Wednesday, December 17, 2014

Certainty of Site C massive cost overrun is 86%

BC's Minister of Energy said in mid October that the $7.9 billion budget for Site C had been examined by top international experts and was assuredly "reliable." Two months later, Premier Clark revealed the dam budget had jumped to $8.5 billion. Days passed and when project approval was announced, the budget had jumped to $8.775 billion.

Once again, the British Columbia Liberals demonstrate practiced mendacity. They are consistent though since mega-projects of the past five years typically doubled between first announcement and completion but were invariably pronounced to be on-time and on-budget. The mantra will be used again for the Peace River project, and it will be echoed by the compliant proMedia, even if the dam costs $18 billion. Overages will be accepted,
because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know.
A comprehensive study, published in Journal of the American Planning Association, was titled Underestimating Costs in Public Works Projects, Error or Lie? The front page sidebar states,
Based on a sample of 258 transportation infrastructure projects worth US$90 billion …it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.
The Oxford University authors make the following observations,
  • Costs are underestimated in almost 9 out of 10 projects. For a randomly selected project, the likelihood of actual costs being larger than estimated costs is 86%.
  • Actual costs are on average 28% higher than estimated costs.
  • Estimated costs are biased, and the bias is caused by systematic underestimation.
  • Costs are not only underestimated much more often than they are overestimated or correct, costs that have been underestimated are also wrong by a substantially larger margin than costs that have been overestimated.
  • Underestimation of costs at the time of decision to build is the rule rather than the exception for transportation infrastructure projects. Frequent and substantial cost escalation is the result.
  • Underestimating the costs of a given project leads to a falsely high benefit-cost ratio for that project, which in turn leads to two problems. First, the project may be started despite the fact that it is not economically viable. Or, second, it may be started instead of another project that would have yielded higher returns had the actual costs of both projects been known. Both cases result in the inefficient use of resources and therefore in waste of taxpayers’ money.
The Sierra Club believes that latter point is significant,
British Columbians will be shelling out up-front, B.C. will be losing big time on the jobs front. Building geothermal plants to the same capacity would employ almost 1,900 people – compared to only 165 for Site C. And this doesn’t even take into account development of the agricultural sector in the valley.
According to The Common Sense Canadian,
The retired head of the Association of Major Power Users of BC, Dan Potts, estimates the proposed Site C Dam would lose $350 million a year for taxpayers and BC Hydro ratepayers. The 30-year pulp mill manager told media in Vancouver yesterday that the project, estimated to cost $8 Billion or more, is “fundamentally uneconomic” – based on its outmoded technology and power trading prices that are likely to remain far lower than the cost of electricity produced by Site C.
Prof. Bent Flyvbjerg was co-author of an article in the Harvard Business Review about the runaway cost of a project at a large American clothing company,
A $5 million project that leads to an almost $200 million loss is a classic “black swan.” The term was coined by our colleague Nassim Nicholas Taleb to describe high-impact events that are rare and unpredictable but in retrospect seem not so improbable. Indeed, what happened at Levi Strauss occurs all too often, and on a much larger scale…
Former Premier Glen Clark created a $200 million black swan intended for coastal waters. The cost of Christy Clark's rare bird will be measured in billions.

A .pdf version of this article is available for download or printing here.

Read this article Lies my energy minister told me from December 12.

Recommend this post

Tuesday, December 16, 2014

PDF version of preceding article

I've had a number of requests for copies of this article by people wishing to share the information. Readers can download a copy from SCRIBD.

Sorry poor people

Recommend this post

Monday, December 15, 2014

Sorry poor people, we have other priorities

Clearly, government revenues from natural resources have declined substantially in recent years. This is in spite of rising metals and minerals prices and growth in production volumes. Here is an example.

In any economy, there are winners and losers. Among the winners is Teck Resources Limited. This company, its affiliates and associates have contributed millions of dollars to the BC Liberal Party. It has invested wisely and, as a result, its assets have grown seven fold since the beginning of 2002, from $5 billion to $36 billion.

