average of 5.2 percent below 1990 levels by 2008-2012.
But developing countries, such as China and India, have no targets under Kyoto and say that rich industrial states -- having fuelled their economies with coal, oil and gas since the Industrial Revolution -- have to take the lead in cutting emissions.
The agreement on a Kyoto renewal road map gives members seven years to negotiate and ratify accords by the time the first phase ends in 2012. Most countries agree that deeper cuts will be needed to avoid climate chaos in coming decades.
Global warming is widely blamed on a build-up of gases from burning fossil fuels in power plants, cars and factories.
With the talks over, a huge sigh of relief swept through the vast conference hall after a 20-hour session that left delegates exhausted and a little emotional. Some environmentalists said the Montreal talks would have profound consequences for humanity.
"At 6.17 this morning, (Dion) brought down the gavel on a set of agreements that may well save the planet," said Elizabeth May of the Sierra Club of Canada.
© Reuters 2005. All Rights Reserved.
Posted by Arthur Caldicott on December 10, 2005
Conference reaches climate deal
U.S. agrees to watered-down declaration
PETER GORRIE
TORONTO STAR
Dec. 10, 2005. 08:25 AM
MONTREAL -- Weary delegates, politicians and lobby group members cheered early this morning as the United Nations climate change conference finally passed its last two major decisions after two days and nights of gruelling talks.
The main negotiating logjam broke around midnight, when the United States agreed to a watered-down declaration that all 189 countries at the conference will start an open-ended “dialogue” aimed at finding new ways to cut greenhouse gas emissions.
That move, in turn, allowed the passage of a crucial separate deal, under which Canada and 39 other industrialized nations bound by emissions-cut targets under the Kyoto Protocol will begin to negotiate deeper cuts for after the Protocol’s first phase expires in 2012.
The U.S. had objected to several increasingly weak versions of the dialogue agreement during the two week conference, and walked out of the talks Thursday night.
But under intense pressure from most other countries represented here, it finally relented, signing on to a final version after yet more revisions.
Environmental groups were enthusiastic about the conference’s outcome. “This is a set of agreements that may well save the planet,” said Elizabeth May, executive director of the Sierra Club of Canada.
They were equally pleased by the last-minute American compromise.
“The Bush administration blinked. The world should remember that,” said Bill Hare, policy director with Greenpeace International.
“They miscalculated and underestimated the will of countries to move forward in combatting climate change,”said Jennifer Morgan of WWF, formerly the World Wildlife Fund.
Environment Minister Stéphane Dion, the conference president, was obviously elated when he banged his gavel to signal the passage of the decisions.
The UN meeting has produced a “Montreal Action Plan” that “will guide us as we tackle climate change on many fronts.”
He denied the U.S. had caved in. Paula Dobriansky, the head of the American delegation, “acted in good faith,” he said. Despite disagreements: “she never told me she would not work with me.”
Under one agreement, the countries with mandatory emissions targets are to immediately start talks on deeper cuts. They are instructed to get the work finished in time so any new caps will take effect as soon as the first phase ends.
The dialogue deal calls for workshops to hold non-binding discussions, with no deadline.
Although vague, Dion said they would come up with innovative measures to combat climate change.
“Now, national governments will have the forum to exchange experiences and analyze strategic approaches, and to free our imaginations,” he said.
Posted by Arthur Caldicott on December 10, 2005
Clinton steals show at U.N. climate talks
Reuters
Sat Dec 10, 2005
MONTREAL (Reuters) - Former U.S. President Bill Clinton told U.N. climate talks in Canada on Friday that the Bush administration was "flat wrong" to reject the Kyoto accord and said cutting greenhouse gases was good for business and the planet.
In an impassioned speech to hundreds of delegates and nongovernmental groups, Clinton rejected a major tenet of the Bush administration's argument for pulling out of the Kyoto Protocol emissions pact in 2001.
Clinton, whose administration negotiated Kyoto in 1997 but never submitted it to a sceptical Senate for ratification, said the belief that Kyoto would hurt the economies of developed nations was "flat wrong."
"We know from every passing year we get more and more objective data that if we had a serious, disciplined effort to apply on a large scale existing clean energy and energy conservation technologies that we could meet and surpass the Kyoto targets easily in a way that would strengthen, not weaken, our economies," he said.
Under Kyoto, some 40 industrialised nations agreed to cut emissions in 2008-12 by over 5 percent from 1990 levels, but Bush says mandatory cuts on emissions from fossil fuels would hamper growth and job creation.
Clinton said a serious commitment to a clean energy future was the solution and this would lead to jobs growth, just like the tech boom of the 1990s fuelled an employment boom.
"We can create jobs out of wind energy, solar energy, out of biofuels, out of hybrid engines," he said.
Stricter efficiency standards for building and appliances would also boost jobs.
"In America, there's no telling how many jobs we could create if we just made the decision that in the rebuilding of New Orleans it would become America's first green city," he said.
Talks in Montreal are trying to take the Kyoto Protocol forward after its first phase ends in 2012 but the discussions have dragged in part because of U.S. objections to any binding commitments on emissions of carbon dioxide and other greenhouse gases.
Many delegations say efforts to curb global warming will be futile unless the United States, responsible for about a quarter of the world's greenhouse emissions, fully participates.
Clinton's speech drew applause and cheers from the audience.
"I don't know if it will have an impact (on the meeting), but I liked what he said. He's talking to the committed here," said Grant McVicar, a member of host Canada's delegation.
Many scientists say rising levels of carbon dioxide from burning fossil fuels will lead to rising seas, melting of glaciers and ice caps and more extreme weather events, including storms like Hurricane Katrina that devastated New Orleans.
© Reuters 2005. All Rights Reserved.
Posted by Arthur Caldicott on December 10, 2005
December 09, 2005
GSXCCC Annual General Meeting
6 November 2005
GSX Concerned Citizens Coalition
4th Annual General Meeting!
DATE: Saturday, 10 December 2005
TIME: 5:00 p.m. to whenever
PLACE: Pixie Hall, 3550 Watson Avenue, Cobble Hill
(across the road from Cobble Hill Farmer’s Institute Hall)
The GSX Concerned Citizens Coalition is holding its fourth AGM, potluck feast and social evening. We want all members and guests to join us, bringing food and drink, and an interest in Vancouver Island’s electricity future.
You are invited and encouraged to attend and:
• Celebrate the demise of the Duke Point Power Plant and the effective end of BC Hydro’s on-Island gas-fired electricity strategy;
• Help determine a New Direction for GSXCCC;
• Elect new directors (members only);
• Renew your membership (or join; assuming we go forward);
• Enjoy a great potluck feast with fun people.
Agenda & Order of Business:
(Non-members are welcome; only members will receive voting cards.)
5:00 – Meet, greet and renew memberships;
5:30 – AGM called to order;
• Financial Report by Phil Marchant, Treasurer (There is no auditor.);
• President’s report on GSX and Duke Point;
• Arthur Caldicott’s report on Vancouver Island Transmission Reinforcement Project and other GSXCCC activities;
• Nominate and elect directors;
• Resolution on next steps.
6:50 – Potluck Feast.
Support your hard-working directors or just come to eat.
Election of Directors:
GSXCCC has eleven directors and space on the Board for twelve. Elections are for two-year periods, staggered.
Incumbent & Position: Status: Going-Forward Position
Tom Hackney, President continuing as Director
Steve Miller, Vice-Pres. continuing as V-P
Arthur Caldicott, Secretary continuing as Secretary
candidate for President & Sec
Phil Marchant, Treasurer candidate for re-election
Don Skerik, Director continuing as Director
Kevin Maher, Director continuing as Director
Mairi McLennan, Director candidate for re-election
Dodie Miller, Director candidate for re-election
Peter Ronald, Director resigning
Tony Fisher, Director continuing as Director
John Hill, Director continuing as Director
? (this could be you!) vacancy Director
Five Directors are due to be elected or re-elected. Their terms are for two years. Directors may be nominated from the floor or may be put forward prior to the meeting (call Tom Hackney (250) 381-4463 or email thackney@island.net). Include evidence that the candidate accepts nomination. Candidates must be members in good standing.
Resolution on the Number of Directors:
The AGM may find it convenient to set the number of Directors at some number less than twelve. Five is the minimum allowable.
Resolved that: The number of Directors for the GSXCCC is ___.
New Direction for the GSXCCC:
Resolved that: The GSXCCC continue to intervene in regulatory proceedings and to take other actions as necessary to continue to promote sound energy policies and practices for Vancouver Island and BC.
Posted by Arthur Caldicott on December 09, 2005
Sea Breeze Files For First Power Line
Nickle's Energy Analects
8 December 2005
The National Energy Board (NEB) reports it has received an application for the construction of a 150-kilovolt, high-voltage, direct-current, international power line (IPL) connecting Vancouver Island and Washington.
The NEB said the proposal from a subsidiary of Sea Breeze Power Corp. would extend a transmission line for 47 kilometres from View Royal, British Columbia, near Victoria, southward across the Strait of Juan de Fuca to Port Angeles, Washington.
About 12 kilometres of the line would be onshore, with the remainder to extend underwater across the strait, the NEB said in noting the Sea Breeze subsidiary also proposes to construct a converter station near existing substations on Vancouver Island.
The proponent would like to start construction in November 2006, the NEB said in noting it would establish procedures for the public hearing process in early 2006.
The NEB said it anticipates conducting at least one public information session on its processes for the filing.
Sea Breeze has proposed two IPL -- the one connecting to Port Angeles from Victoria and another connecting Vancouver to Fairmount, Washington, which could be available for service as soon as 2008.
The interconnecting utilities for two IPL, which have been under development since October 2003, would be British Columbia Transmission Corporation (BCTC) in B.C. and Bonneville Power Administration (BPA) in Washington.
Sea Breeze made its first interconnection filings to the BCTC and BPA in June 2004.
The NEB authorizes IPL projects on behalf of the federal government.
The NEB application was filed by Sea Breeze Victoria Converter Corporation, which was established by Sea Breeze Pacific Juan de Fuca Cable, LP.
The partnership is owned equally by Vancouver-based Sea Breeze and Boundless Energy NW, Inc. of York Harbor, Maine.
NEB news release, 07-Dec-2005
Application submitted to NEB
Posted by Arthur Caldicott on December 09, 2005
Higher Global Output Forecast As Peak Oil Debate Continues
By Mike Byfield
Nickle's Daily Oil Bulletin
8 December 2005
The debate over global petroleum potential continues to bubble, with Cambridge Energy Research Associates, Inc. asserting yesterday that daily capacity will rise as high as 108 million bbls by 2015 from 87 million today. Several decades from now, CERA said, production will move into an "undulating plateau" rather than plunge drastically.
Robert Esser, CERA's director of global oil and gas resources, made that forecast to the U.S. Congress, addressing a hearing to examine peak oil theory which is being conducted by the Energy and Air Quality Subcommittee of the House of Representatives. Esser's forecast is based on a new field by field analysis of global reserves. [Esser's full testimony is here.]
Regarding Saudi Arabia's pivotal reserves, Ross Smith Energy Group has assessed Twilight in the Desert: The Coming Saudi Oil Shock and The World Economy, a best-seller by Houston banker Matthew Simmons. The Calgary consulting group concluded that Twilight incorrectly "posits a crisis where none exists" due to the author's misinterpretation of engineering studies.
Simmons, whose book is now being translated into Chinese, Japanese and Korean, is not backing off. Instead, he claimed that Saudi Aramco insiders have privately expressed relief to him in recent weeks that the worrisome possibility of a production collapse in that country has been publicly aired. [view Simmons' presentation of "Twilight in the Desert" to the Hudson Institute here.]
Like Ross Smith, CERA disagreed with Simmons. Esser testified, "While there has been much debate about Saudi Arabia's ability to expand production capacity, we see no comprehensive justification of claims that production is about to `fall off a cliff.' We anticipate an expansion of crude and condensate capacity from 11.1 million bbls per day in 2005 to as much as 13.2 million by 2015."
"We see no evidence to suggest a [global production] peak before 2020," Esser stated, "nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak."
For the period 1995-2003, CERA said world production was replaced by a ratio of 4:3 due to exploration plus upgrades of previous discoveries. That analysis was based on field figures compiled by its parent firm IHS Inc.
CERA pegged global production for that period at 236 billion bbls. On the supply side, exploration success reportedly added 144 billion bbls and field upgrades accounted for 175 billion bbls, for a total of 319 billion bbls.
Esser said that much confusion has been created by the U.S. Securities and Exchange Commission, whose reporting regulations still reflect technology current in 1970. For example, SEC regulations do not permit American producers to include Canadian oilsands properties in their reserve figures.
CERA acknowledged that non-traditional sources will continue their dramatic rise, constituting 35% of global production capacity in 2015 compared to 10% in 1990. Its report indicates that reliance on OPEC sources will increase only slightly by that time.
Included in the expanded supply figure is an increase of heavy oil capacity in Canada and Venezuela to 4.9 million bbls per day by 2015 from 1.8 million this year. NGL capacity is projected to reach 23 million bbls per day from 14 million.
Esser warned that the more serious threats to global supply come from above-ground factors such as warfare, political turmoil, and inadequate development of a skilled workforce and petroleum infrastructure.
In stark contrast to CERA's optimism, Simmons told the DOB that by 2020 global production is likely to be approximately 60 million bbls per day, creating massive strains in a world economy that is currently headed toward daily demand of 120 million bbls.
His firm, Simmons & Company International, has 126 employees in Houston and Aberdeen, billing itself as the largest investment bank dedicated to the oilfield service sector. The banker noted that improvements in oilfield productivity in recent decades have come entirely from service firms.
"Petroleum producers must be optimists by the nature of their business," Simmons commented. "They are masters of expounding the best possible case in the most conservative-sounding vocabulary. In their eyes, I'm just a banker and a rig guy who doesn't know what he's talking about."
Even so, Simmons said, he publicly predicted in 1995 that North Sea oil production would peak between 1998 and 2000. "At that time, a roll call of the world's best producers forecast that the North Sea would peak in 2010 at eight million bbls per day. In reality, the North Sea peaked at almost 6.1 million bbls in 1999."
The banker commented that North Sea output will dip to about 3.5 million bbls during next summer's workover period, and that the summer low has become the annual production average within a year or two in recent times.
In a similar vein, Simmons pointed to Oman's giant Yibal oilfield, which declined from a peak of 250,000 bbls per day in 1997 to less than 40,000 bbls currently. "The field watered out," he recalled. "Yet just months before the production collapse began, Shell's best technicians had made plans to increase Yibal's production by 30%."
The Houston entrepreneur said his critics wrongly state that his book predicts an imminent collapse of Saudi production. "Twilight explains why a Saudi drop could occur unexpectedly, we can't know exactly when but it might be soon, and the decline could be relatively rapid when it hits, like Oman and the North Sea."
Fundamentally, the author said, no one can rely on the Saudi Arabia's production forecasts until the kingdom releases data on a field by field basis, which its government has consistently refused to do.
Simmons is not yet a believer in oilsands, coal liquefaction and most other non-conventional resource plays. "With alternative sources, be careful that you don't put more energy in than you get out," he advised, postulating that Alberta oilsands operators should weigh the use of nuclear power to preserve natural gas.
The banker suggested that higher oil prices will force profound transportation changes. "Long-distance trucking will be drastically curtailed in favor of trains and ships." In his calculation, ocean freighters are 30 times more energy-efficient than trucks, while a single Mississippi tug can move barge-borne tonnage equal to about 350 semi-trailer truckloads.
The banker believes that rising transport costs will mean that most food will be grown much nearer to consumers, that far more goods will be manufactured locally and that a massive work shift will occur from central offices to computer-networked home offices in order to reduce commuting expense.
"Wages for home-based workers will be based on productivity more than time, and as a result we'll see a huge surge in productivity," the Texan financier prophesied.
Jim Jarrell, president of Ross Smith, said his firm's clients are investors who were alarmed by Simmons' intensively publicized forecasts. The Calgary consultancy's reservoir specialists reviewed Twilight's analysis of Saudi output, which was based on about 235 technical papers published by the Society of Petroleum Engineers (SPE).
Ross Smith contradicted Simmons' claim that Saudi Aramco's reporting data is exceptionally skimpy, commenting that the state oil company's "practice of assigning reserves appears to be as conservative as any we have seen among North American companies."
Jarrell said Twilight's interpretation of SPE engineering studies is professionally unorthodox, at times technically uninformed and inaccurate in terms of its conclusions.
For example, Ross Smith pointed to the best-seller's heavy reliance on a 1979 U.S. Senate subcommittee paper which predicted an irreversible decline in the giant Saudi Ghawar field due to water breakthrough and decreasing pressure. In reality, the Calgary consultant said, Ghawar's water cut peaked at 37% in 1999 and no such production decline has occurred.
While Twilight expressed concern that Saudi exploration has yielded few new oilfields for decades, the Ross Smith study countered that little Saudi wildcat drilling has occurred because the existing fields remain so ample and healthy.
http://www.nickles.com/brn.html
CERA's Robert Esser's full testimony to the Energy and Air Quality Subcommittee of the House of Representatives, is here.
Matthew Simmons' presentation of "Twilight in the Desert" to the Hudson Institute is here.
Posted by Arthur Caldicott on December 09, 2005
December 08, 2005
Government concern about Site C dam stalls power plan
By Scott Simpson
Vancouver Sun
08-Dec-2005
BC Hydro's ambitious 20-year plan for a multibillion-dollar makeover of British Columbia's electricity system hit a major snag Thursday when the provincial government ordered Hydro to back off out of concern about the controversial Site C dam project.
Hydro officials had little to say. Bob Elton, Hydro president and CEO, issued a brief statement by e-mail that the plan, which was to be unveiled today, would be delayed until an unspecified date next year.
Hydro's "Integrated Energy Plan" was expected to include a mix of small, private sector hydroelectric projects, electricity conservation initiatives, upgrades to large government-owned facilities -- and a decision to proceed with the controversial Site C dam on the Peace River near Fort St. John.
It was not immediately clear if the province's concerns were attributable to soft cost estimates for Site C -- which would cost taxpayers a minimum $3.5 billion -- or strong opposition from first nations in northeast B.C., or a conflict with independent power producers who were promised in 2002 that all new power projects in British Columbia would be developed by the private sector.
"In consultation with government, we have now decided to postpone this release and will be doing further work to ensure that this plan meets the needs of ratepayers," Elton said.
Earlier this week, some B.C. Liberal MLAs told Vancouver Sun political columnist Vaughn Palmer that they had concerns about Hydro's ability to shepherd the controversial Site C hydroelectric project -- the cornerstone of the new plan -- through to completion.
NDP energy critic Corky Evans said the province's 11th-hour involvement casts a shadow across more than a year's worth of community consultation and preparatory work by BC Hydro.
"What I find really bizarre is that it flies in the face of the Liberal mantra, maintained all through the public debate about the sale of Terasen Gas and the controversy about the [CN] railroad and all kinds of stuff, that it was not their intention to manipulate public processes or commissions or Crown corporations," Evans said.
Energy Minister Richard Neufeld was tied up in a series of meetings and could not be reached for comment.
Hydro goes through a similar planning exercise very two years, submitting details to the B.C. Utilities Commission as per its regulatory requirements.
However, this year's version of the plan was considered to be its most ambitious effort in more than a decade, in light of British Columbia's growing dependence on imported electricity to supplement a provincial resource that has not grown significantly in volume since the Revelstoke Dam was built in the early 1980s.
Earlier this month, Treaty 8 first nations in northeastern B.C. advised Hydro that they "adamantly" oppose Site C.
The construction of two earlier dams on the Peace, the W.A.C. Bennett and Peace Canyon dams, led to flooding of millions of acres of traditional hunting and fishing territory for the bands.
A BC Hydro summary of a meeting with the aboriginals reported that they "made it clear that they are adamantly against the development of Site C."
Posted by Arthur Caldicott on December 08, 2005
Power for the people
By Dan Potts
Joint Industry Electricity Steering Committee
Vancouver Sun
08-Dec-2005
British Columbia now consumes more electricity than it produces. Blessed for decades with a surplus of electricity, we must now rely on others beyond our borders for a growing portion of our electricity needs.
It is an uneasy situation.
Several jurisdictions in North America, such as California and recently Ontario, have experienced serious problems because of their reliance on volatile external power markets for their electric power. There is no reason for that to happen here in B.C.
We have many resource options to choose from to meet our future needs -- thermal plants fired by natural gas, wood waste, or coal; wind; run-of-the-river hydro; Site C large hydro, and others. The challenge will be in making the right choices and at what cost.
BC Hydro has actively promoted conservation through its Power Smart program for several years and will continue to do so. But even with this aggressive program, consumption is expected to grow, particularly in light of the improved performance of B.C.'s economy.
In 2005, B.C. imported 6,896 giga-watt hours (GWh) of electricity to meet domestic needs, 12 per cent of our consumption and enough to supply over 650,000 homes. Without new generation, by 2020 we will be short on in-province generation by 14,000 GWh and forced to import a full 25 per cent of our energy needs.
BC Hydro is projecting that the Burrard Thermal Generation facility will supply up to 6,000 GWh per year. However, Burrard Thermal is inefficient by current standards, and with the high cost of natural gas is no longer a source of reasonable cost energy for the BC Hydro system.
While the facility still has a role to play as an emergency back-up for the Hydro system, using Burrard to produce 6,000 GWh a year would increase BC Hydro's total energy costs by at least $300 million per year compared to the historic costs of buying that amount of power from import markets.
Bringing on new sources of supply can take years of planning, engineering, and construction. We need to get on with the job if we are to continue to maintain the valuable competitive and employment advantage of low cost, reliable electric power that British Columbians currently enjoy.
Keeping the cost of the new electricity as low as possible is critically important to B.C.'s future. Ultimately it will be the ratepayers -- BC Hydro customers -- who pay for the new facilities. If the choices we make today result in expensive electricity, consumers will be unhappy, industrial and commercial manufacturers will be less competitive and ultimately B.C.'s economy will be negatively affected, having an impact on everyone.
To meet current and future demand, BC Hydro needs to develop an aggressive plan to acquire new, low-cost electricity and to consider all possible options.
The huge shortfall we are facing will require a mix of resources, both large and small. Site C alone can potentially deliver 4,000 GWh, but even if we had approval now it could take up to 10 years to build.
Coal is B.C.'s most abundant energy source and new technology makes generating electricity from a large coal-fired generating plant environmentally sound, predictable and reasonably low-cost.
While run-of-the-river hydro and wind may have a valuable place in BC Hydro's portfolio, they are typically small and dependent on weather conditions.
We have no particular preference for any one generating technology; in fact new electricity supply should come from a balanced range of options. Our only concern is that the process to determine those new sources of electricity not be biased in favour of expensive, less reliable options.
Regardless of the approach, developing new electricity sources and the necessary transmission capacity to distribute it will involve debate and controversy.
While we all may have our favorite approach, it is clear that for BC Hydro to fulfil its commitment to serve the province, low-cost electricity resources must be developed, and soon. To be successful in this effort, BC Hydro will need support from every level of government and the community.
Dan Potts is executive director of the Joint Industry Electricity Steering Committee, which represents the major industrial users of purchased electric power in B.C.
Posted by Arthur Caldicott on December 08, 2005
BC Hydro issues F2006 Call for Power ... at last
BC Hydro issued the Fiscal 2006 (F2006) Open Call for Power (“CFT” or “Call”) on December 8, 2005.
BC Hydro is targeting to procure in this Call:
(a) 2500 GWh/year from Large Projects
(greater than 10 MW capacity)
approximately 2,500 GWh/year of firm electrical energy, of which approximately 900 GWh/year is available commencing on or before 1 November 2009, and approximately 1,600 GWh/year is available commencing on or before 1 November 2010, and associated non-firm electrical energy, from Projects, each having a Plant Capacity of 10 MW or more (“Large Projects”), built, owned and operated by independent power producers, and
(b) 200 GWh/year from a portfolio of Small Projects
(greater than 0.05 MW, less than 10 MW capacity)
(b) approximately 200 GWh/year (based on a portfolio of approximately 50 MW of aggregate Plant Capacity at a 50% capacity factor) of electrical energy from Projects, each having a Plant Capacity of greater than 0.05 MW, but less than 10 MW (“Small Projects”), to be available on or before 1 November 2010, built, owned and operated by independent power producers.
Full F2006 description here.
Key dates in the CFT schedule are as follows:
08-Dec-2005 -- Issuance of CFT
06-Jan-2006 -- Bidder registration deadline
20-Jan-2006 -- Bidders' workshops
07-Apr-2006 -- Tender submission deadline
11-Aug-2006 -- EPAs delivered to successful bidders
28-Aug-2006 -- Executed EPAs and performance security posted
TBD ------------ EPAs filed with BCUC
Full schedule here.
To monitor ongoing updates with the F2006 Call, visit this webpage:
www.bchydro.com/f2006call
Posted by Arthur Caldicott on December 08, 2005
December 04, 2005
A 'Great Pipeline Race' in Canada
By Doug Struck
Washington Post
04-Dec-2005
FORT SIMPSON, A wind prickly with ice bit at Jonas Antoine, the gray-haired native elder. The sting brought a broad grin to his face. "I feel like a wolf in this weather, ready to hunt," he said, leaning against the driving chill.
The cold thrill of sneaking toward a keen-eared moose or snaring a lynx calls him, but Antoine spends days in a stuffy gymnasium, debating with chiefs and elders the looming invader from the north: a huge pipeline from the Arctic that all agree would irrevocably change this land.
Soaring energy prices and profits have revived plans for two massive pipelines -- the biggest private construction projects in North America -- to bring natural gas hundreds of miles south from the frozen Arctic Ocean, through vast untouched forests and under wild rivers, to the United States.
The plans would flood isolated areas of Alaska and Canada with thousands of construction workers, pump billions of dollars into poor native economies, and bring the roar of heavy cranes and bulldozers to pristine areas where it is now quiet enough to hear the hoots of snowy owls and the rustle of pine boughs.
The projects are crucial to keep up with the growing thirst for energy in the United States, say oil company officials and energy analysts. Supporters and opponents agree that the projects would affect Canada's sparsely populated north on a scale larger than the Alaska oil pipeline in the 1970s, and unleash a rush of new exploration and drilling.
"Every square inch is going to be opened to diamonds, sapphires, gold, oil and gas," Michael Miltenberger, the Northwest Territories minister of natural resources, said in an interview in the territories' capital of Yellowknife. "There's an insatiable demand. And the critical first step is the pipeline."
There are daunting obstacles before any construction begins: The two pipeline projects are in competition for workers and capital -- only one can be built at a time. Native groups in Canada have not yet given access rights; environmentalists fret over caribou and the permafrost; and the pipeline companies face a mountain of regulatory red tape and promised lawsuits.
But the huge profits in the energy business, and the unquenchable demand for energy in the United States, have given the projects an impetus that may make one -- or both -- projects unstoppable.
"The time and events are right. It would be very hard to turn your back on this kind of supply," Miltenberger said.
Of the two lines, the Alaska Gas Pipeline is the behemoth. Its most likely route would stretch 1,700 miles from Alaska's Prudhoe Bay to Canada's Alberta province. The line would cost $20 billion and take a decade to build, but the project has picked up momentum under the whip of Alaska Gov. Frank H. Murkowski (R) and $18 billion in loan guarantees approved last year by Congress.
The second line, the Mackenzie Valley Pipeline, would start 250 miles east of the Alaska line, on Canada's portion of the Beaufort Sea. It would snake 800 miles through forests of spruce and pine along the Mackenzie River -- one of the world's longest with no bridge or dam. This all-Canada route would cost $6 billion and is predicted to take three years to complete once construction begins.
Both projects have been pipe dreams for three decades. Drillers who flocked to the cold deserts of Alaska's North Slope after oil was discovered in 1968 also found vast deposits of natural gas. But there has been no way to move the gas to markets; it cannot flow in the oil pipeline. Oil producers proposed both the Alaska and Mackenzie gas pipelines in the 1970s, but the plans died under the weight of rising construction costs, dropping natural gas prices and -- in Canada -- opposition from native groups.
That has changed. Natural gas prices are now at all-time highs, greatly enhancing the lure of profits. Every energy forecast shows a yawning gap between supply and the rising demand. More natives of the north now see economic opportunity in the pipelines, and their necessity is reluctantly being conceded by even environmental groups.
"The economics are right. Everyone needs this supply to come on line," said John Duncan, a member of the Canadian Parliament and the Conservative Party's expert on natural resources. "The real question is which is going to be built first."
Industry analysts say the projects would require so much capital, steel and skilled labor that it would be impractical to build both at the same time. The projects have been jostling for position, sparking what former Alberta energy minister Murray Smith has called "the great pipeline race." Oil company officials would prefer the shorter Mackenzie line to go through first, but delays have jeopardized that possibility.
Four reserves of Indians -- known as First Nations here -- are involved in negotiations to permit the Mackenzie line to cross their land. The four oil companies behind the project have agreed to give First Nations a one-third share of the line, and the federal government in July offered $425 million for native social programs as an incentive. But the bands are split over the proposal.
Antoine, 64, is a member of the Deh Cho, a band of about 4,000 members on land centered at Fort Simpson, a quiet town on an island accessible by ferry in the summer and by a road carved on the river ice in the winter.
He grew up hunting caribou and moose, snaring rabbits and cutting holes in the ice to fish in the winter. He remembers a hard life, remembers being hungry when the game disappeared. But he is wary of the coming pipeline, and the change it will bring.
"You can still have freedom to roam here. You can travel for 100 miles without running into any other tracks, camping wherever you want, drinking out of any stream," he said of the Deh Cho lands.
Herb Norwegian, the blunt chief of the Deh Cho, said his people see no reason why they should not get what they want from oil companies making huge profits. He has asked for fees, royalties and jobs, but his fundamental demand is of the government, which has yet to settle Deh Cho land claims.
"If the pipeline is going to pass through our land, the government has to treat us like the landlords," Norwegian said.
Not all agree with him. Harry Deneron, 63, a member of the Deh Cho group of chiefs, said change already has come, and the First Nations people should benefit.
"Our people will be the first to complain if their hot-water heater goes up," he said with a laugh. "We should accept the pipeline, with conditions. We have to compromise. This has gone on too long."
Either project would march a small army of construction workers into the north for several years. They would carve roads, haul steel, dig a trench through the permafrost and bury the pipeline before departing. The Alaska Pipeline project alone would be more than double the size of the 800-mile-long trans-Alaska oil pipeline finished in 1977, which took 21,000 construction workers three years to build.
Towns along the pipeline routes grimly expect the construction to bring inflation, drugs and crime along with the economic boost for their rural economies. In Yellowknife, two new diamond mines have sent rents soaring and brought cocaine to the streets. Last month, the town experienced its first drive-by shooting.
"We know things are not going to work perfectly. They never do," said Bill Braden, a member of the territorial assembly in Yellowknife. "But the pipeline would give the communities and people of the Mackenzie Valley and Delta hope for the future. Right now, if I was a teenager, I wouldn't see a whole lot of reason to stay in the area."
The bigger footprint, after the construction crews have left, will be in opening the mineral-rich area to further exploration and development.
Mostly for that reason, some environmentalists favor the Alaska Pipeline, which follows the route of the existing oil pipeline and Alaska Highway.
"We think it's the lesser environmental evil," said Stephen Hazell, a director of the Sierra Club of Canada. Environmental groups have largely bowed to the inevitability of at least one of the projects.
"Natural gas is clearly better than coal or oil," said Peter Ewins, a director of the World Wildlife Fund of Canada. "In principle, we are not opposed, if the development is done in a properly planned and well-balanced way."
The natural gas from either line would be fed into a grid of pipelines in Alberta that connects the United States and Canada into a largely seamless single market. Oil company officials say the soaring demand is in the United States, and that is where the gas would go.
But some environmentalists suspect that the Mackenzie pipeline, in particular, would feed the huge oil-sands project in Alberta. There, natural gas is used to cook strip-mined tar sludge into recoverable oil, a process environmentalists say is energy-inefficient and increases global warming.
"If we were convinced the gas was going to be used in people's homes to replace coal-fired energy, we would be much more sanguine about it," said Hazell.
Despite its much larger size, the Alaska Gas Pipeline could move more quickly. The oil pipeline and highway along the proposed route already have cleared the way with access rights, aboriginal land claims and environmental reviews. Since the 1970s, the TransCanada pipeline company has held rights to one route in Canada, and has laid groundwork on the Alaskan side as well.
"The gas market in North America really quite desperately needs this gas," TransCanada Chief Executive Hal Kvisle, said by phone from Calgary. "We think it would be quite foolish not to use" the company's access rights to speed up the project.
Speed is what Alaska's Gov. Murkowski wants. He has made it a personal goal to find a way to get Alaska natural gas to market, foreseeing a second wave of the riches that poured into the state with the oil pipeline. All Alaskans still receive a yearly dividend check from the oil pipeline royalties.
"We are approaching an historic moment -- moving from 30 years of trying, to the reality of a gas line," the governor told reporters recently. He has proposed a novel sharing of ownership in which Alaska would have a 20 percent stake in the line.
"We're going to do it right this time," the governor said by phone from Anchorage after emerging from negotiations with the Prudhoe Bay producers Exxon-Mobil and BP. He already agreed to terms in October with a third company, ConocoPhillips. "The country needs the gas," he said. "This is the time."
Posted by Arthur Caldicott on December 04, 2005
B.C. will need more electricity
Editorial
Times Colonist (Victoria)
04-Dec-2005
Over the past five years, B.C. has gone from being an exporter of electricity to being a net importer. Unless we build one or more new power plants in the near future, the province will face a major shortfall of electricity in the decade ahead.
These are some of the conclusions from a critique of provincial energy policy, tabled recently by the B.C. Progress Board. The board was appointed by Premier Gordon Campbell to look for ways of accelerating economic growth: Its members are drawn from business and the academic community.
The reasons for this emerging crisis are simple enough: The last major addition to our generating capacity came in 1984. Since then our population has climbed 40 per cent, and projections suggest this growth rate will continue. Over the next decade, B.C. is expected to add the equivalent of a city the size of Kamloops every year.
As the report points out, B.C. has been coasting on cheap hydro-electric power from dams built on the Peace and Columbia rivers in the 1960s and '70s. That has created an illusion of security that makes the public and politicians unwilling to confront the need for action.
Moreover it's unlikely the deficiency can be made up by purchasing cheap surplus electricity from neighbouring jurisdictions, as B.C. Hydro has been doing in recent years.
At the same time our energy needs are increasing, world-wide demand is forecast to surge, due in part to the rapid pace of industrialization in China and India. We will be forced, therefore, to pay a much higher premium for imported power in coming years, or to live with brown-outs, or quite possibly to suffer both.
The authors warn that Ontario and California followed a similar path. Political leaders left public utilities to make the argument for additional power capacity, and in both cases, energy producers failed to convince a skeptical public.
In California, the effective outcome was a 20-year moratorium on new plant construction, which coincides with B.C.'s record almost exactly. Both jurisdictions went on to experience repeated brownouts, extending in California to rolling blackouts and a political firestorm that eventually saw the state governor dismissed in a recall vote.
What distinguishes this critique from similar reports is its willingness to confront the elephant in the room -- B.C. Hydro. The authors allege, in respectful but clear language, that government has lost control of the utility.
"B.C. Hydro is seen by many concerned parties to heavily outweigh the ministry (of Energy, Mines and Petroleum Resources) in staff and resources.... As a consequence, B.C. Hydro is seen as setting its own policies ... or responding to matters of public interest, such as the government's Energy Plan, in its own time and manner."
A case in point was the recent decision to abandon work on the new Duke Point power plant in Nanaimo, after the B.C. Court of Appeal granted opponents the right to a hearing. The Crown corporation walked away from $120 million already spent on the project, leaving the community and business partners in the lurch.
Not only did the decision catch ministers off guard, the fall-back strategy -- an upgrade of existing power lines from the mainland -- contradicted the corporation's earlier statements about the urgent need for new generating capacity on Vancouver Island. Of course that only added to the general atmosphere of complacency about electricity supply.
What's at stake is more than a political tussle over who controls energy policy, cabinet or the board of B.C. Hydro. The report makes a convincing case that unless government and the corporation speak with one voice, and do so consistently, there's little chance new installations will proceed.
In fact the challenge is quite daunting. Many of the environmental impacts that accompanied power-plant construction in bygone years would never be tolerated today. When the Peace and Columbia dams were built, aboriginal communities were flooded without prior consultation or compensation. Opposition to new gas-fired generating stations in the Lower Mainland is intense.
A prolonged spate of brownouts would no doubt soften public resistance. But given the extensive lead-time required to bring new capacity on line, well before we get to that point the damage will be done.
Convincing voters a crisis exists before its effects have been felt is never easy. While the Progress Board suggests a number of ways to bridge the gap, such as more energy-efficient building standards and price policies that reward conservation, the bottom line is clear.
Our province can, and should, be self-sufficient in electricity. But unless the cabinet takes B.C. Hydro in hand, and both present a convincing case to consumers, the government's promise of a "golden decade" ahead may fall by the wayside.
Posted by Arthur Caldicott on December 04, 2005
December 01, 2005
BC Hydro reports huge surge in profits
By Derrick Penner
Vancouver Sun
01-Dec-2005
BC Hydro recorded net income of $189 million in its second quarter, compared with $11 million for the same period a year ago, a huge profit jump driven by increased customer demand and electricity trading activity, the company said Wednesday.
Alister Cowan, BC Hydro's chief financial officer, said higher customer loads and trading, coupled with lower financing and amortization costs, were offset by lower revenue while the Crown corporation awaits approval by the B.C. Utilities Commission of a 7.23-per-cent rate increase.
BC Hydro added 24,808 new residential customers and saw an increase in commercial and industrial sales to post $1.26 billion in domestic revenue for the company's six months ending Sept. 30, and saw $765 million in net electricity trading revenue, $468 million more than a year ago.
Company spokesman David Conway said BC Hydro's board of directors is expected to decide by next week whether the controversial Site C Dam will be included as a preferred energy option in its integrated electricity plan.
The Crown corporation conducted a series of public consultations throughout the province earlier this year on the integrated electricity plan, which outlines how BC Hydro plans to meet the province's electricity needs over the next 20 years.
Posted by Arthur Caldicott on December 01, 2005
Oil Free Coast
Just say no to offshore drilling in B.C.
Rick Stiebel, Goldstream News Gazette, 30-Nov-2005
Oil Free Coast Alliance to government: heed public opinion
Matthew Gauk, Martlet (University of Victoria), 01-Dec-2005
Just say no to offshore drilling in B.C.
By Rick Stiebel
Goldstream News Gazette
Nov 30 2005
Rick Stiebel/News Gazette
WCWC Victoria campaign director Ken Wu, right, hands a pamphlet to volunteer/supporter Cindy Robinson during a rally at Esquimalt-Juan de Fuca MP Keith Martin's constituency office Wednesday.
