My Submission to the BCUC Site C Inquiry

Sirs/Mesdames,

RE: Submission to the BC Utilities Commission Site C Inquiry

In the BC Utilities Commission (BCUC) terms of reference for the Site C Inquiry (Inquiry) consideration is made to the topic of expected peak capacity demand and energy demand with respect to the Site C Dam. Specifically, in the terms of reference for this Inquiry the BCUC was required to:

use the forecast of peak capacity demand and energy demand submitted in July 2016 as part of the authority’s Revenue Requirements Application, and must require the authority to report on

  1. developments since that forecast was prepared that will impact demand in the short, medium and longer terms, and
  2. other factors that could reasonably be expected to influence demand from the expected case towards the high or low load case.

 

The research and analysis that formed the basis of the July 28, 2016 Fiscal 2017 to Fiscal 2019 Revenue Requirements Application was completed prior to the Paris Agreement1 coming into force and a search of the document demonstrates that Canada’s commitments under the Paris Agreement were not considered in the forecasts presented. It is my opinion that any review of future energy demand in BC that ignores our commitments under the Paris Agreement would be incomplete. As such, I present the following information for your consideration.

Under the Paris Agreement Canada agreed to drop our greenhouse gas emissions to 30% below 2005 levels by 20302. BC currently meets most of our electrical energy needs using large-reservoir hydro but most of our energy needs are being met using fossil fuels. As a nation Canada has pledged to reduce our dependence on fossil fuels. This can only be accomplished by substantially increasing our supply of electricity. To do so we will need to develop alternative low-carbon energy supplies. Given our future energy needs we cannot ignore readily available, low-carbon energy sources like the Site C project.

Depending on your reference, BC’s total energy consumption, inclusive of the energy required to create secondary electricity, was approximately:

  • 1,142 PJ in 20003
  • 1,264 PJ in 20094
  • and/or 1,070 PJ in 20105

I’m providing multiple numbers because, frankly, I don’t know which one to trust. For the purposes of this discussion I am going to rely on the median, the Globe Foundation number, of around 1,142 PJ of energy a year. This translates to approximately 317,500 GWh of energy. According to BC Hydro, in 20126 BC Hydro’s total energy requirements were 57,083 GWh. This means that BC Hydro supplied less than 18% of the total energy used in BC and that renewable electricity component represents approximately 17% of our yearly energy needs. That leaves over 82% of our provincial energy usage being derived from sources other than BC Hydro. Of that 82% about 33% (approximately 380 PJ) was supplied via fossil fuels (excluding natural gas); about 26% (approximately 300 PJ) was supplied via natural gas; about 20% (approximately 225 PJ) was supplied via burning of waste biomass in industrial facilities; and the remaining was supplied via coal and coke (mostly for use in cement plants)7.

Looking at the numbers above, it becomes clear that cutting our emissions to achieve our pledge under the Paris Agreement will mean reducing the percentage of fossil fuels from our energy mix and replacing that energy with low-greenhouse gas electricity, like the kind that will be produced by the Site C Dam. Consider that the Site C Dam, once completed, is expected to generate 5,100 GWh8 of electricity. To replace the energy currently provided by gasoline and diesel fuels only, we would need to find the energy equivalent to almost 15 Site C dams. Admittedly using the efficiency gains associated with the use of electric vehicles in transportation could bring that number down to 6-9 Site C Dam equivalents (depending on your choice of conversion factors).

Remember that only considers liquid fuels. For a 100% fossil fuel-free B.C., we would also need to replace the natural gas used mostly for industrial purposes and for home and water heating. That would represent another 16 Site C dam equivalents. Consider the City of Vancouver’s Zero Emissions Building Plan which calls for the elimination of natural gas in housing uses. The move from natural gas to electricity for housing uses would significantly drive up electricity demand.

Any knowledgeable observer looking at these numbers would recognize that British Columbia is nowhere near ready to help Canada meet our Paris Agreement commitments. Given our current electrical supply we are approximately 20-25 Site C Dam equivalents away from a goal of a fossil fuel BC and still many Site C Dam equivalents away from achieving our Paris Agreement commitments. What is abundantly clear, however, is that we will need a lot of fossil fuel-free electricity in the very near future if we are to do our part to arrest global climate change. As the numbers clearly show, the Site C Dam project barely gets us started on the road to our fossil fuel-free future but at least it will help move us in the right direction.

Having established that we need a lot of power, the question that must be asked is how do we go about generating that power? Happily, BC Hydro evaluated various energy generation and storage technologies9 including establishing approximate costs for the various options. BC Hydro’s, 2014-2015 power generation options update10 helps clarify the costs of alternatives and makes it clear that, on a cost basis, the Site C Dam represents a cost-efficient means to achieve our future energy needs.

Some have argued that energy imports will allow BC to achieve our electricity needs in the absence of Site C. Well, in 2007 as part of its Energy Plan11 (2007 EP) and in the subsequent Climate Action Plan12 (CAP) our Provincial Government committed us to a path of electricity self-sufficiency. As described in these plans, electricity self-sufficiency was deemed a major priority. The reason for this was self-evident to the authors of those plans: in a world where fighting climate change becomes a defining political objective, ensuring that we have a steady domestic supply of low-carbon electricity is exactly the reason why we have a government-owned utility. The two plans foresaw a future where we needed to use more electricity for transportation and residential uses and wanted to ensure that we had the domestic capacity to meet those needs. Recognizing that the government of the day couldn’t pay for it all the CAP foresaw that we would need to bring in external partners to meet our future electricity needs. It also acknowledged that paying a bit more to provide flexibility of supply and energy security represents sound governmental policy and not a mistake.

Many disagree with that analysis, as “internationally respected economist Robert MuCullough”13 puts it:

In 2013, B.C. Hydro estimated that Site C would cost 2.5 times then current annual market prices. As natural gas and renewable prices have continued to decline, Site C now costs 3.3 times current annual market rates.

Put another way, British Columbia rate payers could save $4.1 billion simply by buying the same amount of power from the United States — even after writing off the $1.75 billion already spent.

Now let’s look at that approach in light of current political/economic conditions. On January 1, 2017, the Province of Alberta initiated its Climate Leadership Plan14. As part of that plan Alberta committed to ending coal pollution15. This requires that Alberta phase out its coal power plants. On January 1, 2017 coal represented 41% of Alberta’s installed electricity generation capacity16. I’m guessing that if Alberta is in the process of shuttering 41% of its generation capacity, it will not have a lot of inexpensive electricity to export.

As for Washington State, they are in the process of implementing a carbon pricing mechanism while looking to increase their zero emission vehicle fleet to 30%17 and simultaneously eliminating the use of electrical power supplied by coal18. While Washington has been a net exporter of electricity19, the vast majority of that has been to California which imported 805 trillion BTUs of electricity in 201520 (latest data available). This would be the same California that is closing its last nuclear plant21 while projecting increases in electricity prices22. California is also starting to price carbon23 and currently generates 6386 GWh24 of electricity from nuclear (closing) and natural gas-fired plants (whose carbon is being priced). What this means is that electricity prices are not going down in California anytime soon.