In British Columbia, taxpayers are losers. So too are the province's most vulnerable residents: like the single parents on disability who suffer clawbacks of family maintenance payments and have had benefits frozen for seven years. Paul Willcocks commented in Clark's pension costs taxpayers $76,000 a year, but disability rate increase not 'affordable'
"Clark said [in June 2014] that she knows the benefits, frozen since 2007, are too low.

"But British Columbia is just too poor to provide any increase. That will have to wait for some unknown future when it is "affordable," she said..."
If the priority of government is to subsidize and steadily reduce the obligations of big businesses that exploit provincial assets, the day when social services are more affordable will never come.

Recommend this post

From outside the Liberal spin machine - RERUN

The following first published July 21, 2014:

Does it surprise you to learn that British Columbia earned a net of only $61 million in gas royalties in the last two fiscal years?

Revenue statements report $534 M in royalties from April 1, 2012 to March 31, 2014 but in footnotes to the province's audited financial statements, we learn that credits owed gas producers grew in the two fiscal years by $476 M, to a total of $1,250 M. BC Liberals choose not to record this liability although it will reduce future royalty payments. This is but one example of accounting flimflammery that distorts the province's true financial state. It also indicates that expectations of riches to come from massive public investments in LNG plants are sheer fantasy.

Last March, the government MLA for one of Canada's wealthiest municipalities rose in the Legislature to speak about natural gas. Jason Sturdy said,
"our government's deep-well royalty credit and infrastructure royalty credit program will also help to increase the competitiveness of our province's natural gas sector and support the long-term prospects of the industry."
The credit programs Sturdy describes are tax expenditures, which are described by a business dictionary as,
"Revenue a government foregoes through the provisions of tax laws that allow (1) deductions, exclusions, or exemptions from the taxpayers' taxable expenditure, income, or investment, (2) deferral of tax liability, or (3) preferential tax rates."
Politicians often use tax expenditures when they don't want to draw attention to transfers of wealth from public to private hands. The BC Government's objective is to reward natural gas producers billions of dollars while citizens — like disabled people in their seventh year of a benefits freeze — are told cupboards are bare. Liberals prefer little discussion or comment not processed by their spin machine. In this case, Robin Austin, opposition critic for natural gas development, did not provide the rest of the story. Instead, he stood after Mr. Sturdy and applauded the government's gas strategy. That, I believe, is opposition that is too loyal.

I am prepared to wager that not one in twenty carbon tax paying British Columbians — perhaps including MLA Austin — know the amount taxpayers subsidize fossil fuel development. Since handout beneficiaries are among their funders, the Canadian Taxpayers Federation does not rate as important the billions in tax expenditures encouraging fossil fuels. Today, one of Jordan Bateman's complaints is about $77.82 the Ministry of Finance spent at an online Disney store. Gas subsidies have not been on Bateman's list of subjects fit for examination.

Search Google for BC natural gas subsidies and you will find the corporate press has almost no coverage. It is discussed at sites like this and by The Dogwood Initiative and the Common Sense Canadian. Otherwise, the subject is considered not something taxpayers need to know. God knows it is material, but that's matters not to corporate media.

The following is extracted from documents published by the Ministry of Finance, including audited financial statements of British Columbia.

Recommend this post

Truthiness - UPDATED

December 15 update:

The bright minds at Kinder Morgan have re-refined advertising in their effort to build support for the inner harbour of Vancouver becoming a site for major bitumen exports. Now the tag line used is,
"Committed to safety since 1953."
Of course, this remains fundamentally false since the Trans Mountain pipeline, built in the mid 20th century, was not acquired by Kinder Morgan until 2005. Previous pipeline operators may have been committed to safety but those people are long gone. Today, Kinder Morgan chooses not to stand on its own record across North America; they prefer to appropriate the reputation of Trans Mountain's departed owners.