That's the position the Western Canada Wilderness Committee reinforced during a rally at Esquimalt-Juan de Fuca MP Dr. Keith Martin's office last week.
"We're not protesting the federal Liberals because they haven't done anything to show us they are lifting the moratorium (on drilling for gas and oil off the coast of B.C.)," said WCWC Victoria campaign director Ken Wu. "But we're encouraging them to publicly comment on keeping it in place before the next election."
Wu cited the potential for oil spills, substantial greenhouse gas emissions and impact on marine life from seismic testing blasts as major concerns.
Wu also pointed out that offshore drilling in Newfoundland is conducted 300 kilometres off the coast, but it could be as close as 20 kilometres from shore if it goes ahead near the sensitive coastlines of the Queen Charlotte Islands.
"It's the one-year anniversary of public input into the process," Wu said. "Seventy-five per cent of people want the moratorium maintained. Now the government needs to move on maintaining it."
Martin, who was in Ottawa when the rally took place at his Langford office, said he's glad the WCWC came out, and that he's discussed the situation with the organization in the past.
"It's up to scientists to assess the potential for damage to the environment," Martin said in an interview with the News Gazette. "The question is can it be done in an environmentally safe manner. If that's the case, we have a responsibility to the people of B.C. to do it in an environmentally safe way."
Martin believes the oil and gas resources need to be utilized, providing scientists give it the green light because of the jobs the work will create and the benefits to the economy.
Long-time WCWC supporter and volunteer Cindy Robinson said it's important to keep the moratorium in place to protect marine life.
"It's already under stress from human activities," said Robinson. "We shouldn't go down a path that creates destruction through oil spills and seismic activity from blasting."
Federal NDP candidates Randall Garrison,(Esquimalt-Juan de Fuca), Jennifer Burgis, (Saanich-Gulf Islands) and Denise Savoie (Victoria) issued a news release the day of the rally demanding the government keep the moratorium in place.
Oil Free Coast Alliance to government: heed public opinion
by Matthew Gauk
Martlet (University of Victoria)
01-Dec-2005
Aaron McMillan photo:
Protesters opposed to offshore drilling display their disapproval Nov. 22 in front of UVicís McPherson library. The event was organized by the Western Canada Wilderness Committee.
Dozens of UVic students spelled out “Oil Free Coast” in front of the McPherson Library Nov. 22 to protest the possibility of offshore oil drilling in B.C.
The media event was a run-up to the National Day of Action on Nov. 23, organized by the Oil Free Coast Alliance. The Alliance, which includes the Western Canadian Wilderness Committee (WCWC) and the David Suzuki Foundation, aims to increase public awareness of potential oil and gas development off the coast of British Columbia.
A federal government moratorium on offshore drilling was put in place in 1971 by Pierre Trudeau at the behest of David Anderson, then Esquimalt-Saanich MP. The moratorium still stands, but some environmental groups are becoming concerned that the federal government, under pressure from the B.C. government, might start taking steps toward oil and gas exploration. “I think the federal government is just sitting on the fence,” said WCWC Victoria campaign director Ken Wu. “We would like some stronger statements that they will maintain the moratorium or, better yet, just have a legislative ban against offshore oil and gas development.”
The National Day of Action came a year after the release of the “Priddle Report,” a public input process instigated by the federal government to gauge public opinion on offshore drilling. The report found that three-quarters of British Columbians surveyed were opposed to oil and gas development.
“We’ve given them a year to consider the results of the public input process, so now we want them to commit,” said Wu. “We think they should be obligated to adhere to the results of their own public input process.”
The biggest concern among those opposed to offshore oil and gas development is the potential environmental impact. Exploration alone, which often involves seismic testing, can cause harm to whales, fish and crabs, according to some studies.
“It basically deafens whales,” said Wu. “It can kill the beaked whales; it can drive whales away from their feeding and migration areas, including Orcas and Gray Whales.”
The drilling would also threaten the seabird colonies and sea-sponge reefs that make the Queen Charlotte Basin a global treasure, says Jay Ritchlin, the marine campaign strategist for the David Suzuki Foundation.
He fears that small daily leakages and spills of drilling fluids would all go out into the ocean and have an immediate impact within a kilometre of the drill.
While large numbers of animals might not be wiped out from daily leakage, Ritchlin says, it could have a negative influence on developing salmon eggs, and the reproduction of herring, otters, and seabirds.
“It’s a really chronic issue that you don’t see,” said Ritchlin. “More and more we’re finding out that the residues from the oil itself have long-term impacts at lower levels.”
Wu and Ritchlin agree that the hypothetical fallout wouldn’t be limited to the environment. While both acknowledge that an offshore oil and gas industry would bring some economic benefit to the province, they point out that there would be pitfalls as well.
“Fishing still employs 16,000 people on the coast, and fish catches are reduced as a result of the destruction of marine larvae,” said Wu. “Fish are driven away from huge areas of their feeding and migration routes. This has been shown around the world.” Wu also cites possible damage to the $500 million a year worldwide whale-watching industry.
In the 2003 Throne Speech, the provincial government stated that they wanted to have an offshore oil and gas industry up and running by 2010. Since then, the province has created an Offshore Oil and Gas Team to foster the industry. One of their biggest selling points is the creation of jobs to service this industry. “My opinion is that B.C. takes all the risk, and probably most of the economic activity will accrue to large international firms who are already in the global oil market,” said Ritchlin.
The National Day of Action saw rallies at 24 locations in 19 Canadian cities. Volunteers leafleted and petitioned passers-by.
“There’s a federal election coming up,” said Wu. “So of all times where [politicians] need to get in line with public opinion, it’s now.”
Posted by Arthur Caldicott on December 01, 2005
November 30, 2005
Coal-fired power generation worth a look by BC Hydro
Coal-fired power generation worth a look by BC Hydro
Don Whiteley, Vancouver Sun, 30-Nov-2005
Too good to be true
Arthur Caldicott, GSX Concerned Citizens Coalition, 30-Nov-2005
Coal-fired power generation worth a look by BC Hydro
Don Whiteley
Vancouver Sun
Wednesday, November 30, 2005
The B.C. Progress Board's report on the province's energy future was critical of both the provincial government and BC Hydro for allowing the province to become a net importer of electricity, after decades of money-generating surpluses available for export.
"We do need to do something," the report said. "We haven't done anything significant to increase our electricity supply for 20 years ... the least we can do is to take the opportunity to responsibly meet our own energy requirements."
Hydro will soon file its latest Integrated Electricity Plan with the B.C. Utilities Commission. Along with commitments to pursue conservation and green energy, the power utility is expected to put the Site C Dam proposal forward as its recommended big future supply project.
I wonder if they are missing the boat here. A number of recent developments suggest that B.C. should fully explore coal-fired power generation as the big-ticket item, instead of another hydro-electric dam.
Coal-fired power generation is only a couple of points below nuclear energy on this province's irrational hysteria index, largely due to coal's reputation as a dirty fuel and its contribution to global warming through CO2 emissions.
But the coal industry is well on the way toward solving that problem. The Canadian Clean Power Coalition (CCPC), an association of coal-fired generating companies and utilities, has completed the first phase of what will ultimately be a pilot plant to test commercial feasibility of what could be an emissions-free coal-fired generating plant.
"The fundamental principle underlying the goals of the CCPC was to identify a process that would produce electricity from coal in some fashion and that would also provide a relatively pure stream of CO2 that could be captured, further processed as necessary, and subsequently used or stored," says a report on the first phase of the project.
The goal is to get all the pollutants out of the emissions, except CO2, which could then be captured and stored.
And on that score, the U.S. Department of Energy announced just a week ago the completion of a successful pilot project using CO2 for enhanced oil recovery in southern Saskatchewan. The Weyburn Project took five million tons of CO2 extracted from a coal gasification plant in Montana, and used it to breathe life back into a moribund oil reservoir.
"The success of the Weyburn Project could have incredible implications for reducing CO2 emissions and increasing America's oil production," said U.S. Energy Secretary Samuel W. Bodman in a press release. "Just by applying this technique to the oil fields of Western Canada we would see billions of additional barrels of oil and a reduction in CO2 emissions equivalent to pulling more than 200 million cars off the road for a year."
Mark Jaccard, a professor of resource and environmental management at SFU, has just published a book called Sustainable Fossil Fuels: An Unusual Suspect in the Quest for Clean and Enduring Energy, in which he writes extensively about this project and its potential to help with global warming. [The Sun's Don Cayo gave the Jaccard book a three-part infomercial, available at www.sqwalk.com/blog/000540.html]
"I should emphasize that when we talk about clean coal technology, I mean clean -- nothing," Jaccard said in an interview. While the Weyburn project used CO2 from a coal gasification project, the gas can just as readily be captured from a generating station that burns the coal. He explained that CO2 injection to enhance oil recovery will provide just the kind of economic jump-start that clean coal technologies need.
CO2 injection to enhance oil recovery is not new -- it has been underway for nearly 30 years. The technique was out of favour when oil prices were low, but with crude oil expected to remain well above $40 US a barrel for the foreseeable future, the economics look good.
Another piece to the puzzle, from a B.C. perspective, is that North America's biggest supplier and distributor of CO2 for enhanced oil recovery is Kinder Morgan, the company that just completed its purchase of Terasen.
In the press release announcing completion of the acquisition, Kinder Morgan said it will "conduct a comprehensive feasibility analysis of CO2-related opportunities in Canada utilizing this expertise for the purpose of identifying and pursuing viable projects."
B.C. has huge coal reserves in almost every part of the province. More than 25 years ago, BC Hydro was considering a coal-fired generating plant at Hat Creek, but emissions technology was in its infancy at that stage and the impact was anything but zero.
Hydro spokesperson Elisha Moreno said the company turned its Hat Creek coal licences back to the provincial government more than a year ago, and is not pursuing any coal-fired power generation at the moment.
"Someone can make a proposal," she said, referring to Hydro's commitment to purchase energy from independent power producers.
"We'd look at it on costs. We still have our 50-per-cent clean criteria to meet. Obviously coal challenges that. The resource is there, but the challenge is public perception."
But if Hydro is willing to consider spending $3.5 billion on its own account to build a new hydro dam on the Peace River, why wouldn't it consider the same kind of investment in other technologies -- and not just coal?
© The Vancouver Sun 2005
Too good to be true
Arthur Caldicott
GSX Concerned Citizens Coalition
30-Nov-2005
Loren Duncan of Glenora, referring to this Don Whiteley article, comments:
Why is this concept, technology, not applicable to natural gas fired plants?
And if it is...why not?
At first take it seems to be too good to be true...as close to perpetual motion
as we are likely to get...
Anyway, just curious...
Cheers, Loren
Natural gas WAS attractive, as a generation fuel source, because it WAS cheap, plentiful and burned much cleaner than coal, which was similarly cheap and plentiful.
Once carbon dioxide emissions became an issue, natural gas was even more attractive, with approximately a third the greenhouse gas emissions for comparable electrical output.
Then natural gas became not so plentiful and the price went up and up and up and all those proposed natural gas plants were shelved, everywhere except in Nanaimo, since BC Hydro seemed to be the last place in North America to notice price and supply trends with gas that were becoming evident to others five years ago.
With the increase in gas prices, the interest in coal-fired generation regenerated, so to speak.
But of course, the reputation of coal as a dirty fuel source hindered its acceptability, and other jurisdictions, like Ontario, found themselves in conflicting situations - on the one hand, initiatives to phase-out of coal generation because of its emissions ran smack into the relatively cheap cost of the fuel and our insatiable demand for electricity.
The industry met this with branding, with marketing, and with technology: the word "coal" was no longer uttered by coal people, without the word "clean" prefixed to it.
"Clean coal" has indeed taken on a life, but there's a big cost to it. Building a plant that implements "clean coal" technologies that result in emissions from coal combustion, equivalent to emissions from a state-of-the-art natural gas plant, may guts the competitive edge that cheaper coal has as a fuel.
Capturing greenhouse gases and disposing of them in some way that is more acceptable than simply spewing them into the atmosphere, is another issue. What works with coal, works with natural gas. But a little contemplation of what these guys are proposing - capture the GHGs at the generation source, move them to depleted oil fields to be pumped back into the ground to extract more oil - isn't a simple or inexpensive task. It hasn't been done on any scale yet. It's all new. The capture technologies cost a whack of dough. The infrastructure to get the GHGs back to the oil fields (pipe, rail, truck) doesn't exist and/or needs extensive investment. The sequestration integrity of the exercise is largely unknown.
The US led Weyburn project cited in the article, is all experimental. It has no economic underpinnings. So all this talk about carbon sequestration is so much talk. And experiment. I'm not aware of any company anywhere that is proposing a production coal-fired generation facility that incorporates carbon sequestration - at least nothing on an industrial scale, that does not rely on huge subsidies. Your comment about too good to be true, and perpetual motion is wonderfully apt.
FutureGen is a US-government led proposal, that may result in an emissions-free coal-fired generation plant. But it's all drawing board and lofty vision right now, seeking participation by other countries, blah, blah. http://www.fossil.energy.gov/programs/powersystems/futuregen/
Interesting, too, is coal's ultimate solution to what to do with all the carbon dioxide. It's the same answer the nuclear industry has to the same problem with wastes. Bury it somewhere. Ocean, underground reservoirs. Outa sight. Another great ecological legacy for our kids.
In a roundabout return to your question, why isn't this carbon dioxide method applicable to natural gas plants? Well, it is, but no-one cares very much because a) natural gas is so expensive that no-one is much interested in developing any plants right now, b) natural gas isn't imbued with the same "dirty" reputation that needs to be overcome for this renewed interest in coal to move from unacceptable to acceptable.
Much of the talk about cleaning up coal is just talk - proponents of real projects are not including carbon sequestration in their proposals. Here in BC, proposals for coal-fired generation are likely to crop up again with BC Hydro's F2006 Open Call for Power, which may be open for bids in December. Any proposals are likely to be nickle-and-dime operations, small plants, probably "mine-mouth" plants (where they propose burning unmarketable "waste coals" which cost them nothing and don't have to be shipped anywhere), with only as much emission control technology to meet the BC government emissions guidelines. Anything better than that will cost too much, and may push the project out of competition.
A quick final word about the BC government guidelines for coal plants. The Liberals came to power in 2001 beholden to big coal mining companies and donors like Teck Cominco, Fording, etc. The Energy Plan issued in 2002 promised regulations that would enable coal generation to get going in BC. The Coal-fired Power Boiler Emission Guidelines were issued in 2003, setting limits for three substances - nitrogen oxides (NOX), sulphur dioxides and particulates. The limits were disgusting - among the most lenient limits in the regulated world. Mercury, a powerful toxic in even the smallest quantities, and a predictable emission from coal generation, was not regulated at all.
In August 2005, the new Ministry of Environment revised the 2003 document, and actually came close to a set of limits that is close to those of other jurisdictions. Not only that, they included mercury.
Coal-fired Power Boiler Emission Guidelines
This would seem like a good thing, something the government would laud itself for. But the government has been pretty quiet about these new limits. Why?
The answer may be that the government is quietly setting the stage for coal-fired projects, but wants to remove the charge of "dirtiest plants in North America" from the list of criticisms these projects will be subject to.
Back to your comment about perpetual motion, isn't that the illusion of fossil fuels? When all the fundamental economic and ecological costs of fossil fuels are accounted for, the net outcome is ...
TOP
Posted by Arthur Caldicott on November 30, 2005
November 24, 2005
Sustainable Fossil Fuels, by Marc Jaccard
Unusual suspect in the quest for clean, enduring energy
Oil, natural gas unlikely to be replaced soon by other power sources
Don Cayo, Vancouver Sun, 22-Nov-2005
SFU professor flies in face of Chicken Littles of fossil fuels
Don Cayo, Vancouver Sun, 23-Nov-2005
A troubling scenario awaits if we keep on our current energy-use path
Don Cayo, Vancouver Sun, 24-Nov-2005
Oil, natural gas unlikely to be replaced soon by other power sources, book says
By Don Cayo
Vancouver Sun
22-Nov-2005
It's not the dinosaur you may have thought. A new book by SFU professor Mark Jaccard argues that the future of fossil fuels is still bright, as there are few practical energy alternatives that could meet global needs within the foreseeable future.
Can the world assure sustainable energy for the century ahead by turning its back on oil, gas and coal? Can we conserve enough of the massive amounts of fuel we squander, and create most of what we really need from renewables like sun, wind and water, or from clean-burning hydrogen, or even nuclear fission or fusion?
Not likely, says Mark Jaccard, a professor of resource and environmental management at Simon Fraser University.
Until now, Jaccard has spent most of his high-profile career touting those very options. But after a lot of research and reflection he has changed his mind. These "usual suspects" aren't the best bet for the next 100 years, he writes in a new book that's sure to raise hackles among his many colleagues to whom oil is an anathema.
Jaccard argues in Sustainable Fossil Fuel: The Unusual Suspect in the Quest for Clean and Enduring Energy that, as the title suggests, the best path for the future is a variation of the one the world is already on. Oil, although increasingly from unconventional sources, will continue to play a big role, while the use of natural gas and coal will more than double.
What about the well-known drawbacks of fossil fuels -- that their supply diminishes over time, and that they pollute the air? And what's wrong with renewables, and, especially, with hugely cutting back on energy use to take pressure off its supply?
In Jaccard's analysis the world won't run out of oil, gas and coal for a long, long time. The key questions hinge on know-how (How much of the vast resources can we figure out how to tap into?) and price (How much are we willing to pay?). And the same two factors -- technology and economics -- will determine how cleanly we can burn future fossil fuels.
These same questions apply, of course, to conservation, to renewables like biomass, wind and water, and to the inexhaustible potential of hydrogen and nuclear.
Jaccard examines these options at length. He finds each of them not entirely wanting, but limited in their ability to displace fossil fuels.
He notes that the rich world has already gained a lot from using energy more efficiently. "Energy intensity" -- the amount of economic value derived from each unit of fuel -- has soared since the 1950s.
And a lot more saving is possible. Not only is a lot of energy squandered in uses of questionable value, but up to 5/6ths of a fuel's potential is lost in the inefficient conversion of primary energy sources into convenient secondary forms.
Yet, he says, the world won't see the boon that conservationists predict if only we do a better job of mending our wasteful ways. It is not just a matter of technical issues, he argues, but behavioural ones as well.
For one thing, when energy efficiency increases, so does the tendency to use it for new or bigger things. Witness the growth in the size of vehicles and the distances that North Americans drive them following a sharp, but temporary, retraction as a result of the oil shocks of the 1970s. Similarly, the advent of things like energy-efficient fridges tempts consumers to buy a separate one to chill the beer or cool the wine, and so on.
This rebound effect helps explain "the explosion of new energy-using services, including outdoor patio heaters, spas, extra-large sport utility vehicles, decorative natural gas fireplaces, coffee mug heaters, desk-top water coolers, in-home entertainment systems, indoor and outdoor decorative lighting and ... the back-massage chair, to name just a few." And, "More efficient vehicles may make people willing to live further from where they work."
Nor do people always adopt new ideas just because they're available. He cites his own experience with high-priced, energy-efficient light bulbs that are now tucked away in a drawer, as they are in thousands of homes, because they don't fit many lamp sockets and his wife doesn't like the light they cast.
Then there's the matter of a couple of billion poor people on the planet -- people destined in the scenarios that he cites to become much more prosperous over the next century. One of the first things they can be expected to do is stop their inefficient burning of wood or charcoal for cooking and heating, and turn rapidly to modern energy sources. So even if the rich world succeeds in massively reducing its own energy use, the savings will be overwhelmed by increased use in developing countries.
Nuclear's potential faces challenges such as investor antsiness and a long lead time to get it on line, he says. And it's currently so far behind fossil fuels that, given the 33-year lifespan of most plants, as many as five a week would have to be brought online for it to dominate by the year 2100.
That pace of building is unimaginable, given political and economic realities. Because of the horrific potential of an accident or terrorist incident, no matter how highly unlikely those may be, people in developed countries strongly oppose the building of more reactors. And in poorer countries where the urgently desired benefits might persuade people to accept the risk, the rich countries that have the technology don't want to share it for fear it will be used to proliferate nuclear arms.
Strikes against hydrogen, a secondary fuel, include the massive amounts of primary energy needed to create it, and the cost and complexity of establishing a distribution network for the hard-to-store fuel.
Storage is also an issue for most renewables -- wind, water, and sunlight. Because these sources can produce power only intermittently, they must either be relegated to a role as fairly small supplementary sources, or else huge and expensive storage capabilities will have to be built. All three, but especially wind and water, need specific sites that usually aren't found near the places where power is consumed. As the best sites are developed, more marginal -- and more expensive -- ones will have to be found.
Modern biomass energy production -- the efficient burning or conversion of wood or farm waste, as opposed to the dirty and wasteful open fires or crude stoves that proliferate in the developing world -- is relatively cheap, as long as it's small-scale and able to use waste. But if it reaches the point where raw fuel has to be grown just for that purpose, it'll require huge tracts of land that won't be available for other uses. And, as with the other renewables, it'll cost more and more as the best sites for fuel production are taken and marginal ones are pressed into use.
Jaccard still sees a growing role for conservation and all of the renewable technologies. But he sees no chance they'll come close to displacing hydrocarbons as the prime energy source.
Tomorrow: Why oil, gas and coal are the best bet for a clean, sustainable energy future. (link)
- - -
Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy
by Mark Jaccard,
Simon Fraser University
The book's first printing will be available Nov. 27 by direct order only from Cambridge University Press, 100 Brook Hill Drive, West Nyack, NY 10994.
Toll-free 800-872-7423.
Fax 914-937-4712.
http://us.cambridge.org
It will be available in bookstores in Canada Jan. 1, 2006. Paperback: $33.95. Hardcover: $94.95
First in a three-part series (Part 2, Part 3)
© The Vancouver Sun 2005
SFU professor flies in face of Chicken Littles of fossil fuels
By Don Cayo
Vancouver Sun
23-Nov-2005
Second in a three-part series (Part 1, Part 3)
The message from most sustainable-energy advocates is that the world is about to run out of fossil fuels.
Some of them seem to believe that this will happen none too soon -- that we burn so much of it so carelessly that we're poisoning the planet.
And then there's Mark Jaccard, a professor of resource and environmental management at Simon Fraser University who has earned his spurs many times over as a sustainable-energy advocate. His about-to-be-released book, Sustainable Fossil Fuel: The Unusual Suspect in the Quest for Clean and Enduring Energy, argues that oil, gas and coal will -- and deserve to -- remain the dominate energy supply at least until the end of this century.
Why? Because there's easily enough of all three to last the next 100 years, and far beyond. Because they will remain the fuels of choice for a great many uses not only in the rich world, where they already dominate, but also in poor countries where billions now rely on smoky, inefficient wood or charcoal fires for cooking and heating. And because it's both possible and affordable to use fossil fuels cleanly, with minimal harm to the environment.
That's not to say Jaccard endorses the status quo. Indeed, he says the world is on an unsustainable course -- one that, if unchecked, will see energy use grow 324 per cent by 2100, with coal consumption expanding 6.5 times to provide almost half the primary energy.
His preferred scenario, which will require judicious planning and policies if it's to come about, is also hydrocarbon intensive. It foresees increased energy use of 280 per cent, and the near-doubling of the role of fossil fuels, mostly coal.
Where will it come from? And how can it be used cleanly?
Jaccard differentiates sharply between fossil fuel reserves -- the amount that we know where and how to access and that we can afford to get out of the ground -- and fossil fuel resources. The latter is what's there, no matter whether we have the affordable technology to get it today.
Those two estimates are far apart. Coal resources are seven trillion tonnes, or 9.5 times the figure for coal reserves. The conventional oil resource pool is twice as large as the reserves; the unconventional oil resource is four times larger; and the natural gas resource, both conventional and not, is three times larger.
"If current consumption trends and fossil fuel reserves both remained static," Jaccard writes, "oil reserves would not be exhausted until the latter half of this century, natural gas reserves would last into the next century, and coal reserves would last 200 years.
"When the focus shifts to resources, at static consumption levels oil would last 200 years, natural gas 500 and coal 2,000."
However, given growth predictions based on current trends, "then the oil resource would last under 150 years, natural gas under 300 and coal under 400."
But Jaccard's test of sustainability isn't just a matter of supply. It also involves economics and ecology -- the impact of the world's energy use must be reasonably benign for the people and the planet.
So key questions are, do we know how, and can we afford, to tap into more of the resource than is generally assumed? Another is, can we use the fuels we get cleanly, with minimal harm to human health and the environment?
Jaccard's answer to all is yes.
He acknowledges that geologists may be right to note that the world is using up conventional oil resources faster than most people realize. But the economist in him observes that this need not be the catastrophe that's often portrayed. Scarcity is bound to raise prices. But higher prices will spur innovation, innovation will increase supply, and new supplies will moderate the price -- an economic cycle we've seen time and again.
Thus, although recovering unconventional oil is unquestionably more costly than tapping into conventional reserves, it will become ever-cheaper as new technologies are perfected and scaled up.
He points out, for example, that the cost of North Sea oil, once a cutting-edge technology, has plunged from $35 a barrel in the late 1970s to $15 today. And he forecasts that similar kinds of savings are in the cards not only for unconventional oil recovery, but also for natural gas and coal. And the eventual prices are not likely to be much higher than we pay today -- with, of course, a continuation of the periodic short-term fluctuations that feed the cries of Chicken Littles.
The key to using fossil fuels cleanly, he says, will hinge on how they are used.
A huge point often overlooked in rich countries is the immense and beneficial impact that will occur as billions of the world's poor switch from the worst-possible use of biomass -- unhealthy and wasteful open fires or poor-quality stoves -- to cleaner and much more efficient modern fuels. That's a priority for every population as their incomes improve, Jaccard says, and it will hugely lessen outdoor pollution and dramatically improve indoor air quality, which contributes to as many as a million deaths a year.
And, just as importantly, both modern biomass and fossil fuels will be increasingly used to create ultra-clean forms of secondary energy -- electricity and hydrogen -- to heat our homes and offices, power our vehicles, and much more. The technology exists to do this with little pollution from the primary fuels, and it, too, will become more cost-effective over time.
THURSDAY: What will it take to ensure that we are on a sustainable energy path? (link)
A troubling scenario awaits if we keep on our current energy-use path
By Don Cayo
Vancouver Sun
Thursday, November 24, 2005
If the world stays on the energy-use path it's on, it will be in trouble by 2100, if not before, says Mark Jaccard, a professor of resource and environmental management at SFU.
"There is considerable evidence that our current energy system is on an unsustainable path," he writes in an about-to-be-released book, Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy. Problems include emissions that undermine human health, cause acid rain and world-wide climate change; risks from radiation leaks or petroleum spills; and vast tracts of land and water despoiled by large-scale projects. As things are going now, he sees these problems only getting worse.
On the plus side, however, Jaccard foresees a big drop by 2100 in how much energy it takes to generate each dollar of GDP. But a quadrupling of per capita wealth -- also a plus, though a challenging one -- and a 75-per-cent increase in population will still strain energy supplies beyond what can be sustained.
Specifically, he sees the current path leading to a doubling of the biomass, mainly wood, used in scores of poor countries for cooking and heating fires that pollute the air and endanger human health. He sees a 17-fold increase, but still too little, in "modern biomass," including farm waste, converted into clean, green energy sources. Hydro development will focus too much on big, land-drowning projects and too little on small benign ones, and it will fall well short of its potential role in a more optimal mix of energy sources. Wind, solar and geothermal will similarly grow substantially, but not enough, and wave and tidal power will go nowhere without policy-driven help.
His preferred scenario, which he says would be sustainable, is based on several subtle shifts that, over the next 100 years, add up to big results.
It includes a 33-per-cent reduction in traditional biomass, and a 26-fold increase in modern biomass, which would produce far cleaner and more efficient results from the same amount of raw material needed to fuel the current-path scenario. He sees 5.5 times more power coming from hydro, but most of the increase from small projects that do little or no environmental harm. He sees good policy bringing about 33 per cent more wind power, and twice as much solar and geothermal power as would otherwise evolve. And he sees tides and waves tapped to provide about two per cent of the energy needed by this richer and more productive world.
Use of fossil fuels would nearly double under his preferred scenario, but they'd slip from 83 per cent dominance today to 57 per cent in 2100 (as opposed to 66 per cent under the current-trends scenario).
What will change more dramatically is what is done with much of that fossil fuel. Jaccard sees the greatest growth for coal, which is plentiful and widely available around the world. But he sees it used in zero-gasification processes that will be able to produce electricity at comparable cost to other new sources, and hydrogen at lower cost than almost anything else. And electricity and hydrogen will come to play a huge role as secondary energy sources, including fueling much of the transportation of people and goods -- a market now totally dominated by oil.
What needs to be done to get off the path that isn't unsustainable and onto one that is?
Jaccard calls for a mix of approaches in national strategies. Voluntary programs spurred by education, though unlikely to do the whole job, could have a role, as could prescriptive approaches and financial disincentives like a tax on pollution.
But he relies most heavily on market-oriented solutions -- especially emissions caps with tradeable permits, and niche market regulations.
He gets into a detailed discussion of how caps could start out fairly high, requiring only modest reductions in overall emissions, and be strengthened over time to accomplish big gains fairly painlessly.
The niche market regulations, a new concept not yet in use anywhere, would foster projects, large and small, to capture and permanently store carbon by-products of combustion, and it would spread the cost among all producers of carbon emissions.
Internationally, Jaccard sees difficulty, if not impossibility, getting agreements for prescriptive approaches such as the Kyoto Accord, which is said to be merely a first step and is not stringent enough to actually reverse the build-up of greenhouse gases. He reviews a list of alternative proposals such as international trading of emissions permits, equity provisions that ensure compliance but provide a financial break to developing countries, an international carbon tax, various mechanisms for technology transfer from the developed world to the poor, and even bi-lateral emission-reduction agreements between countries like the U.S. and China.
Without really settling on or rejecting any of these, he remains optimistic.
"Energy policy at the global level might never seem as logical and coherent as some would wish, but this is no reason to despair," he writes. "The realities of this level simply require creative thinking, a willingness to compromise, and an ability to seize opportunities as they arise.
"Rising incomes in developing countries provide such opportunities because of the enormous energy investments that will occur over the coming decades. Likewise, if current high oil prices are sustained, the energy market will attract substantial investment in developed countries.
"These two developments create an unprecedented opportunity to shape the character of the future global energy system . . . that we can't afford to miss."
- - -
Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy
by Mark Jaccard, Simon Fraser University
The book's first printing will be available Nov. 27 by direct order only from Cambridge University Press, 100 Brook Hill Drive, West Nyack, NY 10994.
Toll-free 800-872-7423.
Fax 914-937-4712.
http://us.cambridge.org
It will be available in bookstores in Canada Jan. 1, 2006. Paperback: $33.95.
Hardcover: $94.95
Last in a three-part series (Part 1, Part 2)
© The Vancouver Sun 2005
Posted by Arthur Caldicott on November 24, 2005
Who's got the power with our power?
BC Progress Board Releases Discussion Paper on Provincial Energy
9-Nov-2005
Who's got the power with our power?
Les Leyne, Times Colonist, 24-Nov-2005
BC Progress Board Releases Discussion Paper on Provincial Energy
On November 9, 2005, the BC Progress Board tabled a discussion paper on energy with the provincial government. The paper, "Strategic Imperatives for British Columbia's Energy Future", was prepared for the Board by Sage Group Management Consultants. The document surveys BC's current energy situation and makes a number of suggestions for action
News Release
Executive Summary (589K)
Summary of Recommendations(572K)
Entire Report (1,391K)
Who's got the power with our power?
By Les Leyne
Times Colonist (Victoria)
24-Nov-2005
There's a revolutionary concept embedded in the B.C. Progress Board report on energy. The 60-page outlook floats the notion that the democratically elected government of B.C. should wrest control of energy policy away from B.C. Hydro.
That's the kind of coup d'etat plotting that can get you strung up in some countries. But the scheme is laid out in the Progress Board report, by the Sage Group. It's no secret that B.C. Hydro is a power unto itself in the province, so a discussion paper that confirms that fact is unlikely to ruffle too many feathers. Recommending a change to that situation, however, is something new and different.
The report comes dangerously close to questioning B.C. Hydro's supremacy in all things electrical. Not only that, but it states that a lot of people are doing the same sort of thinking.
"In discussion with the Progress Board, many parties stressed the importance of the overarching responsibility of the B.C. government and specifically the Ministry of Energy, Mines and Petroleum Resources, to determine energy policy and ensure it is implemented."
Suggesting that the Energy Ministry set energy policy would be a mushy motherhood position in some jurisdictions, but in B.C. it's actually a controversial proposition.
The Liberals came to power in 2001 with an attitude that "political interference" when it came to Crown corporations was a cardinal sin. NDP meddling in the ferry system -- "Go out and build some aluminum catamarans. And make them go really fast" -- was fresh in everyone's minds.
The Liberals also remembered the grand New Democrat misadventure in Pakistan, where they sent a Hydro subsidiary off on a questionable venture involving lies, off-shore bribery and missing money. (It's best remembered in the legislature for the Liberals bellowing: "Who is Ali Mahmood?")
New Democrats also dictated the Island energy policy that resulted in the proposed Duke Point generating plant in Nanaimo, which was just turning into a problem when the government changed, and gradually evolved into a debacle, since abandoned.
So the hands-off attitude, combined with the mass buy-outs of staff resulting from the budget-cutting spree, left most of the field clear to B.C. Hydro, when it comes to electricity policy.
As long as it makes the government a few hundred million dollars every year and keeps the lights on, it can do whatever it wants. (A good illustration of their relative status is at the annual Union of B.C. Municipalities convention, where the government and B.C. Hydro throw matching receptions. Grumbling delegates are obliged to line up for a half-hour to shake hands with the premier and make an appearance at the government function. Then they bolt over to the lavish Hydro bash, where the real party is.)
But now the Progress Board is questioning the natural order of things.
"There was particular concern expressed that the government does not have adequate staff and budget dedicated to developing electricity supply policy and ensuring that this policy is adhered to by B.C. Hydro," says the consultants' report.
It then makes the assertion: "It is the role of the B.C. government to speak for the public in this regard and it is the role of B.C. Hydro to follow the direction of government."
The board says Hydro has the government out-gunned at every turn when it comes to staff and resources, "which puts the government in the position of not being able to provide adequate oversight and direction to B.C. Hydro."
Consequently, "B.C. Hydro is seen as setting its own policies with regard to electricity supply or responding to matters of public interest, such as the government's energy plan, in its own time and manner."
The main reason for asserting control over Hydro is the paramount goal stated in the report of regaining self-sufficiency in electricity, an advantage that was lost around the turn of the century. Whether it was a lack of political will or the absence of compelling need, the province hasn't added any major generating capacity in more than 20 years, and is now a net importer of electricity.
Now they're trying to make up the shortfall, but the report said there is growing concern that many of the small-scale projects are being vetoed by local governments, for zoning or other reasons.
Local governments do have a say in approving such projects, but the report says the province must be the final decision-maker.
"B.C. is not yet in a crisis with regard to its supply of electricity, but it does have serious planning challenges and if these challenges are not met in a timely manner a supply crisis will likely follow."
Somebody needs to ramrod some fairly urgent action on this front. B.C. Hydro is compiling an integrated electricity plan that will try to address self-sufficiency. It would be reassuring if the elected officials did more than just wave their hands over it when it's done.
Posted by Arthur Caldicott on November 24, 2005
November 22, 2005
Huge green power reserves can fuel jobs, economy
Huge green power reserves can fuel jobs, economy
News Release, BC Sustainable Energy Association, 21-Oct-2005
Sustainable Energy Solutions for BC
Submission to BC Alternative Energy and Power Technology Task Force, BCSEA, 21-Nov-2005
Alternative energy sources potentially rich in jobs
Scott Simpson, Vancouver Sun, 22-Nov-2005
Huge green power reserves can fuel jobs, economy
FOR IMMEDIATE RELEASE
CONTACT: Guy Dauncey (250) 881-1304
News Release
BC Sustainable Energy Association
21-Nov-2005
Victoria, BC (November 21, 2005)-British Columbia has huge reserves of green power that could stimulate enormous economic development and employment opportunity, with as many as 400,000 new jobs over 25 years, and establish BC as a leader in renewable energy, according to a report released today by the BC Sustainable Energy Association (BCSEA).
Tallying the province's green energy potential from wind, solar, tidal, geothermal and other technologies, combined with energy-savings from efficiency measures, would produce 84,000 gigawatt hours (GWh) a year. This is 50% more than BC Hydro's current total generation and enough power for 8.4 million homes.
"BC can be a global leader in green energy technologies if it chooses to," said Guy Dauncey, BCSEA president and author of the report, Sustainable Energy Solutions for BC, prepared as a submission to the BC Alternative Energy and Power Technology Task Force. The Task Force is expected to release its findings soon. BC Hydro is also due to release its 2005 Integrated Electricity Plan that will outline how BC Hydro expects to meet anticipated customer electrical demand over the next 20 years.
The BCSEA report identifies tidal energy as BC's largest long-term source of potential power: 13,000 GWh/yr. A further 12,500 GWh /yr could be freed up by 2025 by saving electricity currently used wastefully. BC also has the potential for 11,000 GWh a year of wind energy. Full- and part-time jobs created over the 25-year period total 413,000 jobs, including installation of solar PV roof systems and retrofitting homes and businesses to double their energy efficiency. The report draws on BC Hydro energy resource data and a variety of employment studies to arrive at these conclusions. (See table "BC's Long-Term Potential for Sustainable Electricity Resources and Jobs" below.)
"BC's impressive solar energy potential is very similar to that of Germany, a world-leader in solar installations thanks to progressive government energy policies," said Kevin Pegg, of EA Energy Alternatives Ltd., a Victoria solar, wind and microhydro company. "Washington State recently announced incentives to grow their renewables industry: If they can do it, so can we."
"The challenge is not technical", said Guy Dauncey. "It lies with the decision to prioritize sustainable energy over other sources, such as coal, coal-bed methane, natural gas, or large-scale hydro." BC Hydro is currently following a voluntary commitment that 50% of its energy will come from "clean" resources, which includes cogeneration from natural gas. BC Hydro's 2005 Integrated Electricity Plan may conclude that BC's future power should come from green resources such as those described in the BCSEA report, or from coal-fired power, the Site-C dam, natural gas, or a combination of these sources.
"Deploying these resources will require a transition over several years along with some transition costs," said Dale Littlejohn, a Vancouver sustainable energy consultant and BCSEA director, "but we can do this profitably while improving jobs, health and the economy. As a bonus, we can make BC fossil-free by 2025 and set an example for the rest of the world."