So to our east they are foreseeing a crunch on electricity while to our south Washington should just barely be able to supply its own market. To the south of Washington California is going to be desperately searching for massive amounts electricity. These are not the conditions where we, as British Columbians, want to go hat-in-hand looking for cheap electricity to import. Once BC starts acting on our climate change commitments we are going to need a lot of electricity. Moreover, that electricity is not going to be cheap25 and irrespective of what the activists keep claiming conservation and efficiency improvements will not address this energy shortfall26. As for the Columbia River entitlement, that may help a bit, but as I have demonstrated even including that power we will come nowhere close to meeting our increased demands27.

To conclude I can’t seem to say this enough. The Site C dam is not a perfect project. It has real flaws but I can’t help but hearken back to what Dr. Andrew Weaver, climate scientist, said about the project28:

There are environmental consequences, yes, but there are environmental consequences for everything we do and we have to stop using the atmosphere as an unregulated dumping ground.

To my understanding, BC’s 2007 Energy Plan was predicated on a scenario where fighting climate change meant that Alberta and Washington had no electricity to export. Now with Alberta closing its coal plants we are half-way there. Any post-Paris Agreement Energy Plan must assume that BC will not be importing electricity. To assume otherwise will leave us incredibly vulnerable to external forces. We already pay above market rates for our gasoline. Do we want to depend on the US for our electricity as well?

My answer to this question is no. I think that the 2007 Energy Plan and the Climate Action Plan represented solid evidence-based policy. The two plans acknowledged the risks and admitted that addressing those risks would be a bit more expensive than simply pretending that those risks don’t exist. It is good government policy to ensure that, when the time comes, BC has the energy it will need to meets its commitments to its populace. I do not think we can rely on the kindness of our neighbours because in the coming years it is likely the neighbours won’t have any excess energy to share.

Thank-you for your time on this matter.

Blair King, Ph.D., R.P.Bio., P.Chem.

References

1 – http://unfccc.int/resource/docs/2015/cop21/eng/l09.pdf

2- http://www4.unfccc.int/submissions/INDC/Published%20Documents/Canada/1/INDC%20-%20Canada%20-%20English.pdf

3 – http://globe.ca/wp-content/uploads/2012/10/globe_endlessenreport.pdf

4-http://www2.cieedac.sfu.ca/media/publications/BC_2011_report__09_data__final.pdf

5 – http://pics.uvic.ca/sites/default/files/uploads/publications/Energy_Data_Report_2010_1.pdf

6-(https://www.bchydro.com/content/dam/BCHydro/customer-portal/documents/corporate/regulatory-planning-documents/integrated-resource-plans/current-plan/2012-electric-load-forecast-report.pdf)

7-http://globe.ca/wp-content/uploads/2012/10/globe_endlessenreport.pdf

8- https://www.bchydro.com/energy-in-bc/projects/site_c.html

9 – https://www.bchydro.com/energy-in-bc/meeting_demand_growth/generation-options.html

10- https://www.bchydro.com/energy-in-bc/meeting_demand_growth/generation-options/updates.html

11-https://www.bchydro.com/content/dam/hydro/medialib/internet/documents/info/pdf/2008_ltap_appendix_b1.pdf

12-http://www.gov.bc.ca/premier/attachments/climate_action_plan.pdf

13-https://in-sights.ca/2017/06/18/something-rotten-with-the-state-of-bc-hydro/

14-https://www.alberta.ca/climate-leadership.aspx

15-https://www.alberta.ca/climate-coal-electricity.aspx

16-http://www.energy.gov.ab.ca/Electricity/681.asp

17-http://www.governor.wa.gov/issues/issues/energy-environment

18-http://www.governor.wa.gov/news-media/gov-inslee-announces-executive-action-reduce-carbon-pollution-and-promote-clean-energy

19-https://www.eia.gov/state/?sid=WA

20-https://www.eia.gov/state/?sid=CA

21-http://www.latimes.com/business/la-fi-diablo-canyon-nuclear-20160621-snap-story.html

22-https://eec.ucdavis.edu/files/02-06-2014-The-Future-of-Electricity-Prices-in-California-Final-Draft-1.pdf

23-https://www.forbes.com/sites/energyinnovation/2017/02/08/carbon-prices-rise-in-californias-cap-and-trade-program-as-legal-certainty-grows/#485b6bef2355

24-https://www.eia.gov/state/?sid=CA#tabs-4

25-https://achemistinlangley.wordpress.com/2017/06/10/on-the-costs-of-fighting-climate-change-and-the-site-c-dam/

26-https://achemistinlangley.wordpress.com/2017/06/15/no-efficiency-and-conservation-cannot-replace-the-electricity-supplied-by-the-site-c-dam/

27-https://achemistinlangley.wordpress.com/2016/01/03/a-non-partisan-look-at-british-columbias-energy-picture-in-light-of-the-paris-agreement/

28-https://www.theglobeandmail.com/news/british-columbia/powering-the-future/article1152789/?page=3

Posted in Canadian Politics, Climate Change, Site C, Uncategorized | Leave a comment

What anti-Site C activists won’t tell you about energy efficiency

In a previous post I discussed why energy efficiency was not going to be the cheap and easy way to address BC’s electricity needs. Well a number of activists have challenged me on that topic. They argue that we have only scratched the surface on the road to energy efficiency and that more can be accomplished. My response to them is yes, more efficiency is possible, but at a cost of more societal inequality and higher energy costs. To put it another way, if your argument against Site C is that shelving the project will save you money on your energy bill then you are barking up the wrong tree. In this post I will expand on that message.

As I have previously written, in the last 25 years British Columbians have done a great job of reducing our per capita energy use. Through the Power Smart program BC Hydro has managed to keep our energy demand steady while our population grew. They did this by encouraging us to replace, or get rid of, inefficient appliances (the Energy Star program); being Energy Wise at home and at work; and by encouraging electricity conservation by doing things like getting rid of incandescent lights.

Another way we have reduced our electricity use has been by relying on natural gas for things like heat and hot water. I remember when they brought natural gas to Victoria. While it was inconvenient (as they installed all the pipelines and caused us to buy new appliances) it was great because our new natural gas water heater and furnace dropped our hydro bills precipitously. We paid off those appliances before we knew it because gas was so much cheaper than hydro.

Well one of the steps in achieving our Paris Agreement goals is getting us off natural gas and back to using electricity to heat our homes, cook our meals and heat our hot water. The drive to build highly efficient passive homes will certainly reduce the total amount of energy needed to heat our homes but it does nothing about cooking food or heating water. That will be done using electricity which will drive up demand for electricity just as we come to grips with the problem that the water running through BC Hydro’s dams can only supply a fixed amount of electricity at any given time. As our population continues to grow either we will need to find more supply (like building Site C) or we will need to reduce our maximum usage.