After reading the report by Sightline.Org, people will deduce that Kinder Morgan's commitment has been to profitability, not safety. Here are excerpts:
  • In Louisiana, Kinder Morgan’s coal export facilities are so dirty that satellite photos clearly show coal dust pollution spewing into the Mississippi River.
  • In South Carolina, coal dust from Kinder Morgan’s terminal contaminates oysters, pilings, and boats. Locals have even caught the company on video washing coal directly into sensitive waterways.
  • In Virginia, Kinder Morgan’s coal export terminal is an open sore on the neighborhood, coating nearby homes in dust so frequently that even the mayor is speaking out about the problem.
  • In Portland, Kinder Morgan officials bribed a ship captain to illegally dump contaminated material at sea, and their operations have repeatedly polluted the Willamette River.
  • Kinder Morgan has been fined by the US government for stealing coal from customer’s stockpiles, lying to air pollution regulators, illegally mixing hazardous waste into gasoline, and many other crimes.
December 12 update:

A short while ago, Kinder Morgan ended an advertising campaign that stated,
"Trans Mountain, operating safely in your community since 1953."

That falsehood has been replaced in new advertising with,
"Trans Mountain, operating safely in your community."
That, of course, is debatable. With extreme weather hitting two coasts of North America this week, no participant in the fossil fuel industry is operating safely in any community. Moreover, this is just one more illustration of Kinder Morgan playing fast and loose with the truth. Trans Mountain was incorporated by Imperial Oil and Canadian Bechtel 65 years ago and Kinder Morgan acquired it in 2005. The Texas based operation had been taking credit for "operating safely" when the company was owner of the pipeline for less than 15% of its lifetime. Additionally, economist Robyn Allan says,
"Part of the [company's] strategy is to deal in complexity that avoids scrutiny,"
During Kinder Morgan's ownership, numerous serious deficiencies have been apparent so continuing to claim safe operation is, as polite people might say, disingenuous. Others would call it outrageous lying. Of course, given the high stakes, British Columbians cannot trust this company and we cannot believe any promises they make, no matter what warm and fuzzy claims are made by their paid advertising.


It's not been a good week for Trans Mountain Pipelines hereabouts. Nor has it been a good week for myths that the NEB is an objective regulator and the RCMP is an even-handed enforcer of public order. Essentially, to protect the pipeline company's interests, police exceeded court authority and established a line across Burnaby lands not covered by the Supreme Court injunction. Then, they arrested people for crossing the misplaced barrier.

BC Civil Liberties Association Executive Director Josh Paterson reacted after the court threw out contempt charges facing Burnaby Mountain demonstrators,
“The RCMP made an unacceptable mess of this injunction, improperly arresting nearly 100 people. Today the court has cleaned up the mess. The RCMP arrested demonstrators for violating the court’s order when those people hadn’t crossed the line. Some of these people were deprived of their liberty over an entire weekend. The court made clear that the police had no authority do to that. This is a victory for the constitutional right of people to demonstrate and to express themselves.”
Earlier, Paterson had complained about police conduct,
“We have been extremely troubled to see video and photos of people being choked, thrown to the ground, and pinned to the ground, and we are looking into whether complaints should be filed against the RCMP and other participating police forces.”
One might think this situation would embarrass the RCMP and be an expensive mistake for American owned Kinder Morgan but taxpayers are stuck with the already 7-figure police cost, an amount that will increase when lawyers begin to argue about damages owed children, elders and others for wrongful arrest and imprisonment. However, the reality is that Trans Mountain got what it wanted. Police actions ensured the company was able to complete the disputed work and further its preparations for turning Burrard Inlet into a more significant port for export of diluted Alberta bitumen.

That outcome fits the Harper Government and its oil industry sponsors quite nicely but provides further evidence the RCMP has become an obedient servant of political masters, a status resisted by non-commissioned personnel as well as civilians opposed to what Toronto writer George Jonas referred to as "Canada’s drift from a free society to a police state."

Some people believe that, despite complaints about unnecessary force, the RCMP response in Burnaby was restrained, since there were no reports that snipers were deployed, as happened in New Brunswick.

In various processes recently, including Burnaby Mountain, the NEB demonstrated its loyalty to the fossil fuel industry. Regular readers will not be surprised by another example of subservient regulators serving interests of regulated parties.

On October 14, after noting a Trans Mountain commercial that included the dishonest tag "operating safely in your community since 1953," I filed a complaint with Advertising Standards Canada, a non-profit organization established by the industry to "self-regulate" and ensure integrity of advertising.