The full report is available at: www.bcsea.org/policy/taskforcereport.asp
- 30 -
For more information:
Guy Dauncey (Victoria) 250-881-1304
Kevin Pegg (Victoria) 250-727-0522
Dale Littlejohn (Vancouver) 604-785-5130
MW | GWh/year | Cents/kWh | Jobs | |
Wind | 5000 | 11,000 | 6-12 | 31,250(1) |
Microhydro | 2530 | 11,108 | 4-9 | 5,700(2) |
Wood waste biomass | 215 | 1800 | 4-9 | 484(3) |
Geothermal | 1070 | 9,000 | 5-9 | 7,000(4) |
Tidal | 2225 | 13,000 | 11-25 | 13,906(5) |
Landfill | 15 | 85 | 4-5 | 20(6) |
Solar PV | 6000 | 12,000 | 60 - 20 | 210,000(7) |
Total potential power | 58,000 | |||
Efficiency | n/a | 12,500 | 3-6 | 145,200(8) |
Solar Hot Water | n/a | 10,000 | n/a | [60,000](9) |
GeoExchange Heating | n/a | 3,750(10) | n/a | [21,420](11) |
Total | 84,250 | 413,560 | ||
references here
Alternative energy sources potentially rich in jobs
Waning supplies of oil and natural gas will trigger the need for other sources of energy, a report says
Scott Simpson
Vancouver Sun
Tuesday, November 22, 2005
British Columbia could open new industries and create hundreds of thousands of jobs by turning its attention to the world's $200-billion power technology industry, a report submitted Monday to the B.C. government says.
The report says global climate change, and waning production of oil and natural gas, will throw a wrench into 90 per cent of the world's present energy supply -- describing a fossil fuel shortage as "imminent."
B.C. residents are "solidly behind sustainability" but the province must increase its commitment to research and development of lower-cost alternate energy technology, the report from the B.C. Sustainable Energy Association says.
Wind, tidal and solar generation all offer significant opportunities.
"If B.C. makes this transition first, it will be in a position to be a global hub for one of the largest market opportunities in history," the report says.
The association estimates as many as 400,000 temporary, part-time and full-time jobs could be created and adds that B.C. could more than double its present hydroelectric capacity without building another major dam.
"Our analysis shows that B.C. has the potential to generate 84,250 gigawatt hours of sustainable, renewable energy [including efficiency savings]," says the report, which was submitted to the government's committee on alternative energy and power.
The panel is co-chaired by Environment Minister Barry Penner.
Penner said he hasn't had time to review the report but said that, "as Minister of Environment I can't help but be interested in ideas that support sustainable solutions."
Penner noted that B.C.'s alternative power technology sector already includes more than 60 companies providing 3,000 jobs and generating $700 million in annual revenues.
The report follows a 2002 BC Hydro study that listed the province's green energy resources, but focused on sources that are relatively close to the cost of hydro generation.
BC Hydro's generation cost is 2.5 cents per kilowatt hour (kWh) at its existing "heritage" hydroelectric facilities.
The sustainable energy association estimates micro-hydro at between four and nine cents per kWh and six to 12 cents for wind.
Estimated generating costs for tidal power, a fledgling technology, are 11 to 25 cents per kWh.
Solar power is 60 cents to $2 per kilowatt hour.
Association executive director Guy Dauncey said in an interview that Hydro could structure its electricity rates in a way that supports alternative energy, as several U.S. states have done.
"Everyone who pays a BC Hydro bill would pay an extra, say, half-cent per kilowatt hour which supports the development of new emergent technologies," Dauncey said.
He added that Germany, which has "the same sunshine ratio as British Columbia," is going full-tilt on solar power development.
Mary Hemmingsen, BC Hydro manager of power planning and portfolio management, noted the Crown corporation is compelled by the B.C. Utilities Commission to maintain the lowest-possible electricity prices for its customers -- who enjoy the third-lowest electricity prices in North America.
"We probably agree that B.C. has some really significant green resource potential," Hemmingsen said. She also cautioned that while tidal resources are significant, the technology is, as yet, unproven.
SWITCHING HOW WE THROW THE SWITCH:
The B.C. Sustainable Energy Association says the province has huge green power potential that could provide not only renewable sources of energy but could aso stimulate economic development and employment.
B.C.'s maximum long-term (25-year) potential for sustainable electricity resources
Gigwatts/year Cents/kilowatt hour* Jobs
Wind: 11,000 6-12 31,250
Microhydro: 11,108 4-9 5,700
Wood waste: 1,800 4-9 484
Geothermal: 9,000 5-9 7,000
Tidal: 13,000 11-25 13,906
Landfill: 85 4-5 20
Solar PV: 12,000 60-200 210,000
Efficiency: 12,500 3-6 145,000
Solar Hot Water: 10,000 n/a 60,000
GeoExchange: 3,750 n/a 21,420
Total: 84,250** 413,560
* BC Hydro's existing heritage assets: 2.5 cents per kilowatt hour.
Cost of adding new large hydro assets: 6.5 cents per kilowatt hour.
** 50% above Hydro's current total generation
Source: B.C. Sustainable Energy Association, Vancouver Sun
© The Vancouver Sun 2005
Posted by Arthur Caldicott on November 22, 2005
November 17, 2005
Prepare for Peak Oil Now
By Richard Heinberg
AlterNet
14-Nov-2005
Editor’s Note: This paper, exclusively available to AlterNet, was presented at a Reception with Their Royal Highnesses The Prince of Wales and the Duchess of Cornwall, at the California Leaders Round Table Dialogue on Peak Oil, Climate Change and Business Action; November 7, 2005 in San Francisco.
The subject I teach -- human ecology -- is a discipline that largely concerns population and resources. Over the past few years I have chosen to study oil, because it is the most important energy resource of the modern world.
Only 150 years ago, 85 percent of all work being accomplished in the U.S. economy was done by muscle power -- most of that by animal muscle, about a quarter of it by human muscle. Today, that percentage is effectively zero; virtually all of the physical work supporting our economy is done by fuel-fed machines. What caused this transformation? Quite simply, it was oil's comparative cheapness and versatility. Perhaps you have had the experience of running out of gas and having to push your car a few feet to get it off the road. That's hard work. Now imagine pushing your car 20 or 30 miles. That is the service performed for us by a single gallon of gasoline, for which we currently pay $2.65. That gallon of fuel is the energy equivalent of roughly six weeks of hard human labor.
It was inevitable that we would become addicted to this stuff, once we had developed a few tools for using it and for extracting it. Today petroleum provides 97 percent of our transportation fuel, and is also a feedstock for chemicals and plastics.
It is no exaggeration to say that we live in a world that runs on oil.
However, oil is a finite resource. Therefore the peaking and decline of world oil production are inevitable events -- and on that there is scarcely any debate; only the timing is uncertain. Forecast dates for the peak range from this year to 2035.
The peaking phenomenon itself has been observed again and again in individual oil fields and in entire producing nations. One of the first countries to hit its peak was the U.S.. During the 1930s and '40s, half the world’s production of petroleum came from Texas and Oklahoma. However, U.S. production reached its all-time maximum in 1970 and has been declining ever since. Currently the U.S. imports 60 percent of its oil.
Concern over the likelihood of an impending world peak has increased markedly in recent months as global spare production capacity has dwindled and as prices have achieved what seems to be a new baseline of over $50 per barrel.
Evidence that we are approaching peak includes the following:
ExxonMobil documents that global oil discoveries peaked in 1964. Declining rates of discovery are therefore a long-established trend.
Chevron notes in recent advertisements that 33 of 48 nations are in decline. We have thus seen the peaking of production in a majority of individual nations, including some important producers such as Indonesia, Norway, Great Britain, and Venezuela. Mexico will reach its peak within the next two years.
As noted by the International Energy Agency, there is evidence that a substantial amount of "proven reserves" in OPEC countries are illusory, the result of a scramble for market share within a cartel that allocates export quotas based on stated reserves.
With regard to this last point it should be noted that reserves figures, even when accurate, have historically given little warning of peaking. The U.S. instance is once again emblematic: in 1970, U.S. oil reserves were higher than ever; so were production rates. But only a year later, American production began its terminal decline. The study of discovery rates and depletion rates gives us a much better idea of when the global peak is likely to occur.
Optimistic estimates of future discovery and production issued by Cambridge Energy Research Associates and the U.S. Geological Survey have been criticized by several analysts. The optimists have generally failed to anticipate peaks, first in the U.S. and repeatedly in the case of other nations around the world.
This morning the International Energy Agency (IEA) issued a statement saying that the world will have sufficient energy supplies for the next quarter century. However, the statement noted the necessity of the investment of $17 trillion in the supply train in order to maintain sufficiency for so long. Also, the IEA anticipates Saudi Arabian production expanding to 18 million barrels per day by 2030—a figure considerably higher than the maximum possible rate of production from that country cited not long ago by Sadad al Husseini, the recently retired head of exploration for Saudi Aramco.
Expressions of concern have been voiced by corporations, prominent organizations, and knowledgeable individuals, including ChevronTexaco, the Royal Swedish Academy of Sciences, Volvo, Ford Motor Company Executive Vice President Mark Fields, the Chinese Offshore Oil Corporation’s chief economist, and numerous petroleum scientists and oil industry analysts.
The question immediately arises: Will alternative sources be able to make up the difference?
Alternative sources often discussed include oil sands from Canada, shale oil in Colorado, coal-to-liquids, gas-to-liquids, nuclear, and renewables such as solar and wind. Each of these will require immense investment and well over a decade of intense effort in order to produce substantial quantities of energy to offset declines from fossil fuels. And in most cases, rates of production are and will be constrained by non-economic factors. Take the oil sands, for example. Currently Canada produces one million barrels of synthetic crude per day from that source. There is expectation of two mb/d by 2010, and perhaps as much as four mb/d by 2025. We are unlikely to see higher numbers than that even with extraordinary capital investment, because the production process requires large amounts of natural gas and fresh water, both in short supply in Alberta. Moreover, according to the IEA, the world needs six mb/d of new production capacity each year (and that number is growing) to meet new demand and to offset depletion from existing fields.
How about increased efficiency -- surely that can offset any potential oil supply problems. In principle, yes, but most efficiency strategies will likewise require significant lead times. For example, we have the technology now to enable all of us who own cars to be driving ones that get up to 100 miles per gallon. If we were, that would obviously save an enormous amount of fuel. But how long would it take to implement that strategy? It would certainly take four or five years for Detroit to begin producing such high-efficiency cars in large numbers.
Then, not everyone buys a new car every year. In fact, it takes about 15 years to change out nearly the entire U.S. car and truck fleet. So, altogether, it would take about 20 years to fully implement this particular efficiency strategy.
Will the market be able to respond quickly enough to forestall serious economic, social, and political impacts? It is often said that the Stone Age did not end for lack of stones, nor will the Oil Age end because we run out of petroleum -- but instead because we find a cheaper source of energy. However, as we have just seen, that cheaper source of energy has yet to be identified.
Early this year a report was released, prepared for the U.S. Department of Energy by a team led by Robert L. Hirsch, who has a distinguished background in the oil industry and is a senior energy analyst at SAIC and the Rand Corporation. The Hirsch Report (titled "Peaking of World Oil Production: Impacts, Mitigation and Risk Management") concludes that price signals will arrive at least ten years too late to enable a gentle, market-led transition away from oil to other energy sources. The report describes Peak Oil as an "unprecedented" challenge for modern societies, and describes economic, social, and political risks if preparation is not undertaken soon enough, or on adequate scale.
Let me read you a few sentences from the Hirsch Report:
The problems associated with world oil production peaking will not be temporary, and past "energy crisis" experience will provide relatively little guidance. The challenge of oil peaking deserves immediate, serious attention, if risks are to be fully understood and mitigation begun on a timely basis. Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large. Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic.
The report also concludes that the costs of preparing too late for global oil peak would far outweigh those of preparing too early.
The worst-case scenario for the impact of global production peak is very bad indeed. As I mentioned earlier, we are extremely dependent on oil for transportation, agriculture, plastics, and chemicals. In each area, we are already seeing serious impacts resulting from current prices in the $60-per-barrel range. For example,
Currently tens of thousands of farmers are agonizing over whether they can afford to plant next year’s crop, given high fuel and fertilizer costs.
Chemicals and plastics industries are already hard hit: In the chemistry industry alone, more than 100 plants have closed and more than 100,000 jobs have been lost just this year.
In the airline industry, 40 percent of revenues go to pay for jet fuel; most U.S. air carriers are already in bankruptcy or nearing that situation.
Home heating costs are projected to be 40-50% higher this winter than last.
As prices go even higher, and with actual scarcities of fuel, people will experience difficulties commuting, and the maintenance of our far-flung food distribution systems may become problematic.
On top of all this, oil is a strategic resource: as supplies become scarce, there is increasing likelihood of international conflict.
To avoid the worst-case scenario we must begin today to reduce our dependence on oil. The effort must have top priority. It must focus primarily on reducing demand, and only secondarily on producing large quantities of alternative transportation fuels.
A global Oil Depletion Protocol would reduce price volatility and competition for remaining supplies, while encouraging nations to move quickly to wean themselves from petroleum. In essence, the Protocol would be an agreement whereby producing nations would plan to produce less oil with each passing year (and that will not be so difficult, because few are still capable of maintaining their current rates in any case); and importing nations would agree to import less each year. That may seem a bitter pill to swallow.
However, without a Protocol -- essentially a system for global oil rationing -- we will see extremely volatile prices that will undermine the economies of all nations, and all industries and businesses. We will also see increasing international competition for oil likely leading to conflict; and if a general oil war were to break out, everyone would lose. Given the alternatives, the Protocol clearly seems preferable.
National governments, local municipalities, corporations, and private individuals will all need to contribute to the effort to wean ourselves from oil, an effort that must quickly expand to include a reduction in dependence on other fossil fuels as well.
All of this will constitute an immense challenge for our species in the coming century. We will meet that challenge successfully only if we begin immediately.
Further reading:
The Party's Over
Oil, War and the Fate of Industrial Societies
By Richard Heinberg
New Society Publishers, 2005
Powerdown
Options and Actions for a Post-Carbon World
By Richard Heinberg
New Society Publishers, 2004
Posted by Arthur Caldicott on November 17, 2005
The Baron talks up China and energy
By ERIC REGULY
Globe and Mail
Thursday, November 17
The Rothschilds have been in business for about 220 years, and every century or so investment banking's royals haul out the yellowed charts and realize the empire has a presence in Upper and Lower Canada. As a courtesy, they pay a visit, shiver in the cold, recoil at the wine -- the family gave Bordeaux snobs Mouton and Lafite -- and politely scurry back to Paris or London or New York.
This week, the Rothschilds' gilded airborne carriage took the dapper Baron David de Rothschild and his entourage to Toronto and Montreal. Mr. Rothschild's first official visit to Canada was a courtesy call. But it was also recognition that the small Canadian offices, formally known as N.M. Rothschild & Sons Canada, probably will take on a more prominent role in the family wealth creation machine.
That's because Canada has a lot of what the world covets -- energy and metals. Mr. Rothschild thinks the Chinese are about to emerge as voracious buyers of not just the commodities, but the companies that produce the commodities. The firm, with its presence in Canada and connections to China, might be in a good position to broker some of these deals.
"The Chinese want to demonstrate that they are starting to do what most big companies in the world do when they are national champions, which is look at opportunities everywhere," he says in an interview.
Ray Smith, chairman of Rothschild North America and former CEO of Bell Atlantic (now Verizon), who joined Mr. Rothschild on the Canadian foray, thinks China will be especially aggressive in oil. "The one thing they do not have is oil. [They] also want a seat at the table when the great energy decisions are made. The ones today are minor compared to what they will be 10 years from now."
Mr. Rothschild says the firm's long history of independence has made it especially attractive to the Chinese. This allowed Rothschild to emerge this year as the adviser to the non-executive directors of China National Offshore Oil Corp.
China National Offshore Oil (CNOOC), made an audacious bid for Unocal last summer but Chevron took the prize.
For that, Chevron can thank the political hysteria set off by various politicians. The Chinese bid was a national security threat, they said, even though CNOOC is publicly traded and promised not to remove oil from American soil and export it to China. Congress threatened to delay any decision to approve the merger for months.
The conventional wisdom is that that the Chinese vastly underestimated the political backlash. Not exactly true, Mr. Rothschild says. "We knew our chances were slim. I think the Chinese wanted to register the fact they are players."
CNOOC or other Chinese oil companies probably will make more acquisition attempts, although unlikely in the United States. The American energy press has speculated that Canada's Talisman or Husky Energy might become targets (China Minmetals last year went after Noranda, now part of Falconbridge, and then mysteriously lost interest).
Mr. Rothschild and Mr. Smith both agree that, in 10 years or so, China's pursuit of big resource companies will be an unexceptional aspect of the global M&A scene.
While the Rothschilds are probably best known among mere commoners for setting gold prices in the London gold market (a business they abandoned last year), the CNOOC adventure shows they have a fondness for grubbier industries. The family has a lot of experience in commodities and resources, especially in mining -- Mr. Rothschild started his career at a family-controlled mine in the 1960s -- and in infrastructure and utility plays.
Thanks to the commodities boom, Canada is back on the resources map, which means Rothschild Canada might be, too. Rothschild hasn't been a big name in Canada since 1953, when it led the syndicate to develop Newfoundland's Churchill Falls hydroelectric project, which wasn't finished until the early 1970s.
Mr. Rothschild, 63, has been chairman of Rothschild Continuation Holdings AG, the top company in the empire, since 2003, when Sir Evelyn de Rothschild, the dominant figure on the British side of the business, retired. The firm is fairly small; it has about 2,500 employees in 30 offices in 20 countries. But it has the distinction of being the only privately held global investment bank and one of the few independent names of any size. Most of its European rivals, including Schroders, Flemings and Casenove, were poached in the past decade or so by the big American banks. Another rival, Lazard, recently went public.
Independence and connections to governments and industries that might go back to the era when Napoleon was in diapers allow Rothschild to snag M&A advisory work, which accounts for three-quarters of its income, from varied and surprising quarters. But Mr. Rothschild knows that the firm can go only so far in a land of Wall Street giants. If nothing else, Rothschild, unlike the J.P. Morgans and Citigroups of the world, can't use its balance sheet to attract clients with loans.
Mr. Rothschild and Daniel Labrecque, the CEO of Rothschild Canada, insist the firm is not working on a transborder deal involving a Canadian company, although the rumours say it has teamed up with a Canadian investment bank on a potential resources company sale. But making a splash in the Canadian market seems only a matter of time as Rothschild thumbs through its fat Rolodex. "The ambition is to become a quality player in Canada," the baron says.
Posted by Arthur Caldicott on November 17, 2005
November 14, 2005
Enviros Need to Get With a Program
| By Steven Pearlstein
Washington Post
November 2, 2005
The Sierra Club, the country's leading grass-roots environmental organization, has spent a year trying to figure out what it thinks about liquefied natural gas, so far without success. And therein lies a parable about politics and policy that explains a lot about the current stalemate in national energy policy. Like most environmental groups, the Sierra Club would prefer that we meet our energy needs through conservation and stepped-up use of renewable resources such as solar and wind power. But with home heating bills set to climb as much as 50 percent this winter and some cold-weather states facing the very real possibility of rationing natural gas supplies, even most enviros concede the need to boost supply. |  The liquified natural gas plant at Cove Point, Md., owned by Dominion Resources, is one of six such facilities in the United States. (By Mark Gail -- The Washington Post) |
Enviros, in fact, can take some credit for the current gas shortage. For years, they've fingered oil- and coal-fired power plants that are leading culprits behind acid rain and global warming. But so many utilities rushed to build cleaner gas-burning plants that demand has now badly outstripped supply.
The readiest source of additional domestic supply -- offshore drilling -- is hotly opposed by environmentalists as too risky to marine ecosystems. Instead, they prefer to tap the huge reserves that remain under Alaska's North Slope. They're willing to override their genetic disposition to tampering with the Alaskan wilderness and support a new (non-liquefied) gas pipeline along the trans-Alaskan highway through Canada to the Lower 48. But the pipeline would require a $20 billion investment that even Big Oil is unwilling to make.
Which leaves us natural gas in its liquefied form, which must be transported from abroad in cargo ships and unloaded at coastal terminals that change the liquid back into gas.
There are already six such facilities in the United States, including one at Cove Point in Calvert County, and the industry estimates that it will need as many as a dozen more. Fourteen proposals have already received federal approval, 20 have been proposed, and probably 10 more are in the works.
With all those to choose from, you might think that the Sierra Club would have identified the ones it could support. But with a few notable exceptions -- the expansion at Cove Point being one -- you'd be wrong. It would appear that for the Sierra Club, LNG has become the energy source to be supported in principle, but rarely in practice.
Go to the Web site of the Los Angeles chapter of the Sierra Club, for example, and you'll learn why any of three proposed terminals would be frighteningly dangerous and costly to electricity customers while making the nation even more dependent on foreign fuel.
In Louisiana and Mississippi, the Sierra Club chapter warns of tens of thousands of innocents who would be burned to a crisp if there were ever an explosion and fire at any of the LNG terminals proposed for the Gulf Coast.
On the East Coast, the Sierra Club's Delaware chapter has come out against BP's plan to build an LNG terminal in the Delaware River. In its April newsletter, the New York chapter lists eight environmental catastrophes that would befall the region if Shell were allowed to build a floating terminal 25 miles out in the Long Island Sound. And in Boston, the Sierra Club is leading the charge against a proposal by AES to build an LNG terminal on a small, unused and largely unusable island at the mouth of Boston Harbor.
The grass-roots politics of all this is easy to understand. For years, environmental groups have successfully opposed power plants, utility lines and offshore drilling by tapping into the not-in-my-back-yard instincts of anyone living near such projects. Now, when an LNG proposal comes along, the response is almost reflexive. Local residents see the need to gussy up their NIMBYisms with environmentalist garb, and local enviros are happy to oblige.
Back at Sierra Club headquarters, however, officials are still struggling to reconcile the knee-jerk opposition of local chapters to just about every energy infrastructure project with the political imperative to confront the realities of Republican rule and soaring energy prices.
"We are very conscious that we need to articulate what we are for as well as what we are against," says David Hamilton, who oversees energy policy issues for the Sierra Club in Washington.
Recently, a number of environmental groups were able to put aside their reflexive NIMBYism to support controversial wind-farm proposals off Cape Cod and San Francisco. And some environmental leaders have become so alarmed by the pace of global warming that they have even indicated a willingness to reopen the debate over nuclear power.
My guess, however, is that unless more enviros figure out how to prioritize their issues and engage in the kind of trade-offs and compromises needed to recapture the political center, their once vaunted movement runs the risk of falling further into irrelevancy.
Online discussion about this column
Washington Post business columnist Steven Pearlstein was online to discuss his latest column, an examination of environmentalists and their continued unwillingness to get behind liquefied natural gas projects. The transcript of the discussion is here.
Steven Pearlstein can be reached at pearlsteins@washpost.com.
FERC's map of Existing and Proposed North American LNG Terminals is here. Note that it is missing the two LNG proposals on BC's coast: Kitimat LNG at Kitimat, and Westpac Terminals (empty website) at Ridley Island, Prince Rupert.
Posted by Arthur Caldicott on November 14, 2005
November 11, 2005
Peak-power jolt for homeowners urged
Scott Simpson
CanWest News Service
Thursday, November 10, 2005
The provincial government should order B.C. Hydro to increase electricity rates for homeowners during peak hours, and to charge more for above-average electricity consumption, says a report released Wednesday by the B.C. Progress Board.
The advisory board to the B.C. Liberal government says British Columbians have a "false sense of security" because existing electricity rates are among the cheapest in North America -- and warns that additions to B.C.'s electricity supply will be significantly more expensive.
Hydro is already moving in the direction of variable rates with B.C.'s major industries. It will introduce a new pricing structure for industrial customers that involves a near-tripling of electricity rates on the last 10 per cent of electricity consumed in peak winter hours.
That would bump the price from 2.3 cents per kilowatt hour to 6.1 cents per kilowatt hour to reflect the higher costs of bringing new sources of electricity onto the Hydro grid. Off-peak rates will fall in the summer, allowing industry the opportunity to recoup some of its winter electricity costs.
The progress board says adopting a system of variable rates would send a signal that there are additional costs associated with consumption during peak times.
"B.C. has had the luxury of a secure supply of energy, which has resulted in complacency about where it will come from in the future and what it will cost," says the report, titled Strategic Imperatives for British Columbia's Energy Future.
The progress board was established by Premier Gordon Campbell in July 2001 to review the province's economic and social performance and to provide policy advice to government.
The report says B.C. has made only nominal additions to electricity supply in the last 20 years despite a 33 per cent increase in population over that time.
"The provincial government, through the B.C. Utilities Commission, should direct BC Hydro to introduce pricing of electricity that sends the correct signals to all consumers for their energy decisions, mindful of the government's pricing policy with respect to heritage assets," says the report.
Hydro residential and industrial customers have traditionally paid a flat rate for their power, reflecting the low-cost production coming from B.C.'s so-called 'heritage' assets -- its network of dams and electricity generating facilities on the Columbia and Peace rivers in eastern British Columbia.
New sources of electricity supply cost more. They include run-of-river hydro projects developed by the private sector, and Hydro is also mulling private wind farms, natural gas-fired generation, and a major new dam at Site C on the Peace River.
Variable pricing isn't entirely punitive -- consumers who use electricity-gobbling appliances such as dishwashers in the late evening hours could end up paying cheaper-than-standard rates as a reward for conservation.
Meanwhile, Hydro president-CEO Bob Elton warned in a speech Tuesday to the Vancouver Board of Trade that filling B.C.'s needs with imported electricity is an "increasingly risky" strategy.
B.C. currently relies on imports for 12 per cent of its electricity needs and Hydro projects that dependence to grow unless the province adds supply.
Elton said B.C. faces increased risk of supply bottlenecks due to a limited number of transmission lines, unforeseeable price-increase risks, and the risk of "severe" consequences for the economy if the present situation continues.
He said British Columbians need to be interested in the situation because "there is a long-term challenge that needs long-term planning to solve."
Later this month, Hydro will present to the B.C. Utilities Commission a plan for addressing B.C.'s long-term electricity needs. It will consist of a mix of projects, possibly including the Site C dam on the Peace River near Fort St. John.
In an interview, Elton acknowledged that Hydro's recommendations may stir up some controversy but said it is imperative for British Columbians to consider all the options and make choices that reflect the interests of the entire province.
© Times Colonist (Victoria) 2005
Posted by Arthur Caldicott on November 11, 2005
Energy becomes Canada's top export
By Eric Beauchesne
Times Colonist (Victoria)
11-Nov-2005
OTTAWA -- Energy has become Canada's No. 1 export, easily surpassing both machinery and equipment and automotive products, while also boosting total exports to a record high and pumping up the country's trade surplus.
"Energy has now moved firmly into first place among all our exports," senior Statistics Canada economist Philip Cross said.
The only other times that energy was Canada's top export was during the mid-1970s and early-1980s energy crises, he added.
Machinery and equipment had previously been Canada's No. 1 export, followed by auto products.
Energy exports crossed that milestone in August, according to revised figures for the month released Thursday with the September trade figures. Energy maintained that top spot in September with export sales rising above the $9-billion mark for the first time ever.
However, Canadians are also energy importers.
"The value of Canada's exports and imports both hit record highs in September, thanks to soaring outbound shipments of natural gas and inbound shipments of crude petroleum in the wake of back-to-back hurricanes," Statistics Canada said.
However, there is more to the strong trade report than just energy, other analysts noted.
"Canada's trade balance is still holding up, even in the manufacturing sector as the economy adjusts to the higher Canadian dollar," Nesbitt Burns economist Sherry Cooper said.
The strong trade performance, combined with evidence of a strong domestic economy, will reinforce the Bank of Canada's determination to continue raising interest rates to head off inflation, she and other analysts said.
"The Bank of Canada will take this surprisingly strong report, on the back of the surprising strong jobs report, as a sign that they are on the right path and will continue to raise rates," Cooper said.
In September, exports jumped 2.8 per cent to a record $39.8 billion, while imports posted a more moderate 1.4 per cent gain to a record $32.7 billion, Statistics Canada said.
As a result, the trade surplus rose to $7 billion, $1 billion more than expected, and up from an upwardly revised $6.4 billion in August, it said.
"Hurricanes Katrina and Rita sent natural gas prices soaring, resulting in a big gain in the value of natural gas exports going south of the border," it said, noting that about three-quarters of the increase in exports was due to higher natural gas prices.
Canada's surplus with the U.S. exceeded $10.7 billion, the second highest level ever, and up from $9.4 billion in August, as exports to the U.S. surged while imports from there edged down.
Canada's trade deficit with other countries, however, rose to $3.7 billion from $3 billion, as exports overseas shrank slightly, while imports surged nearly six per cent, reflecting increases in consumer goods from China and higher prices for oil from Saudi Arabia and Russia.
Exports of natural gas surged 26.7 per cent in September to a near record $4.4 billion, reflecting a 25 per cent jump in prices, which followed a 14.6 per cent surge in August. While petroleum-product exports also rose, crude-oil exports continued to edge down from what was a record high two months earlier.
Times Colonist (Victoria), Page C06, 11-Nov-2005
Alberta oilsand juggernaut 'could crush B.C. growth'
By Scott Simpson
VANCOUVER -- Alberta's oilsands are an economic juggernaut that could crush British Columbia's efforts to expand its northeast natural gas industry, a new B.C. Progress Board report warns.
The report says British Columbia should seek a collaboration with Alberta on job, transportation, and export strategies, lest Alberta simply "outbid' B.C. for gas industry workers and crimp economic growth in this province.
The report says B.C. has a lot of leverage to apply, if necessary, to encourage Alberta's cooperation.
B.C. assets include highways, transmission lines, oil pipelines, rail lines and ports without which Alberta cannot get many of its energy products -- including crude oil, natural gas, coal and electricity -- to market, says the report.
For example, Alberta-based Enbridge Pipelines just announced a $4 billion pipeline project running from Edmonton to the B.C. port town of Kitimat, planning to export Alberta oil sands crude to markets in China and the United States.
"In many ways, British Columbia holds the key to getting those products and services to market," says the report.
"Just as British Columbia is well advised to strike a joint labour strategy with Alberta to protect British Columbia interests, Alberta is well advised to develop a joint export strategy with British Columbia to protect Alberta interests."
The progress board was created in 2001 by Premier Gordon Campbell to serve as a senior policy advisory body to the provincial government.
This week it issued a report, Strategic Imperatives for British Columbia's Energy Future, that says B.C. must "protect and promote" its considerable energy assets -- and recognize that those assets are central to maintaining and improving B.C.'s high standard of living.
It says that "the development of the Alberta oil sands and the need to get both oil and electricity from the development to market provide an unparalleled opportunity for cooperation and resulting benefit between the two provinces."
Conversely, B.C. has relied on Alberta-based labour and investment to develop the gas industry in this province -- it uses pipelines built by Alberta-based companies to carry some of its gas to markets in eastern Canada and the United States.
"The development of the Alberta oil sands will put the Alberta government in a strong surplus position fiscally for years to come.
"Alberta's coming wealth will create a potential threat to British Coloumbia as better wages, take-home pay, health services and access to education in Alberta are likely to put enormous pressure on the British Columbia labour market, particularly in the area of skilled trades and engineers."
The report notes that those skill sets are "in short supply worldwide."
"Moreover they are the very skill sets British Columbia needs to grow its energy sector and to complete a wide array of transportation projects now underway in the province."
Posted by Arthur Caldicott on November 11, 2005
BCUC approves Kinder Morgan takeover of Terasen
KMI - Terasen Acquisition Decision
BC Utilities Commission, 10-Nov-2005
KMI - Terasen Acquisition Application
Document Registry at BC Utilities Commission
Terasen sale to Texas firm wins okay
Scott Simpson, Vancouver Sun, 11-Nov-2005
KMI - Terasen Acquisition Decision
BC Utilities Commission
10-Nov-2005
NOW THEREFORE the Commission, for the reasons stated in the Decision, orders that the Application is approved subject to the conditions contained in the Decision accompanying this Order.
DATED at the City of Vancouver, in the Province of British Columbia, this 10th day of November 2005.
BY ORDER
Original signed by:
Robert H. Hobbs
Chair
KMI - Terasen Acquisition Decision
Terasen sale to Texas firm wins okay
By Scott Simpson
Vancouver Sun
11-Nov-2005
The $6.9-billion sale of Terasen Inc. to a Texas energy firm can proceed, albeit with conditions that protect the interest of the Vancouver-based utility company's 875,000 customers, the British Columbia Utilities Commission ruled on Thursday.
The BCUC, in a 51-page ruling, said Kinder Morgan Inc.'s experience at operating natural gas systems, coupled with Terasen's management record and the continuing scrutiny of the utilities commission, assures that the public's interest will be served by the transaction.
The commission said it received more than 8,000 letters of comment on the sale, from "individuals, businesses, communities, community organizations, and associations," including about 650 form letters.
Last month, the BCUC described the volume of correspondence it had received on the sale as a "record" for any proceeding.
"Virtually all of the letters of comment oppose the transaction," with the "vast majority" expressing concern about foreign ownership of Terasen.
Terasen is a Toronto Stock Exchange-listed company whose shareholders voted 96 per cent in October to sell their shares to Kinder Morgan at an attractive premium to their recent trading value.
Other public objections included "general anger," the lack of oral public hearings on the transaction, "a perceived loss of control/sovereignty over resources (energy security)," a presumed reduction in quality of service, Kinder Morgan's spotty environmental record in the U.S., and general distrust of the United States.
However, the commission says, most of the objections are based on misunderstanding of Terasen's status as a publicly-traded private-sector company, and the presumed jurisdiction of the BCUC.
For example, the BCUC notes, concerns about foreign ownership are the responsibility of Industry Canada, a federal agency, and can only be reviewed through the Investment Canada Act.
Industry Canada has not yet rendered a verdict on the sale.
"The Commission Panel appreciates the input of so many citizens and has carefully reviewed and considered the concerns raised by the public," says the decision, which is signed by BCUC chair and CEO Robert Hobbs, commissioner Lori Boychuk, and commissioner Robert Whitehead.
"The Commission Panel is cognizant of the strong public opposition towards this Transaction, as exhibited by the number and tone of letters received. However, the Commission is also mindful that it must consider and adjudicate this application within its statutory mandate and the relevant provisions of the [Utilities Commission Act].
"The Commission Panel notes that much of the opposition to this transaction appears to be based on misunderstandings about the existing ownership and structure of Terasen, the structure of the natural gas market in B.C., and the authority of this Commission over public utilities operating in B.C."
The decision notes that there were restrictions on foreign ownership of Terasen shares when the company, formerly known as B.C. Gas, was created in the late 1980s out of an amalgam of private and public assets.
"The government of B.C. removed these restrictions in 2003," the ruling notes.
The BCUC put a number of restrictions on the sale and notes that the commission will continue to have jurisdiction over Kinder Morgan -- including regulating gas rates charged to customers and quality of service.
Restrictions include forbidding Kinder Morgan to transfer its Terasen customer and billing information out of British Columbia, and requiring that the company not strip away revenue that should be dedicated to maintaining Terasen's existing quality of service.
Kinder Morgan has already announced that it will keep the Terasen Gas name, as well as all of the company's employees except for some senior managers. The company has also said that, over the longer term, it expects to add more employees in B.C. and invest in new pipeline infrastructure in Western Canada.
B.C. Energy Minister Richard Neufeld said in an interview that the BCUC's requirement that Terasen and Kinder Morgan maintain "totally separate" finances "makes good sense" because it will protect the B.C. operation's ability to borrow money.
Neufeld described the New Democratic Party's anti-sale campaign as "pure politics" because Kinder Morgan won't own B.C. natural gas resources -- just the pipelines that deliver them.
"They will still be regulated by the B.C. Utilities Commission for what they pay for the services that are delivered to them by pipes. The cost of natural gas is priced on the North American market. That's just a pass-through on the costs -- although those pass-through costs are still reviewed by the B.C. Utilities Commission. They were before this deal and they will continue to be."
Terasen president and CEO John Reid said in a prepared statement that the company is "pleased with the Commission's decision and we remain confident that combining the assets, skills and people of Terasen with Kinder Morgan will provide long-term value and economic benefits to Canadians.
"There will be no change of service levels for Terasen Gas customers as a result of this acquisition. Natural gas consumers in BC will continue to be served by a first-class utility committed to public and employees safety and meeting the energy needs of its customers," Reid added.
Kinder Morgan chairman and CEO Richard Kinder echoed Reid's comments.
"We are pleased with the Commission's order and look forward to providing the same safe, reliable services to which Terasen's customers have become accustomed," Kinder said in a prepared statement.
"When the transaction is completed, the transition for Terasen's approximately 875,000 natural gas distribution customers in British Columbia should be seamless. The Terasen Gas name will remain the same, its headquarters will continue to be in Greater Vancouver (Surrey) and the BCUC will still maintain regulatory supervision and oversight of the company. Additionally, we intend to retain virtually all of the Terasen Gas employees, policies and procedures."
ssimpson@png.canwest.com
- - -
TAKEOVER TIMELINE:
Aug. 1: Kinder Morgan announces $6.9-billion bid to buy Terasen Inc.
Oct. 14: B.C. Utilities Commission reports record amount of correspondence about the sale, most object.
Oct. 19: Terasen shareholders vote 96% in favour of deal.
Oct. 24: BCUC rules out holding oral public hearing on sale, stays exclusively with written hearing.
Nov. 10: BCUC approves sale.
What's next: Industry Canada to render verdict on sale under Investment Canada Act.
Posted by Arthur Caldicott on November 11, 2005
November 10, 2005
BC SEA sponsors events in November
Victoria, Sat & Sun, Nov 12 & 13
Showcase Event:
Sustainable Energy Now!
Solving the Energy Puzzle
University Canada West
950 Kings Rd. in Quadra Village
Vancouver, Tue, Nov 22
Climate Change: The Biggest Show on Earth
UBC Robson Square, 7 pm
For more info:
www.bcsea.org
Posted by Arthur Caldicott on November 10, 2005
November 09, 2005
Powerline route ignores E&N corridor potential
By Dunc MALCOLM
Goldstream News Gazette
Nov 09 2005
A presentation concerning a proposed underground power transmission line produced sparks at the Nov. 1 council meeting in View Royal.
Sea Breeze Power Corporation, a Vancouver-based company, informed council of the proposed route for the underground and underwater transmission cable that will carry power from its Knob Hill wind farm, through View Royal to McCauley Point and on to Port Angeles, Wash.
Mike Wise, the project manager for the Juan de Fuca transmission cable, briefed council on the Sea Breeze's upcoming application to the National Energy Board.
Wise said he hopes the application will be heard by next spring and construction can begin in t hefallof2006.