The activists argue that we can use renewables to supply that electricity. I agree but point out some limitations with that approach. The first is that given solar insolation values, much of BC is restricted on how much energy can be generated by solar panels. Certainly, solar can serve a useful purpose in the interior (in summer) but on the coast (and during winter) solar panels will often supply little or no electricity and solar panels are entirely useless in the dark. This brings us to the current dilemma in the renewable energy field “the duck curve”.

For those of you not familiar with the term “the duck curve” is a way of describing the supply/demand challenges associated with renewable-heavy electricity systems over the course of the day (good explainer here). The problem is that the sun and wind don’t generally supply power when people need it the most. Most solar electricity is generated in the heat of the day when families are at work or school and household use is at its minimum. Then, just when the sun goes down, everyone goes home and power demand spikes. This happens when families get home after work/school and turn on the air conditioners/heaters; set their ovens to cook dinner; give their kids their evening baths before bed-time; and turn on their family electronics. All this household use drives up demand right when the supply of renewable energy is at its lowest (in the early evening). This makes a shape of the demand curve go upward in a way that look a lot like the neck of a duck. This demand is met by our electrical system by ramping up peaker power plants to cover the spike in demand. Unfortunately if you don’t have any spare capacity lying around things can get very tricky very quickly.

In a world without natural gas or nuclear peaker plants the duck curve will need to be addressed  by either “flattening the duck” (by reducing that demand) or using storage (charging batteries during the day and then using that battery power when demand is at its peak). Unfortunately for British Columbians, this second option will not be of much use. If you live in Vancouver, in February, then your solar panels won’t generate enough charge during the day to be of any use in the early evening.

This leaves us with the less palatable option, we must reduce demand during peak hours. How do British Columbian’s create efficiencies in a system that is already quite efficient? The answer is what the activists have been careful not to discuss. Absent more supply (like Site C) this will be done through “load-shifting”, “demand response” and “dynamic pricing”. These terms all mean essentially the same thing: rationing through price. All involve making power more expensive when demand is high in order to discourage its use. Under these programs, you price electricity in shorter increments (by the minute/second) with price peaking when demand is highest. This is supposed to cause users to avoid electricity-intensive activities at that time so that demand doesn’t exceed supply. How will BC Hydro do this? Well we all have smart meters on our houses so they already have the tools to charge a premium based on time of use.

I am one of the lucky ones. My wife and I have good jobs. If the price of energy rises at dinner time, we will find a way to make do. Our kids won’t be eating cold cereal for dinner nor skipping baths to save money. But that will not be the case for everyone. Come late February when the days are dark and the nights cold the cost of giving your kids a hot dinner and a warm bath before bed will simply be too much for many families to afford. Now I can hear a lot of readers complaining that I am telling a scare story. That is absolutely the case. The scariest stories are the ones that cut closest to home and the reality is that, absent more supply, the way we will have to cut our demand is by pricing some users out of the market and who gets hurt most when price becomes a premium? The poorest.

As a side-note there is an alternative to the free-market approach, but that is even less palatable. This would involve strict rationing where the government decides how much power each household gets or shuts down power altogether. This is not a scenario I’m interested in discussing at this time.

Going back to the title of this post. The use of price to address demand is the secret to the next generation of energy efficiency initiatives. It is something the activists understand but choose not to discuss because doing so will reveal the inequity inherent in this approach. It places an undue burden on those least able to afford that burden.

Having revealed this issue, let’s bring this story back to Site C. As I have written many times, Site C is not the perfect tool to address our anticipated energy needs, but in my opinion it is the best of the options out there because of a number of facts:

  • It takes advantage of its location downstream of two other dams to reduce its reservoir size compared to its capacity. Its reservoir will occupy much less space than a comparable dam elsewhere.
  • Its location downstream of two other dams means it will not have the sediment issues seen in other dams. Sediments are a serious concern in dams because it is the deposition of fresh sediments that results in methane emissions in dam reservoirs. Absent new sediment deposition the reservoir at Site C is anticipated to essentially cease producing methane after about 10 years of operation and as such Site C energy will have a very low-GHG footprint.
  • Its proximity to existing transmission infrastructure means it will not cost as much to connect to the transmission system.
  • From a cost perspective it will provide cheaper energy than the renewable options, especially when one factors in transmission costs.
  • Its power is dispatchable which increases its value as renewables start to make up a larger slice of the energy market.
  • It is secure and will belong to British Columbians, which means that when regional energy supplies are short we won’t be out there trying to buy energy in a sellers market.

On the down-side there are serious issues associated with Site C:

  • There are still unsettled issues with indigenous peoples in the region. While BC Hydro has the agreement of many of the local nations there is still work to do the ensure that the people of the Peace do not bear an undue burden to provide BC with our electricity.
  • It will flood good land and will have ecosystem effects including damaging some fisheries. Admittedly the amount of land being flooded is less than would be necessary elsewhere but good farmland will be flooded to make the reservoir possible.
  • Habitat fragmentation in the Peace is a serious concern and Site C will further exacerbate that problem.

Looking at the two lists I believe that the pros outweigh the cons and it should be possible, through government action, to help mitigate the negatives associated with the dam. This is especially important because the alternatives are so unpalatable. Those alternatives sound good when spoken of in abstract: energy efficiency, renewables… who can be against those concepts.? The problem is they are not nearly as benign in practice. Renewables are still a lot more expensive than Site C and the arguments for them only make sense if the costs continue to decrease markedly over time and even then these costs ignore the transmission system upgrades necessary to get those renewables to the grid. As for efficiency, as I discussed above what energy efficiency really means is more social inequity with the burden of fighting climate change being unfairly borne by the poorest and least able among us.

Put in the simplest of terms, to address our future energy needs we can choose to increase capacity (through Site C) or increase efficiency. From a costs perspective increasing capacity is a cost borne by our society while increasing efficiency is a cost borne by the individual. What further swings this decision to the capacity side of the ledger is the reality that those efficiency gains will be disproportionately borne by the poorest among us.

Posted in Canadian Politics, Site C, Uncategorized | 8 Comments

Busting Dogwood’s “Myths” on Oil-by-Rail and Crude Oil Exports

This week the pipeline debate returned to the headlines and with it have come the anti-pipeline activists who have ramped up their outrage machine to 11 and have been on the various media platform presenting their case. What I find most frustrating is the intellectual laziness of the these activists. It is almost as if they have simply stopped trying to convince the informed and are directing all their efforts at their dedicated base and the uninformed. As such, their messages have become increasingly simplistic and, most problematically, seem dependent on out-of-date or misconstrued references. Last week I wrote a piece about the Wilderness Committee’s laughingly sophomoric screed against the oil sands and today I will focus on the latest pronouncements by Dogwood and a representative from the Wilderness Committee.