The issue was straight forward since Trans Mountain had been charged and convicted for not operating safely in the community of Burnaby. CRED (Conversations for Responsible Economic Development) reports in Assessing the risks of Kinder Morgan’s proposed new Trans Mountain pipeline,
"Kinder Morgan, Inc. is an U.S. energy transport company headquartered in Houston, Texas. Kinder Morgan was formed in 1997 when former Enron executives Richard Kinder and William Morgan bought Enron’s liquid pipeline assets, Enron Liquids Pipeline, L.P...

"Carl Weimer, executive director of the Pipeline Safety Trust, a US-based non-profit organization, has noted that Kinder Morgan has a poor safety record since acquiring a huge network of pipelines in a short time period. The National Response Center, the the sole federal point of contact for reporting oil and chemical spills in the U.S. and its territorial waters, has found Kinder Morgan responsible for more than 1,800 violations since it was incorporated in 1997, nearly 500 of which are pipeline incidents...

"Since purchasing the Trans Mountain pipeline in 2005, Kinder Morgan has been responsible for four major spills:

"Abbotsford 2005: A ruptured pipeline dumped a total of 210,000 litres of crude oil into the Abbotsford area and into Kilgard Creek. In a 2007 report from the Transportation Safety Board of Canada, Kinder Morgan was criticized for a delay in response time because the line between the Sumas tank farm and the Sumas pump station was not part of a leak detection system.

"Burnaby 2007: A road crew ruptured a pipeline, causing 250,000 litres of crude oil to flow into Burrard Inlet Bay via the Burnaby storm sewer system. Eleven houses were sprayed with oil, many residential properties required restoration and approximately 250 residents voluntarily left their homes. Cleanup took more than a year. The Transportation Safety Board ruled the accident was the fault of Kinder Morgan as it was responsible for ensuring the excavation crew knew the pipeline’s exact location before they started digging.

"Burnaby 2009: 200,000 litres seeped from a storage tank into a surrounding containment bay at the Burnaby Mountain tank farm, causing strong fumes locally.

"Sumas 2012: 110,000 litres of oil leaked from a Sumas Mountain holding tank, caused by freezing water placing pressure on a gasket. The National Energy Board’s investigation found that “the leak was detected later than it should have been,” the company’s management of procedures was “inadequate” and that the operator “failed to recognize the leak situation” on two occasions. It took three alarms and a shift change before someone was sent out to investigate.

So, following my complaint, and similar complaints from others, was Advertising Standards Canada (ASC) effective in ensuring integrity of Kinder Morgan's message? I doubt the sincerity of the ASC process and it certainly did not prevent Corus, Global, CTV and others from running KM advertising that they knew, or should have known, was false.

As noted in the "confidential" response from ASC, almost seven weeks after my complaint,
"The advertiser advised ASC that it is in the process of replacing the statement, 'operating safely in your community since 1953,' from its advertising. Given this ASC has closed its file on this matter."

Bada bing bada boom!

By the way, I noted but reject ex parte statements about confidentiality, which I assume are aimed at protecting advertisers. I made no agreement to keep this particular matter behind closed doors and I believe matters of public interest deserve complete reporting and full disclosure.

Trans Mountain exposed its lie to millions of people over many weeks. When the campaign was drawing to a close, they agreed to change the offending words but didn't promise to avoid mistruths in the future, nor did they issue retractions and apologies. Since the falsehoods continued long after being noted publicly, Kinder Morgan demonstrates it is dishonest, not unlike Enron, its direct ancestor.

Following is the Northern Insight article published October 15, 2014 after my complaint was filed online with CSC.

This week, radio Station CKNW played commercials aimed at promoting public confidence in the absolute safety of Trans Mountain pipeline operations and marine shipments of petroleum products on the west coast. The spots end with this tagline:
"Trans Mountain, operating safely in your community since 1953."