According to Wise, although the application has to include alternative routes for the underground cable, the preferred route would see the cable running from the Pike Lake sub-station and along the hydro right-of-way between Thetis Lake and Francis King regional parks. The route would split into two lines at Creed Road with each line running to a single line along Old Island Highway, to Craigflower Road and south on Lampson Street.
The alternatives included a line through Thetis Lake Park and along Highland Road and a route following Munn's Road. There were no alternative routes put forward for the Old Island Highway section of the route.
Council had expected that Sea Breeze would discuss various alternatives with them prior to settling on a preferred route.
Indeed, it was the lack of alternatives and the logic behind Sea Breeze's preferred route that disturbed council the most. Coun. John Rogers asked pointedly why the E&N rail right-of-way was not included in the alternative routes to be presented to the federal government.
Wise stated that for the section of line north of Old Island Highway, Sea Breeze excluded the Munn's Road and Thetis Lake Park alternatives after identifying problems associated with both routes. He said the number of trees in Thetis and the park's topography made it unsuitable for an underground cable and that the Munn's Road route was too windy and took the line too close to residences to allow for safe.
"Like the Old Island Highway," responded Rogers. "If traffic is a consideration, then go along the E&N right-of-way," he added. Council also expressed concerns over the possible need to relocate existing utilities on Old Island Highway to accommodate the Sea Breeze cable and who would cover the cost.
"That could be negotiated," replied Wise.
The proposed line would cross the Juan de Fuca Strait and come ashore in Port Angeles, Wash. It would run beneath city streets and tie into the Bonneville power station - about a mile inland.
According to Scott McLain, Director of Public Works and Power Systems for Port Angeles, although no formal application has been made by Sea Breeze, any costs stemming from the city having to temporarily move or permanently relocate any utilities will be the responsibility of Sea Breeze. "It is an absolute condition of the license to use the public right-of-way," explained McLain.
In referring to the map showing the cable's proposed route along city streets, View Royal Mayor Graham Hill stated emphatically, "The town would like to see that red line gone."
Added Rogers, "To put it another way, we want to see the E&N back on as an alternative (to Sea Breeze's application before the NRB)."
Posted by Arthur Caldicott on November 09, 2005
Federal Court of Appeal Kills Sumas 2 Appeal
News Release
Sierra Legal Defense Fund
November 09, 2005
VANCOUVER - In a startling end to a long running dispute, the Federal Court of Appeal today dismissed Sumas Energy 2's challenge to the National Energy Board's March 2004 decision. The original ruling denied SE2 permission to build an international power line connecting its Washington State power plant to BC Hydro's power grid near Abbotsford.
After two full days of argument, the Court took the rare step of issuing a decision on the appeal immediately, finding that SE2's appeal has no merit and should be dismissed. It also ordered SE2 to pay the costs of the parties that have opposed its appeal.
"This is a huge, huge victory for opponents of SE2" said Sierra Legal Defence Fund lawyer Tim Howard. "It is extremely rare for the Court to dismiss an appeal right at the hearing, and the Court's decision to do so states loud and clear that SE2's appeal has no merit whatsoever."
Sierra Legal worked with Thomas Berger, Q.C. who spoke on behalf of the Society Promoting Environmental Conservation and the David Suzuki Foundation at the Federal Court of Appeal hearing. SE2 had argued that the NEB decision was not valid and that the Board overstepped its jurisdiction by making a decision involving a foreign company. The American Company unsuccessfully tried to use NAFTA to justify going ahead with the power project.
"This is good news for Abbotsford and everyone living near the U.S. border. It sets an important precedent for U.S. power companies looking to set up shop on the border, where their emissions will pollute Canadian airsheds, so that they don't have to deal with strict state laws governing domestic air pollution," said SPEC Executive Director Karen Wristen. "Our national regulators have a duty to protect the health of Canadians too, and the Court has confirmed it today.
Morag Carter, climate change program director for the David Suzuki Foundation added, "This is a huge victory for British Columbians. The judge's decision sends a clear message that air pollution and public health should be major considerations when it comes to energy supply. It bolsters the case for clean, renewable energy and a new focus on conservation and efficiency."
While the Court issued the decision denying the appeal today, it will still write detailed reasons to support that decision for release at a later date. SE2 could apply to the Supreme Court of Canada for permission to bring a further appeal. Background on the Sumas 2 hearings can be found online at www.sierralegal.org.
-30-
For more information, please contact:
Sierra Legal Defence Fund:
Tim Howard, lawyer
Cell: (604) 313-3132, (604) 681-4146
David Suzuki Foundation:
Morag Carter
Climate change program director
(604) 732-4228 ext. 280, cell: (778) 386-1448
SPEC:
Karen Wristen
Executive Director
(604) 736-7732, cell: (604) 788-5634
Sierra Legal Defence Fund (www.sierralegal.org) is a national non-profit organization dedicated to environmental justice.
Posted by Arthur Caldicott on November 09, 2005
November 08, 2005
Sea Breeze response to BCUC IR#1
concering Vancouver Island Cable
On October 6, 2005, Sea Breeze Power Corp. filed an application to build a transmission cable system from the Lower Mainland (Surrey's Ingledow Substation) to Vancouver Island (Victoria's Pike Substation). See Sea Breeze: Vancouver Island Cable
See also, BCUC Sea Breeze - VIC CPCN Project site (link)
On October 17, the BCUC presented Sea Breeze with its first Information Request (IR#1). The extensive IR was challenging, and intervenors in both the Sea Breeze - VIC proceeding and the competing BCTC - VITR proceeding have awaited the Sea Breeze response with interest.
On November 7. Sea Breeze responded in a set of documents totalling 40 megabytes. The entire response is available in one humungous download at the BCUC Sea Breeze - VIC CPCN Project site. (link)
The response is also available at the Vancouver Island Cable website (www.vancouverislandcable.com), in smaller, more convenient chunks: 269 page main document, plus separate appendices.
One of the more interesting BCUC questions was 1.11.3
1.11.3 If the Commission were to conclude that HVDC Light® technology as set out in the VIC Application and/or the VIC route is the preferred option, is there any reason why it should not direct BCTC to adopt this option?
RESPONSE:
Sea Breeze VCC is satisfied that the near term transmission needs of Vancouver Island could be met in a satisfactory way if the BCUC were to direct BCTC to utilize HVDC Light® technology, provided the interconnection points to be used are Ingledow and Pike, as proposed in the VIC Application.
However, in the circumstances, it would be unfair and unnecessary for the BCUC to grant a CPCN to BCTC for that purpose (as opposed to Sea Breeze VCC), given that BCTC has, to date, demonstrated a complete lack of interest in the HVDC Light® option, and has failed to adequately consider that option in
the VITR Application, despite Sea Breeze VCC's active promotion of HVDC Light® as providing the best solution for the Island's transmission needs; and, considering that, as a result, Sea Breeze VCC has now dedicated very substantial resources and has incurred very significant expense to put forward the VIC Application.
ABB's support for the Sea Breeze VCC proposal, its involvement as part of Sea Breeze VCC's technical team, and its contemplated responsibility for design, delivery, installation and commissioning of the parts of the system under a turnkey contract are also critical factors which the BCUC should consider. If, despite the foregoing, the BCUC does grant a CPCN to BCTC for the purpose of constructing an HVDC Light® facility substantially similar to what Sea Breeze VCC has proposed in the VIC Application:
• the BCUC should make an order under section 118 of the Utilities Commission Act requiring BCTC to compensate Sea Breeze VCC for all of the substantial costs it has incurred over the past two years prosecuting the HVDC Light® solution with the BCUC and BCTC; and
• the BCUC should also require BCTC to employ an objective project manager with experience in the construction/installation of HVDC Light® technology, to ensure that the prejudicial attitude previously demonstrated by BCTC toward this technology does not create a situation that could compromise the timeliness and effectiveness of the Project.
---
Posted by Arthur Caldicott on November 08, 2005
Spinning tar into oil
As Canada rushes to supply fuel-hungry nations by tapping its oil sands, northern Alberta is transforming from a sleepy backwoods into a bustling cash cow
Karen Warren / Chronicle
The eight-story-tall cranes used to scoop up the oil sands tower over the landscape near Fort McMurray in Alberta, Canada. With crude prices hanging so high, Canada's unconventional oil sands — or tar sands, as they're often called — have become wildly profitable, adding more than 170 billion barrels of oil to Canada's reserve base
By LYNN J. COOK
Copyright 2005 Houston Chronicle
Nov. 6, 2005, 12:49AM
CALGARY, ALBERTA - Think Saudi Arabia has a lock on oil? Think again.
Turns out Canada has almost as much crude, if not more.
For years Canada has pumped oil from traditional wells, shipping it across the border to U.S. consumers.
In fact, our neighbor to the north is the top oil exporter to the United States. (Saudi Arabia ranks third after Mexico.)
But with crude prices hanging so high, Canada's unconventional oil sands — or tar sands, as they're often called — have become wildly profitable, adding more than 170 billion barrels of oil to Canada's reserve base.
Today, the sands produce as much oil as Texas — about 1 million barrels a day.
Output is set to nearly triple during the next 10 years, and the Canadian Association of Petroleum Producers is predicting a yield of 6 million barrels of oil a day by 2030, a little more than half of what Saudi Arabia produces now.
This swelling supply will feed Americans' voracious appetite for oil far into the future, but the promise is not without problems.
Extracting valuable crude oil from sand is labor-intensive and expensive. And the process, which involves leveling acres of evergreens and spewing greenhouse gases into the air, has riled environmentalists.
Still, energy companies such as Shell, Suncor, Exxon Mobil and ConocoPhillips press on.
As Bob Gibson, managing director of independent investment bank Mustang Capital Partners of Calgary, points out: "All the issues get diluted at $60 oil."
From above Fort McMurray, hundreds of miles north of the U.S. border, the landscape looks more like the cratered surface of the moon than the boreal forest of Alberta.
The sandy soil is sticky with crude, so energy companies have rushed in to clear-cut the land and strip mine for oil where vast stretches of pines and firs once stood.
At the Millennium mine, operated by Calgary-based Suncor, eight-story-tall cranes fitted with enormous shovels carve up the earth, scooping it into the back of dump trucks so big that operators have to climb a staircase to get into the cab.
Oil-soaked sand — called bitumen — is hauled to giant bins and dumped into an elaborate system of machinery, where it is crushed, washed, superheated and chemically treated. What's finally spun out is thick, sludgy crude that can be turned into, for example, the asphalt used to pave roads or the gasoline that fuels the vehicles driven on them.
Jim Proudfoot, Suncor's chief safety engineer, said 1,000 operators work in the mines every day as part of a round-the-clock operation that has a goal similar to that of air traffic control — constant movement.
That's because to wring one barrel of crude from the oil sands, 2 tons of earth has to be pulled from the mine and processed.
At Suncor, more than 330,000 tons of earth is excavated to produce 166,000 barrels of oil every day.
The equipment used to tap the oil sands is expensive, energy-intensive and beyond huge.
"You know how they say everything is big in Texas? Well, everything's big in Fort McMurray, too," Proudfoot said.
Caterpillar-brand dump trucks weighing 360 tons buckle the dirt roads beneath them as they ferry loads of bitumen out of the mine.
In the hot summer months, a wave of road will crest in front of the trucks' tires. They kick up so much dust, water trucks have to routinely spray the pathways that lace through the mine.
The trucks' 925-gallon tanks hold enough fuel to fill 40 new-model Hummers and burn through it in about 18 hours.
Even more immense are the cranes that gouge out the pits, So large there are no diesel engines big enough to run them, they are plugged into a power station by supersize electrical cables that worm their way around the site.
In the winter, Fort McMurray's thermometer can dip to 40 degrees below zero — the point at which mercury freezes. Then, the oil sands often come off in chunks the size of a Volkswagen bus, breaking several "teeth" on the shovel every shift. The cost to replace one tooth: $3,500.
When a dump truck needs a new tire it costs $50,000.
"I describe it as the ultimate big-toys-for-big-boys scene," Gibson said, though Suncor likes to note that 20 percent of its mine work force is female.
Only about 18 percent of Canada's oil sands are accessible by mining. The remainder is locked too deep underground to be accessed without drilling. Energy companies are turning to horizontal drilling and flooding wells with steam and fire to get at it.
The most common technology used when drilling in the oil sands is steam-assisted gravity drainage — or SAG-D.
Two horizontal wells are drilled parallel to each other. Piping-hot steam is blasted down the top chamber to heat the hardened bitumen, allowing the warmed, gooey oil sands to drain into the lower chamber, where it can be pumped out.
But once it gets to the surface, there are more headaches.
At about 50 degrees Fahrenheit, bitumen has the consistency of a hockey puck. So just getting the carbon-intensive solid to flow through a pipeline requires a lot of chemicals and condensate to dilute it.
Right now, most oil sands crude gets upgraded and refined pretty close to home in Alberta's Edmonton industrial complex and across the border in Washington state and the Midwest. Several proposed pipelines could take it a lot farther afield, namely to the Gulf Coast and China.
Enbridge, which has offices in Houston, is working on a project dubbed "Gateway," which would run oil sands crude across the Rockies to Kitimat on British Columbia's coast. The $4.1 billion project would require a new deepwater port to be built so supertankers could dock there to pull away with cargo bound for China or California.
Brian Fowler, the commercial manager for the Gateway project, said refineries in Los Angeles and San Francisco already are capable of processing heavy crude because they get that kind of supply from Alaska, where the resource stream is slowly but surely tapering off.
But it's China's demand for oil, which has been increasing even faster than U.S. demand, that's captivated Enbridge.
"Candidly, we're underpinning the success of this profitability to Asia," Fowler said.
He said most people don't realize it, but Canada is closer than the Middle East to China's major ports. A supertanker of crude takes 34 days to travel from Canada and 45 days from Saudi Arabia, he said.
The Gateway project will sink or swim based on whether companies that ship to Asia will agree to 15-year commitments. It's a lot to ask since most tanker contracts are locked in for only one year.
"It takes five years to build a pipeline, and, I'll tell you, getting a refinery to make that decision five years in advance is tough," Fowler said.
Houston-based pipeline company Kinder Morgan is spending $5.6 billion to buy Terasen, which operates a trans-mountain crude pipeline that moved oil sands output to Vancouver.
The company, which mostly operates natural gas pipelines, likely will double that line's capacity and continue to expand in the oil sands region, said Kinder Morgan President Park Shaper.
"We will remain agnostic," he said. "We're happy to go whatever direction people want as long as they're paying for it."
Enbridge and Exxon Mobil also are working to reverse the direction of some pipelines that ran Gulf Coast crude up to the Midwest. Now, those pipes will bring Canadian crude down to Cushing, Okla., and the heavy-oil-refining complexes on the Gulf Coast.
Not everybody in Alberta is happy about the way the oil sands are progressing.
A recent report from the University of Alberta's Parkland Institute said Canada is backsliding into the ancient role of "hewers of wood and drawers of water" and neglecting the development of Canadian industry.
The report frets about pipeline expansion into the United States, saying it has the potential to destroy Alberta's refining and petrochemical industry. The report's conclusion: Without drastic measures to protect itself, Canada could quickly turn into one more pool of raw resources for the United States to pillage.
The Alberta government and 16 energy companies are considering a huge, new
$6 billion refining and petrochemicals complex near Edmonton that would churn out upgraded — and more expensive — fuels and chemicals, keeping more money in Alberta. The proposal is in its initial stages.
Alberta Energy Minister Greg Melchin is on the ropes. He wants to make sure the sun doesn't set on Alberta's heyday, but a lot of Canadians are fighting mad about the province's economic windfall and greenhouse-gas emissions.
Despite levying only a 1 percent tax on most oil sands projects right now, Alberta is taking in almost as much money as the entire federal government.
The province also gets royalties from regular oil wells and earns even more from natural gas production.
The Canadian Association of Petroleum Producers said Alberta's energy prosperity is creating new wealth and jobs in other Canadian cities, including Ontario, where steel is manufactured.
Alberta, which became the only debt-free province in Canada last year, has a budget surplus, so the provincial government is cutting a $400 check to every man, woman and child who lives there.
The province, which churns out the lion's share of the country's carbon dioxide emissions, has put Canada's commitment to the Kyoto treaty on climate control in peril.
The accord calls for Canada to slash greenhouse-gas emissions — carbon dioxide output — from its 1990 benchmark level. That reduction is supposed to be achieved by 2012, but, thanks in large part to activity in the oil sands, Canada's carbon emissions have jumped more than 20 percent.
Many policymakers and energy executives say there's a solution that can keep the oil sands progressing while keeping Kyoto alive. None seems willing — or able — to spell out exactly what that answer is.
Shaper said Kinder Morgan is interested in carbon sequestration — binding up the greenhouse gas and injecting it back into the ground.
The company has experience with it in Texas because it runs a pipeline through which captured carbon dioxide is taken to old oil fields and pushed down wells to force more oil to the surface.
Energy Minister Melchin likes the idea of sequestration but said that, as it stands, the economics are marginal at
best.
One industry insider said that despite Kyoto's impending deadline, most decision makers aren't giving it too much thought.
"Not really," he said."Everybody's too busy making money."
Posted by Arthur Caldicott on November 08, 2005
Coal Smoke Adds to Band's Cancer Alarm
Elk Falls mill We Wai Kai say they were steamrolled by mill's permit approval.
By Quentin Dodd
TheTyee.ca
Published: November 4, 2005
A Campbell River area mill has been granted permission to continue to burn coal, outraging leaders of nearby First Nations band worried about high cancer rates among their people.
Less than a month after the We Wai Kai First Nation on BC's Quadra Island formally complained that the government hadn't met the law by consulting with them sufficiently, the permit approval was rushed into place, claim band leaders and their lawyer.
The granting of the permit to the Elk Falls mill is the latest twist in a struggle by the We Wai Kai to discover why, over the last decade, they've seen much higher levels of cancer at their Cape Mudge Village Reserve on Quadra Island than at their Quinsam Reserve in Campbell River.
The reason, they say, may be that the Cape Mudge reserve receives higher and more regular seasonal fallout from air-borne smoke-stack emissions from the nearby Catalyst (formerly Norske Skog) mill than does the Quinsam Reserve. For years the band has requested testing of mill emissions at Cape Mudge to shed light on their health crisis.
Toxic plume?
For several years the mill has been testing the burning of coal as an auxiliary fuel in its boilers, and applied to continue the practice indefinitely.
The We Wai Kai, through Vancouver lawyer Alan Donovan, informed the government they didn't want to see the mill's coal-burning test-period permit extended until proper monitoring studies have been done directly at the island-village reserve to assess the amount and nature of chemicals the site receives each year during the peak season from August through October. During that period, prevailing wind frequently blows the mill emissions over Quadra Island that eventually settle directly over the village.
On Thursday, the We Wai Kai received notification that the provincial waste management branch has granted Catalyst a permit to burn coal on an indefinite basis, according to band administrator Brian Kelly.
The permit-approval notification to the We Wai Kai indicates the mill will be required to install and operate an emissions-monitoring station at the village by April 30, as the band had long been requesting, says Kelly. But it's still not clear how long the monitoring station will be required to be in place, says Kelly.
Band demands more consultation
Kelly and other band leaders charge the government has failed to properly consult with the band.
He said after Donovan's letter went to regional waste manager Randy Alexander, the official extended the public-consultation period by a month to the end of October. Alexander let it be known that a decision could still be handed down before Oct. 31 if the government agency was satisfied it had addressed the First Nation's concerns and issues, and then held a meeting which lasted just a couple of hours with a few band officials.
"There wasn't time to meet with the (Band) Council," Kelly said, adding that the meeting had basically consisted of a question-and-answer exchange in which the government representatives asked questions to find out what the First Nation's main concerns were, and the Band personnel outlined their biggest concerns.
That, Kelly said, does not constitute sufficient consultation, and the council will discuss the situation early next week to decide its next move.
Mirror image communities
Backing the band on coal burning issue is the Sierra Club and activists running the Reach For Unbleached (RFU) campaign against pulp mill pollution.
The Cape Mudge Reserve and its sister community the Quinsam Reserve share similar age, gender and population-size figures, as well as identical lifestyle and diet patterns. Yet Cape Mudge villagers, exposed to more of the mill's air pollution, have three times the cancer rate recorded by its sister community over more than 10 years.
Recently, in preparation for its request to extend its temporary permit to burn coal, the Catalyst mill finally did launch a study of its air emissions. But the We Wai Kai claim that study wasn't going to include a monitoring or sampling station at the We Wai Kai's Cape Mudge village, even during the August-through-October period when the area of the village receives the plume of emissions from the mill's stacks most often.
'Extraordinarily high cancer death rates'
Donovan's letter to the provincial government on behalf of the First Nation, citing "respiratory ailments and extraordinarily high cancer death rates", reminded that Cape Mudge band members had for years asked unsuccessfully for suitable mill-emissions monitoring at the village.
Donovan said that studies should be conducted over at least two years, to cover that number of peak-fallout periods.
Upon learning of the terms of the permit approval on Thursday, Donovan, accused the government of "rushing ahead with little to no scientific data. They don't have the science and they haven't done the groundwork for a properly-informed decision."
"Additional contamination from the burning of coal would create further damage to the health, safety and enjoyment of life of this aboriginal community," says Donovan's letter on behalf of the band. In October, mill manager Norm Facey downplayed the band's concerns, telling Canadian Press that if the mill were causing health problems, mill employees would be the ones most affected and the Workers Compensation Board would have stepped in.
Facey also said that if the Elk Falls mill was not allowed to continue burning coal, it would seriously hurt the mill's bottom line.
Campbell River based journalist Quentin Dodd is a regular contributor to The Tyee.
Posted by Arthur Caldicott on November 08, 2005
The Conscience of Canada strikes again
BOOK REVIEW: Too Close for Comfort: Canada's Future Within Fortress North America
By JENEFER CURTIS
The Globe and Mail
Saturday, November 5, 2005
Back in the seventies, an energetic housewife named Maude Barlow jumped onto the feminism bandwagon. A few short years later, she was advising prime minister Pierre Trudeau on women's issues. When she failed in her bid for federal office, she helped found the Council of Canadians, now Canada's main citizen's advocacy group. Ever since, along with a few other citizen's groups, she and the council have been the conscience of Canadian politics. Free trade, the bank mergers, the Multilateral Agreement on Investment, safe milk, public pensions -- no other group has bellowed a critical voice at as many issues as the Council of Canadians.
Sadly, thanks to some of its methods and the elite accommodation that plagues today's Parliament Hill and provincial legislatures, the council has had little actual influence. But it raises awareness. And Barlow churns out a lot of books. This one is her 14th. Every Canadian should read it, its oversights notwithstanding.
Barlow's thesis in Too Close for Comfort is that, driven by the interests of both American and Canadian big business, our government is committed to create a "North American fortress with a common economic, security resource and regulatory and foreign policy framework." This despite antipathy by Canadians toward U.S. President George Bush.
Bush is probably the chief villain in this typical Barlovian call-to-arms, followed closely by the Canadian Council of Chief Executives' Thomas D'Aquino. The latter, Barlow delights in reporting, went on a 10-city "tour" of the United States, apologizing for Canada's refusal to support the Ballistic Missile Defence Plan. John Manley, positioned here as an accomplice of D'Aquino and referred to by one source as "the politician in whom the Bush administration had the greatest trust," and Conservative Party Leader Stephen Harper also get severely scolded.
Barlow's catalyst for the "deep integration" of our two countries (Mexico is hardly mentioned, despite the title's reference to North America) is security measures. The U.S. government is "retooling its military" to the annual tune, in 2005, of $445-billion -- the Iraq occupation alone is costing $220-billion -- and we are following suit, copying its laws, increasingly sharing information with it and potentially allowing for unprecedented invasions of privacy and violations of human rights.
She rightly attacks Bill C-36, the Anti-Terrorism Act, put in place right after 9/11; its sweeping powers include the rights to carry out a preventive arrest without warning, compel a person believed to have information about a terrorist to testify before a judge (and thereby remove a person's right to remain silent), wiretap suspected terrorist groups for up to a year, and lay criminal charges against anyone who knowingly participates in activities of a terrorist group. The bill's broadened definition of terrorism is such that, as academics have commented, South Africa's Nelson Mandela would be considered a terrorist.
And she offers up dozens of smaller yet eerie examples: What about the fact that the private data of thousands of Canadians with outstanding student loans is now available on request by U.S. Homeland Security officials, thanks to the sale of the Canadian Imperial Bank of Commerce student loan subsidiary Edulinx to a U.S. company called Nelnet?
Did you know that the new U.S. Ambassador to Canada, David Wilkins, was once campaign chairman for the late Strom Thurmond, the former senator most known for his opposition to equality for blacks? Barlow spends too much time passing on such accusations and lamenting the neo-conservative movement, the rise of the Christian right and U.S. military aggression before coming to the crux of the book: the "incremental and systemic harmonization of Canadian and American regulations and standards governing health, food safety and all aspects of the environment."
Anyone who works with a border-associated body in Ottawa can vouch for the accuracy of this phrase. They will tell you, as Barlow does, about "Smart Regulations," a laborious federal government initiative that is bringing countless regulations in line with international trade and investment policies. (That this initiative was started before 9/11 disrupts her thesis that this whole "fortress" has its roots in security matters.)
Many of Barlow's evil ramifications of Smart Regulations are factually correct: that it is crystallizing relationships with like U.S. bodies, that deregulation of certain industries is happening and that certain U.S. methods might infiltrate Canada. For instance, if C-27, the Canadian Food Inspection Agency Enforcement Act, becomes law, there is evidence that the U.S. preference for industrial livestock feed, which allegedly caused bovine spongiform encephalitis (BSE), will prevail here, over our more costly family-farm methods.
The book contains some oversights, a glaring one being the fact that a document she quotes frequently -- the CCCE's final report from its Task Force on the Future of North America -- was rejected by current Minister for Public Safety Anne McLellan. Also, many of our anti-terrorism measures came in response to our international obligations, and are not evidence of kowtowing to the United States. As well, her sources all seem to be activists or fringe groups. If she had, for example, talked to a government bureaucrat, she might realize that the line between "harmonization" and "co-operation" is fine, and that Canada is holding onto "made-in-Canada" approaches in several policy areas.
Moreover, there are examples where working together with Americans might be advantageous to Canada. Consider again the BSE crisis. "If we had openly shared all the science with the States," one agricultural insider recently commented, " they might not have been able to justify closing the border on a food-safety basis as they did."
But Barlow is onto something important, especially in the area of security, where any government always risks disrupting that delicate balance of protecting both the community and individual freedoms and privacy. The Senate's report on the Anti-Terrorism Act -- essentially a review-to-date of the legislation -- is due out Dec. 18. Already, the government has claimed that the contentious clauses in the act have been used sparingly, a sheepish defence if ever there was one.
Meanwhile, as retired Globe and Mail political columnist Hugh Winsor wrote this week, Canada's Muslim and Arab communities, thanks to U.S.-inspired heavy-handedness on the part of our security services, are beginning to feel like second-class citizens.
She may make a few errors, but the wake-up call that Barlow sends out in this informative and timely book more than makes up for them.
Jenefer Curtis is an Ottawa political writer. Her book The Hired Guns: How Lobbyists are Shaping Canada will be published next spring.
Dates in BC from Maude Barlow's speaking tour:
November 7 Prince George, British Columbia
University of Northern British Columbia, CANFOR Room
This event is co-sponsored by Prince George PIRG 7:00 p.m.
November 8 Parksville, British Columbia
Parksville Community and Conference Center
132 Jensen Avenue East
Sponsored by Oceanside Coalition for Strong Communities, 7:00-9:00 pm
November 9 Victoria, British Columbia
The Da Vinci Centre, 195 Bay St. (Victoria West) 7:30 p.m.
November 10 Vancouver, British Columbia
Maritime Labour Centre,1880 Triumph St.
(Triumph and Victoria) 7:30 p.m.
Council of Canadians website for Too Close for Comfort
Posted by Arthur Caldicott on November 08, 2005
November 02, 2005
Is Grid West Dead? - RTO spells inefficiency in power
Compromise on unified power grid is blocked
Ted Sickinger, The Oregonian, 02-Nov-2005
RTO spells inefficiency in power
Steve Johnson, Seattle Post Intelligencer, 01-Nov-2005
Non-profit agencies keep the lights on
James P. Thorgerson, Seattle Post-Intelligencer, 20-Oct-2005
Grid West: Home Page
Grid West: Current Activities Overview, 29-Aug-2005
Compromise on unified power grid is blocked
Ted Sickinger
The Oregonian
02-Nov-2005
The Bonneville Power Administration and a cast of utilities, independent power generators, Native American tribes, environmental groups, regulators and consumer groups spent millions of dollars over the past decade haggling over how best to improve the efficiency and reliability of the Northwest's power grid.
Tuesday, the participants all but admitted their effort to create an independent entity capable of managing a unified grid is dead. A group of investor-owned utilities that had supported the project, called Grid West, voted to reject a compromise proposal that BPA had cobbled together to appease critics, most notably publicly owned utilities in Washington.
Instead, the investor-owned utilities will go forward with a scaled down version of Grid West, absent BPA, which controls the largest chunk of transmission assets in the region.
"It's unfortunate," said Dave Kvamme, a PacifiCorp spokesman. "We have 10 years of history working toward a not-for-profit entity that would oversee the region's transmission lines independent of buyers and sellers of electricity."
Grid West is the most recent regional iteration of an effort by federal regulators to increase efficiency and reliability in the electricity industry by eliminating piecemeal management of the power grid. Proponents maintain that a grid managed by a single cooperative entity rather than a host of competing interests would eliminate many bottlenecks, rate disputes and scheduling conflicts that plague the system today.
Regionally, supporters of a unified grid hoped it would clear the way for overdue investments in new transmission equipment that would improve reliability, help make it easier to access renewable power projects in remote areas, and help the BPA sell into power-hungry markets to the south.
But the effort has been controversial from the start. The most vocal opponents have been the publicly owned utilities in Washington, many of which have long-term contracts to buy power from BPA at preferential rates. BPA owns 75 percent of the high voltage transmission grid in Oregon, Washington, Idaho and Montana, so its participation was a linchpin in the organization.
The public utilities, backed by Washington's congressional delegation, worried the plan would increase their costs, and were skeptical that a regionwide organization would deliver any new efficiencies.
They were loath to see control of BPA's transmission grid pass to a private entity, particularly one that would be regulated by the Federal Energy Regulatory Commission. They waged an intense campaign to get BPA to say no to Grid West, and created an alternative proposal to solve transmission problems without creating an entity regulated by the federal commission.
Grid West "would have been a profound change for the region . . . the loss of local and state political control of Bonneville's operation," said Marilyn Showalter, executive director of the Public Power Council, a Portland based organization that represents public utilities in the region.
Investor-owned utilities, meanwhile, have been pressured by the Federal Energy Regulatory Commission to form the regional organizations, in part because the federal agency wants to eliminate utilities' incentives to use control of the grid to make life more difficult for competitors. With limited access to cut-rate BPA power, investor-owned utilities also have a greater appetite for electricity generated in remote areas -- by coal-fired plants and wind farms, among other things -- but don't want to deal with a complicated tariff structure to move the power to their customers.
BPA, the 800-pound gorilla of generation and transmission in the region, has come under enormous political pressure, and has tried to tack between the two camps. Earlier this year, it proposed a compromise plan that would have moved forward with some of the public utilities proposals, and taken incremental steps toward the implementation of Grid West.
The compromise satisfied neither camp.
On Monday, nine of eleven members of Washington's congressional delegation wrote to BPA Administrator Stephen Wright urging him to avoid going forward with the so called "convergence" approach.
A day later, a majority of the investor-owned utilities voted against Bonneville's compromise. Instead they decided to soldier on without BPA's participation and transmission assets.
PGE and PacifiCorp had both supported Grid West, as did the Oregon Public Utility Commission.
BPA said Tuesday its compromise proposal would have been the right way to go. In its absence, said spokesman Ed Mosey, "Nothing will change in terms of the operation of the system. We'll operate the way we always have."
Robert Kahn, executive director of the Northwest Independent Power Producers Coalition, said that's the problem. "Something needs to be done," he said. "The status quo is a mess."
RTO spells inefficiency in power
By STEVE JOHNSON
GUEST COLUMNIST
Seattle Post Intelligencer
November 1, 2005
James Torgerson claims the Northwest's power grid needs a regional transmission organization called Grid West because of the resounding success of the electricity transmission operators elsewhere ("Non-profit agencies keep the lights on," Oct. 20). Torgerson, who heads an RTO in the Midwest and an RTO interest group, is too buried in his rhetoric to realize the opposite is true. RTOs don't work there, and they won't work here.
Seven RTOs were created to deregulate markets and hypothetically lower electricity prices and increase reliability. But the letters R-T-O have spelled inefficiency, market abuse and higher bills for customers. Every one has failed to protect its consumers.
At Torgerson's own RTO, the Midwest Independent System Operator, founding members Louisville Gas & Electric and Kentucky Utilities Co. are withdrawing because of concerns over "keeping rates down and maintaining reliability," the utilities wrote in a Federal Energy Regulatory Commission filing.
MISO's operating budget increased 861 percent -- from $21 million in 2000 to $202 million in 2004 -- according to a Cambridge Energy Research Associates cost comparison.
Customers of PJM Interconnection have rebelled against the Mid-Atlantic RTO because of a pricing model that sent costs soaring.
"We are struggling to find out what the benefits are to us," one member utility's vice president was quoted as saying. PJM Interconnection's operating budget increased 166 percent since 2000, according to the same Cambridge comparison.
All told, the Cambridge costs study found that experiments in the organized markets -- which RTOs are intended to promote -- have cost the West $7.3 billion. The American Public Power Association has voiced its displeasure over "the dysfunctional nature" of RTO pricing efforts.
Torgerson claimed RTOs foster "significant new investment in their region's transmission infrastructure," yet FERC reported that RTOs in New England, the Midwest and New York built zero transmission circuit miles in 2004. The Northwest, without an RTO, built more than 300.
Nonetheless, some in our region, including the Bonneville Power Administration, are intent on forming Grid West, which would turn over Northwest control to private hands and federal regulators. One study estimated Grid West RTO would cost Northwest ratepayers $122 million a year. That estimate is likely to go up as the RTO comes online.
Most public power utilities in the region favor a "better, faster, cheaper" approach relying on local control and the region's history of working together. The Transmission Improvements Group has proposed an alternative that uses contracts and existing entities to improve the power grid -- not turn the keys over to a private entity.
Given the abysmal track record of RTOs in protecting consumers, it would be crazy to plunge ahead with a similar organization in the Northwest.
Steve Johnson is executive director of the Washington Public Utility Districts Association.
Non-profit agencies keep the lights on
By JAMES P. TORGERSON
GUEST COLUMNIST
Seattle Post-Intelligencer
Thursday, October 20, 2005
A debate is heating up in the Pacific Northwest about what direction regional power authorities should take to ensure the reliability and affordability of the electricity system that serves much of the region.
Like the rest of the nation, the Northwest faces growing electricity demand, transmission and generation needs, rising fuel prices, protection of the environment and the need to balance the competing needs and interests between producers and consumers, as well as those of public and for-profit entities.
A response that has proved effective for much of the country is the creation of Regional Transmission Organizations (such as the proposed Grid West). It's important for Northwest consumers to know how the not-for-profit organizations work and how they produce meaningful results.
RTOs and Independent System Operators deliver two-thirds of the electricity used in the United States, to two-thirds of the nation's population, with the core function of keeping the lights on.
These organizations also coordinate long-range planning for their respective regions and foster new, much-needed grid expansion. In addition, many RTOs and ISOs operate wholesale electric markets that save customers billions of dollars every year.
With the economies of scale RTOs employ, we bring more sophisticated tools to the complex management of vital grid operations. RTOs have built extensive networks to collect information about conditions across the grid, to meet customers' ever-changing electricity demands by coordinating the performance of thousands of power plants, and to deliver energy across hundreds of thousands of miles of utility-owned transmission lines.
RTOs and ISOs coordinate generation and transmission to make grid operations more efficient. For example, in the mid-Atlantic region, PJM Interconnection's plant scheduling software has reduced its customers' wholesale electricity costs by $56 million per year. ISO-New England's coordination of power outages saved customers about $40 million annually between 2000 and 2004, and New York's ISO has reduced generation outage rates to 4.5 percent today from a level of 9.5 percent in 1999. Total improvements in plant efficiency are equivalent to adding 1,500 megawatts of generation at no cost.
Through rigorous planning and analysis, RTOs and ISOs also fostered significant new investment in their region's transmission infrastructure.
As one example, New England has sited five major transmission upgrades totaling more than $1.5 billion and enabled more than $5 billion in construction of new, cleaner power plants between 2000 and 2004. These generators use natural gas more efficiently and reduce air pollution -- sulfur oxides are down by 48 percent and nitrogen oxide by 32 percent.
Transmission planning coordinated by the California ISO helped break a regulatory logjam and led to construction of several critical transmission lines. Since the California ISO opened access to the state's wholesale power grid, more than $3 billion in transmission improvements have been approved for construction. Four new transmission upgrades went into operation in 2005, improving grid reliability and leading to about $100 million in savings, which will eventually be passed on to consumers.
PJM's planning efforts have led to more than $1 billion in transmission upgrades since 1999.
In the Midwest, the Midwest ISO has overseen the addition of more than $600 million of transmission facilities and access to more than 1,000 megawatts of renewable resources since 2002.
Finally, RTOs are closely regulated and held accountable on many levels. Federal oversight takes place by FERC and there is local accountability as well. Formal councils of state officials oversee and contribute to our planning and cost allocation decisions. Transmission owners, local citizen groups and state regulators all participate actively in our activities and have input in our decisions.
The bottom line: RTOs are helping to deal with the difficult challenges facing the industry across much of the nation.
James P. Torgerson is the president and CEO of the Midwest ISO and chairman of the ISO/RTO Council, which is comprised of the seven ISOs and RTOs in the United States and two in Canada.
Posted by Arthur Caldicott on November 02, 2005
October 31, 2005
Resource expo eyes northern wealth
Aboriginal and business leaders meet to discuss development
Scott Simpson
Vancouver Sun
Monday, October 31, 2005
Aboriginal leaders, resource-industry companies and politicians are gathering this week in Vancouver for a conference that could unlock even more of British Columbia's northern wealth.
Resource Expo 2005 is organized by the Native Investment and Trade Association, focusing this year on natural gas and oil industry development, mining and forestry.
Three Canadian premiers, 2010 Winter Olympics CEO John Furlong and Alaska Gov. Frank Murkowski are on the speakers' roster.
Conference organizer Calvin Helin said Canadian federal and provincial governments are spending a total of $18 billion per year in transfer payments to first nations and Inuit peoples -- costs that could be reduced or avoided if those groups were brought closer to the economic mainstream.
For B.C., that means incorporating aboriginal interests into the development of natural resources in light of Supreme Court of Canada decisions recognizing the duty of Canadian governments to consult on questions of land use.