The latest from Dogwood BC would be a combination podcast and online article titled: “The Top Ten Kinder Morgan Myths — BUSTED!” Now typically I don’t listen to these podcasts as they tend to drag, but based on the content of the web page I felt it necessary to listen to the start of this one and I wasn’t disappointed. It didn’t take more than a couple minutes for Economist Robyn Allan to make some truly astounding statements. Specifically she starts by stating [my transcription so may not be perfect]:

There are no Asian markets for Alberta’s crude oil, there certainly are refineries in Asia that process oil but they are not accessing it from Canada. We have experienced it historically with the lack of our ability to develop markets in Asia. In 2012 the NEB gave KM unprecedented preferential treatment by approving their request for guaranteed 79,000 bbl/day of access to the Westbridge dock, Kinder Morgan promised that if that access was granted markets in Asia would develop. Well what we find from the statistics from Port Metro Vancouver and even from the NEB itself is that those markets have not developed. In 2016 not one tanker went to Asia all the tankers went to US markets…

Now I have previously recommended that when listening to the activists you must pay attention because they will say things to misdirect you. In this case, Dr. Allan conveniently forgets what happened to the world markets since 2012. Oil prices tanked and suppliers were dumping onto the market. In that challenging market, what happened to Alberta heavy crude on the West Coast? It was all snapped up by the Americans before we could even get it to Asia. Yet somehow Dr. Allan announces that this was a bad thing. Certainly access to tidewater didn’t open up new Asian markets, instead Alberta was able to open up a very important new North American market: the rest of PADD 5.

In case you don’t follow the US crude business there are some important things to understand about the US market. The US market is broken into Petroleum Administration for Defense Districts (PADDs) and PADD 5 (the West Coast, Alaska and Hawaii) is not effectively interconnected to the rest of the US by pipelines. As such it mostly must be self-sufficient or must import oil. Historically, BC crude has been pretty much restricted to the Puget Sound in Washington State due to lack of export capacity. California and Alaska have historically supplied the lion’s share of the demand in PADD 5. What most don’t know is that that California produces some of the highest GHG intensity fuel on the planet (even higher than oil sands crude). Alaskan oil, meanwhile, is drying up. This leaves much of PADD 5 with a supply shortage. Thanks to access to tidewater Alberta crude, which couldn’t get to California, is now flowing there. Dr. Allan sees this as a bad thing as California isn’t Asia but for oil producers it is a great thing. The trip to California is much shorter than the trip to Asia and as such the cost to move the crude much lower. So while Dr. Allan may be correct, we haven’t opened up new Asian markets, what we have done is open up the North American market in a way we never did before. An expanded Trans-Mountain can tap into the entirety of PADD 5 in a way it never could before, and, if enough supply exists it could also make a dent in the Asian market as a bonus. So while conditions changed since 2012 they did so in a good way and this is something to be celebrated not cursed.

As for the other big domestic market we need only look south to the Puget Sound. As I have written more times than I care to remember, the Puget Sound needs oil to run its refineries as their current supply from the Alaska north slope is drying up. The safest way to get that oil is via the Trans-Mountain through the existing pipeline network. Absent that pipeline supply they are getting more and more oil via rail. To repeat an expanded Trans-Mountain won’t need new tankers to get the fuel to the Puget Sound because it has an existing pipeline network to do the trick.

This brings us to the big falsehood being presented by the anti-pipeline activists that oil-by-rail is not happening, will not happen and/or has collapsed. The seed for this blog post was planted on Monday (July 31st) while listening to a radio debate between Climate_Pete (Peter McCartney from the Wilderness Committee) and Cody Batershill. During the debate Peter repeated his claim that oil-by-rail had “collapsed”. This, of course, is not the case. Certainly oil-by-rail decreased in 2016 but as the NEB statistics clearly show Canadian oil-by-rail exports have rebounded and are back where they were in 2013 and 2014. Put simply, Climate_Pete’s talking point is out-of-date and needs to be re-examined in light of the most recent data.

Dr. Allan, in the Dogwood podcast, was more careful with her words. She limits her discussion of oil-by-rail to marine export facilities, which she points out do not exist and will not exist on the West Coast. Once again you have to really pay attention, she has completely changed the topic and created a straw man to attack. The oil-by-rail we are talking about of the West Coast is the oil that is going to the Puget Sound and California that could be getting there via a safer alternative (the Trans-Mountain). Ironically, while Dr. Allan and her crew are claiming that oil shipments by rail are not increasing, the Sightline Institute in the US is documenting a massive increase in oil-by-rail to the West Coast. It is mildly amusing when an activist group does my debunking for me. As I discussed above, PADD 5 is running out of domestic crude and much of the remaining crude it has is of the very high-GHG variety. Absent supplies via pipeline the alternative being used for supplying the Puget Sound and California will be oil-by-rail.

Now I know that some particularly parochial activists will argue that oil-by-rail in the US is better that oil-by-pipeline in Canada but that ignores the fact that we share one planet and one border. As the near disaster of the oil train derailment outside Mosier Oregon almost showed, an accident on the US side of the border can have massive repercussions for Canadians. Canada and the US share the Columbia River and all the major rail lines for oil-by-rail run along the Columbia River Valley. A spill in the Columbia River Valley will hurt Canadians as well as Americans.

Going back to the Dogwood page we get another classic example of activists using out-of-date information to fuel their talking points. Their third “busted myth” is that the oil companies will use oil-by-rail irrespective of whether pipelines are built. Looking carefully you will note that this claim backed up by a 2015 Cenovus press release where Cenovus reports that they bought a rail terminal to ship oil-by-rail. The problem is that the activists have such short memories. Can anyone remember what major event happened in 2015? Oh yes that would be when President Obama rejected the Keystone pipeline. Now here is some information you never actually hear from the activists. Only Phase 4 of the Keystone pipeline network was rejected by President Obama. Phases 1 through 3a were completed and Phase 3b is under construction. Since the Canadian section of the pipeline (Phase 4) was rejected Canadian producers planned to use a “rail bridge” to bypass the hole in the pipeline network. Thus, Dogwood’s claim that oil companies will use rail anyways is not supported by the references presented in their article. Rather the reference they produce to bust a “myth” actually reinforces that fact. The oil-by-rail they cite was bought specifically to allow a bridge from Canadian producers to newly developed pipeline facilities in the US. Had the pipeline been built Cenovus would not have needed the oil-by-rail facility in the first place.

Honestly folks, this game of whack-a-mole is intensely tiring. It is late at night, I am 1500 words into this blog post and have only had time to debunk two of the first three “Kinder Morgan Myths – Busted” by Dogwood. I have started to tire of this whole debate because it is becoming increasingly clear that the activists really don’t care about putting in the effort to provide reasonable arguments. The time spent in their echo chambers has made them intellectually lazy. They create a talking point in 2015 (oil-by-rail is decreasing) and then they don’t bother to check whether the information is still true two years later (it isn’t). Honestly, these are paid activists. This is their job. Yet they can’t be bothered to check the NEB website once a year to see if their talking point still applies. They argue against straw men while ignoring real data and what is being reported on the ground. They make arguments that are directly debunked by friendly activists groups just on the other side of the border. Sure, it sounds convincing when spoken to a sympathetic interviewer on a Dogwood podcast but it just sounds silly when viewed in the light of the North American oil market.