News report, October 2011
"Three companies pleaded guilty Monday, Oct. 3, 2011 for their part in a 2007 oil spill in Burnaby that damaged nearby homes and leaked into Burrard Inlet. Trans Mountain Pipeline, which owns the pipeline, and two contractors, B. Cusano Contracting and R.F. Binnie and Associates, each pleaded guilty to one count of polluting the environment under the Environmental Management Act. A total of 26 charges were laid after work on a sewer project ruptured the pipeline in July 2007, setting off a 12-metre geyser of crude oil that showered 11 nearby houses and led to the evacuation of 250 residents."
The Canadian Code of Advertising Standards contains this clause:
1. (a) Advertisements must not contain inaccurate, deceptive or otherwise misleading claims, statements, illustrations or representations, either direct or implied, with regard to any identified or identifiable product(s) or service(s).
Anyone who believes Trans Mountain advertising noted above is inaccurate or deceptive is entitled to lodge a complaint with Advertising Standards Canada.

Filing a complaint is a relatively simple process.

Addendum, November 29:
Please read Rafe Mair at The Common Sense Canadian, Critics of Burnaby Mountain citizens are out of touch with public will for change. He comments on a Vancouver Sun editorial that states,
"It is time for those protesting against Kinder Morgan work crews on Burnaby Mountain to stand down. They have made their point and are now breaking the law…It should be remembered that pipelines are of national importance, with international trade implications, which is why, ultimately, the federal cabinet bears responsibility for sanctioning such enterprises."
I wonder if Posthaste editorialists might next advocate legalization of marijuana since trade in that commodity is another matter of national importance, with international trade implications.
BC Liberal Premier:
"Cutting red tape is a priority."
The BC Government also promised increased access to parks and other Crown lands for mining, forestry and oil and gas exploration and alteration of building codes, workers' compensation, Agricultural Land Commission and other regulations in a plan to reduce and simplify business obligations.

Recommend this post

Sunday, December 14, 2014

A crime family depends on its enablers - rerun

The bulk of this item was written in 2010 and it was moved to the top a year later. I've done a little editing to recognize the political environment of 2014 but not much has changed, in the article and in BC politics. Indeed, the winners kept winning and most of our fellow citizens barely noticed. - Dec 2014
I quoted from a Lewis Carroll poem The Walrus and the Carpenter in a comment thread at the Vancouver Observer. My obvious suggestion was that Tzeporah Berman had been like oysters that naively went for a stroll on the beach to be consumed by their ushers, the walrus and the carpenter. It will not surprise regular readers that I think Lewis Carroll gave us important words. Here is a rerun from a year ago that provides more of the poem, with polemics added by me. - May 2011
Premier Gordon Campbell, his back room puppet masters, greedy co-conspirators and BC Liberal Party members are devoid of honour. Campbell, head of this west coast crime family, long ago lost his integrity and moral compass. His aim has been to simplify conversion of public assets to private control, for private benefits.

Soulless self-dealing manipulators, operating in the shadows, hold Liberals in place to achieve goals of personal enrichment. In the past few years, appetites have grown because they learned that restraint is no longer necessary. With hundreds of misinformation officers on the public payroll and a servile media close at hand, a new realities - even false ones - are achievable.

We see the rewards, taken in the form of padded contracts, consultancies, extravagant salaries and supplementary pensions, directors' and meeting fees, unquestioned expense payments, sports event tickets, travel junkets,  severance payments, etc. The always understood quid pro quo is silence, loyalty and kickbacks to the party.

What better example than the BC Rail insiders, executives and directors scooping millions while conducting less business than a neighbourhood Canadian Tire manager. Despite the costly executive, Liberal insider Patrick Kinsella also dipped his substantial wick into the easy takings.

The received wealth of those granted privileges by senior Liberals is through private influence peddling. People with ordinary skills, except for ability to operate in shadowy corridors of government, draw incomes that would leave ordinary citizens gasping, if revealed.

The enablers of the Liberal crime family are backbench MLAs, some once honourable folk who aimed to serve the community for good. Now, they are fleshy fungi, kept in the dark, fed an individually designed diet of composted droppings, hopeful their heads will one-day poke above the putrid layers.