B.C. teems with opportunities for oil-and-gas development as well as potential for new mines that could provide high-paying employment for local first nations -- with the provincial government gaining the opportunity to increase resource royalty revenue.
However, those projects often need first nations support to proceed.
Resource Expo attracts many of the aboriginal leaders who represent a key to unlocking those resources -- and their attendance is an indication of their willingness to listen, Helin said.
"I think this is one of the best times in the history of aboriginal people that we have a chance to actually move forward," Helin said in a recent interview.
"The tribes have real leverage. They are figuring out how to utilize that leverage in a way that makes a difference to the grassroots people. People should be aware of it, not only aboriginal people but non-aboriginal business people should be aware that these opportunities are there.
"We have to turn what's a social and economic drain into a huge economic and social positive. We've never been in a better situation to do this."
Helin describes the conference as a neutral forum.
"It's hard to get a lot of these people from remote places together and if you want to do business with them you have to go out and meet with them -- and if you're going to Nunavut it's a $3,000-$4,000 ticket."
Tony Fogarassy, an energy-sector lawyer who works with clients on first nations issues, will update conference delegates on recent legal and political developments, notably B.C.'s "New Relationship" policy.
"If a project can be done right, with environmental sensitivity, then first nations would love to be a part of it," Fogarassy said.
"The downside of all of this is that it takes time. Most companies look at their quarterly financials or year-ends and expect certain deliverables, or shareholders expect certain deliverables to be met. When they deal with first nations communities the timelines are different."
Michael McPhie, president of the Mining Association of B.C., says "the greatest majority" of resource-development projects in B.C. will have a "substantive first nations component."
"This conference is a really good example of bringing all these groups together. It shows how top-of-mind it is to most of us."
The mining industry took a hit earlier this week when the B.C. Assembly of First Nations announced unanimous support for first nations who oppose Northgate Minerals' plan to use Duncan Lake to store gold mine waste for a $200-million expansion of their Kemess gold mine.
McPhie says one of the benefits of Resource Expo is that it can serve as a forum for resource developers to highlight well-executed projects.
"There are going to be challenges. When you interlace that with an uncertain treaty environment, with Supreme Court decisions in different forums on different issues, I think what it speaks to is the need for forums like this to show projects that have been done well.
"Are there going to be conflicts? Of course. That's human nature. But I think [what] we need to do as an association is first to recognize the very legitimate role that indigenous people play in our decision-making and find ways to work together. That's got to be critical."
Resource Expo 05
Native Invest Trade Association
Oct 31 - Nov 1
Sheraton Wall Centre, Vancouver
Posted by Arthur Caldicott on October 31, 2005
October 30, 2005
Between Midnight and the Rooster's Crow
a film about EnCana in Ecuador
directed by Nadja Drost
Follow the story of big oil from the toxic rivers of the Amazon to company headquarters in Alberta.
Canadian oil giant EnCana is under fire for the construction of an oil pipeline that is generating controversy and conflict in the Amazon.
Faced with the contamination of their lands and coercion by military forces, Ecuadorian peasants tap into reserves of remarkable strength and courage as they resist. Between Midnight and the Rooster’s Crow explores the experiences of the people whose lives are being drastically altered by the race for black gold -- a race fuelled by oil companies, a government desperate for foreign investment, and a rapidly-globalizing world.
* Best Canadian Documentary at Hot Docs Canadian International Documentary Festival
* Best Documentary, Bogotá Film Festival
* Honourable Mention, Best Canadian Film, Planet in Focus International Film Festival
Calgary, Thursday, November 3
Uptown Stage and Screen
610 8th Ave. SW, Calgary
Advance Tickets are available at Sunnyside Market, 338 - 10 St. NW
For more info: 270-3200
Edmonton, Friday, November 4
Global Visions Film Festival
Screens Friday November 4th, 9pm
Garneau Theatre
8712 109 St., Edmonton
www.globalvisionsfestival.com
Vancouver, Saturday, November 5
Amnesty International Film Festival, Vancouver
Screens Saturday, November 5th, 6:25 pm
Pacific Cinémathèque
1131 Howe Street, Vancouver
For more info: www.amnesty.bc.ca/filmfest/
Victoria, to be announced
Posted by Arthur Caldicott on October 30, 2005
October 29, 2005
B.C. oil, gas industry to grow 20% in 2006
SURVEY: Sector expects to drill 1,600 wells next year, placing the province in third spot
Scott Simpson
Vancouver Sun
Saturday, October 29, 2005
British Columbia's booming oil and gas industry will grow an estimated 20 per cent in 2006 as activity across Canada reaches record levels, a new industry survey suggests.
The Petroleum Services Association of Canada's drilling forecast for 2006 says the industry will grow six per cent next year, "the result of continued strong commodity prices and a growing emphasis on natural gas from coal."
Alberta will account for the bulk of all Canadian activity with an estimated 20,000 wells -- a "milestone record" -- representing a six-per-cent increase in wells drilled in that province.
The level of activity in Saskatchewan will remain flat, at 3,430 wells, while B.C. in third place will see 1,600 wells drilled -- a 20-per-cent increase.
"While the total number of wells drilled in B.C. is relatively low compared to Alberta, activity levels in that province have been climbing over the past few years," PSAC president Roger Soucy said in a news release.
"B.C. is becoming a favourable location for oil and gas activity, and with the move towards southern B.C. for NGC [natural gas from coal], we are expecting a significant elevation in activity levels there."
PSAC said it's basing its 2006 forecast on crude oil prices of $60 US per barrel and natural gas prices of $9.50 Cdn per thousand cubic feet an Alberta gas trading hub.
"For most of 2005, the commodity price story was oil. More recently, natural gas prices have risen significantly. We expect the pricing of both commodities to stay strong next year," Soucy said.
In a subsequent interview, Soucy said commodity prices are important, but added that B.C. government efforts to expand the industry are major factors.
"The provincial government over the last three or four years has set the stage, so to speak," Soucy said. "They have expanded the infrastructure in the province, in the northeast in particular, so that it was easier to gain access to the resource. They have expanded road systems, upgraded roads and bridges."
B.C.'s summer drilling program has also boosted activity.
"Historically there was only a 90-day window of opportunity to drill in B.C.," during winter when northeastern B.C.'s vast muskeg plain was frozen.
"What that created was a situation where the equipment and the rigs moved in from Alberta for three months and then left at the end of the winter season. That didn't help the local communities to benefit much.
"Now what's happening is that you see a very active service and supply industry in B.C., growth of jobs, business opportunities, and so forth. The government has done its part."
In addition, British Columbia is attractive because, unlike the mature gas fields of Alberta, this province is relatively unexplored.
Soucy said there is still tremendous potential in B.C. for gas drillers to make huge, lucrative finds.
"B.C. has a good resource area that hasn't been exploited to the extent it has in Alberta, where, particularly in the south, the industry is almost limited to small wells that produce low amounts for a short period of time.
"That's not the case in B.C., where there is still lots of potential for very good quality wells that will produce for a number of years. That's why you're seeing the activity levels you're seeing in B.C. now."
Posted by Arthur Caldicott on October 29, 2005
October 28, 2005
BCUC postpones cable projects consolidation decision
The BC Utilities Commission has issued some (in)decisions and a revised schedule following the BCTC - VITR Pre-Hearing Conference on October 21.
1. Consolidation
The Commission is deferring a decision on consolidation of the BCTC - VITR application and the Sea Breeze - VIC application until:
- Sea Breeze has filed its responses to BCUC IR#1 to Sea Breeze in the VIC application on November 7
- completion of the VITR Pre-Hearing Conference #3 on November 10.
"If after reviewing the responses to the BCUC Information Request No. 1 and after hearing submissions during the Pre-hearing Conference, the Commission Panel decides to proceed with a review of the Sea Breeze CPCN Application the Commission Panel expects that a consolidated process will be more efficient and effective than the alternative of two review processes. Therefore, the Commission Panel has established a process that assumes the Sea Breeze CPCN Application is to be consolidated. If, however, the Commission Panel decides that a consolidated process is not appropriate in the circumstances, then a revised regulatory timetable for review of the VITR Application will be issued after the Pre-hearing Conference to be held on November 10, 2005. "
2. Town Hall Meetings
A schedule is provided (see below), but may be adjusted based on further submissions to the Commission
3. Scope will not include prior decisions on zero-rating HVDC
"the Commission Panel concludes that scope of this proceeding should not include a review of prior Commission decisions regarding the zero-rating of the HVDC system for planning purposes."
4. TRAHVOL request for clarification as to whether environmental effects are within scope
"IRAHVOL requests that the Commission Panel provide further directions to Participants regarding whether or not “environmental and socio-economic issues” are within the scope of this proceeding. IRAHVOL submits that if it were not for participant funding issues, IRAHVOL would not seek further directions as applied for in Exhibit C34-5 regarding the scope of this proceeding (T2: 257). The Commission Panel is of the view that participant funding issues should be given no weight when considering procedure or any other matters that are before the Commission. IRAHVOL’s request is denied, and IRAHVOL is encouraged not to raise participant funding issues unless done so pursuant to the Participant Assistance/Cost Award Guidelines and in writing."
5. Panel Inspection of Transmission Line Corridor
Commission is uneasy about doing the inspections, based on one objection from BCPIAC - BCOAPO. Commission awaits further submission from TRAHVOL.
6. Process for Review of Hul’qumi’num Treaty Group Request
"By letter dated October 19, 2005 (Exhibit C27-5), Hul’qumi’num Treaty Group sought certain orders. The process for review of this request will not be established at this time, and may be established after further submissions from Hul’qumi’num Treaty Group (T2: 318)."
BCTC-VITR: BC Transmission Corp. - Vancouver Island Transmission Reinforcement, 230 kV AC cable from Delta to Duncan
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=78
Sea Breeze-VIC: Sea Breeze Pacific Regional Transmission System Inc. - Vancouver Island Cable, 300 kV HVDC Light cable from Surrey to Victoria
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=90
Posted by Arthur Caldicott on October 28, 2005
Canada can control oil destiny: Morgan
Heft makes companies predators, not prey
By DAVE EBNER
Globe and Mail
Friday, October 28, 2005
CALGARY -- Canadian oil and natural gas companies are big enough and strong enough to fend off advances by potential international suitors, the outgoing chief of Canada's largest energy company says.
Gwyn Morgan -- speaking yesterday in his EnCana Corp. office on the 18th floor of Bankers Hall in Calgary -- said his company has reached a size where it doesn't need to fret about being someone else's dinner.
"If you're one of the strongest and fastest, you're not at the back, you're not going to be taken out by those that are chasing you, in the Darwinian sense," Mr. Morgan said.
Mr. Morgan made his point -- which is shared by Murray Edwards of Canadian Natural Resources Ltd. -- during his first extensive interview since announcing on Tuesday that he is stepping down as chief executive officer of EnCana.
Speculation about the future of Canadian oil and gas companies hit the headlines this month, reaching a particularly fevered pitch last week as investors pushed stock of EnCana up almost 10 per cent in a single day on rumours of a bid from Royal Dutch Shell PLC.
EnCana has said there was no bid, no suggestion of a bid and no talks about a bid.
Shell yesterday reported its quarterly results.
Shell's chief financial officer said on a conference call that that it would be difficult to justify a "very large acquisition" to investors given high prices in the market.
Deals of less than $10-billion (U.S.) would be more sensible, the CFO said. EnCana's market capitalization is more than $40-billion.
Mr. Edwards, vice-chairman of Canadian Natural, the No. 2 player behind EnCana, said he is "skeptical" about the potential for foreign takeovers and added that Calgary companies are just as capable of buying their international peers.
"Canadian companies have got to a size where they're as much acquirers as acquirees, in terms of critical mass," Mr. Edwards said in a Tuesday interview.
In May, rumours swirled around that Talisman Energy Inc., Canada's No. 3 independent explorer, was going to be bought by France's Total SA, chatter that pushed Talisman stock higher.
Mr. Edwards said the world's biggest public energy companies simply might not be interested in Canadian firms.
That's because some assets owned by domestic players were acquired in sales by supermajors like BP PLC. Talisman owns former BP assets, for instance, and in 1999 Canadian Natural acquired its Horizon oil sands lease from BP as part of a $1.1-billion (Canadian) purchase of oil properties in Alberta.
"A lot of these assets were acquired over time through rationalization by other people," Mr. Edwards said. "I'd be skeptical if guys wanted to go back" to buy back what they sold.
In January, 2002, Mr. Morgan unveiled a made-in-Canada merger to create EnCana by bringing together his Alberta Energy Co. with PanCanadian Petroleum.
"When the opportunity came to bring the two companies together, I knew and David [O'Brien of PanCanadian] knew that we could create something that was so much stronger and would most likely be able to maintain its independence for a long time to come," Mr. Morgan said.
Because of this, there is no pressing need to bulk up today, Mr. Morgan said, especially if it's only to get bigger rather than better.
"To do that would be a very short-term, foolish thing to do. Unless you can merge assets that are complementary, you're going to lose," Mr. Morgan said.
Talisman CEO Jim Buckee said his company has assets that are attractive to supermajors, but added Talisman is strongest as a whole, and that selling parts are not part of the plan.
"I know they like the Southeast Asia assets and they like [Canadian] Foothills very much. But having said that, I couldn't answer for what the majors are going to do," Mr. Buckee, a onetime BP executive, said in an interview last week after his company announced a $2.5-billion takeover of North Sea oil producer Paladin Resources PLC.
Mr. Morgan is being replaced as EnCana CEO on Jan. 1 by Randy Eresman, currently the company's chief operating officer. Mr. Morgan said Mr. Eresman was the obvious choice.
"Randy's consistently been No. 1 on the depth chart," Mr. Morgan said. "Since that was well known by the board and well accepted and supported by the board, we didn't have to have a long discussion when I told them what my plans are because [the succession] was something that was a natural evolution."
Canadians stand tall
Leaders of Canada's two biggest oil and natural gas companies say homegrown firms are not likely to be picked off by larger international players, suggesting in fact, that Calgary based explorers could just as easily be the acquirers, not acquirees.
The Canadian and U.S. independents ($U.S.)
EnCana Corp. $41 billion
Devon Energy $29 billion
Burlington Resources $27 billion
Canadian Natural Resources $22 billion
Anadarko Petroleum $21 billion
Talisman Energy $16 billion
The supermajors ($U.S.)
BP PLC $244 billion
Exxon Mobil $358 billion
Royal Dutch Shell PLC $209 billion
Total - NYSE $158 billion
Posted by Arthur Caldicott on October 28, 2005
Exxon, Shell: spare a subsidy sir, we're not rich enough yet
Possible Federal stake in pipeline 'still on table'
Claudia Cattaneo and Paul Vieira, Financial Post, 28-Oct-2005
Exxon, Shell gush to record profits
Steve Quinn, Associated Press, in Globe and Mail, 28-Oct-2005
COMMENT: More federal subsidies to oil and gas companies already engorged with obscene profits? Exxon and Shell want the Mackenzie Gas Pipeline because they'll make money operating it, it will open up new fields for development of lucrative oil and gas, and it will provide gas to the oil sands - where Exxon and Shell are also major players and need the valuable gas to extract the even more valuable oil from the sand. Oil sands operators are already greased up on subsidies, tax and royalty breaks. And so rich, it makes your head spin. In one of these articles, Exxon is reporting revenues of $100 billion in the quarter. Enough.
Possible Federal stake in pipeline 'still on table'
Imperial said no: source
Claudia Cattaneo and Paul Vieira
Financial Post
Friday, October 28, 2005
A proposal by Ottawa that it could take an equity stake in the Mackenzie Valley pipeline "is still on the table" despite being rejected by the companies behind the megaproject, highly placed sources confirmed yesterday.
"There's no denying the question of equity was used inside the umbrella discussion of subsidies," a senior source said. "And Imperial [Oil Ltd.], as soon as 'equity' was mentioned, they said 'no.' "
"It's certainly there in so far as the feds are concerned," the source said.
Anne McLellan, the Deputy Prime Minister and the minister responsible for the pipeline file, denied a National Post story that a formal offer has been made to try to move forward the stalled $7-billion project proposed by a consortium of oil companies led by Imperial.
Ms. McLellan told reporters yesterday the government has no intention of re-entering the megaproject business and emphasized that a "private-sector" solution is required when it comes to Mackenzie.
However, she did not rule out the idea.
"We have not put any proposal on the table," she said. "We have talked to Imperial because they came to us with the discussion around fiscal enhancements. In fact, there is a long, long, lengthy list of things that could or could not be done. It is way too soon to see whether this government will choose to take a serious look at a package that is defined as fiscal enhancements."
Several sources confirmed the Post report that the federal government has proposed taking a stake of about 20% in the pipeline.
The proposal was made because Ottawa is now very concerned that a rival US$20-billion line from Alaska is gaining momentum and wants the Mackenzie project back on track, although "in the end there may be other ways than outright ownership to help the project move forward," said one source.
A proposal for an equity stake "was put on the table and the producers' group, basically, said 'no thanks.' And [the producers'] position now is that we are not going to discuss it," said another source.
Secret negotiations between the companies backing the project and the federal government over fiscal terms are getting down to the wire.
Imperial has said it will decide by next month whether enough progress has been made so it can move forward with public hearings for the pipeline, which would bring to market much-needed supplies stranded in the Arctic and help cap soaring natural gas prices.
The talks have bogged down on fiscal terms with Ottawa and access and benefits deals with aboriginal groups along the Mackenzie Valley. Imperial and its partners, Shell Canada Ltd., ConocoPhillips and the Aboriginal Pipeline Group -- an aboriginal enterprise -- want a fiscal regime that recognizes that the up-front costs are huge and it will take years before profits are recorded.
But the government believes giving breaks to highly profitable energy firms would be politically unpopular at a time consumers are being squeezed by high energy bills. Ottawa's negotiators have advanced the equity proposal as a way of getting something in return.
Ottawa's ownership in the megaproject could be similar to the 20% interest the State of Alaska is seeking to hold in Alaska gas pipeline under agreements being negotiated with Alaska producers, the sources said.
Ms. McLellan confirmed that Imperial has approached the government about cutting a deal that would make the project more financially palatable.
"Absolutely no proposal has been made to Imperial in any form in relation to any fiscal enhancements," Ms. McLellan said.
"The one thing I will say is that we're all committed to making sure this project takes place but we clearly see this as a private sector-driven project in co-operation with the aboriginal communities along the valley.
"We know that Imperial has talked about fiscal enhancements. We have indicated we're willing to sit down and talk to them about that but the suggestion that there has been any proposal at any time from us in relation to this project on the fiscal enhancement side is completely false."
Tim Hearn, Imperial's CEO, said recently the oil companies are not looking for handouts, but terms that recognize that today's high gas prices are unlikely to continue as large quantities of liquefied natural gas come to North America from foreign sources in the next decade.
He said the terms should also take into account that the project is opening a new basin and requires huge capital investment that will not yield a return for many years.
The government sources said oil companies have asked for tax and royalty concessions of $1.2-billion to $2-billion and certainty on fiscal terms.
© National Post 2005
Exxon, Shell gush to record profits
Hurricanes help drive largest oil company past $100-billion (U.S.) in sales for quarter
By STEVE QUINN
Associated Press
inGlobe and Mail
Friday, October 28, 2005
DALLAS -- High prices for oil and natural gas propelled Exxon Mobil Corp. and Royal Dutch Shell PLC to their best quarterly results ever yesterday, with Exxon becoming the first U.S. company to ring up quarterly sales of $100-billion (U.S.).
To put Exxon's performance in perspective, its third-quarter revenue was greater than the annual gross domestic product of some of the largest oil-producing nations, including the United Arab Emirates and Kuwait.
The world's largest publicly traded oil company also set a record for U.S. companies by posting profit of almost $10-billion, according to Standard & Poor's equity market analyst Howard Silverblatt.
Both Exxon and Shell said their performances were buoyed by higher prices for crude oil and natural gas, even as output suffered due to a busy hurricane season in the Gulf of Mexico. The companies noticed slight decreases in fuel demand.
Exxon's profit ballooned 75 per cent to $9.9-billion, compared with $5.7-billion a year ago. Revenue grew to $100.7-billion from $76.4-billion in the prior-year period. The previous oil industry earnings record was Exxon's 2004 fourth-quarter profit of $8.4-billion.
At Shell, third-quarter profit grew 68 per cent to $9-billion, compared with $5.4-billion a year earlier. Revenue at the Anglo-Dutch company rose 8 per cent to $76.4-billion.
"We are capturing the benefits of high oil and gas prices and refining margins," Shell chief financial officer Peter Voser said, referring to the profit margin on each barrel of crude that is refined into gasoline, diesel and jet fuel.
Shares of Exxon fell 60 cents to $55.60 on the New York Stock Exchange, where U.S.-traded shares of Shell rose $1.15, or 1.93 per cent, to $60.65.
Excluding special items, Exxon's profit was $8.3-billion, or $1.32 a share, or slightly below the $1.38 per share expected by analysts polled by Thomson Financial.
With oil futures above $60 a barrel for much of the third quarter, Exxon's profit from petroleum exploration and production rose by $1.8-billion to $5.7-billion. Prices for gasoline, diesel and jet fuel lifted refining and marketing profits by $727-million to $2.1-billion.
However, income at the company's chemicals unit declined by $537-million to $472-million, a reflection of the higher prices for raw materials.
Exxon said the hurricanes slashed U.S. production volumes by 5 per cent from a year ago, while global daily production slipped to 2.45 million barrels of oil equivalent from 2.51 million barrels. By the end of the year, it will cost the company about $100-million after taxes, the company estimated.
Shell said its adjusted earnings -- arrived at by stripping out the fluctuating value of petroleum -- added up to $7.4-billion, sharply higher than analysts' forecasts.
Shell's profit from exploration and production increased by $2.6-billion to $5-billion in spite of an 11-per-cent decline in oil and natural gas output. Its refining and marketing profit climbed by $201-million to $1.7-billion. Its chemicals business saw profit decline by $251-million to $321-million.
Shell said hurricane damage would cost it about $350-million, although much of the expense would be covered by insurance.
Slick profits
High gasoline prices in the wake of hurricanes Katrina and Rita helped fuel record profits at Exxon Mobil and Royal Dutch Shell.
$106.7-billion Combined profits expected this year for the world's five biggest publicly traded oil companies -- Exxon Mobil, BP, Shell, Chevron and Total.
26% The estimated increase in profits at the Big 5 energy companies this year.
28% The rise in U.S. gasoline price in the past 12 months.
Although many polls show U.S. consumers are intent on altering their behaviour (i.e., driving less), we still have not seen significant structural shifts in behaviour.'
Man Financial analyst Edward Meir
SOURCES: BLOOMBERG NEWS, THOMSON FINANCIAL, ENERGY INFORMATION ADMINISTRATION
Posted by Arthur Caldicott on October 28, 2005
Bid process lets funny smell taint Ridley Island deal
Don Cayo
Vancouver Sun
Friday, October 28, 2005
A bad smell is emanating from the few known facts concerning the likely sale of Ridley Island coal terminal in Prince Rupert.
The short story is that Ottawa is poised to turn over a facility that cost $250 million (in 1980s dollars) for just $20 million, most of which won't be paid until years from now. The only "preferred bidder" has no track record in running a port. And even though the coal industry is on a roll, the bidder isn't asked to pledge even-handed access to all companies wanting to use the terminal.
Would you like to know why there's only one bidder on the list, or who else would like to make a bid, and what they might bring to the table? Me, too.
Yet, if there's a scandal here, it's not that this basic information is being kept secret. Fact is, these days it's the norm for a government to invite some bids and refuse to consider others for reasons they never explain.
Governments like pre-qualified bidders, particularly for complex procurement contracts or large construction jobs that are complicated by a design component, because the bidding process has become so convoluted and expensive. Companies balk at going through such hoops unless they see a reasonable chance of winning; "pre-qualification" limits the competitors and tells them who they're up against. And the government people who pick the winning tender no doubt find it more convenient and less risky to deal with known quantities.
So in theory, pre-qualified bidders are companies proven to possess the expertise and resources necessary to do the job. I have enough faith in the general integrity of the system to believe that's often the case.
But a pre-qualified bidder could be one who pays bribes, who is friends with or related to a decision-maker, or is a political ally. With so much of the process hidden, how can the public tell?
With complex contracts there may be cases where it's justified for a government to take what looks on the surface like a second-best bid. But in the absence of detailed information and independent assessment, it's hard to have confidence that any given instance is a valid case.
And certainly it's possible to manipulate the criteria for pre-qualification to ensure a certain bidder gets, or doesn't get, a job. That's what I think happened last year when BC Ferries called for proposals on three big new ferries that are now being built in Germany. The criteria for yards to be allowed to make a final bid included basing 40 of 100 points on an examination of each yard's recently built, similar-sized ships. Since no B.C. yard had built any such ships, they had no chance of winning the contract -- yet BC Ferries CEO David Hahn and Premier Gordon Campbell were able to maintain the political fiction that they hadn't arbitrarily excluded B.C. bids.
The danger of losing accountability when public contracts are negotiated in private first hit my radar screen several years ago when I started looking at public-private partnerships. They're inherently complex, often involving not just design and construction, but also operation. Trade secrets are involved in many bids, and it's not fair to ask a bidder to tip its hand to competitors.
I wrote about P3s and accountability during the Campbell government's first stumbling forays into that turf, and later during its more successful hand-off of P3s to Partnerships BC.
And, lo, Partnerships BC came up with a full-disclosure policy. It publishes all contract information, except the details of the losing bids, once a contract is awarded. It also releases a value- for-money report on what it would cost if government did the work. And a fairness commissioner -- the first one was the independent-minded Ted Hughes -- observes each bid process and reports publicly on it.
This is a made-in-B.C. template that could provide the basis for accountability policies for other arms of government. Unfortunately, it has so far been ignored.
For example, the province's Alternative Services Secretariate, the body that steers through all privatization initiatives, releases only summaries of contracts and withholds key information such as performance penalties and/or rewards. And Vanoc, with all its pricey Olympic construction looming, can't or won't even tell me how extensively it will be requiring bidders to pre-qualify, let alone what its disclosure policy will be.
Which is a pity. Because when things are hidden, people are certain to wonder why.
So whenever there are questions -- when something smells funny as it does now in Prince Rupert -- many will assume the worst. And, as with the Ridley deal, the process and the projects will be tainted -- whether they deserve to be or not.
© The Vancouver Sun 2005
Posted by Arthur Caldicott on October 28, 2005
October 27, 2005
Alberta proposes giving oil priority over environment
John Cotter
Canadian Press
Thursday, October 27, 2005
EDMONTON -- Alberta is proposing sweeping changes to the way it manages its booming oil sands sector, but critics fear the new plan will run roughshod over the environment.
The proposed Mineable Oil Sands Strategy would make mining the top priority in development areas over other concerns such as forestry, rivers and wildlife. (link)
The change is expected to increase oil sands recovery and make development, including the reclamation of mined areas, easier to manage.
"We are developing a strategy that will help coordinate development in this area," Energy Minister Greg Melchin said Wednesday.
Recent reports suggest Alberta's oil sands could triple production to as much as 1.2 million barrels a day in the next 20 to 25 years.
With enough investment, the oil sands could contribute up to half of Canada's oil supply by 2020, an increase of more than 25 per cent.
Environmental groups such as the Pembina Institute warn the Alberta government's proposal marks a fundamental shift in policy. (link)
In the past, oil sands mining has been permitted on the condition that rivers remain intact, the integrity of watersheds is maintained and key wildlife corridors are preserved.
Under the proposal, strip-mining the oil sands would take priority over protecting the environment, said Pembina Institute spokesman Chris Severson-Baker.
He estimated the plan would mean writing off 2,800 square kilometres of boreal forest.
"Albertans who value the integrity of the province's boreal forest and the people who live, fish, hunt and trap in the Athabasca region should be concerned about this strategy," he said.
Severson-Baker called on the province to shelve the strategy and come up with a better plan.
Alberta Environment Minister Guy Boutilier said the proposal would balance economic development and environmental protection.
"The environment is our mother ship," he said in a release.
The proposal would allow companies to reroute some tributaries of the Athabasca River. Any fish habitat lost from such activity would have to be replaced.
© The Vancouver Sun 2005
Alberta Ministry of Energy Mineable Oil Sands Strategy pages
Pembina Institute statement on Mineable Oil Sands Strategy
Tell the Alberta Government what you think
Posted by Arthur Caldicott on October 27, 2005
October 25, 2005
Gas will stay up: analyst
By ANGELA BARNES
Globe and Mail
Tuesday, October 25, 2005
TORONTO - Relatively high natural gas prices are here to stay for the next few years, according to Bank of Nova Scotia's commodities expert. That isn't good news for Canadian homeowners facing a long cold winter of high heating costs, but it is for Canadian gas producers.
"Today's tight North American supply/demand balance for natural gas is unlikely to ease significantly until 2008, when six new U.S. LNG [liquefied natural gas] import terminals come on stream," said Patricia Mohr, vice-president of Scotia Economics, in the latest report on the bank's commodity price index.
Natural gas prices on the New York Mercantile Exchange have doubled in the last year, rising from $7.37 (U.S.) a million British thermal units in October, 2004 to a record high of $14.22 three weeks ago. They have since eased off to around $13, helped in part by indications that demand has eased somewhat, particularly in the industrial sector, in the face of the exceptionally high prices.
Ms. Mohr sees NYMEX natural gas prices averaging around $9 per mmbtu next year and West Texas intermediate crude oil prices averaging about $60 a barrel - levels "guaranteeing exceptionally strong financial results for Canadian oil and gas producers," she said. Crude prices touched a record intraday high of $70.85 on Aug. 30, just as hurricane Katrina was bearing down on New Orleans.
It currently stands at about $61.35 High energy prices were a key factor fuelling the rise in the Scotiabank commodity price index to a record high in September, its second in as many months. The index increased 9 per cent from August to a level that is double the October, 2001 cyclical low.
Climbing metal and mineral prices also were a major contributor to the advance in the index, which measures price trends in 32 of Canada's major exports. "Widespread gains in most base metals, precious metals, uranium and potash offset slightly lower prices for nickel, aluminum and cobalt," Ms. Mohr said. The metals and minerals index rose to a record last month to stand 2 per cent above the peak set in June, 1988.
Posted by Arthur Caldicott on October 25, 2005
BCUC rules out oral hearing on Terasen deal
By Scott Simpson
Vancouver Sun
Tuesday, October 25, 2005
Utilities commission is satisfied with written submissions
The B.C. Utilities Commission announced Monday that there will be no oral hearing on the proposed $6.9-billion sale of Terasen Inc. to Texas-based Kinder Morgan Inc.
BCUC commission secretary Robert Pellatt said in a letter to Kinder Morgan that hearings proceed to an oral stage "only when the commission panel has questions arising from written submissions."
The BCUC was deluged with a record volume of correspondence, more than 6,000 letters, in connection with the sale. Many of those letters came from Terasen Gas residential customers who objected to an American company taking ownership of the province's largest gas utility.
Vancouver-based Terasen, like Kinder Morgan, is a publicly traded company. Kinder Morgan made an unsolicited offer for Terasen in August at a 19-per-cent premium to recent share value.
Terasen shareholders voted overwhelmingly last week to accept that offer.
Pellatt said the BCUC is satisfied with written correspondence on the transaction and expects to issue a final decision on Nov. 10.
"The commission has an established practice of proceeding with an oral phase only when the commission panel has questions arising from written submissions," Pellatt said, adding that in this instance the panel "does not have any questions" arising from the proceeding.
"Further, given the extensive submissions and comments received in the written process ... the commission panel considers the record is closed for this proceeding."
Terasen public affairs director Cam Avery said the commission was "able to enjoy a huge, huge amount of information."
Avery added that concerns expressed by many correspondents were "beyond the purview of the commission."
"Canada's energy export policy is just not part of the BCUC's deliberations," Avery said.
Pending approvals from the BCUC, and from Industry Canada, the Kinder Morgan purchase could be wrapped up by Nov. 30.
Avery said Terasen's customers won't notice a difference: Terasen Gas will still be the name of the company on monthly gas bills, and rates cannot rise as a result of the deal.
"You will see no effect on your gas bill as a result of this transaction. Gas rates are reviewed quarterly by the B.C. Utilities Commission and have been for years. This transaction will have no effect on people's gas bills," Avery said.
"It will still be a Terasen Gas billing, same people hooking up the meters, same people reading the meters, same people buying the gas for them. Nothing is going to change here."
© The Vancouver Sun 2005
Posted by Arthur Caldicott on October 25, 2005
SE2 issues simmering with MPs
By Trudy Beyak
Chilliwack Progress
Black Press
Oct 23 2005
A legal battle over a controversial international power line is surging ahead, triggering renewed public environmental concerns in the Fraser Valley.
Conservative MPs - including the Opposition party's environment critic Bob Mills - took a public stand last Saturday against Sumas Energy 2, an American power corporation which wants approval to build a power line on Canadian soil.
SE2 is a 660-megawatt natural-gas-fuelled power plant, which Washington state has approved to be built in Sumas less than 500 metres from the Canadian border.
The power plant, if built, would "become the largest new air polluter in the Fraser Valley," said Langley MP Mark Warawa, a former Abbotsford councillor.
Mills said this legal case will be carefully watched across Canada.
"This issue is precedent-setting for every border region across Canada," said Mills.
There has been unanimous opposition to SE2 from local citizens and local governments, the province of B.C. and the Conservative Party of Canada, Warawa said.
The power company intends to spew more than 2 1/2 tons of pollution daily into the confined Fraser Valley air shed, which has a history of episodes of poor air quality. The B.C. government has stated it would not approve such a power plant in the Fraser Valley on the north side of the border.
SE2, however, is appealing the National Energy Board of Canada's decision to deny the company owners the right to construct a 230,000-volt international power line through Abbotsford to wheel power from its power plant to U.S. markets.
The Federal Court of Appeal is set to hear SE2's appeal case in Vancouver from Nov. 7 to 9.
Whatcom County, meanwhile, will not permit the company's 230,000-volt power line to be built in its jurisdiction because of public concerns on the south side of the border about decreased property values and health concerns.
Sharon Roy, a director with Whatcom County, said the county continues to be opposed to SE2.
"We are very much opposed to the building of that power plant - and we certainly don't think it is fair that Canadians would have to breathe most of the pollutants to be emitted from that power plant," Roy said.
Whatcom County is watching the legal proceedings in Canada with interest. If SE2 fails in its bid to build a power line in Canada, the company may eye a legal challenge in Whatcom County, predicts Roy.
Lawyers for the Province of B.C., City of Abbotsford, FVRD, and Sierra Legal Defence Fund, including Tom Berger, have submitted legal arguments against SE2.
Mills said environment ministry officials must represent Canadian interests abroad.
"An International Joint Commission report recommended the federal government become more involved with cross-border air-pollution initiatives," Mills said.
Depending on which way the court rules, this matter could still end up on the desk of the Canadian federal government for approval, said Abbotsford Coun. Patricia Ross.
"The U.S. will get the power generation, but it will be mostly Canadians that will suffer the negative effects."
Alex Drozdow, president of the federal Liberal Abbotsford riding, said the organization is opposed to SE2 and feels confident the court will make the right decision and uphold the NEB denial decision.
Posted by Arthur Caldicott on October 25, 2005
October 24, 2005
Bidder offered a fraction of Ridley's cost
By Peter O'Neil
Vancouver Sun
Monday, October 24, 2005
'Fire sale' offer by group expected to gain control of port facility unacceptable, MP says
OTTAWA -- The expected winning bidder in the privatization of Ridley Terminals, the coal shipping facility in northern B.C. that cost taxpayers $250 million to construct in the early 1980s, offered $20 million for the Crown corporation in 2003, The Vancouver Sun has learned.
But the offer included only $3 million in cash up front, with the remaining amount to be paid out starting seven years after the deal closes and continuing for the next 33 years in amounts no greater than $500,000 annually.
The offer, from Ontario companies Fortune Minerals Ltd. and Federal White Cement Ltd., was obtained by Conservative MP John Cummins and provided exclusively to The Vancouver Sun.
"This asset has got some value but it's being sold off at fire sale prices. And you've really got to wonder why," said Cummins.
"This is outrageous. To begin these payments in the seventh year, and it ends 40 years later, really rubs salt in the wounds."
Members of the Ridley Shippers Coalition, a group of western Canadian mining firms that oppose the planned sale to the Ontario companies, say the Fortune bid was inferior to at least two offers from their member companies.
They provided The Sun with documents showing that Western Canadian Coal of Vancouver offered $25 million, of which $5 million would be delivered within six months of the deal closing and the remaining $20 million over eight years.
However, the WCC offer was made March 30, 2004, after the original competition was over and coal prices had jumped substantially.
Cline Mining of Toronto offered $9.36 million up front plus a royalty over 15 years of $64 million, which was intended to pay off Ridley's huge debt. No date was included in that document.
The Fortune offer was based on Ridley being cleared of its debts.
Fortune President Robin Goad said the B.C.-Alberta coalition is trying to manipulate the media to advance their self-interests.
He said the leaked Fortune offer doesn't reflect the final terms of the deal he expects to strike with Ottawa, though he said he was forbidden from saying what those terms are because of a confidentiality agreement.
The proposal is detailed in a Sept. 30, 2003, letter sent via courier to former transport minister David Collenette from Goad and Federal White Cement president George Doumet.
Northern Energy Mining Inc. president Pat Devlin, a member of the Ridley Shippers Coalition, urged the government Friday to consider his group's bid to run the terminal as a co-operative that will keep shipping costs low.
He said the Fortune group intends to charge higher fees that will make it a profit but will hurt the ability of Canadian resource firms to compete with Australian exporters.
"Remember, when this was built by the federal government it was never supposed to be a privately run, for-profit business. It was to be a benefit to the province and the country, and Canadian taxpayers paid $250 million for it. So selling it out cheap is only justifiable if it still creates the economic benefit it was originally intended for."
The leak of the deal's terms is the latest in a bizarre business saga that has included a bitter clash between Transport Minister Jean Lapierre and the corporation's so-called "rogue" management team and board of directors.
Lapierre was forced earlier this month to obtain a cabinet order preventing Ridley from signing long-term contracts after he failed to bring the managers and board to heel with a "dressing down" in his office earlier this year.
Lapierre said last week he will go ahead with his plan to obtain cabinet approval to begin negotiating with the Fortune group, despite complaints from industry and opposition MPs.
But Cummins said the federal government is shortchanging taxpayers by selling a valuable asset just prior to a rebound in coal prices that has considerably increased the asset's value.
"I think the government should just pull back from this issue. This whole thing needs a rethink. The government needs to determine what's in the best interests of northern British Columbia."
The issue came up in the B.C. legislature Thursday when the New Democratic Party called on the B.C. government to step in to prevent the sale to Fortune.