Posted in Canadian Politics, Pipelines, Trans Mountain, Uncategorized | 3 Comments

Why a rushed BCUC review of Site C will be bad for our pocketbooks and our fight against climate change

July 18th marks a big changeover in BC. Sixteen years of Liberal rule comes to an end and a new NDP government (supported in the Legislature by the Greens) comes to power. One of the commitments our new NDP Premier has made was to submit the Site C Dam project to an accelerated review with the BC Utilities Commission (BCUC). It is my opinion that an expedited review of the Site C project will be bad for our pocketbooks while also having the potential to set back our fight against climate change.

Prior to the Site C Dam being approved it went through an independent environmental assessment by the federal and provincial governments. This Joint Review Panel spent two years looking at the project that included public hearings and the production and review of hundreds of reports. The output from this assessment was a 29,000 page Site C Environmental Impact Statement and an environmental approval certificate that included 77 separate conditions. Now one thing was missing in this review process: the Site C dam was never submitted to the BCUC for its review.

This was a conscious effort at the time. The government passed the “Clean Energy Act” that specifically exempted the project from BCUC review. Why? Well the BCUC is tasked with regulating B.C.’s energy utilities and is responsible for getting the best value for money for BC consumers. The problem is that the fight against climate change isn’t about getting the lowest energy prices for BC consumers, it is about reducing our carbon footprint. A BCUC review based on cost would look at the cost of Site C and look at the cost of a natural gas generation plant and go with the latter.

I can’t count the number of people who have told me that instead of building Site C BC Hydro should just re-open Burrard Thermal. Well re-opening Burrard Thermal certainly makes financial sense but it does not make climate sense. In a province that has the alternative of low-carbon hydro-electric power to turn around and generate electricity using natural gas represents climate negligence. That being said, exporting liquid natural gas (LNG) to countries that would otherwise use coal, makes sense from a global climate perspective.

So, if you are someone who doesn’t believe that climate change is an issue then you might have a legitimate case against Site C, but if you also claim to be concerned about climate change, demanding that we get the lowest cost energy possible only sets back the cause. Rising electricity prices represents a feature of the process not a bug.

I am frequently asked what will happen if Site C is submitted to the BCUC on an expedited review? Well the first thing is that they will not have time to get new data. It took the Joint Review Panel two years to assemble their report. The BCUC can’t repeat this process in 90 days.  Instead they will be relying on the data that was generated for the Joint Review Panel in 2012-2013. I don’t have to remind readers that a little something happened between then and now, notably the Paris Climate Agreement. Paris will have an incredibly important effect on our energy needs. It is going to reduce the options for future developments while increasing our demand for low carbon energy.

As for the availability of imports. Well in a post-Paris world the people we currently import electricity from will no longer have excess power to export. Rather the market is going to be turned on its head with Alberta and Washington going from exporters of electricity to importers and more importantly California, the 800 pound gorilla in the room, needing to fill a huge hole made by its closing of Diablo Canyon which supplies 9% of California’s electricity. This which will only drive up the price of electricity.

As for the individuals who claim that conservation will help us achieve our goals. Well efficiency and conservation cannot replace the electricity supplied by the Site C dam.  We have spent the last 25 years improving our efficiency and the results have been great. The problem is most of the major efficiencies that can be made, have been made. There are no more easy tricks to reduce electricity demand. Moreover it has been projected that the population of BC will increase by 1 million people in the next 20 years.  That increased demand cannot be addressed by conservation and efficiency gains.

An expedited BCUC review is like a family upon hearing they are pregnant planning to buy a new car only to discover half-way through the process that they aren’t going to have one child but instead are going to have triplets. That sleek looking sedan they were looking at with space for just one car seat in the back is no longer going to meet their needs. The data collected for the Joint Review Panel is not going to meet the BCUC’s information needs in a world that has changed so much with the signing of the Paris Agreement. Any legitimate review has to include consideration of our energy needs in a post-Paris future and needs to accept that some energy alternatives (coal and natural gas) are off the table. An expedited BCUC review will do neither. It won’t have the time to conduct the assessment necessary to address our energy needs under the Paris Agreement and, by regulation, it will be required to consider price to consumers and not greenhouse gas emissions. Talk about a guarantee that clean, low-GHG alternatives like Site C will be ruled out.

Any expedited  BCUC review that does not include considerations of our climate change commitments under the Paris-Agreement and the changes the Paris Agreement has made in the energy map of Western North America will almost certainly result in a decision that is bad both for our collective pocketbooks and for the international efforts to fight climate change.

Posted in Canadian Politics, Climate Change, Climate Change Politics, Site C | 4 Comments

On the Wilderness Committee’s sophomoric screed against the oil sands

Recently, I was directed to a sophomoric screed prepared by a climate campaigner at the Wilderness Committee. The paper (or possibly fundraising pamphlet?) “Time’s Up for the Tar Sands” represents some of the worst writing I have recently encountered on the oil sands. Frankly it reads as if an earnest grade schooler was asked to produce a negative article on the oil sands, the writing is simply that bad. What is most amazing is that according to the document itself, in addition to the author, it had three individual editors (Rumnique Nannar, Beth Clarke, Eric Reder). Honestly, this is such a target-rich load of hogwash that I don’t think I can do it credit in under 5000 words. Lacking the energy to write a blog post that long I am going to highlight some of the most egregious prose from this hilariously bad article.

Let’s start with the format. The author refers to the work as a “paper”  but it actually consists of a number of very brief hot-takes on various topics relating to the oil sands (or tar sands as the author prefers). Within each sub-section are the occasional link to a reference section in the back. This may be intended to convince the reader that the paper has some academic merit but a look at the references identifies that most are simply links to news articles, articles from anti-oil NGOs and other opinion pieces that don’t provide any academic heft but rather present the various authors’ opinions, which the Wilderness Committee author treats as if they were facts. What is more troubling is that while the author provides links to other documents for some of his claims, most are not supported with references and many are either deceiving or simply wrong. To demonstrate let’s look at page one.

The author starts with a series of attribution statements:

This freakish warmth has led to drought-fuelled wars in the Middle East and North Africa, the imminent extinction of the Great Barrier Reef and successive super typhoons rocking the Philippines and the South Pacific.