But four young Oysters hurried up,
All eager for the treat:
Their coats were brushed, their faces washed,
Their shoes were clean and neat--
And this was odd, because, you know,
They hadn't any feet.

Worst of all are the seasoned professional pundits, claiming to report objectively as servants of the public, but in reality, little more than water carriers, supporting the party line, aiming to share comforts of the ruling class. Vaughn Palmer issued a typical example in his September 16 column, HST was 'game changer' in plan to reduce deficit.

This fits right in to the new Liberal strategy. First, they said this "revenue neutral tax change" was "the single best thing we can do to stimulate the economy." That did not fly when their shill economists were discredited and the real story was revealed from the government's own studies.

The truth was that consumers were to face five years of higher costs without offset. Therefore, the Liberal spin machine designed a new strategy. The ever loyal Bill Good and then a broadcaster Christie Clark ran with this for weeks. We needed HST to avoid cuts to social programs; no alternatives existed. This story stumbled a bit because a tax described as revenue neutral could hardly ensure continuation of government programs.

The latest claim rolled out is the need to reduce deficits because those unfair impositions force future generations to pay for our current benefits. Inarguable, supposedly. However, the claimants feel zero remorse for loading future citizens with tens of billions in contractual commitments for energy ($60B in 2014). For electricity, Liberals gave all the upside to private producers and all the economic downsides to tomorrow's power consumers.

Vaughn Palmer has been beavering away for the Liberals these past weeks. He's a crafty old pro who sells only a part of his soul, unlike many media colleagues, Bill Good for example, wanders only between government apologist and government cheerleader. Palmer leads his story with a pre-election memo written by Campbell's agent at the Finance Ministry, Graham Whitmarsh. The story reinforced is that HST was not on the Liberal radar, but it might be later if conditions dictated the move. Sure enough, days after the election, the conditions existed. According to Palmer, a "pissed-off" Premier demanded options to meet the promised $495 million deficit, a figure they already knew to be impossible. Two days later, a deal with Ottawa was set, including a $1.6 billion federal transition payment.

Palmer is no fool. He knows how slowly negotiations grind between governments and that underlings do not make major policy commitments without directions from superiors. If appointed functionaries were allowed that option, political masters would have abdicated traditional responsibilities. No, Palmer knows the real story; he simply will not report it. That is not in the BC Business Party's interest.

Does anyone else find it strange that Liberals gave Palmer the Whitmarsh memo but did not include it in any of the FOI responses to which it would have belonged, if it were real? No, this is simply crass news management by a dishonourable government aided by a helpful commentator.

"The time has come," the Walrus said,
"To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings.

Diogenes, for the uninitiated, was a Greek philosopher born in the late 5th Century, BC.  An influential member of a school of philosophy known as the Cynics, Diogenes believed in living a simple life of virtue in harmony with nature.  The image of Diogenes most familiar to the modern world is that of a man walking through city streets in broad daylight and carrying a lantern in search of an honest man.  Reports of Diogenes’ search efforts indicate that he did not find that which he was seeking.
I had opportunity to listen to Friday's Dull Edge from the Ledge on CKNW. Wow. Online political and media critics are no longer merely nincompoops. Now we are akin to anonymous child pornographers and conveyors of malicious libel.

The elitist triplets do not like to be held to account for their wobbles, fearfulness and shaded truth. Bill Good is consistent. After complaining about critical internet voices, he introduces featured and favourite caller Sam. Good old reliable Sam. No embarrassing discussion of media failures from him. Why would there be?  He has his own ticket to the front of the parade.

"I weep for you," the Walrus said:
"I deeply sympathize."
With sobs and tears he sorted out
Those of the largest size,
Holding his pocket-handkerchief
Before his streaming eyes.

"O Oysters," said the Carpenter,
"You've had a pleasant run!
Shall we be trotting home again?'
But answer came there none--
And this was scarcely odd, because
They'd eaten every one.

Recommend this post

Friday, December 12, 2014

Lies my energy minister told me

October 15, I listened to Energy and Mines Minister Bill Bennett provide detailed assurance that, unlike budgets of numerous BC megaprojects that suffered runaway costs, the $7.9 billion Site C dam budget was final, fully reviewed by specialists and reliable because it included a contingency well above prudent amounts. Nothing left to chance, uncertainty or politics because number were developed by the world's top experts.