B.C. Transportation Minister Kevin Falcon, who acknowledged that Victoria had considered acquiring Ridley from Ottawa, said he's satisfied the privatization plan will result in "equal and open access for all users in British Columbia."
© The Vancouver Sun 2005
Earlier articles on the Ridley Island sale to Fortune Minerals are here
Posted by Arthur Caldicott on October 24, 2005
October 23, 2005
Canada doesn't have oil, Alberta does
By Rondi Adamson
Toronto Star
23-Oct-2005
Canada doesn't have oil, Alberta does, and U.S. is our main trading partner, says Rondi Adamson
The United States does not have too much "control" of our oil. The idea that it does — because, under NAFTA, we sell a certain proportion of oil to the United States — shows a failure to understand any number of things.
Who is the "our" in our oil? I don't know many Albertans, but I know enough of them to know they don't think Ontario, or much of the rest of Canada, is part of that "our."
Since Ottawa sold its stake in Petro-Canada, it could be argued that the federal government doesn't control any oil. Albertans do. And Albertans may feel that they kindly allow Ottawa to collect billions of dollars in taxes from that oil.
In short, Eastern oil consumers and Western oil producers most likely disagree about who controls what, and who it "belongs" to.
Control of oil comes from the marketplace, not from any buyer. Let's just imagine that the Canadian government mandated oil sales to China. China would then buy less from everyone else and American firms would still end up paying about the same price on the world market and getting about the same amount.
The only difference? According to John Palmer, economics professor at the University of Western Ontario, "We would force Canadian producers to pay more to ship it to China instead of the United States. In the process, we would further strain Canada-U.S. relations while donating cheap oil, by probably subsidizing the transport costs, to China."
Prime Minister Paul Martin should keep that — among other things — in mind when he decides to use oil to threaten the United States. Speaking two weeks ago in New York, the Prime Minister attempted to address the ongoing softwood lumber dispute. He hinted that Canada would look at China and India as a marketplace for "our" oil, restricting energy exports to the United States, if the Bush administration doesn't smarten up.
Apart from how morally questionable it is to suggest that trading with a dictatorship like China is a preferable/equal option to trading with a free country like America, there is also the matter of reality.
Canada is dependent on the American market, which buys approximately 85 per cent of what we have to offer. This is not to mention how our Prime Minister is causing further deterioration of already tenuous Canada-U.S. relations.
In the world market, oil is fungible. Who sells how much to whom is of little import. The price is determined by supply and demand, not a single oil company, or state. Certainly, if American demand dropped, so would the world price, but American firms do not set oil prices.
It would be nice if Canadian politicians would realize all of this and find less childish ways to deal with our largest trading partner. We always seem to be reacting against the United States, rather than carefully thinking through our rhetoric and our options.
Rondi Adamson is a Toronto writer whose work has been published in the Christian Science Monitor, Wall Street Journal Europe and USA Today.
Posted by Arthur Caldicott on October 23, 2005
Scrap NAFTA to loosen American grip on our energy sources
By Linda McQuaig
Toronto Star
23-Oct-2005
We would have to scrap NAFTA to loosen American grip on our energy sources, notes Linda McQuaig
When it comes to oil, the Middle East is where the action is. Or as Dick Cheney once put it — before he was vice-president and became careful about saying such things — the Middle East is "where the prize ultimately lies."
Outside the Middle East, generous oil endowments are rare. Interestingly, Canada is among the well-endowed. With our small population and relatively abundant reserves, we are one of the few western nations with the potential for something the U.S. yearns for: energy independence.
Oil is the lifeblood of the modern economy. It's the most effective and flexible form of energy, so we could count ourselves lucky up here.
Too bad, then, that we trusted our fate back in the early 1990s to a small team of negotiators appointed by the Mulroney government.
Sadly, in the course of negotiating the North American Free Trade Agreement, these Canadian negotiators acquiesced to Washington's demands for guaranteed access to our oil. They agreed to Section 605, which prevents us from cutting back our oil exports to the U.S. The section also prevents the U.S. from cutting back its oil exports to us, but they don't export oil to us.
This has potentially ominous implications for Canada.
The world is rapidly running out of easily accessible oil. Supplies of affordable oil will therefore be more precarious in the future. A recent report by the U.S. Energy Department's National Technology Laboratory bluntly noted: "The world has never faced a problem like this."
Of course, oil contributes to global warming, so it's important we reduce our consumption. But, until we move to an alternative or learn to live with less, oil remains crucial to our way of life.
Yet, despite looming oil shortages, Canada is blithely exporting roughly 70 per cent of all the oil we produce each year to the U.S., rapidly depleting what's left of our easily accessible oil. Under NAFTA, we can't cut back that proportion, unless we cut our own consumption.
Meanwhile, Canada is also an oil importer. The eastern and central parts of the country, including Ontario, rely heavily on imported oil.
So, if there were international oil shortages, many Canadians would suffer. NAFTA would prevent us from redirecting oil headed for the U.S. to destinations in Canada, no matter how great the Canadian need.
If this doesn't amount to handing over too much control over our oil to the U.S., what would?
The Mulroney government presumably surrendered this control in exchange for what it said was a guarantee that our goods would have access to the U.S. market — a guarantee which, we were told, was Canada's reason for signing NAFTA. But the final deal contained no such guarantee, as Canadian critics noted at the time, and as the ongoing softwood lumber saga underscores.
So we not only gave up control over our oil, it seems we gave it up for, well, nothing.
Linda McQuaig, a Toronto-based commentator, is author of It's the Crude, Dude: War, Big Oil and the Fight for the Planet. available in paperback. lmcquaig@sympatico.ca.
Posted by Arthur Caldicott on October 23, 2005
Senate Energy Committee Approves ANWR Drilling
Green Car Congress
20 October 2005
ANWR. Click to enlarge.
The Senate Energy and Natural Resources Committee on Wednesday approved legislative language instructing the Secretary of the Interior to create and implement an oil and gas leasing program in the Coastal Plain of the Arctic National Wildlife Refuge that impacts no more than 2,000 surface acres.
The legislation approved by the committee today is Title IV of the budget reconciliation bill to be marked up by the Senate Budget Committee on October 26. The committee passed Title IV in response to instructions from the Budget Committee to raise $2.4 billion in revenue for fiscal years 2006-2010. According to the Congressional Budget Office, the competitive sale of oil and gas leases in the plain will raise $2.5 billion during that time.
During the meeting over the ANWR provision, three amendments were offered and defeated.
Sen. Maria Cantwell (D-Wa), offered an amendment to ensure the payment to the US Treasury of 50% of revenues from oil and gas leasing and production on the Coastal Plain. Defeated 9–13.
Senator Ron Wyden (D-Or), offered an amendment prohibiting the exportation of oil and gas produced under ANWR leases. Defeated 10–12.
Ranking Member Jeff Bingaman (D-NM), offered an amendment to limit the authorization of oil and gas development on the Coastal Plain in the same manner as in other units of the National Wildlife Refuge System. Defeated 8–14.
The time is ripe for ANWR. Global and national conditions mandate the environmentally-sound development of oil and gas in the Arctic. The Senate first passed ANWR legislation in 1996. If that hadn’t been vetoed, I don’t think we would be paying $3 a gallon for gasoline today. The hurricanes in the Gulf underscored what Congress has known for along time: We must produce more of our own oil and we must diversify the places where we produce it. We must do it for our economy and our energy security.
—Sen. Pete Domenici (R-NM), Chair, Senate Energy and Natural Resources Committee
In March of 2004, the Energy Information Administration, at the request of Representative Richard W. Pombo, Chairman of the U.S. House Committee on Resources, published a report using government figures and analyzing—to the extent that anyone can without sinking a well shaft down through the coastal plain—the effect of drilling in ANWR.
Given the uncertainty over the exact amount of oil in place, the report lays out three scenarios: one for low-oil resources, one the mean case, the other for high oil resources.
Some of the report’s findings:
The mean-case estimate is that there are 10.4 billion technically recoverable barrels of oil in ANWR, divided into many discrete fields. This estimate includes oil resources in Native lands and State waters out to a 3-mile boundary within the coastal plain area. The mean estimated size of oil resources in the Federal portion of the ANWR coastal plain is 7.7 billion barrels.
It will take approximately 10 years to bring the first field on-line (comparable to other Arctic drilling).
Assuming sequential development of the fields, rank ordered by size, ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day.
Today the US imports some 10.5 million barrels per day. In 2025, the EIA estimates that almost to double to some 20 million barrels imported per day.
Using the EIA’s projections of declines in domestic oil production and increases in oil consumption (mostly from the transportation sector), by 2025 ANWR would reduce US reliance on imported oil by four percentage points—from 70% to 66%.
In other words, ANWR oil would make a small difference, but not a substantive, strategic difference. It doesn’t come close to solving the problem or providing “energy security.” Even if peak ANWR oil were available today, the US would still be importing more than 9 million barrels per day, and climbing.
As an aside, the 2,000 acres don’t need to be contiguous, and only the equipment that touches the ground (i.e., the pipeline stanchions, not the pipelines, which are in the air) count toward the figure. Since a drilling platform can occupy as little as 10 acres, there’s still the possibility of having several hundred platforms, with a maze of interconnecting roads and pipelines, spread throughout the 1.5 million acre reserve.
Posted by Arthur Caldicott on October 23, 2005
October 22, 2005
No fur flying at the VITR Pre-Hearing Conference
On Friday, October 21, the BC Utilities Commission held a Pre-Hearing Conference with applicants and intervenors in both the BCTC - VITR proceeding and the Sea Breeze - VIC proceeding.
The transcript is here.
The big point of debate was expected to be whether the Sea Breeze VIC application should be consolidated with VITR. In my notes, only one intervenor firmly opposed the Sea Breeze motion to consolidate, and despite lots of cautions about the Sea Breeze proposal and whether it would pass the "threshold" or "credibility test" of the BCUC, even the heavy hitters - BCTC, BCH, JIESC - did not oppose.
"What credibility test?" was asked, to which no answer was forthcoming.
The lawyer for Sea Breeze came all set up to defend a motion that he expected to have roundly trashed in the debate, and when he had his chance at the microphone, he was at sixes and sevens in his reply which was cobbled on the spot out of his prepared notes and his need to recognize that most likely (the decision is now in the hands of Chairman Hobbs, who may seek advice from Heaven, but sure isn't taking any from anyone else) Sea Breeze was going to get what it wanted.
On a number of occasions Hobbs was reminded about the risk of appeal if he were to make any decision that was not watertight in terms of its legal integrity. One great line from Mr. Carpenter, counsel for BCTC: "I'm not going to suggest that some of my friends in this room are actually wearing their court robes under their suits but I can assure you that they have them close by." (The GSX Concerned Citizens Coalition is pleased to take significant credit, with thanks to its lawyer, Bill Andrews, for the sensitivity of appeal at the BCUC.)
The fur didn't fly, so it wasn't as rich a day as some hearing days - the mention of energy and Vancouver Island is akin to a lit cigarette tossed out a car window.
Perhaps the next most interesting event in these two proceedings will be the Sea Breeze replies to BCUC Information Request #1 with respect to the VIC application. I expect a lot of people will devour that document. It's due November 7. Some excerpts from the lengthy IR are appended, below.
BCTC-VITR: BC Transmission Corp. - Vancouver Island Transmission Reinforcement, 230 kV AC cable from Delta to Duncan
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=78
Sea Breeze-VIC: Sea Breeze Pacific Regional Transmission System Inc. - Vancouver Island Cable, 300 kV HVDC Light cable from Surrey to Victoria
http://www.bcuc.com/ApplicationView.aspx?ApplicationId=90
--
BCUC Information Request #1
[The BC Utilties Commission has fired its first Information Request to Sea Breeze for the Vancouver Island Cable (VIC) project. Here are just a few of the questions from the 3 MB, 27 page document. The selection is pretty random. These are questions that I could understand, and which I found interesting after a quick read of the 27 page IR.]
Sea Breeze does not agree with BCTC's assessment of HVDC Light® technology in its CPCN application for the VITR Project.
56.1 From Sea Breeze's perspective, what are the errors or misconceptions in BCTC's review of HVDC Light®? Please support the list of errors with relevant statistics, system studies, or technical papers, and include BCTC's Appendices P, Q, and R in the review.
2.1 The VIC Application states that Sea Breeze management is confident that, if a CPCN is granted for VIC, there will be no major difficulty in obtaining funding. Please explain whether Sea Breeze believes that a CPCN under Section 45 of the Utilities Commission Act ("UCA") is the unique significant condition precedent for arranging funding for VIC, and if so why it holds this view. If a CPCN is not the unique significant condition precedent, what others are there?
3.6 Where the VIC proposed route would be in lanes, streets or other municipal property, does Sea Breeze anticipate that it will be expected to pay fees under franchise or operating agreements with the municipalities through which it will pass? Why or why not? Please outline the discussions regarding franchise or operating fees that Sea Breeze has had to date with municipalities.
[there are more in this vein on ROW from BCTC, expropriating from unwilling private owners, etc.]
6.1 On page 178, Sea Breeze states it agrees with the position of BCTC, that there is a clear need for new transmission facilities providing additional reliable transmission capacity from the Mainland to Southern Vancouver Island. Please confirm that in Sea Breeze's view, the power supply deficiency lies on Vancouver Island and the primary requirement of the new transmission facilities is to carry power to the Island,
6.2 The VIC Application states that the Juan de Fuca Cable Project is well advanced and is scheduled to be operational as much as one year prior to VITR. On page 180, Sea Breeze states that either VIC or the Juan de Fuca Project will avoid the need for the VITR project until 2016. On page 178 of the VIC Application, Sea Breeze submits that the Vancouver Island transmission need is best served "by one or both of (Sea Breeze's) proposed projects. If the Juan de Fuca Cable Project is "well advanced" and is sufficient to meet the transmission need, why is Sea Breeze proposing VIC?
6.3 Please expand on how "well advanced" the Juan de Fuca Cable Project is, and when all necessary project approvals are expected.
6.4 The discussion on page 160 indicates that the VIC and Juan de Fuca projects are redundant until 2016, when they would become complementary. Please explain how Sea Breeze believes the Commission should deal with the VIC Application at this time, when Sea Breeze appears to be also actively pursuing the more-advanced Juan de Fuca Project.
6.9 Please clarify the statement on page 204 that ".. .when energized this project (Juan de Fuca) would come under the jurisdiction of the BCUC pursuant to the Province's legal definition of a 'utility'." Does Sea Breeze expect that the Commission will approve rates for the Juan de Fuca cable?
6.10 Please discuss whether Sea Breeze intends to hold an Open Season for VIC transmission rights. Why or why not?
6.11 Please discuss whether Sea Breeze is requesting Commission approval of a CPCN for the VIC Project on the basis that it will be a merchant transmission facility. Why or why not?
8.2 The VIC Application at page 199 estimates the EPC cost of VIC at $302 million, based on a turnkey project estimate from ABB. Please provide a copy of the information with regard to cost and schedule that Sea Breeze received from ABB.
[and many more questions that nose around Sea Breeze costs for VIC]
9.12 Sea Breeze notes on page 44 of the VIC Application that the VIC will bypass the Gulf Islands. What (if any) are the differences between the VITR and the VIC with respect to providing transmission service to the Gulf Islands?
11.3 If the Commission were to conclude that HVDC Light technology as set out in the VIC Application and/or the VIC route is the preferred option, is there any reason why it should not direct BCTC to adopt this option?
12.1 The VIC Application at page 44 states that the VIC project line will be operated exclusively by BCTC. Does this mean that BCTC will be the only customer of Sea Breeze? What other customers would Sea Breeze intend to serve using the VIC line?
14.5 With reference to Exhibit B-6, BCUC DR 56.4 in the VITR proceeding, please provide a comparison of the seismic risk of VIC to VITR Options i and 2, in terms of the ability to withstand seismic events that have a return period of once every X years.
15.1 Further to the statement that HVDC Light® systems are in commercial operation around the world, please provide a summary of all comparable HVDC Light® systems that are in service, stating the length of the cables, the transmission capacity and commercial in-service date of each.
15.2 For each of the foregoing HVDC Light® systems, please provide the year by year availability performance statistics, including Forced Energy Unavailability and Scheduled Energy Unavailability.
17.0 Reference: VIC Application, Exhibit HI, page 8
"The VIC Project eliminates or defers for many years the need to upgrade the Island's AC grid to relieve constraints on Cut-Plane D (between Dunsmuir and Pike substations) because it will serve the major load on Vancouver Island below the existing bottleneck. BCTC has estimated that it would cost $49 million to alleviate such north to south transmission constraint."
Reference: VIC Application, Exhibit Bl, p. 188
"Our studies indicate that the transmission capability problem can be related to any of the transmission sections between Dunsmuir and Pike Lake, hence the additional infeed at VIT alone does not provide an adequate solution."
17.1 Please supply the studies referenced on page 188.
[this may be a key part of Sea Breeze's costing comparison. I believe Sea Breeze says BCTC is not including costs of necessary upgrades on the line between Duncan (VIT) and Victoria (Pike) if VITR goes ahead.]
"Export of energy off island via VITR by an DPP, BC Hydro, or Powerex, to a customer in the Lower Mainland or U.S. would be problematic."
26.1 What level of on-island generation would be required before a power flow in the VI to Lower Mainland direction could be reasonably expected on either the VIC or VITR projects?
26.2 Is Sea Breeze aware of any VI to Lower Mainland scheduling path constraints?
Sea Breeze notes that the VIC would become part of the BC electricity grid and would be operated exclusively by BCTC.
29.1 Does Sea Breeze expect to continue to own the VIC?
Sea Breeze suggests that one or both of the VIC and the Juan de Fuca Cable Project could meet the need for new transmission facilities to Vancouver Island.
55.2 The construction of transmission facilities alone is not sufficient to ensure an adequate supply of energy to Vancouver Island customers. Please provide Sea Breeze's proposals with respect to the acquisition of energy. In the response, please address potential energy sources, the responsibilities of the various parties (including BCTC and BC Hydro), the mechanism(s) for accessing transmission capacity on the Juan de Fuca link, the implications for BC Hydro's EEP and REAP, and the consequence of BC Hydro not acquiring capacity on that link.
Sea Breeze submits that it is not necessary, nor would it be appropriate, for the Commission to carry out a detailed review of the potential environmental effects of the VIC Project.
85.1 Given that the relative environmental impact of the VIC and VITR projects has been cited by Sea Breeze as a factor in favour of the VIC project, why is it not appropriate that the Commission consider the environmental effects in its deliberations?
Read the entire IR:
BCUC Information Request #1 at
Posted by Arthur Caldicott on October 22, 2005
Power station due to be in operation by mid-November
Vancouver Sun
22-Oct-2005
Construction is entering the final stages at the new power station on China Creek. Project engineers hope to throw the switch on the twin generators in mid-November.
The project has been led by the Hupacasath First Nation, with $2.5 million of the funding from the federal government.
The 6.5-megawatt station will power about 6,000 homes.
Revenues from the project will be paid out to the various equity partners on a quarterly basis.
The city of Port Alberni will receive five per cent, while Ucluelet First Nation will get 10 per cent. The industry partner, Sunex, will take home 12.5 per cent of revenue, leaving 72.5 per cent for project proponent Hupacasath First Nation.
Posted by Arthur Caldicott on October 22, 2005
Gather round the gas flare for a big Alberta boost
By JEFFREY SIMPSON
Globe and Mail
Saturday, October 22, 2005
EDMONTON -- Each Albertan will be receiving a $400 cheque in January. Called a "resource rebate," it's each taxpayer's share of $1.4-billion carved from the huge provincial surplus. It's really, really dumb policy.
Maybe the rebate is great politics. Maybe Premier Ralph Klein's popularity as Alberta's Santa Claus will jump a few points in the polls. As policy goes, however, the rebate stinks.
The first page of the economics textbook says: Don't overheat a hot economy. Alberta's economy is the hottest in North America. It doesn't need more heat, which is what the rebate will provide when people spend the money.
When recipients spend, retailers will be happy. So will manufacturers in Ontario and the United States. And hoteliers in Arizona or Hawaii. Some of the rebate money will stay in Alberta, where it isn't needed economically, and the rest will go elsewhere.
The rebate's unfair, too. The millionaire gets it, and so does the person on welfare. If the government wanted to help people on low incomes, the rebate is perverse.
Alberta already has Canada's lowest taxes. It also has the brightest future within Canada. The place is crying out for visionary political leadership. Instead, it gets cheesy rebates.
The paranoid right-wingers in Alberta think the rest of Canada lusts after Alberta's wealth. They're coming. Just you wait. They're cooking up another national energy program. As with all paranoia, it's not based on facts, just memories, fears and an ideological agenda.
No one in the rest of Canada wants to hold Alberta back. Instead, they want to grab hold of the province's coattails and soar into the future.
Alberta has an amazing opportunity to show Canada how to succeed in a globalized world driven by knowledge, innovation, research and brainpower.
The places in the world that hard-wire this message -- It's global, stupid! It's knowledge, stupid! -- into their genes will be the ones with the highest standards of living, the best jobs and the best social programs.
Alberta has the people, resources, wealth and power to lead. It needs the political vision to set high targets for a big-sky place.
So here are a few.
Make the province's two leading universities -- the University of Calgary and the University of Alberta -- rank in the world's top 50 by 2020. The ambition for the largest university, the U of A, should be No. 20 in '20. University operating budgets are rising by 6 per cent annually for the next three years (after years of previous neglect). The U of A has a terrific new president, Indira Samarasekara; she can aim for the top 20 if she gets the resources.
Make Alberta's school system, already one of the continent's best, the best in North America and one of the top two or three in the world. Alberta has the power to make this happen -- if the political leaderships exists.
Make Alberta's training systems, public and private, the best in Canada. Labour shortages are everywhere in the province's hot economy. It's going to take public investments in skills development and upgrading to keep abreast, or ahead, of demand.
Make Alberta one of the top two or three places for medical research in North America, and one of the top five in the world. Former premier Peter Lougheed's brilliant invention, the Alberta Heritage Fund, already finances medical research. It could do so much more. What does the world call the breakthrough in diabetes treatment? The Edmonton Protocol, because that's where the discoveries were made. Build on this legacy. On second thought, leap from it.
Make Alberta a continental leader in sustainable development. Don't just burn huge quantities of natural gas to develop the tar sands, because the carbon emissions will be huge. Finance urgent research into carbon sequestration, shipping and burying carbon, so that a virtuous circle is created of energy exploitation with diminished atmospheric impact.
Make Alberta the model for health-care experimentation. Help break Canada free from the existing model that is devouring public budgets everywhere, depriving governments of the ability to make more sensible investments in the future.
Make Alberta the country's fairest place. Shrink poverty, because poverty holds back development. Unequal societies are often less productive than more equal ones. Lower taxes don't necessarily mean high productivity, right-wing ideology notwithstanding. If they did, Finland wouldn't have the world's most productive economy.
Make every important decision revolve around this question: How does Alberta become the most outward-looking place in North America? The world isn't at all "flat," as one pundit pretends, but space is shrinking.
Alberta has a superb private sector, a competent civil service, creative people, an excellent work ethic, a can-do spirit, and natural resources in high demand. It's been hugely influential in reshaping how people elsewhere think about public issues, whether or not the province understands this influence.
Alberta has the power to do better than cutting cheques to itself. That's why its future political decisions are so important to Albertans, and to the rest of us.
COMMENT:Well, we should be cooking up a national energy program, despite intimidation by Alberta.. We have health policy, environment policy, industrial policy, trade policy, but no energy policy.
Oh, let's see, it's the most important economic activity right now in the world. It's the largest resource economy in the country. It makes and breaks governments and nations. Energy is the stuff which is driving American international policy. And it pits little old Canada against the largest richest corporations the world has ever known.
And we shouldn't do a little national strategizing around it? Gimme a break. Of course we should, and it's only because Alberta Ottawa is afraid of an Albertan hissy-fit that it won't talk about what we so obviously need. Canada needs a national energy policy.
British Columbians are up in arms over the Kinder Morgan takeover of Terasen. You don't think that's the stuff of national energy policy? Kinder Morgan is the agent of US energy policy. Terasen should be a part of Canada's.
Canada's largest ever energy project is the Mackenze Gas Pipeline, controversial for a generation, and still the subject of intense debate. No policy guides its implementation or abandonment - oh, no - just a bunch of companies pushing their interests on government and indigenous peoples.
How about all the public discussion about using energy as a weapon in lumber wars with the US? And what about NAFTA and Canada's impossibly dumb commitment to ensure oil and gas keep flowing to the US? What about paced development, instead of market-driven expansion that does its thing without reference to local needs or sustainability. What about the fiscal and regulatory environment in which renewable energy could be thriving?
We need a national energy policy, and we should be developing it right now. - Arthur Caldicott
Posted by Arthur Caldicott on October 22, 2005
October 21, 2005
Ottawa to review U.S. takeover of Terasen
By PETER KENNEDY
Globe and Mail
Friday, October 21, 2005
VANCOUVER -- In an unusual move, Ottawa issued a public statement yesterday saying it will review U.S. energy giant Kinder Morgan Inc.'s proposed $6.9-billion takeover of Terasen Inc. to ensure that it will be of "net benefit" to Canada.
Facing opposition in British Columbia, Federal Industry Minister David Emerson is stepping aside from the review process to avoid conflict of interest allegations stemming from an earlier role as a director of Terasen, which was previously known as BC Gas.
"He will not be involved in the final decision on this investment," a spokesman for Mr. Emerson said, adding that Intergovernmental Affairs Minister Lucienne Robillard will be the one to approve the deal if it proceeds.
Mr. Emerson's decision to recuse himself comes after Terasen shareholders overwhelmingly approved the controversial takeover by Kinder Morgan, a Houston-based pipeline operator, at a meeting in Vancouver on Tuesday. The acquisition is widely seen as a strategic move by Kinder Morgan to gain a broad foothold in the Alberta tar-sands industry and to give Terasen more capital to expand the pipeline side of its business.
However, it has sparked a firestorm of criticism from citizens and politicians who worry about the ramifications of a U.S. firm gaining control of a Canadian company that supplies natural gas to 870,000 B.C. residents.
"We do not want the possibility that the U.S.A. Patriot Act will give the American government access to our billing records via Kinder Morgan," said David Askew, a member of the Vancouver chapter of the Council of Canadians.
Corky Evans, a B.C. New Democratic Party MLA, said the B.C. Utilities Commission, which is also reviewing the sale, should open up the transaction to public hearings before Canada's third-largest utility is sold to a U.S. company.
"This is about whether or not Canadians should be able to have a conversation about Canada before we sell a chunk of it," he said.
A spokesman for Mr. Emerson said Ottawa doesn't usually issue a statement to say that it is reviewing a transaction like the one involving Terasen. However, he said the decision to do so was due, in part, to criticism of the deal.
"I'm told that the B.C. Utilities Commission has received something like 5,000 e-mails on this, almost universally opposed," the spokesman said. "They tend to come from Canadian nationalists who don't want to see the company sold into foreign hands.'' Industry Canada has issued a statement saying there is an ongoing review of the transaction under the Investment Canada Act, which gives the federal government the ability to negotiate enforceable commitments with the investor during the review process. It also said that acquisitions that are subject to review under the act receive approval only when they demonstrate a net benefit to Canada.
Yesterday, B.C. Energy Minister Richard Neufeld said he preferred to offer no opinion on the transaction, saying it is up to the B.C. Utilities Commission to determine whether it is in the best interests of the citizens of British Columbia.
Posted by Arthur Caldicott on October 21, 2005
October 20, 2005
Share and share alike
By Donald Gutstein
Georgia Straight
Publish Date: 20-Oct-2005
The evening after the British Columbia government introduced legislation imposing a contract on the province's teachers, Michael Smyth interviewed British Columbia Teachers' Federation president Jinny Sims and Labour Minister Mike de Jong on his CKNW Nightline BC radio show. Smyth was argumentative and surly with Sims. He accused her of not being straight with the public. When he interviewed de Jong, Smyth was respectful and attentive. He sought de Jong's opinion; he disputed Sims's opinion. Smyth ended the segment with a promo for his next-day column in the Province.
The column continued his attack on teachers. Smyth accused Sims of displaying "predictable moral outrage", as if it had been fabricated for the cameras and tape recorders. He lambasted the union for its "militancy" and the NDP for its predictably "snuggly relations" with the teachers.
As for the government, Smyth informed us, Premier Gordon Campbell had to bring down the hammer because "the hammer.is the only thing the BCTF understands." The kindly but firm father applied the punishment he knew would hurt but would be good for his unruly children.
Several days later, his column and radio show spread some of the blame for the impasse to the government. Both sides were at fault, Smyth said and wrote. Government was responsible for provoking and baiting the teachers, among other factors.
It's as if he's creating his own echo chamber. He shouts "teachers are militant" or "government provoked the teachers" in one direction. He shouts it again in another. It bounces back from somewhere else, as other media pundits join in. Soon the message surrounds us and we don't know any more where it originated. The message seems to have always been out there, so it must be true.
Smyth is not alone in appearing on supposedly rival news outlets. Vancouver Sun political columnist Vaughn Palmer appears every morning on CKNW's Morning News With Philip Till. Palmer also hosts the Voice of BC show weekly on Shaw Cable 4. Keith Baldrey, Global TV's legislative bureau chief, is a weekly radio commentator on the "Cutting Edge of the Ledge" segment of the Bill Good Show on CKNW.
CKNW is one of 50 radio stations across Canada owned by Corus Entertainment, including four in Vancouver. Both Corus, which also owns 10 cable channels, and Shaw Cable-the second-largest cable system in the country-are controlled by the Shaw family of Calgary, whose net worth last year was $635 million.
Global TV, the Vancouver Sun, and the Province are owned by the Asper family of Winnipeg. The Aspers own major newspapers across Canada, the Global Television Network, eight cable channels, and the canada.com Web sites. This family was worth $1.09 billion in 2004.
When the Senate Communications Committee came to town earlier this year to study media concentration, it heard loudly and clearly that CanWest holds too much of the Vancouver English-language media market. The inevitable consequence, many presenters told the committee, is a reduced diversity of news and opinion available to citizens.
Now CanWest is sharing its people with Shaw and Corus. Reduce, reuse, and recycle are excellent concepts when applied to the environment; they are dangerous when practised by news media.
CTV, CHUM, and the Globe and Mail are small players in the Vancouver market. CBC radio and television are the only news organizations equal in size and scope to the giants. But after its recent labour troubles, the public broadcaster may be permanently weakened. That leaves industry leaders the Vancouver Sun, the Province, Global TV, and CKNW, and they're increasingly speaking with one voice.
Some of the connections between CanWest and Shaw-Corus are long-standing. The premier's brother, Michael Campbell, has had his Money Talks show on CKNW for years, and his Vancouver Sun business column is tired news. Vaughn Palmer has been doing his Voice of BC show for several years.
Others are more recent. Global TV anchor Jill Krop often hosts CKNW's The World Today. Weatherman Phil Reimer does the weather for the Sun and CKNW.
In January 2005, CKNW began airing Adler on Line, hosted by right-wing broadcaster Charles Adler from Winnipeg. Adler does a TV segment each night on Global Winnipeg, known as "Adler on Global", and he hosted CanWest's Global Sunday program in Calgary for several years.
CanWest News columnist Jonathan Manthorpe is a regular guest with John McComb's CKNW afternoon show discussing international affairs. Shell Busey writes a Sunday Homes column in the Province and hosts two weekend radio shows on CKNW.
If these exchanges were happening within one company, it would be called convergence. The late Izzy Asper once said his model in building his company was the Chicago Tribune. In the mid-'90s, the paper constructed a cable-television studio in the middle of its fourth-floor newsroom. Reporters who wrote stories in the day's paper would be interviewed in the evening about the story and add elements not included in the print version-at no extra pay, of course. Convergence was supposed to increase revenues and reduce costs.
But the exchanges are happening between separate companies. And not only are they sharing their human resources, they're writing and talking about each other.
On September 29, the Province ran a picture of CKNW reporter Leanne Yuzwa, who is noteworthy, perhaps, because she's a boxer.
On September 7, Fanny Kiefer returned to work as the ubiquitous host of Shaw Cable's Studio 4. The next day, the Province put her picture on the front page and ran a story and another picture inside. The Sun provided a long article.
A Province story about the epidemic of drug-overdose deaths in the Downtown Eastside near the end of August quoted just two sources: a police constable and CKNW. The Province E-Today section of August 12 carried a discussion about Philip Till's suitability as CKNW's morning-show host. Several days before that, Pete McMartin's Sun column discussed an on-air interview he had done with Till.
And that's just in a two-month period. Are CanWest and Shaw setting the stage for a merger that would create the largest media empire in Canada? Or are two of Canada's wealthiest families merely obsessed with cost-cutting by laying off staff and sharing whomever is left with the other guys, a kind of contracting-out to the competition?
CanWest's near-monopoly means that its commentators and columnists are the experts, not because they are most knowledgeable and well- informed but because they have the soapbox and no one else can compete. If another organization wants to be taken seriously, it grabs CanWest's experts.
These practices may be good for shareholders but they do little for readers and viewers. With so few major news organizations in the city, the pool of experts is shallow. They know each other, they interview each other, and they rarely disagree. The range of opinions is narrowed even further.
Sharing employees creates other concerns for the audience. Can CanWest ever report objectively on Corus or Shaw, or Corus on CanWest, if their most high-profile people are scurrying between the organizations? Can one reporter work simultaneously for two competing media organizations? Can one reporter use the facilities of one newsroom to write for another? Where is the reporter's loyalty when she obtains a scoop? What ethical issues might arise?
Certainly, the love-in between the two companies today is a far cry from the situation seven years ago when they were bitter rivals vying for the media empire of the late Frank Griffiths. When he died in 1994, Griffiths had assembled in Western International Communications the jewels of B.C. broadcasting: BCTV and CKNW, plus eight other television stations, 11 radio stations, interests in four cable channels, and a 54-percent interest in Canadian Satellite Communications, a satellite TV provider.
In 1997, Izzy Asper and son Leonard sat down opposite J.?R. Shaw and son Jim in a Toronto hotel to divvy up the WIC assets, but no deal was reached. Two years later, after bids, counterbids, and lengthy court challenges, a deal was finally reached-the one that had been before them all along. CanWest got the television stations; Shaw got CanCom and Corus, the radio stations, and the cable channels.
Leonard Asper became CEO of CanWest in 1999, and within a year he transformed the company from a money-spinning second-rate television network into a converged conglomerate with billions of dollars in debt after paying $3.2 billion for Conrad Black's major city daily newspapers and a half interest in the National Post (later increased to full ownership).
Jim Shaw took over in 1998 and turned his father's cable firm, the second-largest in Canada, into a diversified media empire of radio stations, cable channels, and Internet holdings, plus the leading Canadian animation house, Nelvana. Unfortunately, his empire was created just before 9/11, when advertising revenues tanked. Corus took several years to climb out of its hole back to profitability.
Corus compensated for lost advertising revenues by laying off as many staff as possible while still being able to run the operation. Less than a week after Corus received CRTC approval to take over the Women's Television Network, it axed 60 jobs. This followed an earlier company move to eliminate 100 jobs across the country, except for in the radio division. The radio cuts came next: 20 of the 155 full-time employees at the four Vancouver stations and 11 more in Edmonton. With its depleted resources, Corus needs CanWest.
The end game is not yet clear. Both companies seek an end to foreign-ownership restrictions. This would allow them to cash out. But opening Canada's media to control by people like Rupert Murdoch, who owns sham news service Fox News, is a nonstarter unless Stephen Harper and the Conservatives gain power. The Canadian Radio-television and Telecommunications Commission wouldn't necessarily turn them down, because it has become so supportive of what the industry wants.
Leonard Asper and Jim Shaw are probably having too much fun moving the dominoes around the board to want to sell. So they might do a deal.
Telus says the future is friendly, but in media the future is all about controlling content and distribution. CanWest has huge content resources but no electronic distribution systems such as cable or satellite TV to deliver them. Shaw-Corus has the cable and satellites but is light on content. Together they make a world-class powerhouse, at least domestically.
Such a combination would make the Aspers and Shaws even richer. But it would be a black day for Canadians, weakening our rights to receive the information we need to be informed citizens. The echo chamber would be made permanent and we would forever lose our bearings.
Meanwhile, Jim Pattison's AM600 pulled the plug on Rafe Mair's talk show last week. Mair ended up on that station after his popular CKNW show was cancelled by Corus several years ago, in part because he was critical on-air of Corus's cost-cutting measures. Who will tell those stories now?
Posted by Arthur Caldicott on October 20, 2005
October 18, 2005
China as Canada's No. 1 trade partner? Not likely
By Richard Gwyn
Toronto Star
18-Oct-2005
One of the first things China will do once it becomes a major customer for Canada's oil — as apparently is Prime Minister Paul Martin's policy — is to tell us to get lost when we next suggest that Beijing join the Kyoto Protocol to combat global warming.
The same answer will come winging across the Pacific should we complain about China's treatment of its democracy activists.
On these issues and many more like them, we will, if not actually get lost, then go silent as soon as China starts importing the rumoured 400,000 barrels a day of Alberta tar sands oil.
There's no argument whatever that Martin is absolutely right to go toe-to-toe with President George Bush and his administration over American failure to abide by the NAFTA panel ruling against it on the softwood lumber issue. The panel decision was unanimous. Three other panels have ruled the same way on the same issue.
Even The Wall Street Journal, usually a cheerleader for Bush, believes Washington should pay back the $5 billion it has collected in special charges on our lumber.
In economic terms, the lumber issue isn't that big a deal. Despite the discriminatory treatment, we're still selling a lot of the stuff across the border. But ignoring international law and thereby putting the NAFTA trade pact at risk is a very big deal indeed.
The best measure of how big a deal this is is that Americans, themselves, are getting nervous about their own behaviour.
On a trip to London last week, the State Department's legal counsel John Bellinger told reporters, "We are very interested in countering this perception that the U.S. doesn't have regard for international law." Earlier, Bellinger had said the same thing to the judges of the International Court of Justice at the Hague.
Bellinger's problem — and that of the U.S. in terms of its image around the world — is that "perception" is reality.
Thus, in Sunday's New York Times, columnist Nicholas Kristof wrote that, "The Bush administration's campaign to bully a poor country (by cutting off some aid) over the (International Criminal) court is cultivating more ill will toward the U.S. than extremists ever could have."
Bellinger himself had a hard time in London coming up with any significant current examples of the U.S. implementing the spirit and letter of international agreements. But, and this is a big but, "U.S. Bad" doesn't mean "China Good."
Of course, we should sell our logs and rocks to China, or to anybody. With the tar sands, though, there is the embarrassing fact that digging out the oil from it does more to heat the globe than any other oil project, by far.
But the notion of China as an alternative trade partner to the U.S. is pure fantasy. In fact, a double fantasy.