Now attributing various world-wide events to climate change is a common thing for activists, but when push comes to shove, the data actually isn’t there to support most of those attributions. In this case, the IPCC SREX makes this fact abundantly clear, as does the most recent research which steps back from attributing individual weather events to climate change. As for the “imminent extinction of the Great Barrier Reef” and blaming wars in Africa and the Middle-East on climate change those charges have been generally shown to be baseless. While the Great Barrier Reef is under severe stress caused by a number of factors, including climate change, following the end of the latest El Nino event it is now recovering. It’s death is not imminent and the primary cause of the recent bleachings was the El Nino which specialists in the field agree was not caused by climate change. As for the warfare angle, the people who actually study conflict in those regions agree that:

attributing such causal powers to climate “oversimplifies systems affected by many geopolitical and social factors,” and they point out that unrelated geopolitical trends — most notably, decolonization and the vicissitudes of the Cold War — tend to be ignored in climate reductionist agendas…Climate variability is a poor predictor of armed conflict,” he observes, and civil wars in Africa are far better explained by ethnopolitical exclusion and a poor national economy.

The next statement, while referenced to an anti-fossil fuel NGO, is demonstrably not true:

Humanity cannot build any new coal, oil or gas infrastructure — anywhere on the planet — if it hopes to achieve the goal of keeping global warming at a safe level, set at the 2015 Paris Climate Change Conference.

The Paris Agreement makes no such requirement and such a sweeping statement is simply unsupportable. I know that activists love hyperbole but seriously, humanity can’t build any infrastructure? A gas station adding a pump island is too much? Please be serious here. Improving infrastructure can be carried out under our Paris Agreement commitments. The important thing is emissions not infrastructure.

The next claim is made twice in this introduction: “Canada is hellbent on pursuing the world’s dirtiest oil” and”Tar sands oil is the dirtiest and most expensive on Earth.” This is, of course, incorrect. Recent studies by California’s Environmental Protection Agency, Air Resources Board for their Low Carbon Fuel Standard  made the following findings:

  • There are 13 oil fields in California, plus crude oil blends originating in at least six other countries, that generate a higher level of upstream greenhouse gas emissions than Canadian dilbit blends;
  • Crude oil from Alaska’s North Slope, which makes up about 12 per cent of California’s total crude slate, is actually “dirtier” than the Canadian dilbit known as “Access Western Blend”;
  • The “dirtiest oil in North America” is not produced in Canada, but just outside Los Angeles, where the Placerita oil field generates about twice the level of upstream emissions as Canadian oil sands production; and
  • The title of “world’s dirtiest oil” goes to Brass crude blend from Nigeria, where the uncontrolled release of methane during the oil extraction process generates upstream GHG emissions that are over four times higher than Canadian dilbit.

As for the claim that the oil sands are the most expensive oil, that dubious title likely goes to the Kashagan oil field in Kazakhstan but it certainly doesn’t go to oil sands oil most of which can be produced at very reasonable costs.

Honestly, the author even recognizes that what he has written is not the truth. When I challenged him on it on Twitter his response was classically Trumpesque claiming that if he re-wrote the section it would be correct so that should be good enough. The problem is that when you make a definitive statement and it is shown to be incorrect you can’t turn around and say “ignore what I wrote” that is not how these things work. It is either correct or not. If you write “most expensive on earth” then all the words apply not just one.

The next section presents a simplistic description of one type of oil sands development. Certainly the new Kearl oil sands project is a surface mine. It produces low-GHG oil with a solid decommissioning plan. The problem with the introduction is that 80% of the oil sands production is anticipated to be from in situ developments not surface mines. To present a technology used for 20% of the resource  as the primary/only way to extract the entire resource is disingenuous at best and deliberately deceiving at worst.

You get the point, the introduction is simply a hash of obsolete, half-right and debunked talking points. I’m over 1000 words into this post and I am only about 250 words into the introduction. I have barely scratched the surface of this “paper”. The simple problem is that the effort involved in de-bunking bad writing far exceeds the effort required to produce it.Lacking the space I will only present some quickies that jumped out at me throughout the remainder of the document.

Later in the introduction the author link to the famously-flawed “carbon budget” paper titled “The geographical distribution of fossil fuels unused when limiting global warming to 2°C” and authored by McGlade and Ekins. I address that paper in detail in this post.To summarize the IPCC does not say that 85% of our oil sands have to be left in the ground to meet the 2oC goal. Two mid-level academics from the University College of London are making that demand.

The article also repeats the idea that we should leave our oil supply to foreign governments. I address this fallacy in my post: Let’s Have An Honest Conversation About Pipelines And Ethical Oil.

The article dismisses oil-by-rail and suggests that: “Low prices have already caused North American oil-by-rail shipments to plummet.” Certainly oil-by-rail spiked in 2014 and dropped by about half in 2016 but the amount has stabilized and is anticipated to increase with the decrease in Alaskan crude available to the Puget Sound and the US desire to export US Bakken production from the West Coast.

The article even goes as far as to suggest that pipefitters with an average hourly wage of $33.50 /hr should  give up their jobs to work as solar installers who have an average salary of $17.55/hr. An option that is easy to say when you are paid to be an activist by an NGO but is less practical if you have a family and a mortgage.

Honestly, I’m running out of speed here. The truth of the matter is that you would expect that an organization like the Wilderness Committee could make a competent case against oil sands expansion using real data and not a bunch of half-truths and biased references. Instead, they throw out this sophomoric pamphlet that they call an “article” and end it with a request for money. I remember a time when I had a membership in the Western Canada Wilderness Committee and when I would regularly visit their office and bookstore in Victoria and even donated money to the cause. If this is what they are producing these days I’m glad I let my membership lapse a long time ago.

Posted in Canadian Politics, Climate Change, Climate Change Politics, General Politics, Uncategorized | 8 Comments

Imagining a politician debating his former self on Site C

Last evening, while relaxing, I imagined a fascinating debate. It involved the Climate Scientist Dr. Andrew Weaver (Sci W) going up against the Politician Dr. Andrew Weaver (Poli W) on the topic of the Site C Dam. The basis of this debate was a Globe and Mail story where Poli W was recanting the earlier views of Sci W. In reading the commentary from Poli W I couldn’t help but recognize that a debate between the two would highlight both the strengths and weaknesses of our scientific and political debate about climate change, renewable energy and the Site C Dam.

To begin let’s look what the article says about Sci W’s views on the Site C Dam project

“I cannot see what is stopping Site C,” Mr. Weaver said eight years ago. At the time, Mr. Campbell was launching an ambitious climate-action agenda and Mr. Weaver concluded it was time for BC Hydro to get back in the business of mega-projects to produce more emissions-free energy. “They should be carving out their niche with the Site C dam,” he said.

What was missing from the new article was the full context of what Dr. Weaver said back in 2009:

“The only solution, to be perfectly blunt, is to go carbon neutral.” And the only way to do that, he said, is for BC Hydro to get back in the business of mega-projects. “They should be carving out their niche with the Site C dam,” he said.

“I cannot see what is stopping Site C,” Prof. Weaver said. “There are environmental consequences, yes, but there are environmental consequences for everything we do and we have to stop using the atmosphere as an unregulated dumping ground.”