Well, that was then... this is now.

It's just talk. Otherwise, Mr. Bennett
would have mentioned it in his speech.
Liberal spokesman Vaughn Palmer is explaining that "$8.5 billion is within the range of the revised cost estimate.” Put simply, in two months, costs escalated $600 million, a rate of more than $10 million a day.

Remember the years of proMedia outrage after a different Premier named Clark offered assurances that the cost of fast ferries would be $210 million, "right down to the toilet paper." He was wrong... to the tune of about $240 million. Today, top news at The Province Online includes "how to book the cheapest airline flight," a Calgary man's claim that bigfoot DNA had been "plucked from a BC tree" and a report about an Afghani Bruce Lee lookalike.

It seems budgets in British Columbia, in the words of Paul Willcocks, "are apparently written in pencil, to make it easier to rewrite the numbers as costs kept rising."

In October, I reported Bennett's reassurances,
With keen perception of a man certain of the road he follows, Bennett recognizes uses that might overwhelm present generating capacity if a ten or fifteen billion dollar commitment to Site C is not made.
"There are new and increasing uses for electricity: electric cars, the things that we tape our favourite television shows with, our phones, our iPads, our laptops, etc.; a lot more electricity being needed."
In the same speech, he admits that Site C would provide power for mining and gas projects but he failed to mention that the established industrial rate would be less than BC Hydro's costs, either from Site C or its many private power suppliers. The eventual amount of that subsidy remains a matter of negotiations that will affect whether proposed LNG projects go forward. With large up-front infrastructure costs, negligible gas royalties and no LNG taxes until operators declare all costs are recovered, BC taxpayers should hope Liberals soon propose a different reelection strategy.


Here is another small excerpt from Bennett's October statement. You'll hear him being corrected by his minder when he uses the word WE when he's supposed to speaking ME. In Bennett's words, the decision will be,
"based on what's best for ratepayers in the province. That's going to be the overriding consideration for us... [whispers...] or, for me, as I go to cabinet and make a recommendation to them on this project..."
Since government has not made arrangements with First Nations, it will have difficulty arguing that negotiations were meaningful if the project launched prior to completion of agreements. The strategy is to pretend a "final investment decision" is not yet made. Therefore, all activities complete or underway are without cabinet approval and no costly project is certain without authorization from the highest level.

Sure, the committed public investment measures in the hundreds of millions for design, engineering, assessments and approvals. The Petronas deal is done and it has been promised cheap, secure power. The Site C pre-construction phases is substantially complete; if it were not, Bennett wouldn't have a "reliable" final budget. They have environmental certificates issued after a lengthy process and BC Hydro is involved in contracting for worker accommodations and site preparation. By every practical measure, Site C is underway. Calling an end to the enterprise would result in huge losses that would not be "what's best for ratepayers in the province.?


H/T to RossK at The Gazetteer for pointing the way to Vaughn Palmer's column.

Also read Certainty of Site C massive cost overrun is 86%

Recommend this post

Wednesday, December 10, 2014

Ian Jessop on Kinder Morgan

On his CFAX1070 afternoon show this week, Ian Jessop interviewed Eric de Place, Policy Director of, which Tuesday published a new report, “The Facts about Kinder Morgan” that examines the company’s behavior.

The report reveals Kinder Morgan’s track record includes below industry standard maintenance, pollution, law-breaking, and cover-ups. In one California community, the company was convicted on six felony counts after one of its pipelines exploded, killing five workers.

This foreign company is the kind of enterprise facilitated by Canada's Conservative Government. Facilitated with pride too, as demonstrated in a Vancouver Observer report, Waterloo woman finds NEB e-mail lauding public’s inability to question pipelines.

On his CFAX1070 program, Ian Jessop regularly examines subjects not often covered by competing news operations. If the station's signal is not available in your area, listen online, from 1pm to 3pm daily, or by downloading the podcast.

Here is the 19-minute segment about Kinder Morgan from December 9.

Recommend this post