As trade partners go, China would make the U.S. look like a patsy.
Brazil, which entered into a much-touted, special trade agreement with China, is now going through an agonizing rethink because so few of the agreed return benefits (investments, infrastructure projects) have come through.
Also, for whatever we would get, we'd find ourselves paying a political surcharge. The surcharge of silence about China's repressive, authoritarian regime.
There'd be more than silence in the equation. The Chinese industrial and commercial system remains comprehensively corrupt. Bribes paid over there — as they have to be to get almost anything done — will come back here, in one way or another.
In the immortal words of the otherwise forgotten Social Credit leader Robert Thompson, "The Americans remain our best friends, whether we like it or not."
It would help, though, if they tried a bit harder to be a bit friendlier.
Richard Gwyn's column appears Tuesdays and Fridays. gwynR@sympatico.ca.
Posted by Arthur Caldicott on October 18, 2005
October 17, 2005
Fossil fuels are here to stay, says expert
Gordon Jaremko
CanWest News Service
Monday, October 17, 2005
Doom-and-gloom forecasts for gas, coal and oil are wrong, says SFU prof in a new book
EDMONTON -- Reports of the death of fossil fuels are greatly exaggerated, a prominent Vancouver scholar and public servant has concluded after a research odyssey burned off his preconceptions and academic training about energy.
"They call me the fossil fool now," Mark Jaccard joked recently between lectures he was giving in Edmonton.
But the Simon Fraser University professor and former chief executive officer of the British Columbia Utilities Commission was only half-kidding.
Cambridge University Press in England will this fall publish a book by Jaccard that breaks away from a recent gush of literature claiming current supply scares, price spikes and environmental resistance are the death rattles of oil, natural gas and coal. The volume will be titled Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy.
It has been assumed for decades societies will gradually switch to renewable energy forms and wean themselves off oil, gas, coal and atomic power, Jaccard said.
But he concluded the assumptions he was taught were wrong. His forthcoming book forecasts that oil, gas and coal will still satisfy 58 per cent of world energy needs in the year 2100.
That market share will be down from today's 85 per cent but still require high production because total global consumption of all energy forms will grow as developing countries strive for North American-level living standards.
That includes China, whose seemingly endless industrial and transportation needs will see it battle the United States and other trading partners for investment opportunities in the Canadian oilsands. China now buys most of its imported oil from the Middle East, Indonesia and Africa. It is also expanding its presence in central Asia, a rapidly growing energy producing region, as well as South America.
Heating, cooking, transportation and electric power are bound to become steadily more expensive, Jaccard said. Costlier sources of fossil fuels will be tapped. Producers and consumers alike will face stricter environmental standards. Expensive alternatives such as wind and solar power will spread. A revival of atomic power awaits regions with the greatest need for new supplies.
But obtaining energy to maintain current living standards, and support new services and gadgets requiring energy, will not bankrupt North American consumers, Jaccard predicted.
By the end of this century energy will burn up about eight per cent of family budgets, he calculated. That will be up from today's six per cent but still barely half the 16 to 20 per cent of Canadian and American household money, work and time that went into gathering and preparing fuel and tending primitive appliances in 1900, Jaccard said.
Periodic cost increases above the long-range average trends are built into the global energy market and play a role in stimulating economic evolution, he suggested.
Current steep oil prices, for instance, are part of a natural trend to replace dwindling traditional supplies from conventional wells with costlier new sources such as Alberta's oilsands.
"Prices will jump around," Jaccard said. But governments can help make energy changes easier by introducing policies that help markets adapt to changing needs and technologies, he added.
For example, clear, long-range emissions-reduction targets should be set by climate change policy makers so industry can engineer new projects to make steady improvements, he said.
He urged Canada to try a system of "niche market regulation'' used in California. The state stimulated cuts in auto emissions and helped spawn hybrid electric and gasoline cars by requiring manufacturers to make small fractions of their fleets comply with low- to zero-pollution targets, Jaccard said.
CALCULATING THE TRUE COST OF ENERGY PRODUCTION
It takes energy to make energy -- and a lot of it -- in the northern Alberta oil sands.
Bitumen projects will burn 1.01 billion cubic feet of natural gas a day by late 2006, the National Energy Board says in a new forecast. That will be a 40-per-cent increase from 2004 and about twice as much gas as all the homes in Alberta burn.
The growth in gas consumption roughly matches the pace of increases in oilsands output, which is forecast to hit 1.2 million barrels per day by late 2006.
The consumption growth rate is expected to moderate as new projects adopt emerging methods of cutting their use of gas -- or making their own fuel -- for heat-driven bitumen extraction systems, synthetic-oil upgrading and power generation.
But energy will remain a big oilsands expense. FirstEnergy Capital Corp. forecasts that as production grows to two million barrels daily by 2010, annual operating costs will more than double to about $10 billion from $4 billion in 2004 with increasingly expensive gas driving much of the rise.
The Alberta government will pay a share of the tab. Oilsands royalties are collected on the net value of production to the industry, after subtracting expenses.
Ran with fact box "Calculating the True Cost of Energy Production", which has been appended to the end of the story.
© The Vancouver Sun 2005
Posted by Arthur Caldicott on October 17, 2005
October 15, 2005
Kitimat selected for Enbridge's Gateway Pipeline
Kitimat, B.C., Selected as End-Site Location for Enbridge's Gateway Project
Enbridge news release, 14-Oct-2005
$4-billion pipeline to land in Kitimat
Scott Simpson, Vancouver Sun, 15-Oct-2005
COMMENT:Good news in Kitimat; Disappointment in Prince Rupert, the other potential terminal location for the proposed Gateway Pipeline, which - if built - will transport oil from Alberta's oilsands to China and other markets, including, possibly, the US. A Chinese company has already secured half the capacity of the Gateway project. (link)
Dashed hopes at Fortune Minerals, as well, which appears to have won a quiet move by the federal government to sell Ridley Island Terminals near Prince Rupert (link). Revenues from the Gateway project will not now be part of Ridley Island's future.
It won't look like boom town in Kitimat for a while, as the Methanex plant closes on November 1 and 125 or so people are out of jobs. But EnCana has an option on the Methanex site for a "soluent" terminal facility (link), and Gateway is actually two pipelines, the oil export pipe, and a "condensate" import pipe. Even if the EnCana project and the Enbridge condensate project eventually become just one project, Kitimat is going to be busy. Then there's the Galveston Kitimat LNG project on the books as well, proceeding through a BC environmental assessment with little fanfare. (link)
But the big issue: oil tankers in Douglas channel. There's some understanding that a tanker moratorium is in place on the coast. Does it apply to the oil tankers that will be taking Gateway oil to China and elsewhere? What do the Haisla and Haida think of this? What do the salmon think of this?
Kitimat, B.C., Selected as End-Site Location for Enbridge's Gateway Project
NEWS RELEASE TRANSMITTED BY CCNMatthews Printable Version
FOR: Enbridge Inc.
TSX SYMBOL: ENB
NYSE SYMBOL: ENB
OCT 14, 2005 - 12:30 ET
CALGARY, ALBERTA--(CCNMatthews - Oct. 14, 2005) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) is pleased to announce that after months of fieldwork, Kitimat, British Columbia, has been selected as the end-site location for the proposed Gateway Project. Key factors in the decision to select Kitimat were the deepwater port and abundant industrial land.
"Enbridge is very excited about the Gateway Project and what it will mean to the North Coast of British Columbia," said Art Meyer, President of Gateway Pipeline Inc. "We believe this project will bring economic benefits not only to Kitimat, but the entire region during both the construction and operation phases."
The Gateway Project is estimated to cost approximately $4 billion and will consist of a petroleum export pipeline and a condensate import pipeline along the same right-of-way, and a marine terminal. The pipeline will run from Strathcona County, near Edmonton, to Kitimat.
"The Gateway Project is good news for Kitimat and will provide many opportunities for our community in the future," said Mayor Richard Wozney of the District of Kitimat. "We have worked hard over the last number of months to attract Enbridge as a corporate citizen and look forward to working with them."
The Gateway Project is expected to generate thousands of direct jobs during construction and up to 75 permanent jobs for the operation of the pipeline, marine terminal and related facilities.
Over the past three years Enbridge has met with communities and First Nations, interest groups and governments to discuss the Gateway Project and is committed to open and transparent consultation about the project.
Once commercial certainty and regulatory approval are achieved for the Gateway Project, Enbridge anticipates starting construction in 2008, with the pipeline being operational in 2010.
Gateway Pipeline Inc. is a wholly owned affiliate of Enbridge Inc. that has been created to manage the development of the Gateway Pipeline.
Enbridge Inc., a Canadian company, is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,400 people, primarily in Canada, the U.S. and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the U.S. under the symbol ENB. Information about Enbridge is available on the Company's web site at www.enbridge.com.
Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions that are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
BACKGROUND INFORMATION ON THE ENBRIDGE GATEWAY PROJECT
- The Gateway Project, estimated to cost approximately $4 billion, involves the proposed development of two new pipelines, a new marine terminal, tankage, pumping stations and related facilities.
- The Gateway Project will run from Strathcona County near Edmonton to Kitimat, British Columbia.
- Key factors in the decision to select Kitimat as the end-site location for the pipeline were the deep-water port and abundant industrial land.
- The pipeline will be 1,200 kilometres in length.
- The petroleum export pipeline will be 30-inches in diameter and designed to move an average of 400,000 barrels per day.
- The condensate import pipeline will be 20-inches in diameter and designed to move an average of 150,000 barrels per day.
- Condensate is a by-product of natural gas production and is used as feedstock to oil refineries but its primary use in Western Canada is to dilute heavy oil for easier transport by pipeline.
- Certified marine tankers will be used to either import condensate or export petroleum. The marine terminal will include tankage, emergency response equipment, tanker births and other related facilities.
- Enbridge anticipates filing the National Energy Board application for the Gateway Project in April 2006, beginning construction in 2008 and having the pipeline operational in 2010.
- The socio-economic benefits during construction of the project are estimated at $1.52 billion in BC and $1.26 billion in Alberta.
- During the operation of the Gateway Project, the socio-economic benefits are estimated at $107 million per year in BC and $60 million per year in Alberta.
- The Gateway Project is an important part of Canada's energy future and will help ensure there is enough capacity to transport new oil expected from Canada's oil sands in the years to come.
FOR FURTHER INFORMATION PLEASE CONTACT: Enbridge Inc.
Jim Rennie
News media:
(403) 231-3931
Email: jim.rennie@enbridge.com
or
Enbridge Inc.
Bob Rahn
Investment community:
(403) 231-7389
Email: bob.rahn@enbridge.com
Website: www.enbridge.com
or
NATIONAL Public Relations
Michelle Ward
(604) 970-5901
Email: mward@national.ca
$4-billion pipeline to land in Kitimat
GATEWAY I Enbridge project means thousands of jobs for northwest B.C.
Scott Simpson
With files from Leanne Ritchie, Prince Rupert Daily News
Vancouver Sun
October 15, 2005
The final decision on a Pacific terminal for Enbridge's $4-billion Gateway pipeline project came down to money, with Kitimat announced Friday as the Calgary company's preferred location.
The sprawling pipeline project, slated to span some 1,200 kilometres from Edmonton to the Pacific Ocean, is expected to create a mini-job boom and economic spinoffs worth about $1.5 billion for the B.C. economy.
A route to Prince Rupert would have cost at least $500 million more than Kitimat, although an Enbridge spokesman said communities across northern British Columbia will benefit from the project.
The company expects unspecified "thousands" of jobs during a two-year construction phase and about 75 permanent jobs including about 35 at the terminal in Kitimat.
Gateway Pipeline Inc. president Art Meyer said economic spinoffs will include materials purchases, construction jobs and indirect employment.
The company hopes to gain all regulatory approvals by 2007 and have the pipeline operational by 2010.
"Certainly this is great news for Kitimat, and Terrace, and the region," said Kitimat Mayor Richard Wozney, who was in Terrace for the announcement.
"We welcome this industrial investment. I think it will be a great addition to our community and to our private port operation in Kitimat.
"This will add to our reputation as being somewhat of an energy hub and a petrochemical centre. We hope they will get through all of their regulatory approvals, start construction in 2008 and be in operation in 2010."
Gateway involves twin pipelines between Kitimat and Edmonton -- a condensate line taking oil-thinning materials east from a terminal in Kitimat to oil processing facilities in Alberta, and a larger petroleum line carrying crude oil to the West Coast.
The project must still address regulatory and market hurdles -- including signing up enough pipeline customers to make the lines economic.
Meyer noted during a teleconference with reporters that the proposed condensate line already has strong support from shippers.
Later this month Enbridge will embark on an "open season" for expressions of interest from shippers for the petroleum line -- which passed a major milestone earlier this year when PetroChina signed a memorandum of understanding for half its capacity.
"We have decided on Kitimat as the end point for the pipeline. That's really been based on economic criteria, as well as the deep water port and industrial land that's available in the area. But the primary factor was economic and a business case determined Kitimat was the most appropriate choice," Meyer said.
"With that said, we certainly do see this project being an economic benefit to the entire region and we've been pleased to work with all communities in the region to pursue that.
"We are looking forward to working hard over the next while to make this vision a reality, both through the phase in which we will be confirming commercial certainty, then through the regulatory approval process, and finally into construction."
Meyer said the pipeline route to Prince Rupert was longer, but it would have meant a shorter travel time for tankers plying the route from a B.C. terminal to potential markets in California and Asia.
Posted by Arthur Caldicott on October 15, 2005
The Other Hurricane
Has the Age of Chaos Begun?
By Mike Davis
TomDispatch.com
October 6, 2005
The genesis of two category-five hurricanes (Katrina and Rita) in a row over the Gulf of Mexico is an unprecedented and troubling occurrence. But for most tropical meteorologists the truly astonishing "storm of the decade" took place in March 2004. Hurricane Catarina -- so named because it made landfall in the southern Brazilian state of Santa Catarina -- was the first recorded south Atlantic hurricane in history.
Textbook orthodoxy had long excluded the possibility of such an event; sea temperatures, experts claimed, were too low and wind shear too powerful to allow tropical depressions to evolve into cyclones south of the Atlantic Equator. Indeed, forecasters rubbed their eyes in disbelief as weather satellites down-linked the first images of a classical whirling disc with a well-formed eye in these forbidden latitudes.
In a series of recent meetings and publications, researchers have debated the origin and significance of Catarina. A crucial question is this: Was Catarina simply a rare event at the outlying edge of the normal bell curve of South Atlantic weather -- just as, for example, Joe DiMaggio's incredible 56-game hitting streak in 1941 represented an extreme probability in baseball (an analogy made famous by Stephen Jay Gould) -- or was Catarina a "threshold" event, signaling some fundamental and abrupt change of state in the planet's climate system?
Scientific discussions of environmental change and global warming have long been haunted by the specter of nonlinearity. Climate models, like econometric models, are easiest to build and understand when they are simple linear extrapolations of well-quantified past behavior; when causes maintain a consistent proportionality to their effects.
But all the major components of global climate -- air, water, ice, and vegetation -- are actually nonlinear: At certain thresholds they can switch from one state of organization to another, with catastrophic consequences for species too finely-tuned to the old norms. Until the early 1990s, however, it was generally believed that these major climate transitions took centuries, if not millennia, to accomplish. Now, thanks to the decoding of subtle signatures in ice cores and sea-bottom sediments, we know that global temperatures and ocean circulation can, under the right circumstances, change abruptly -- in a decade or even less.
The paradigmatic example is the so-called "Younger Dryas" event, 12,800 years ago, when an ice dam collapsed, releasing an immense volume of meltwater from the shrinking Laurentian ice-sheet into the Atlantic Ocean via the instantly-created St. Lawrence River. This "freshening" of the North Atlantic suppressed the northward conveyance of warm water by the Gulf Stream and plunged Europe back into a thousand-year ice age.
Abrupt switching mechanisms in the climate system – such as relatively small changes in ocean salinity -- are augmented by causal loops that act as amplifiers. Perhaps the most famous example is sea-ice albedo: The vast expanses of white, frozen Arctic Ocean ice reflect heat back into space, thus providing positive feedback for cooling trends; alternatively, shrinking sea-ice increases heat absorption, accelerating both its own further melting and planetary warming.
Thresholds, switches, amplifiers, chaos -- contemporary geophysics assumes that earth history is inherently revolutionary. This is why many prominent researchers -- especially those who study topics like ice-sheet stability and North Atlantic circulation -- have always had qualms about the consensus projections of the Intergovernmental Panel on Climate Change (IPCC), the world authority on global warming.
In contrast to Bushite flat-Earthers and shills for the oil industry, their skepticism has been founded on fears that the IPCC models fail to adequately allow for catastrophic nonlinearities like the Younger Dryas. Where other researchers model the late 21st-century climate that our children will live with upon the precedents of the Altithermal (the hottest phase of the current Holocene period, 8000 years ago) or the Eemian (the previous, even warmer interglacial episode, 120,000 years ago), growing numbers of geophysicists toy with the possibilities of runaway warming returning the earth to the torrid chaos of the Paleocene-Eocene Thermal Maximum (PETM: 55 million years ago) when the extreme and rapid heating of the oceans led to massive extinctions.
Dramatic new evidence has emerged recently that we may be headed, if not back to the dread, almost inconceivable PETM, then to a much harder landing than envisioned by the IPCC.
As I flew toward Louisiana and the carnage of Katrina three weeks ago, I found myself reading the August 23rd issue of EOS, the newsletter of the American Geophysical Union. I was pole-axed by an article entitled "Arctic System on Trajectory to New, Seasonally Ice-Free State," co-authored by 21 scientists from almost as many universities and research institutes. Even two days later, walking among the ruins of the Lower Ninth Ward, I found myself worrying more about the EOS article than the disaster surrounding me.
The article begins with a recounting of trends familiar to any reader of the Tuesday science section of the New York Times: For almost 30 years, Arctic sea ice has been thinning and shrinking so dramatically that "a summer ice-free Arctic Ocean within a century is a real possibility." The scientists, however, add a new observation -- that this process is probably irreversible. "Surprisingly, it is difficult to identify a single feedback mechanism within the Arctic that has the potency or speed to alter the system's present course."
An ice-free Arctic Ocean has not existed for at least one million years and the authors warn that the Earth is inexorably headed toward a "super-interglacial" state "outside the envelope of glacial-interglacial fluctuations that prevailed during recent Earth history." They emphasize that within a century global warming will probably exceed the Eemian temperature maximum and thus obviate all the models that have made this their essential scenario. They also suggest that the total or partial collapse of the Greenland Ice Sheet is a real possibility -- an event that would definitely throw a Younger Dryas wrench into the Gulf Stream.
If they are right, then we are living on the climate equivalent of a runaway train that is picking up speed as it passes the stations marked "Altithermal" and "Eemian." "Outside the envelope," moreover, means that we are not only leaving behind the serendipitous climatic parameters of the Holocene -- the last 10,000 years of mild, warm weather that have favored the explosive growth of agriculture and urban civilization -- but also those of the late Pleistocene that fostered the evolution of Homo sapiens in eastern Africa.
Other researchers undoubtedly will contest the extraordinary conclusions of the EOS article and -- we must hope -- suggest the existence of countervailing forces to this scenario of an Arctic albedo catastrophe. But for the time being, at least, research on global change is pointing toward worst-case scenarios.
All of this, of course, is a perverse tribute to industrial capitalism and extractive imperialism as geological forces so formidable that they have succeeded in scarcely more than two centuries -- indeed, mainly in the last fifty years -- in knocking the earth off its climatic pedestal and propelling it toward the nonlinear unknown.
The demon in me wants to say: Party and make merry. No need now to worry about Kyoto, recycling your aluminum cans, or using too much toilet paper, when, soon enough, we'll be debating how many hunter-gathers can survive in the scorching deserts of New England or the tropical forests of the Yukon.
The good parent in me, however, screams: How is it possible that we can now contemplate with scientific seriousness whether our children's children will themselves have children? Let Exxon answer that in one of their sanctimonious ads.
Mike Davis is the author of many books including City of Quartz, Dead Cities and Other Tales, and the just published Monster at Our Door, The Global Threat of Avian Flu (The New Press) as well as the forthcoming Planet of Slums (Verso).
Copyright 2005 Mike Davis
This was originally published as a tomgram at TomDispatch.com
"a regular antidote to the mainstream media"
Posted by Arthur Caldicott on October 15, 2005
October 13, 2005
Martin dismisses criticism from Klein
that oil is Alberta's to sell
Greg Bonnell
Canadian Press
Thursday, October 13, 2005
COMMENT: Albertans are as intelligent and industrious as other Canadians. But that's it. They're not smarter than the rest of us. They don't work harder than the rest of us. They're not more deserving or entitled than other Canadians. But they're a hell of a lot richer than the rest of us.
Albertans don't pay provincial sales tax. They don't have a provincial debt. They're constant contributors to national accounts. Lucky them. And that's all it is. Luck of geographical placement.
Yet Ralph Klein gloats about his province's economy as if he made it all happen, as if Albertans earned the riches. His province is not rich because of special business acument. It's because they "have" most of Canada's oil and gas. Alberta would be debt free and Klein's voters rich, even if he were permanently pissed to the eyeballs and unable to stand up between elections. What's fair or just about that?
By today's rules, what's under Alberta isn't Canada's oil and gas. It is Alberta's. (Actually, it belongs now to whatever corporations Alberta has sold the rights to. Alberta keeps some, in the form of royalties, but most of it is handed over to the corporations. Corporations which are rolling in unprecedented profits. Undeserved, unearned profits. But that's another rant.)
This is not right. It's time to rewrite the deal. Canada's environment belongs to all of us, and it's our national duty to protect it. Canada's natural resources should belong to all of us, and it's time to change the deal. Time for Canada to stand up to Alberta's bullying and claim substantially more of the benefits for all Canadians of all that fossil fuel wealth.
Paul Martin is playing that old electoral strategy that makes the US a foe. George Bush makes that easy to do right now. "BC vs Ottawa" has been a winning gambit for decades. Alberta has played the same game against Ottawa at least ever since Trudeau's National Energy Program in 1980.
Martin has nothing to lose in Alberta, and plenty to win in the rest of the country. Maybe it's time to get ugly with Klein.
I can already hear the whining about "National Energy Program II" starting in Alberta and BC. Yep.
And how to stay the course when those bloated oil and gas corporations turn their bankrolls to bringing down a government.
OWEN SOUND, Ont. (CP) - Prime Minister Paul Martin was on the defensive Wednesday about his government's role in promoting Canada's commodities, a day after Alberta Premier Ralph Klein told Ottawa to keep its hands off of his province's resources.
"Of course the federal government has a role in trying to open markets, new markets, and we will continue to do that," Martin told reporters in Owen Sound, Ont., where he met with community leaders. He was responding to criticism from Klein, who has pointedly said his province's petroleum isn't the prime minister's to sell.
"I'm not trying to pick a fight with anybody. I just want the Americans to live up to the terms of the NAFTA agreement, both in letter and spirit," Martin later told reporters at an event in Petersburg, Ont., near Kitchener.
Martin slammed the U.S. for continuing to impose duties on Canadian softwood lumber, while also hinting that countries such as China and India are becoming a more lucrative market for Canadian oil that the U.S. needs.
Washington is refusing to recognize a trade panel's final ruling that said U.S. duties on Canadian softwood are unwarranted.
Martin and other government leaders have been careful not to directly link the softwood conflict with punishment for the United States on other trade fronts.
But speaking to a Wall Street audience last week, Martin warned that the softwood dispute is threatening the integrity of the continental trade pact and future economic relations.
Martin said Wednesday that business leaders have encouraged his government to develop more markets for a range of Canadian commodities.
"That should not be a disagreement with Mr. Klein. In fact, I would have expected Mr. Klein to really support our position, given the importance of his own cattle producers," he said.
Klein said Wednesday in Edmonton that he in fact does support Martin trying to open new markets for Canadian products.
"I think that what we have here is a media thing. I don't care if he wants to sell and promote our oil but it's not his to sell. That is the only point I was trying to make."
The Opposition, meanwhile, renewed calls for Martin to get tough with U.S. President George W. Bush to solve the longstanding softwood lumber problem.
Conservative Leader Stephen Harper said the United States needs to be reminded of its legal obligation to comply with NAFTA rulings.
"If the U.S. has some difficulty with that . . . then this is going to have repercussions," he told reporters in Vancouver Wednesday.
The U.S. has collected $5 billion in duties on softwood imports since May 2002, hurting Canadian companies which export lumber south of the border.
© The Canadian Press 2005
Posted by Arthur Caldicott on October 13, 2005
October 12, 2005
Secret firm backs bid for Ridley Terminals
Mining officials slam Ridley sale
Peter O'Neil, Vancouver Sun, 10-Oct-2005
B.C. coal miners object to terminal plan
Peter Kennedy, Globe and Mail, 11-Oct-2005
Fortune responds to Vancouver Sun article regarding Ridley Terminals Inc.
Fortune Minerals news release, 11-Oct-2005
Secret firm backs bid for Ridley Terminals
Peter O'Neil, Vancouver Sun, 12-Oct-2005
Shippers have 'huge concern' about Ottawa's handling of coal terminal
Don Whiteley, Vancouver Sun, 12-Oct-2005
Bidder offered a fraction of Ridley's cost
Peter O'Neil, Vancouver Sun, 24-Oct-2005
COMMENT: What a wierd situation this is, in which corporations are whining to government to interfere on their behalf against other corporations. Big guys whining about little guys, no less. These are corporations which have invested a fortune, so to speak, in putting governments in place which generally march in time to the hands-off tune of these same corporations. Corporations which were upstaged by Fortune Minerals, not quite one of their own.
BC's other coal port, Westshore Terminals at Roberts Bank had revenues last year of some $127 million dollars. Net earnings were $48 million. In the first six months of 2005, revenues of the Westshore Terminals Income Trust jumped to $76 million and net earnings of $27 million. This is no penny-ante operation ekeing out a tough living. It's no wonder Teck Cominco et al want a piece of the Ridley Terminals action now that the coal business, especially, is booming in the north.
Westshore Terminals is owned by BC's own King Midas, Jim Pattison. Over 90% of Westshore's business is derived from a comfortable relationship with the "Coal Partnership" - essentially Teck Cominco, Fording (with substantial Teck Cominco ownership) and Elk Valley Coal Corporation (which is largely a Teck Cominco and Fording entity).
One might ask, however, why the federal government was okay with operating the Ridley Terminal for the years it was losing money, but feels it necessary to privatize the thing just when it looks like it is poised to make substantial profits - and on highly suspect giveaway terms.
Mining officials slam Ridley sale
Association says Prince Rupert facility shouldn't go to Ontario firm
Peter O'Neil
Vancouver Sun
Monday, October 10, 2005
CREDIT: Glenn Baglo, Vancouver Sun Files
Ridley Terminals coal-loading facility near Prince Rupert.
OTTAWA -- The federal and B.C. governments, despite touting a "Pacific Gateway" initiative to help Canada exploit booming Asian markets, are acting against the interests of Western Canadian resource exporters by planning to sell off the Ridley Terminals facility to an Ontario-based junior mining firm, says a mining industry official.
The Mining Association of B.C. said Transport Minister Jean Lapierre should take a second look at a proposal by five resource companies from Vancouver and Calgary, including mining giant Teck Cominco, to buy and operate the Ridley coal shipping facility in Prince Rupert.
Association president Michael McPhie said the coalition will ensure that Canadian shippers are charged shipping fees low enough to allow them to compete with Australian firms.
McPhie said he realizes that Lapierre is anxious to get rid of money-losing Ridley, which cost taxpayers $250 million in the early 1980s and is believed to be on the market for a tiny fraction of that price.
"But I don't think expediency should be a driver for making good or bad decisions," he said, adding that Lapierre's move contradicts political promises to make it easier for Canada to trade with China and India.
Lapierre has confirmed that Fortune Minerals Ltd., a London, Ont.-based mining firm with no revenue-producing properties, is the front-runner to acquire the Crown corporation, which he said is costing taxpayers $500,000 a month in subsidies. Fortune stresses that it has $20 million in cash and three mining properties, including one coal project in northern B.C., nearing production stage.
But a group of five resource firms based in B.C. and Alberta say the federal government should re-open bidding to allow them to buy and operate Ridley as a kind of co-operative that is focused on keeping shippers' costs down.
The group is called the Ridley Shippers Coalition and is made up of Teck Cominco, Northern Energy and Mines, and Western Canadian Coal, all based in Vancouver. Sumitomo Canada, a subsidiary of a giant Japanese firm, and Grand Cache Coal, both based in Calgary, are also part of the coalition.
Fortune president Robin Goad said Friday he will issue a news release before markets open Tuesday to confirm The Vancouver Sun's disclosure that his company, along with an unidentified corporate partner, are poised to acquire Ridley.
He ridiculed the coalition's position that the terminal should be shipping resources at below-market prices.
"It's nonsense. How many businesses operate not-for profit?" Goad said.
Goad also confirmed that he asked Lapierre to prevent Ridley management from signing long-term contracts before the sale is complete.
The unusual move by Lapierre, who had cabinet issue an order under the Financial Administration Act, was necessary because Ridley wanted to sign contracts -- and hand over some of its assets -- at below-market costs.
He said some of Ridley's putative customers were members of the same coalition trying to buy the Crown corporation.
The federal government is preparing legislation and budgeting at least $500 million as a down payment to advance the gateway concept that's aimed at improving port, road and rail infrastructure on the West Coast.
"It makes geographic sense that British Columbia become the nexus of trans-Pacific trade, the gateway to Asia," Prime Minister Paul Martin said in a speech earlier this month, echoing early statements from B.C. Premier Gordon Campbell.
"But make no mistake: the further development of the Pacific Gateway will benefit not only B.C., and not only the West, but all of Canada. Indeed, when we say that Canada is much greater than the sum of its parts, this is the kind of example we can point to."
The B.C. government said earlier this year it would consider buying Ridley, but recently wrote to Lapierre saying it is satisfied with Ottawa's plans to privatize the facility.
Lapierre said the provincial government is satisfied that a sale to Fortune wouldn't be contrary to the interests of the resource industry.
© The Vancouver Sun 2005
B.C. coal miners object to terminal plan
Ottawa names Ontario firm as preferred bidder for sole operator of gateway
By PETER KENNEDY
Globe and Mail
Tuesday, October 11, 2005
VANCOUVER -- British Columbia's mining industry is urging Ottawa to reconsider a process that could make a small Ontario company the sole operator of a B.C. shipping terminal that is emerging as a key gateway for Asia-bound coal shipments from Western Canada.
The plea comes after the federal Ministry of Transport named Fortune Minerals Ltd. of London, Ont., as the preferred bidder among the roughly 60 companies that expressed interest in buying the Ridley Island coal terminal at Prince Rupert.
B.C. Mining Association president Michael McPhie said rising coal prices and the prospect of soaring port shipments in the next few years has made Ridley a "strategically important asset" for the province's resource sector.
"Having a single operator running the terminal with a profit motive could seriously comprise access in the future," he said.
Mr. McPhie said the industry wants Ottawa to consider an alternative proposal from a coalition of northwestern coal producers, including Teck Cominco Ltd., Northern Energy and Mining Inc. and Western Canadian Coal Corp.
Ridley Terminals Inc. president Greg Slocombe agrees that Ottawa should consider the coalition's plan to run the terminal in a co-operative environment where all of the members share in the costs and the risks. "Why not put it in the hands of those who are going to own and operate it as a cost centre," Mr. Slocombe said.
By making the terminal available to the industry at large, he said Ottawa can help the Canadian coal sector compete with rivals in Australia that run their terminals as a co-operative and benefit from closer proximity to sea ports.
The controversy over ownership has arisen two years after Ottawa put the terminal up for sale. At that time, the Prince Rupert region was facing the economic consequences of its declining fishing and forestry sectors.
But because of rising coal prices and the development of new mines in B.C. and Alberta, coal shipments through Prince Rupert are expected to soar in the next few years, reaching up to eight million tonnes annually by 2008, compared with 1.3 million last year, according to Ridley Terminals estimates.
Vancouver-based Hillsborough Resources Ltd. expects to boost shipment levels after signing a preliminary deal to develop a basket of B.C. coal properties in a joint venture with the coal division of Anglo American PLC of South Africa.
"We are aghast that the federal government would consider a private company as the sole owner of that facility," Hillsborough president David Slater said.
A spokeswoman for federal Transport Minister Jean Lapierre confirmed that ministry officials are in talks with Fortune Minerals, which was named the primary bidder following a request-for-proposals process that she described as both "legal and open.'' But she said no final decision on who gets to operate the terminal will be made until the company's proposal is reviewed by a cabinet committee.
In an interview, Fortune Minerals president Robin Goad said fears that his company will limit access to the terminal, if it is allowed to buy the site, are "groundless."
"As part of our proposal we are providing guarantees to the federal and [B.C.] provincial governments that we will provide free and open access to all bulk shippers on a commercially competitive basis," he said. "We have guaranteed to maintain the facility as a bulk handling terminal with priority being given to coal."
Fortune is a junior exploration company that is developing the Mount Klappan coal project, about 300 kilometres northeast of Prince Rupert. It is one of two partners in a private company that hopes to acquire and operate the Ridley Terminal. The other partner is a yet-to-be-named B.C. firm with significant experience in shipping and handling bulk material, Mr. Goad said.
Fortune responds to Vancouver Sun article regarding Ridley Terminals Inc.
News Release
Fortune Minerals
10/11/05
Issued Capital: 34,037,573
LONDON, ON, Oct. 11, 2005 (Canada NewsWire via COMTEX) --
Fortune Minerals Limited (TSX-FT) is responding to an article that appeared last Friday in the Vancouver Sun newspaper, which quoted federal Transport Minister, Mr. Jean Lapierre as indicating that Fortune has been selected as the primary bidder for Ridley Terminals Inc. (RTI), a Crown Corporation that owns and operates the Ridley Island coal terminal in the City of Prince Rupert, British Columbia. RTI operates on lands under lease from the Prince Rupert Port Authority, which is also a Federal Crown Corporation.
Fortune confirms that it is a shareholder of Northwest Bulk Terminals Inc. (NBTI), a private company that has submitted a proposal to Transport Canada (TC) to purchase the assets of RTI pursuant to a tendered "Request for Proposal" process. The other shareholder in NBTI is a British Columbia company with expertise in handling bulk materials. NBTI is in discussions with representatives of TC with respect to such a purchase. Completion of the proposed transaction would be subject to various conditions.
Prince Rupert has an ice-free, deepwater harbour and is the closest port in North America to Asia in terms of sailing time. It is also a western terminus for the Canadian National Railway Company. The coal terminal was built by the federal government in the 1980's to load and export coal from the past producing Quintette and Bullmoose coal mines in northeast British Columbia. The facility has an annual capacity of approximately 16 million tonnes.
NBTI has a business plan, which it believes will make the Ridley terminal profitable. The proposed acquisition presents a significant opportunity for Fortune to participate in Asian economic growth through this major conduit for Canadian sourced commodities. The terminal is located 330km southwest of the Company's Mount Klappan anthracite coal project, which was recently assessed in a positive, full feasibility study expected to be released shortly.
Fortune Minerals is a diversified natural resource company with seven mineral deposits and a number of exploration projects, all located in Canada. They include the Mount Klappan anthracite coal deposits in British Columbia, and the NICO cobalt-gold-bismuth deposit, the Sue-Dianne copper-silver deposit and other base and precious metals exploration projects in the Northwest Territories. Fortune is the managing partner of Formosa Environmental Aggregates Ltd., an industrial mineral company developing the Greenock high calcium limestone quarry in Ontario. Fortune Minerals is a company focussed on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
SOURCE: Fortune Minerals Limited
please contact: Fortune Minerals Limited: Robin Goad, President, Julian Kemp, Vice President, Jennifer Gauthier, Executive Assistant, Tel.: (519) 858-8188, Fax: (519) 858-8155, info@fortuneminerals.com, www.fortuneminerals.com; Renmark Financial Communications Inc.: John Boidman: jboidman@renmarkfinancial.com; Sylvain Laberge: slaberge@renmarkfinancial.com; Henri Perron: hperron@renmarkfinancial.com; Media:
Cynthia Lane: clane@renmarkfinancial.com, Tel.: (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com;
To request a free copy of this organization's annual report, please go to http://www.newswire.ca and click on reports@cnw.
Copyright (C) 2005 CNW Group. All rights reserved.
Secret firm backs bid for Ridley Terminals
Peter O'Neil
Vancouver Sun
Wednesday, October 12, 2005
OTTAWA -- An unidentified B.C. company is backing the bid by Fortune Minerals, a small Ontario resource firm with no operating revenues, to acquire the Ridley Terminals coal-shipping facility from the federal government over the objections of the B.C. mining industry, Fortune's president said Tuesday.
"This is not an east-versus-west issue, which some people are trying to make it sound like," said Robin Goad, who added that the mystery company has experience in the area but doesn't want its identity publicized.
Fortune, in a news release Tuesday confirming The Vancouver Sun's report last week that it was the lead bidder for Ridley Terminals, said it was in fact bidding for Ridley through a private company called Northwest Bulk Terminals Inc.
"The other shareholder in NBTI is a British Columbia company with expertise in handling bulk materials," Fortune said in the release.
Goad said the company is a private firm that doesn't want its identity exposed. NBTI was incorporated last December in Ontario, and lists only two individuals connected to the company, both as administrators: Goad and Fortune chairman Georges Michel Doumet, a Vancouver businessman and president of Federal White Cement Ltd., an Ontario company.
Goad would neither confirm nor deny rumours that B.C. billionaire Jim Pattison is Fortune's NBTI partner, but Doumet said the billionaire isn't a shareholder in NBTI.
"He's not involved," Doumet said.
Pattison, who publicly declared his interest in buying the Crown corporation when the federal government began seeking buyers in 2003, is already a powerful player in the increasingly lucrative coal shipping industry.
The Jim Pattison Group is sole owner of Westshore Terminals, located at Roberts Bank near Delta. Westshore is the largest coal-handling facility on the North American west coast.
Pattison, speaking through administrative secretary Maureen Chant, said Tuesday: "We don't comment on those kinds of things."
A group of resource firms based in Calgary and Vancouver, including Teck Cominco, is lobbying the federal government to reconsider the sale to Fortune, based in London, Ont., and contemplate their bid to acquire Ridley.
The group, called the Ridley Shippers Coalition, wants to run the terminal as a kind of owners' co-operative that would charge discount fees to ship coal, sulphur, wood pellets, and other bulk commodities low enough to compete with shipper- or government-owned terminals in Australia, Canada's main competitor in Asian markets.
The Mining Association of B.C. publicly questioned federal Transport Minister Jean Lapierre last week for not considering the Western Canadian coalition's bid, noting that the federal and B.C. governments are openly pushing for ways to help exporters tap into red-hot Asian economies.