Looking back at 2009 Sci W we have a classic climate scientist approach to a problem. Note the absence of a scintilla of doubt and the absolute certainty in advancing the cause. I can assure you as a someone, who regularly gets lambasted by climate scientists and politicians for my pragmatism; Sci W would have had no time for the complexities and political niceties evinced by Poli W.

Now let’s look at what Poli W has to say:

“What has changed is the economics,” he said in an interview.

In 2009, he was convinced the hydroelectric project would help British Columbia meet aggressive targets to reduce greenhouse gas emissions. He also believed that with a construction budget of $6-billion, Site C was the most economic way to generate more greenhouse gas-free electricity.

“This, at the time, was the cheapest way of getting clean energy,” he said. “There is no question, this is clean energy.”

However, he said it didn’t take long for the math to fall apart. The cost of wind and solar has dropped dramatically, while the construction cost of the dam has climbed. As well, the increased demand that BC Hydro forecast has not materialized – in fact, domestic demand has declined since 2008. And, a federal environmental review panel brought to light the negative impact on the rights of Indigenous peoples in the valley.

“To be blunt, one of the things I didn’t consider back when I was a climate scientist, thinking about nothing but climate science, was the issue of First Nations’ rights and title,” he said…

…We’ve killed this nascent industry that was ready to take off here. These were producers who work in partnership with First Nations in British Columbia.”

So how would the debate have played out? Well I’m guessing that as a scientist Sci W would have directed Poli W to the latest research on renewable energy prices in BC. The easiest place to find useful figures would be BC Hydro’s latest detailed electricity supply option analysis. This analysis is regularly updated (with the latest wind update dated in 2015). Let’s look at what this assessment says about costs of wind power:

Estimated unit energy cost for onshore wind power ($2015): $81 to $301/MWh

Estimated unit energy cost for offshore wind power ($2015): $180 to $635/MWh

These numbers come with an incredibly important proviso:

Note that costs associated with off-site access road improvements and off-site transmission systems are not included in these estimates as it was not part of the scope of this mandate.

As I have previously discussed, at length, access to the transmission system is the Achilles heel of most wind projects. In British Columbia, most of the major wind resources are not located proximate to population centers and as such transmission costs can greatly increase the cost of a project. Consider that the Northwest Transmission Line project is looking to cost over $2 million a kilometer to build. Smaller feeder lines are, of course, much less expensive, but building transmission systems in BC represents no minor task and to not even consider those costs in the calculus would underestimate the price of wind significantly.

For simplicity sake, however, lets completely ignore those transmission costs and just look at the facility costs. To be clear, the BC Hydro wind numbers are higher than the generic US average number presented by Energy BC but since the BC Hydro number considered actual conditions in BC and even differentiated  by region, I am wont to trust the detailed local analysis over the generic US number. Looking above we see that the absolute cheapest of the alternatives (without transmission) goes for around $81/MWh. Now consider that all-in (including transmission and estimated cost-overruns) the “unaffordable Site C” is anticipated to produce firm electricity at a cost of $83/MWh.

Given the above information, I’m sure Sci W would make mincemeat of Poli W’s economic arguments. At this time wind is not cheaper than Site C and unlike Site C, wind facilities have useful lifespans of only about 20-25 years and are notoriously intermittent. To give an equivalent to the firm power supplied by Site C you would need several generations of facilities (with ensuing decommissioning costs) and you would need to massively overbuild since a wind turbine with a name-plate capacity of 2 MW typically produces a generating capacity of 0.6-0.8 MW. As for the flat demand I’m sure Sci W would provide the same argument that I did in my previous blog post. That any scenario where we attempt to fight climate change will result in an increased demand for electricity.

As for geothermal, well while $83/WMh represents the lowest end of the wind range it is above the bottom of the geothermal range (Estimated unit energy cost ($2015): $71 to $398/MWh). That being said, geothermal has its own issues with land use and transmission and even then the average facility far exceeds the established Site C cost. Looking at these numbers Sci W would have a pretty easy argument to make that Site C remains one of the most economical of the green energy alternatives on the board in BC with geothermal coming a close second. Wind, while every activist’s favourite comes a sorry third.

As for the suggestion that Site C is killing off a nascent industry? While that has been the argument made by organizations like the Canadian Wind Energy Association but according to BC Hydro they are still accepting offers and signing electricity purchasing agreements. Admittedly the Standing Offer Program may have issues and is not assigning any volume for 2020 and beyond but that is supposedly contingent on them reviewing their current price and volume targets. Ultimately, it is my understanding that the lack of accepted plans comes down to a simple assessment of costs and BC Hydro simply trying to get the best price for their consumers. There simply aren’t enough low-cost wind projects on the existing map to come close to replacing the capacity provided by Site C.

Realistically the only argument presented by Poli W above that would not be immediately refuted by Sci W would be on the topic of First Nations’ rights and title. This is a topic that typically is ignored in the scientific calculus. The argument used by the climate activists has always been that indigenous peoples are likely to be the ones most harmed by climate change so this project would represent the lesser of two evils.

Author’s note: I am going to take a quick break from the format to be clear here. I do not agree with this argument. Historically disenfranchised and underserved communities and peoples should be the last ones asked to bear the brunt of our battle against climate change. Any efforts to fight climate change have to acknowledge and respect Treaty Rights and look to minimize what we ask of these communities and peoples. 

Returning to our format: in this case I believe that Poli W is clearly on the right track. There are important issues of First Nations’ rights and title that seem to have been poorly managed during this process. I am not a road engineer, but I cannot see why the road could not be re-routed (at a cost) to avoid the sensitive areas under dispute. I understand that BC Hydro has been in negotiation about compensation to the affected First Nations and that some First Nations are in support of the dam but this is a topic about which I know too little to comment further. Ultimately, however, I think the First Nations right’s argument would go to Poli W.

Imagining the proposed debate, I can’t help but think that Sci W would polish the floor with Poli W. Admittedly, Poli W would make up some ground on the First Nations file but on the topics of energy price and economics Sci W seems to have all the supporting data.

Ultimately, however, the Site C file becomes a litmus test on individual feelings about risk tolerance with respect to climate change and climate change mitigation. This is because any clear-thinking individual who believes that we are facing an existential threat from climate change cannot help but support a project that (according to the data) provides some of the cleanest and least expensive low-carbon energy out there. If we, as a nation, decide we are going to meet our Paris Agreement commitments then the demand curve for electricity is going to swing upwards and Site C becomes a necessity. There are simply not enough economically viable wind/geothermal plans in the planning stage to provide the power will will need if we are to carry out a fundamental transition away from fossil fuels in time to make a difference for our planet.

Alternatively, if your view is that we are going to simply mouth words about climate change while continuing to use oil, gasoline and natural gas at current rates then there will not be a demand for Site C power and it becomes a white elephant.

In completing this post I recognize there might be a third position, but to me it is an untenable one. It is the position of many of the activists who keep holding out imagining that some glorious energy break-through is on the horizon that will make Site C unnecessary while simultaneously making these alternative energy projects more cost-efficient. Hoping to be rescued by a unicorn is not a pragmatic approach so I will simply leave that idea there for your consideraton.

Irrespective of all the above, it is my belief that more must be done to get better buy-in of the project from the affected First Nations. As I have pointed out, I’m not a social scientist and I don’ know that part of the file very well; but doing right by the affected parties seems a minimum requirement for the Site C project.

Posted in Canadian Politics, Climate Change, Site C, Uncategorized | 1 Comment

Why BC should not plan to rely on cheap electricity imports in a post-Paris Agreement world

There are a few things in life upon which British Columbians can depend: the sun rising in the east and setting in the west; rain in Vancouver in November; the Canucks frustrating their fans; and people complaining about the price of gasoline. To this list I would like to add one more: that when given enough time in front of a microphone Dr. Harry Swain, former Site C panel chair, will complain about the mandate of his panel. One of his most frequent complaints has been that the panel was not allowed to consider imports or the Columbia River Entitlement in its assessment. Dr. Swain sees that aspect of his mandate as a negative, I, on the other hand, see it as a positive. Why you ask? Well that is the topic of this blog post.

To explain, let’s go back to a topic upon which most British Columbians can agree: that we pay too much for gasoline when compared to our neighbours to the south and the east. That is even when you eliminate our carbon tax. As I have previously described, the reason for this predicament is that BC is utterly dependent on imports from Alberta and the Puget Sound to meet our gasoline, diesel and jet fuel needs; and that dependence has cost us in spades. It is called supply and demand. We have a strong domestic demand and we have no domestic supply, thus we are left at the mercy of the market and as we all know, the market has not been kind to us in this respect. So what does this have to do with electricity and the Site C dam?

Well, in 2007 as part of its Energy Plan (2007 EP) and in the subsequent Climate Action Plan (CAP) our Provincial Government committed us to a path of electricity self-sufficiency. As described in these plans, electricity self-sufficiency was deemed a major priority. The reason for this was self-evident to the authors of those plans; but seems to be lost on the environmental activists of today. In a world where fighting climate change becomes a defining political objective ensuring we have a steady domestic supply of low-carbon electricity is exactly the reason why we have a government-owned utility. The two plans foresaw a future where we needed to use more electricity for transportation and residential uses and wanted to ensure that we had the domestic capacity to meet those needs. Recognizing that the government of the day couldn’t pay for it all the CAP foresaw that we would need to bring in external partners to meet our future electricity needs. It also acknowledged that paying a bit more to provide flexibility of supply and energy security represents sound governmental policy and not a mistake. As I wrote in a previous post: it is a feature of the system not a bug.

In reading the writings of the critics of Site C I can only marvel at how they completely miss that point in their critiques. It is as if they have never had to fill their car’s gas tank. They seem to believe that the energy market will always be over-supplied and electricity will always be cheap. As “internationally respected economist Robert MuCullough” puts it:

In 2013, B.C. Hydro estimated that Site C would cost 2.5 times then current annual market prices. As natural gas and renewable prices have continued to decline, Site C now costs 3.3 times current annual market rates.

Put another way, British Columbia rate payers could save $4.1 billion simply by buying the same amount of power from the United States — even after writing off the $1.75 billion already spent.

Now let’s look at that approach in light of current political/economic conditions. On January 1, 2017, the Province of Alberta initiated its Climate Leadership Plan. As part of that plan Alberta committed to ending coal pollution. This requires that Alberta phase out its coal power plants. On January 1, 2017 coal represented 41% of Alberta’s installed electricity generation capacity. I’m not sure about the rest of you, but I’m guessing that if Alberta is in the process of shuttering 41% of its generation capacity, it will not have a lot of dirt-cheap electricity to export.

As for Washington State, they are in the process of implementing a carbon pricing mechanism while looking to increase their zero emission vehicle fleet to 30% and simultaneously eliminating the use of electrical power supplied by coal. While Washington has been a net exporter of electricity, the vast majority of that has been to California which imported 805 trillion BTUs of electricity in 2015 (latest data available). This would be the same California that is closing its last nuclear plant while projecting increases in electricity prices. California is also starting to price carbon and currently generates 6386 Gigawatt hours of electricity from nuclear (closing) and natural gas-fired plants (whose carbon is being priced). What this means is that electricity prices are not going down in California anytime soon.

So to our east they are foreseeing a crunch on electricity while to our south Washington should just barely be able to supply its own market. To the south of Washington California is going to be desperately searching for massive amounts electricity. These are not the conditions where we, as British Columbians, want to go hat-in-hand looking for cheap electricity to import. As I have pointed out in numerous blog posts, once BC starts acting on our climate change commitments we are going to need a lot of electricity. Moreover, that electricity is not going to be cheap and irrespective of what the activists keep claiming conservation and efficiency improvements will not address this energy shortfall. As for the Columbia River entitlement, that may help a bit, but as I have demonstrated even including that power we will come nowhere close to meeting our increased demands.

To conclude I can’t seem to say this enough. The Site C dam is not a perfect project. It has real flaws but I can’t help but hearken back to what Dr. Weaver, climate scientist, said about the project:

There are environmental consequences, yes, but there are environmental consequences for everything we do and we have to stop using the atmosphere as an unregulated dumping ground.

So to the activists who are fighting Site C I ask you this: you claim that Site C is not needed because we can always import electricity from Washington/Alberta. BC’s 2007 Energy Plan was predicated on a scenario where fighting climate change meant that Alberta and Washington had no electricity to export. Now with Alberta closing its coal plants we are half-way there. Any post-Paris Energy Plan must assume that BC will not be importing electricity. To assume otherwise will leave us incredibly vulnerable to external forces. We already pay through the nose for our gasoline. Do we want to depend on the US for our electricity as well?

My answer to this question is no. I think that the 2007 Energy Plan and the Climate Action Plan represented solid evidence-based policy. The two plans acknowledged the risks and admitted that addressing those risks would be a bit more expensive than simply pretending that those risks don’t exist. It is good government policy to ensure that, when the time comes, BC has the energy it will need to meets its commitments to its populace. I do not think we can rely on the kindness of strangers. I don’t know about the rest of you, but my family’s emergency preparedness plan includes ensuring we have the provisions needed to keep my family provided. The anti-Site C activists’ emergency preparedness plan appears to be to go knocking on their neighbour’s doors asking for handouts. Unfortunately for them if and when that time comes it is likely the neighbours won’t have enough to share.

Author’s note:

I’ve written this before and write it again here. Here is my conflict of interest declaration: I don’t have any conflicts of interest with regards to this file. Neither I, nor my employer, has anything to do with the project. I don’t get paid to blog and I generate no income from this blog. I do not blog for, or on behalf of, my employer. These words are mine and mine alone and I blog in my spare time. I have no more to gain or lose, personally or professionally, from the Site C Dam than any other British Columbian.

Posted in Canadian Politics, Site C, Uncategorized | 3 Comments
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