Ridley's management, described by Ridley chairman Mike Tarr as "rogue" in the eyes of the federal government, has been trying to sign long-term contracts with shippers over Lapierre's objections.
The minister took the unusual step this month of using a cabinet decree to prevent Ridley from signing deals longer than 18 months.
Lapierre needs cabinet approval before he launches full-scale negotiations to sell the facility at a price believed to be a fraction of the $250 million it cost to build in the early 1980s.
© The Vancouver Sun 2005
Shippers have 'huge concern' about Ottawa's handling of coal terminal
Don Whiteley
Vancouver Sun
Wednesday, October 12, 2005
As the acting minister of natural resources, John McCallum, jets off to Beijing on an energy and lumber sales mission, he might want to drop in on Prince Rupert first to check out a management mess in the Ridley Island Coal Terminal.
Key to any future major sales of coal to Asian markets, this high-tech, state-of-the-art facility sits idling while Ottawa dithers over who should take it over and run it. What's worse, Transportation Minister Jean Lapierre recently issued an order preventing the current management team from signing any more contracts with shippers until the terminal's sale has been completed.
With China and others begging for coal, and coal prices at record levels, who in his right mind would stop management from doing deals? There are other potential coal suppliers in the world, and a prospective Asian buyer would move in a heartbeat if there was any whiff of turmoil over access to the coal.
As Vancouver Sun Ottawa reporter Peter O'Neil has explained in detail over the last few days, there's a very nasty catfight over the future of the facility and who will get to run it. After a bidding process that was launched three years ago, the federal government has selected a "preferred" bidder in the form of Northwest Bulk Terminals Inc. Fortune Minerals of Toronto is the only identified shareholder. Fortune has very little operating experience, but has an intriguing silent partner in this deal described only as "a British Columbia company with expertise in handling bulk materials." Jimmy Pattison maybe?
Apparently spurned in its bid to run the terminal is a shippers coalition that reads like a who's who of the mining business, including Teck Cominco, Western Canadian Coal Corp., Northern Energy and Mining Corp. -- all operating companies with oodles of experience. Backing the shippers coalition is the B.C. Mining Association, which argues that Ridley Island Coal is of such strategic importance to a number of B.C. coal producers that it shouldn't be run by one private company.
This fight will eventually result in a new owner, and whichever way it goes it should signal a new and very profitable era for a terminal that was built in the 1980s to handle the Northeast coal development, but has lost money consistently. It currently operates at only a fraction of its capacity.
But the federal government's decision to tie the hands of the current management team by prohibiting the signing of any new contracts threatens to derail the entire process.
Gary Livingstone, president of Western Canadian Coal Corp. (and a shippers coalition member), is beside himself over this move, and expressed concern over the fate now of a letter of intent he signed with Ridley for production from his company's new mine starting next July.
"The only point of that is to give a free hand to Fortune to go in there, rip up any commitments, and charge whatever they want," he said. "I recall seeing some quotes talking about the fact that the federal government admitted they directed Ridley based on a request from Fortune.
"That gives shippers like us a huge concern," he said. "We were the first ones to go through the port, and we're operating under what we believe is a long-term commitment. For them to make that statement -- we're now evaluating that to see what legal rights we have."
Livingstone said he signed a letter of intent with Ridley management a year ago and has been shipping some coal since last December.
"We're investing $300 million on a new mine we're bringing on stream next year," he said. "We're operating on the premise we have an agreement in place. If the feds do something that affects that, it will give us some very serious concerns."
Livingstone credited the current management team with doing an "outstanding job" of getting more product moving through the terminal and looking to the future. "When you read in the paper comments about 'rogue' management, it's unbelievable. To hear that from Ottawa, who are so far removed from what is happening in B.C. -- it's mindboggling."
When Fortune's silent partner is identified, it may become much clearer why Ottawa seems intent on giving the job to this small company instead of the high-powered consortium now in second place.
There is speculation that Jimmy Pattison is involved, and a Pattison spokesperson on Tuesday would neither confirm nor deny any involvement on his part. With his interest in Westshore Terminals, Pattison certainly fits Fortune's definition of a company with "expertise in handling bulk materials."
Another company mentioned as a possible partner is Salt Lake City-based Savage Companies, through its Canadian subsidiary Savage CANAC Corp. Savage operates large bulk terminals for coal, petroleum coke and sulphur in the U.S.
Savage spokesman David Wolach confirmed Savage's interest in operating the terminal, but said there was no agreement with anyone. "We've had discussions, and we're interested in participating, but nothing has been signed," he said.
But in the meantime, it seems ludicrous to handcuff an existing management team trying to drum up business for a taxpayer-owned terminal in a region of B.C. that has been depressed for more than a decade.
Ridley Terminals President Greg Slocombe says he can still accommodate growth and expansion in coal shipments on a spot basis, despite the handcuffs. But his ability to go after bulk commodities other than coal have been seriously impacted. That makes no sense whatsoever from a business perspective.
© The Vancouver Sun 2005
Posted by Arthur Caldicott on October 12, 2005
Hunger For Natural Gas
By Stan Cox
www.alternet.org
October 12, 2005
The era of cheap natural gas, like that of cheap oil, is ending. We have barely begun to assess the drastic, worldwide changes that will ensue.
Two Gulf hurricanes and the approaching winter in the Northern Hemisphere have kept natural gas futures hovering near all-time highs. But with the accelerating depletion of reserves in North America, the intermittent gas crises we've been seeing since 2001 will start coming thicker and faster, finally merging into an era of permanent scarcity.
A chronic gap between supply and demand would mean plenty of hardship in the United States and Europe, which have come to rely on natural gas not only for heat, but increasingly for electricity generation and manufacturing. But the future looks even more grim in the global South, where the maintenance of human life itself has come to depend on the steady and reliable supply of natural gas that's needed to synthesize nitrogen fertilizer for food production.
Turn off the gas, and a lot of American families would have a hard time cooking dinner -- but a lot of families in places like Nepal and Guatemala would have nothing to cook.
Nitrogen and human existence
Crop plants assemble carbon, hydrogen, oxygen and nitrogen into proteins that are essential both to plant growth and to the diets of humans and other animals. Of those four elements, nitrogen is the one that's too often in short supply. If you see yellowish, stunted crops, whether they're in an Indiana cornfield or an Indonesian rice paddy, it's likely that you can blame it on a lack of nitrogen.
A world of 6.4 billion people, on the way to 9 billion or more, needs more protein than the planet's croplands can generate from biologically provided nitrogen. Our species has become as physically dependent on industrially produced nitrogen fertilizer as it is on soil, sunshine and water. And that means we're hooked on natural gas.
Vaclav Smil, distinguished professor at the University of Manitoba and author of the 2004 book Enriching the Earth: Fritz Haber, Carl Bosch and the Transformation of World Food Production, has demonstrated the global food system's startling degree of dependence on nitrogen fertilization. Using simple math -- the kind you can do in your head if there's no calculator handy -- Smil showed that 40 percent of the protein in human bodies, planet-wide, would not exist without the application of synthetic nitrogen to crops during most of the 20th century.
That means that without the use of industrially produced nitrogen fertilizer, about 2.5 billion people out of today's world population of 6.2 billion simply could never have existed.
If farming depended solely on naturally occurring and recycled nitrogen fertility, the planet's cropped acreage could feed only about 50 percent of the human population at today's improved nutrition levels, according to Smil. But absolute dependence on synthetic nitrogen is geographically lopsided -- it's largely in countries with a high human-cropland ratio that survival hinges on nitrogen fertilizer. This includes India, Indonesia, and China, where four in 10 human beings on Earth reside.
In contrast, those countries lucky enough to have ample cropland and relatively low population density could survive on far less synthetic nitrogen than they currently use.
The nation that ranks as the world's third biggest nitrogen fertilizer consumer could, conceivably, get by without the stuff. If that country, the United States, were to moderate its meat consumption, raise all livestock on pasture and rangeland instead of nitrogen-wasting grains, rely more on legume crops (plants like beans and alfalfa that obtain nitrogen from the air with the help of bacteria), curb waste and cut food exports, it could maintain its food supply without using any synthetic nitrogen at all, according to Smil's calculations.
The momentum of past population growth is expected to add two to four billion people to the world's population by 2050, even with concerted efforts to rein in growth. Almost all of the increase will occur in Africa, Asia, Latin America and the Middle East. That will double the demand for nitrogen fertilizer in those regions, and by that time, says Smil, 60 percent of their inhabitants will depend existentially (in the literal sense, not the philosophical one) on natural gas-derived nitrogen fertilizer.
Danger: Flammable
Ironically, in that vast volume between the earth's surface and the atmosphere's upper limits, nitrogen is the most abundant element. We're continuously bathed in nitrogen gas, which makes up 78 percent of the air we breathe. But in the air, nitrogen atoms are paired up, each atom linked to another by an extremely tight molecular bond. Those molecules can't be used by living organisms unless that bond is broken, and only a small number of single-celled species have developed a means to do that biologically.
To pry nitrogen atoms apart chemically requires intense energy; it happens, for example, around a bolt of lightning. So it was not until 1909 that humans developed an industrial-scale method, called the Haber-Bosch process after its German inventors, to reassemble nitrogen atoms into another molecule, ammonia, that is usable by crop plants.
The two essential inputs to the Haber-Bosch process are air, which is free, and natural gas, which is expensive and becoming more so. Therefore, to extend Vaclav Smil's reasoning, 40 percent (soon to be 60 percent) of the Earth's inhabitants owe their survival to natural gas, a non-renewable fossil fuel. And if Julian Darley is right, a species that can't survive without natural gas is a species in big trouble.
Darley is author of the 2004 book, "High Noon for Natural Gas," in which he argues that the era of cheap and plentiful gas, like that of cheap oil, is coming to a close. Humans began tapping the Earth's deposits of oil and natural gas a little over a century ago. We've been exhausting the planet's oil reserves more quickly than gas reserves, because oil is easier to pump, transport and use. The planet's gas endowment will last longer, but the world is now using more each year than is being discovered -- an ominous sign.
Accelerated consumption across the globe, says Darley, will continue to drive up natural gas prices, deplete reserves, and trigger chronic shortages. In a world where growing energy demand has begun to run up against environmental limits, gas is almost too good to be true, and, it seems, too good to leave in the ground. For instance:
* Countries trying to meet the greenhouse emissions limits set by the Kyoto Protocol are rapidly building natural gas-fired power plants, which emit much less carbon dioxide than do coal plants. Even in the United States, the world's number-one Kyoto deadbeat, most newly built power plants are gas-fueled, even as our domestic gas reserves dwindle.
* In response to criticism of its heavy coal burning, China intends to triple or quadruple its use of natural gas for power generation in the coming decade.
* The petroleum industry is pushing hard to build large numbers of liquefied natural gas (LNG) tankers, along with the requisite high-tech port facilities in the major producing and consuming nations. That will make it easier for a big energy-using nation like the U.S. to suck not only from gas pipelines on its own continent but from wells almost anywhere on the planet, as we currently do to feed our oil habit.
* Building and operating a global LNG system will require vast amounts of energy -- much of it supplied by gas, of course. To produce the power required to haul liquefied gas across oceans while keeping it cooled to about -260 degrees Fahrenheit, LNG tankers draw on their own cargo. And an explosion at a LNG terminal could produce a fireball a mile wide -- qualifying LNG as a potential WMD.
* The process of extracting oil from sands in the Canadian province of Alberta -- often looked to as a key new resource in a "safe" part of the world -- requires natural gas, and a lot of it. Darley predicts that if the oil sands are to satisfy even one-eighth of North America's demand, they will have to absorb a quarter to a half of Canada's natural gas production!
* Hydrogen is often hailed as a fuel of the future, but today, most hydrogen is manufactured from -- what else? -- natural gas. Hydrogen could be generated by, say, using solar energy to split water molecules, but don't count that happening on a large scale as long as gas is available. President Bush's well-hyped 2003 FreedomCar initiative relied mostly on gas-derived hydrogen.
Not everyone is as pessimistic about natural gas as is Darley. The U.S. Department of Energy, as usual, paints a much rosier picture of potential gas reserves. Vaclav Smil appears to expect future gas availability to end up somewhere between what Darley and the DOE predict. But on one point there seems to be universal agreement: Consumption of the world's natural gas will continue to accelerate, and in the rush, gas could prove even more volatile than oil, politically and economically as well as chemically.
The timetable for peak gas or plateauing natural gas production and an eventual decline is much harder to forecast it is for oil. But a perfect storm of long-term forces appears to be blowing demand in only one direction -- up -- and the greatest access to such a hard-to-transport, hard-to-store resource will likely go to those players with the most money and the strongest armies.
Why armies? Because the world's remaining natural gas reserves lie mostly in the Mideast, Central Asia and Russia, almost guaranteeing that a century of conflict and chaos lies ahead.
Natural gas reserves of the top 10 countries.
The slice of the pie labeled "Rest of World" includes a number of small countries, many of them in Africa. Their gas reserves could sponsor decades of domestic fertilizer production. But, as people from Kirkuk to Caracas to the Niger Delta can tell you, fossil fuel reserves also can attract a lot of unwelcome attention from more powerful, energy-hungry nations.
Empty Stomachs, Full Jacuzzis
As natural gas becomes both more portable and more essential to food production in much of the world, impoverished farmers in Bangladesh and Egypt will find themselves bidding for it against Kansas farmers, homeowners from sweltering Phoenix or frigid Buffalo, and appliance-makers from Shanghai.
Ask someone whose children's lives depend on getting nitrogen out of the air and into food crops, and she'll probably tell you there's no higher use for natural gas. But in affluent societies that take food for granted, gas ("one of the cleanest, safest and most useful of all energy sources") can provide a lot of options that, after a while, start looking like necessities: keeping the house cool in August, cooking a corn-fed pot roast, driving to the store when you're out of organic milk, or relaxing in a hot tub.
Fertilizer production currently uses only about 5 percent of the world's natural gas production, and nonagricultural uses are already asserting greater dominance over tightening gas supplies on this continent. The escalation of gas prices in recent years has made fertilizer production far less profitable; as a result, the U.S. has lost 30 percent of its nitrogen fertilizer production capacity. American farmers now obtain more than half of their nitrogen fertilizer from abroad, making them the world's biggest importers of the product.
Mainstream economists, as always, predict an easy resolution: as the price of natural gas goes up, they say, people and nations will get more serious about conservation. But natural gas, latched onto increasingly as a somewhat more benign substitute for other fossil fuels, is playing the role of methadone in humanity's vain attempt to ease its withdrawal from coal and oil. And market forces tend to go haywire when dealing with addictive substances.
Without a right to food, people have no rights at all. So when there's a worldwide rush on a mineral resource essential to the production of adequate food -- when the market is the problem, not the solution -- non-market measures are needed to ensure that farmers are free to raise essential food crops.
The Food and Agriculture Organization (FAO) of the United Nations has nonbinding "Right to Food" guidelines stating in part that,
States should consider specific national policies, legal instruments, and supporting mechanisms to protect ecological stability and the carrying capacity of ecosystems, to insure the possibility for sustained, increased food production in present and future generations, prevent water pollution, protect the fertility of the soil, and promote the sustainable management of fisheries and forestry.
A firm legal basis for ensuring that all people have access to the means of food production is the UN's 1976 International Covenant on Economic, Social and Cultural Rights, which recognizes "the right of everyone to be free from hunger." The treaty has been ratified by more than 150 nations. The United States is not among them.
Americans cannot expect to support a universal right to food by the roundabout and inadequate practice of importing natural gas and fertilizer, using them to produce surplus grain, and then exporting the grain to countries with food deficits. Every nation must have the means to grow its own food sustainably, with efficient recycling of crop, livestock and human wastes. And when those nutrients aren't sufficient, farmers need guaranteed access to fossil fuels and fertilizers as well.
Nitrogen fertilizer made it possible for us to overpopulate the Earth, and now we're hooked. Someday, as reserves of fossil fuels dwindle, our descendents will come to inhabit a less crowded planet, on crops fed entirely by sunlight and natural fertility. Whether that future population decline happens humanely through planning and restraint or cruelly through catastrophe depends largely on how we manage nonrenewable resources, especially natural gas.
Stan Cox is senior scientist at the Land Institute in Salina, Kansas and a member of the Institute's Prairie Writers Circle. The assistance of Prof. Tim Crews of Prescott College is much appreciated.
Posted by Arthur Caldicott on October 12, 2005
October 11, 2005
Fort St. John leads parade of B.C.'s oil and gas boom
By Gordon Jaremko
Times Colonist (Victoria)
11-Oct-2005
FORT ST. JOHN -- Alberta industrial expansion into northeastern British Columbia startles even welcoming local boosters with its power.
"Right now it's almost overwhelming," said travel agent Marva Kosick, president of the Fort St. John Chamber of Commerce. "It's hard to keep up. We're getting new highways, roads, houses, apartments, stores -- anything you can name, it's being built," she said.
About 20 Alberta companies are spending $4.5 billion a year developing natural gas in the region, said Steve Spalding, B.C. manager for the Canadian Association of Petroleum Producers (CAPP). EnCana Corp. alone has long-range commitments averaging $1 billion a year.
In the industry's North America-wide quest for new gas supplies, "B.C. has a key role to play," Spalding told an annual oil and gas conference held by Fort St. John, the industry's regional capital 700 kilometres northwest of Edmonton.
The B.C. gas investments equal about half of annual spending on Alberta's oilsands, based in a community that likes to call itself "the energetic city" with one-third the population of the Fort McMurray region. The B.C. activity is less visible because it spreads conventional drilling, pipelines and plants across vast northern bush country, but signs of strain are everywhere.
All 1,000 motel and hotel rooms in the Fort St. John area routinely fill up every night, thanks to forest products mill construction on top of the gas development. The nearest vacancies are 70 kilometres south in Dawson Creek, and are scarce there. Recreational vehicle camps are full of blue-collar workers' heated trailers and vans. Roads are crowded well before dawn.
And there are still not enough people for all the work available. "There's a shortage of virtually every skill set you can think of," said Fort St. John Mayor Steve Thorlakson. "Unemployment is too low to calculate."
A $12-million oil and gas trades training centre is being built in Fort St. John, with energy companies covering half the cost. By the end of this month, an oil and gas service sector support and recruitment team led by the B.C. Energy Ministry will have held job fairs in 14 communities across the B.C. since the start of the year.
Enthusiasm for energy development has spread into the aboriginal population, which is demanding trade and business training as well as environmental standards and compensation.
"We too are very interested in becoming wealthy," said Liz Logan. As deputy chief of the regional Treaty Eight First Nations coalition, she echoes leaders in the Alberta oilsands region's aboriginal capital of Fort McKay, home base for a growing community-owned business conglomerate.
In the Fort St. John area Doig River First Nation's DRE Oilfield Services is one of the biggest locally owned employers, fielding about 100 staff during winter drilling seasons.
As in the oilsands, where royalty and tax deferrals tailored to industry requests feed the development wave, the B.C. gas boom is fuelled by government co-operation. In B.C. the collaboration started during construction of the $5-billion Alliance Pipeline from the Fort St. John region to Chicago in the late 1990s via a route across Alberta past the northern outskirts of Edmonton.
B.C. policy includes royalty breaks for deep drilling and costly field developments, road and pipeline construction partnerships with energy firms, and a grant scheme called Fair Share that taps provincial royalties to help northern municipalities build services for industrial growth.
The current highly favourable regime came together quickly that in early 2003 after talks between B.C.'s then newly elected Liberal government and CAPP, energy ministry oil and gas policy director Cameron Lewis recalled.
"This is one of the few jurisdictions in North America that is increasing its gas reserves," Lewis said.
The energy ministry will this fall ask the cabinet to make gas development incentives that were initially granted for a three-year trial period into a permanent fixture of B.C. policy, Lewis said.
The package will be sweetened by a fresh royalty plum which makes rates reflect net profits on new fields rather follow traditional practice of taking shares off gross revenues, he predicted.
A 33-year-old environmental moratorium will continue to prevent oil and gas drilling offshore of British Columbia, with the pro-development provincial government blaming Ottawa for indecision on plans to lift the ban.
"The biggest hurdle is to get the federal government moving," B.C. Energy Minister Richard Neufeld said in an interview. "I don't expect much movement until after the next election."
But Neufeld acknowledged popular opposition, encountered by federal and provincial public inquiries, against throwing open drilling targets in some of Canada's most gorgeous and best-preserved coastal areas including the Queen Charlotte Islands region.
"It will come in time," Neufeld said, inspired by visions of wealth in geological surveys projecting eventual discoveries of oceans of energy -- eight billion barrels and 40 trillion cubic feet of natural gas.
"The quickest way for us not to make it happen is to move too fast," he said, adding that his government may have to settle for preliminary seismic exploration as fulfilling its declared objective of a thriving B.C. offshore oil and gas industry by 2010.
Posted by Arthur Caldicott on October 11, 2005
October 10, 2005
In Canada's Wilderness, Measuring the Cost of Oil Profits
By CLIFFORD KRAUSS
New York Times
October 9, 2005
I've flown over one of those so called tailing ponds really lakes. They are a black glimmering abomination held like the sword of doom over all the waters of the Athabasca Delta and the Arctic. No one is talking about this in Canada. Ever wonder why?
Phil Carson
ScreenWeavers
Digital Tapestries
http://www.screenweavers.com
250-740-0943
FORT McMURRAY, Alberta - Just north of this boomtown of saloons and strip malls, a moonscape is expanding along with the price of oil.
Deep craters wider than football fields are being dug out of the pine and spruce forests and muskeg swamps by many of the largest multinational oil companies. Huge refineries that burn natural gas to refine the excavated gooey sands into synthetic oil are spreading where wolves and coyotes once roamed.
Beside the mining pits, propane cannons and scarecrows installed by the companies shoo away migrating birds from giant toxic lakes filled with water that was used in the process that separates oil sands from clay and dirt.
About 82,000 acres of forest and wetlands have been cleared or otherwise disturbed since development of oil sands began in earnest here in the late 1960's, and that is just the start. It is estimated that the current daily production of just over one million barrels of oil - the equivalent of Texas'
Because the oil sands region is so remote, the environmental damage receives little attention from the Canadian news media or public comment from Prime Minister Paul Martin's government. But industry leaders acknowledge that they face an enormous challenge because refining oil sands is several times more energy intensive than conventional oil production. In addition, the process is a major source of heat-trapping gases and far more destructive to the landscape than traditional drilling.
"There is a significant environmental footprint associated with the development of the resource, and that could become a potential constraint to growth," Gordon Lambert, vice president for sustainable development at Suncor Energy Inc., said in an interview. But he added that with technological improvements in extraction and refining, "we're bending the curve on a number of these historic environmental issues."
Oil sands development was once considered a crazy dream, too expensive and polluting to be profitable. But with oil prices exceeding $60 a barrel, companies like ExxonMobil, Royal Dutch Shell and Chevron Texaco are committing large investments to new projects, and some companies are offering record-breaking bids to lease growing amounts of land for future development. Energy-hungry China
In a neighboring and politically stable country, the oil sands are destined to become an increasingly important source of energy for the United States market for decades. The industry and government say the northern Alberta sands hold proven reserves of 175 billion barrels, a claim some experts dispute. But if it is true, only Saudi Arabia
But environmentalists have a list of warnings, starting with the energy costs of extracting the oil.
"What bugs me about oil sands is that it is a resource that is being inefficiently used," said Marlo Raynolds, executive director of the Pembina Institute, an environmental research group based in Calgary. "We're using natural gas, which is the cleanest fossil fuel, to wash sand and make a dirtier fuel. It's like using caviar to make fake crabmeat."
The environmentalists also warn that the growing oil sands industry threatens to tear up a huge stretch of Canada's
They also say that Canada, already behind in its commitments to reduce greenhouse gas emissions under the Kyoto Protocol on climate change, will not be able to reach its Kyoto targets if production of oil sands keeps rising at the current rate.
Few Canadians seem to be complaining. This year, every Albertan - even children - is receiving a $400 check in the mail from the provincial government, whose budget surplus has exploded from oil revenue. While Fort McMurray is among the fastest-growing cities in Canada, real estate prices are climbing across the province.
The few protesters tend to be local Indians, although many of the local bands are getting into the oil sands business or supplying projects with services.
"There are no moose, no rabbits, no squirrels anymore," complained Howard Lacorde, 59, a Cree trapper whose trapline has been interrupted by a new oil sands project developed by Canadian Natural Resources. "The land is dead," he added, shaking in anger, as he walked through a construction site that was once his trapline.
Suncor, the EnCana Corporation and Shell Canada Ltd. are talking about setting up a cooperative effort to capture, transport and sell carbon dioxide that otherwise would be released into the air from oil sands production. Total S.A. is considering building a nuclear power plant here to extract the oil sands without having to use increasingly expensive natural gas and reduce emissions of heat-trapping gases, which many scientists associate with global warming.
The companies say they are committed to restoring the lands they drill and mine to a state as close to natural as possible, and they note that advanced technologies are decreasing the amounts of gas released per barrel of oil they produce.
So far they have reclaimed 13,000 acres of forest and wetlands, about 15 percent of the land disturbed. But the provincial government has approved oil-sand work on more than 230,000 additional acres over the next 60 years, and applications for new projects are proliferating.
Suncor, the earliest major operator and still one of the biggest, has made a public commitment to environmental responsibility. It has planted 3.1 million trees, taking cuttings from shrubs and native vegetation. The company says it is recycling 90 percent of the water it uses, and it boasts that one species of toad considered at risk is thriving in its reclaimed ponds.
On a new production site using steam injection to liquefy rather than mine the raw material of oil sands and raise it to the surface, Suncor will reuse water from the mining operation instead of using fresh river water.
"With concerted effort and the technology in play, we will be taking on the environmental challenge aggressively," Mr. Lambert of Suncor said. But he conceded that "the economic growth we are experiencing means a rising greenhouse gas production profile."
The only thing likely to slow production is a sustained decline in oil prices, something few energy specialists predict.
"There is no environmental minister on earth who can stop the oil from coming out of the sand, because the money is too big," said Canada's environment minister, Stéphane Dion, in an interview. "But we have to be very strict on environmental impact."
Posted by Arthur Caldicott on October 10, 2005
Federal government chronically unable to sustain its own environmental initiatives
Commissioner finds federal government chronically unable to sustain its own environmental initiatives
2005, 2005 Report of the Commissioner of the Environment and Sustainable Development, 29-Sep_2005
Environmental lethargy is one more example of a worn-out government
Editorial, Vancouver Sun, 10-Oct-2005
Commissioner finds federal government chronically unable to sustain its own environmental initiatives
News Release
The Commissioner's Perspective—2005, 2005 Report of the Commissioner of the Environment and Sustainable Development
Ottawa, 29 September 2005
While the federal government has announced many initiatives to put Canada on a path to environmental sustainability, it rarely sees them through to completion, says Johanne Gélinas, Commissioner of the Environment and Sustainable Development, in her Report tabled today in the House of Commons.
“When it comes to protecting the environment, bold announcements are made and then often forgotten as soon as the confetti hits the ground,” said Ms. Gélinas. “The federal government seems to have trouble crossing the finish line.”
The Commissioner's most recent Report details urgent examples of unfinished environmental business in areas such as Canada's deteriorating oceans, the protection of biodiversity, and the safety of drinking water in First Nations communities, as well as in other areas of federal responsibility.
The Report also looks at the government's efforts to protect national parks and to follow through on its commitment to “green” federal purchasing. As well, it includes the results of three audits of environmental petitions submitted to the government by Canadians—one of which deals with the government's promise to update requirements for nuclear liability insurance coverage to meet international standards.
“The issues we raise this year pose concrete risks to the environment and well-being of Canadians,” said Ms. Gélinas. “Federal performance must improve markedly if vital initiatives are to achieve their goals.”
The Commissioner of the Environment and Sustainable Development and her audit team are part of the Office of the Auditor General of Canada. Her mandate is to audit and report to Parliament and Canadians on significant environmental and sustainable development issues.
- 30 -
The Report of the Commissioner of the Environment and Sustainable Development is available on the Office of the Auditor General of Canada Web site (www.oag-bvg.gc.ca).
Information:
Julie Hébert, Communications
Tel.: (613) 952-0213, ext. 6292
E-mail: communications@oag-bvg.gc.ca
Environmental lethargy is one more example of a worn-out government
EDITORIAL
Vancouver Sun
Monday, October 10, 2005
The federal government is blowing a lot of hot air on environmental issues and its lack of action is threatening Canadians' well being. That finding comes through loud and clear in the lengthy report of the commissioner of the environment and sustainable development, an arm of the Auditor-General's office.
And whether you think the concept of sustainable development is as important in human history as the industrial revolution or is junk science peddled by an international cadre of social engineers, the criticism of political inertia stands up.
The report takes the government to task for making bold announcements, which are often forgotten "as soon as the confetti hits the ground." Commissioner Johanne Gelinas accuses her political masters of failing to sustain their initiatives with policies, plans and structures that would allow departments to implement the programs, or track their progress when they do.
In some cases, the matters in question are of grave consequence to human health, such as safe drinking water. Ottawa has been slow to update quality guidelines, which set limits for contaminants, and has not lived up to its responsibilities to inspect water on aircraft, putting thousands of travellers at risk.
The audit found that as many as half a million people living in 600 first nations communities have no assurance that their drinking water is safe because there are no federal laws or regulations in place. Despite $2 billion spent to address the problem, the situation has deteriorated. The report warned further that a five-year, $600-million water management strategy approved in 2003 won't improve quality or safety on a continuing basis.
The report says Ottawa has done little to protect Canada's oceans and reverse dwindling fish stocks, or to address the problems of pollutants, invasive species or declining biodiversity.
It found that insurance coverage carried by operators of nuclear facilities is at levels established 30 years ago and no longer meets international standards.
The report says Parks Canada must upgrade its parks management plans -- half of those examined in the audit were outdated.
It also complained that the government has no policy on "buying green." Given its annual $13-billion procurement budget, that could make a dramatic difference to fledgling industries involved in environmentally sensitive manufacturing, recycling, alternative energy and conservation.
Gelinas blamed bureaucratic infighting and turf wars for the lack of coordination on programs that cross departmental boundaries. Programs and staff are often changed without regard for results and senior bureaucrats aren't held accountable, she added.
In other words, it's business as usual in Ottawa.
The report's wide-eyed surprise that politicians don't do what they say they'll do must be disingenuous. Liberal commitments to environmental action aren't meant to protect the environment; they are meant to win the votes of those who care about such things. Once the votes have been cast, there is no imperative to follow through.
It's a flaw in our system that governments too long in power see perpetuation of their privilege to be their over-riding purpose. The environment is only one of the many issues of concern to Canadians that are subservient to the Liberal priority of preserving the status quo.
What little governments do accomplish is typically limited to the early years of their mandate. After that, the pledge to public service mutates into a sense of entitlement. That happened long ago to the Chretien-Martin Liberals.
Unless there are political points to score, there probably will be no action taken on the commissioner's report, which will join dozens of others the government has ignored over the years. Canadians must come to understand that, in a vibrant democracy, they must not let government cynicism, greed and political opportunism supersede the public interest.
© The Vancouver Sun 2005
Posted by Arthur Caldicott on October 10, 2005
October 08, 2005
The Clusterfuck Nation Chronicle: Calgary
by Jim Kunstler
The Clusterfuck Nation Chronicle
Commentary on the Flux of Events
October 3 2005
for previous chronicles click on
Clusterfuck Nation Archives
I was way out in Calgary, Alberta, last week, the tar sands capital of western Canada. I was there to yak on camera for a CBC-sponsored documentary about suburbia, and the city itself proved to be a strange and interesting case of immersive delusional behavior.
Calgary started out, of course, as the railhead for western ranching and a jump-off for various gold rushes in the late 19th century. Now it has become an archetypal city of immense glass boxes in a sterilized center surrounded by an asteroid belt of beige residential subdivisions -- sort of what Rochester, New York, would be like if it had an economy. The vast suburbs ooze out onto the prairie to the east, along with their complements of strip malls, power centers, car dealerships, and fry-pits, and on the west they bump up against the foothills of the Rockies.
The real estate scene in Calgary is rip-roaring because newcomers are flooding in to work the tar sand angles. No doubt the tar sands will generate a lot of wealth in the years ahead. But those who think they will save western civilization from a Peak Oil clusterfuck are going to be very disappointed. We are not going to run the interstate highway system, Walt Disney World, and WalMart on the Canadian tar sands.
These days, a lot of people (including news reporters) are saying that the tar sands contain the equivalent of a trillion barrels of oil, which is just plain nonsense. It's more like the equivalent of 180 billion barrels -- with world consumption at 30 billion annually (do the math). But the word equivalent is tricky, too, because it's only the equivalent in volume, not in the cost of recovery, since the stuff does not flow out of the ground at room temperature like Texas sweet light crude. The process requires a huge up-front mining operation on top of everything else, conducted in a climate so cold that the 13-foot-diameter tires of giant dump trucks crack regularly. The Achilles heel of the operation is that it requires hundreds of millions of dollars a year worth of natural gas to melt the stiff goop out of the sand, and that Canada's natural gas supply is verging on depletion just as ours is. They'll have a gnarly choice in a few years: either heat their homes or power the tar sands operation.
Another catch is that even in the short term, the petroleum that is recovered is not going exclusively to the United States or even Canada. The Chinese have been very busily inking contracts for substantial gobs of it. Is George Bush going to send the 82nd airborne into Alberta to secure access to the tar sands?
But this blog entry is not really about the tar sands, it's about the expectations of the people working off of them, which is that they assume the easy motoring utopia will continue indefinitely and are madly busy building a suburban infrastructure for it to dwell in, even while Canadians themselves are now paying the equivalent of $4 US a gallon for the privilege to commute forty miles a day.
What's going on in Calgary, with new subdivisions of half-million dollar houses opening every month, is the North American tragedy in microcosm. Because every new suburban house built, every new Target store opened, every new parking lot paved, every highway widened will be a project in the service of a living arrangement with no future. It is a true madness that beats a path to historic tragedy.
And this is what you have to think about, wherever you live in the US or Canada: what kind of projects and proposals are moving right now in the permitting pipeline of your own municipal planning boards? Things waiting to be built in the next year or two. Chances are they're the same suburban furnishings we've been getting for half a century, in the latest state-of-the-art releases. Each one is a tragedy. Each one will carry us further into darkness.
How do you stop such suicidal behavior? Probably not by persuasion or exhortation. People change what they are doing when circumstances compel them to and not before. The American public barely even thinks about these things. The Sunday New York Times news section contained not one story this week bout the current state of oil-and-gas operations in the Gulf of Mexico. The fact is that Hurricanes Katrina and Rita destroyed more than 90 production platforms as well as pipelines and drilling rigs. The implications are so obvious and we are not getting them.
The Clusterfuck Nation Manifesto
Eyesore of the Month: September 2005
The Golden Arches still stand in Biloxi, Missisippi, following the wrath of Katrina, but just about everything else lies shredded across the landscape. The people of Mississippi face a critical crossroads as they contemplate rebuilding. Will they simply restore the suburban pattern that was wiped clean by the hurricane? Or will they change the rules to encourage compact redevelopment in recognition that the age of easy motoring is over? To rebuild suburbia as it was will be exactly the kind of tragic misstep that this nation can't afford.
Read more Jim Kunstler at www.kunstler.com
Posted by Arthur Caldicott on October 08, 2005
Race for Arctic pipeline heats up for Canada, U.S.
By BARRIE MCKENNA
Globe & Mail
Saturday, October 8, 2005
WASHINGTON -- The race is officially on to deliver the Arctic's vast reserves of natural gas to energy-hungry markets in Canada and the United States.
Alaska Governor Frank Murkowski says he's just days away from striking a royalty deal with Exxon Mobil Corp., British Petroleum and ConocoPhillips Co. that would pave the way for the $20-billion (U.S.) pipeline megaproject.
"I anticipate receiving an affirmative response from the producers within the next few days," Mr. Murkowski said, adding that today's lofty natural gas prices have finally made the long-planned project economic.
The pending deal comes as Exxon subsidiary Imperial Oil Ltd. and other producers are at loggerheads with Ottawa over the fiscal terms of a second shorter and cheaper northern pipeline -- a $7-billion (Canadian) line to tap into natural gas in Canada's Mackenzie Valley.
A deal on the Alaska pipeline could put pressure on Ottawa to come to terms with Imperial Oil on the all-Canadian line. Imperial chief executive officer Tim Hearn warned this week that the Mackenzie pipeline might never get built if it can't reach a deal soon with Ottawa and native groups.
"If this thing drags out and drags out, I believe Alaska will get built and we might as well just take a back seat for a long period of time," he told reporters in Calgary.
And some analysts agree.
"If the Alaskans are going, the bigger line will be the one that gets all the attention," said Calgary-based energy analyst Ian Doig. "I don't think Ottawa can move that quickly."
The two projects are so ambitious that there may not be enough capital, manpower, expertise and pipe steel in North America to build both routes at once, Mr. Doig said.
At least two companies are involved in both projects -- Exxon and ConocoPhillips. Shell Canada Ltd. is also involved in the Mackenzie Valley project. Alaska officials insist they aren't in competition with the Mackenzie Valley project. Indeed, Mr. Murkowski has said both projects should go ahead.
Exxon and the other producers on Alaska's North Slope were tight-lipped about the state's offer on royalties, jobs and access to the gas -- the culmination of 18 months of intense negotiations between the state and the companies.
"We will evaluate the State of Alaska's fiscal contract and will respond when our assessment is complete," said Exxon spokeswoman Susan Reeves from Houston.
Even with a royalties deal, Alaskan officials conceded it will be four or five years before construction can begin. "If we get an agreement this would be an important step in getting North Slope gas to market," said Chuck Logsdon, gas line adviser to Mr. Murkowski.
Mr. Logsdon said the state hasn't given producers a deadline to respond, but it anticipates a deal "pretty soon."
Buoyed by the recent price surge, which has pushed the cost of natural gas to about $14 (U.S) per thousand cubic feet, Alaska insists its project is now clearly economic.
Meanwhile, Imperial Oil, eager for guarantees from Ottawa to help it recoup the massive investments needed, said the pipeline remains uneconomic.
But analysts and industry insiders said Imperial is using an artificially low $2.50 per thousand cubic feet estimate of the future natural gas price in its modelling to extract a better deal from Ottawa.
"No one is using that number," said Wilf Gobert, vice-chairman and head of research at Peters & Co. Ltd. in Calgary. "Imperial Oil is trying to protect their downside."
"Nobody has a $2.50 gas price," echoed an oil and gas industry executive, who asked not be named.
Mr. Gobert said most producers are using a long-term forecast of $4 per thousand cubic feet, still well below the current price. Most investors, on the other hand, are betting that gas prices will retreat from their current peak, but remain above $5 for several years.
The