Tuesday, October 7, 2014

Pretending less is known than we know

At times, I wonder if mainstream political journalism in BC is written by the uninformed for the uninformed. Gary Mason provided an example to consider when he commented on the latest threat directed at BC Liberals by Petronus, an Asian energy company.
"While senior officials in the government tried to play down that threat, it had the desired effect. According to senior government sources, the province has dialled back its LNG tax revenue expectations. And it is also trying to find ways to relax environmental codes of practice that would add to the cost of doing business in the province for Petronas and others."
Anonymous government sources are occasionally useful but problematic when information conflicts. People whispering to Mason shouldn't be playing down tactics of intimidation and admitting those same tactics are working. But, confusion is almost certain to arise when messages reflect immediate political expediency rather than carefully considered policy.

Mason's article is less about examining the soundness of a policy set or the credibility of its political managers than it is about the newspaper facilitating whatever course Liberals may eventually take.
"Premier Christy Clark has staked the economic future of the province on LNG development. Even if it doesn’t end up being the trillion-dollar opportunity she has touted, the one that is going to wipe out the provincial debt, some LNG development is better than nothing."
What Mason presents as inarguable is a consistent message of government. Any economic development is better than nothing. That's similar to the logic presented unpaid interns churned through modern enterprises when they are told they might gain nothing today but they'll be better positioned for good times in the future, if and when those days arrive.

The Globe and Mail columnist does not examine the economic road Christy Clark and her associates travel upon nor does he consider alternatives. In the online version of Mason's column is a link to Justine Hunter's B.C. touts LNG's critical importance to provincial economy.

An inquiring reader might expect one of Toronto's national newspapers to test the credibility of BC government statements. Is LNG critically important if its existence would be dependent on untaxed feedstock, subsidized energy inputs, transmission and transportation infrastructure paid for by taxpayers, capital equipment financed through tax credits, exemption from carbon taxes, waivers of environmental and labour regulations and unlimited permits for foreign workers?

Is it a fact that "some LNG development is better than nothing?"

Mason goes on, excusing government uncertainty and misdirection,
"But the world of LNG has also changed since the last election when a thriving industry in B.C. was being imagined by the Premier. Prices have dropped. Competition has surged. The economic future of the commodity is unclear."
Those statements are disingenuous because the gas market has been undergoing change since well before 2013. Along with new energy transmission lines in Asia, production technologies that led to an oversupply of gas in North America are being implemented there, particularly in the region dubbed Pipelinestan by writer Pepe Escobar. The globe-trotting reporter wrote in 2010,
"Future historians may well agree that the twenty-first century Silk Road first opened for business on December 14, 2009. That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang Province in China’s far west...

"The bottom line is that, by 2013, Shanghai, Guangzhou, and Hong Kong will be cruising to ever more dizzying economic heights courtesy of natural gas supplied by the 1,833-kilometer-long Central Asia Pipeline, then projected to be operating at full capacity...
Almost a year before the BC general election, I wrote "Our pending meltdown" at Northern Insight. The only thing certain about the prospects for trading natural gas was uncertainty. The article, now more than two years old, is repeated here:

Are BC Liberals about to drag taxpayers into another economic calamity? Something akin to BC Hydro's private power initiative, where government has taken near $50 billion of financial risk and guaranteed abundant profits to private energy promoters.

[Russia's] Gazprom Biggest Loser as Shale Gas Upends World Markets, Bloomberg Businessweek, June 21, 2012
"...The U.S. no longer needs Russia’s gas, leaving President Vladimir Putin fighting to salvage Gazprom’s $20 billion Shtokman project in the Arctic. China, the biggest energy consumer, is exploring its own shale reserves and hesitating to accept a pipeline from Russia. Gazprom’s shipments fell about 14 percent so far in 2012...

"Russia, with about $13 trillion of gas deposits, has the most at stake in the energy revolution that’s blasting shale from Pennsylvania to China in rocks impossible to drill just a decade ago..."
China shale gas boom could surpass U.S., Reuters, Dec. 7, 2011
"China is set for a shale gas revolution which will surpass that seen in the United States, the chairman of Sinopec, the country's second-largest oil company, said a day after Reuters revealed Royal Dutch Shell Plc had begun shale gas production in China.

"Fu Chengyu, chairman of state-controlled China Petroleum & Chemical Corp (Sinopec) , said it could take five to 10 years but that China's output would exceed that of the United States.

" 'I think the total reserves are even more than the U.S. so production is not less than the U.S., but it is a matter of timing,' he told reporters at the sidelines of the World Petroleum Congress.

"U.S. energy markets were fundamentally changed by the development of shale gas. In the space of several years, the country went from natural gas shortages to a point where companies are planning to export gas to Asia, ..."
Site C and the Kitimat LNG Export Terminal: Christy Clark’s Program for Income Redistribution, Jim Quail's Blog, February 8, 2012
"...[Producers] are in a mad rush to suck the gas out of the ground and get it to China before the Chinese start exploiting their own huge shale gas reserves on a major scale: once that happens, there will be no Asian market for tankers full of LNG. That gives the Canadian developers maybe a bit over a decade to make their money and run.

"It takes a lot of energy to liquefy natural gas. Almost universally, around the world, LNG plants use a portion of their own natural gas supply to provide that energy. It appears, however, that BC Hydro is prepared to supply electricity, at BC’s below-cost industrial bulk energy rates, to the Kitimat LNG consortium, for their liquefaction operations.

"So what’s the big deal, you ask?

"The initial phase of the Encana plant would require about 250 MW of electrical generation capacity to provide it with sufficient energy. The three projected Kitimat LNG plants would require about 1,600 Megawatts of power to liquefy its billions of cubic feet of gas for export.

"How much power is 1,600 MW?

"About one-and-a-half Site C dams is how much power.

"Hydro would sell that much power to one corporate mega-project, at industrial tariff rates of around $35 per megawatt hour. That same power would cost Hydro at least $80 per MWh, assuming they built one-and-a-half Site C dams for that purpose, or around $129 per MWh if they bought it from Independent Power Producers. So we’d pay for Site C, through our Hydro bills, to sell the electricity it produces for less than half what it cost us..."
H/T Bob Makin, by Twitter, for the Bloomberg Businessweek article

Please visit Jim Quail's blog, an excellent one, for additional information about energy.

Energy critics roast Clark's LNG strategy, Frank Luba, The Province, June 22, 2012
NDP energy critic John Horgan believes Clark's changes should have been debated in the legislature.
"She's going to amend the Clean Energy Act by regulation," said Horgan. "These are detailed and generational changes we are making and we should do that with a thoughtful eye, not with an expedient political eye and that's what she did," he said."
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11 comments:

  1. The natural gas in BC would need to be fracked, which uses energy.
    Then that gas would be pumped across BC, which uses energy.
    Then the gas would have to be cooled into LNG, which uses energy.
    Then the LNG would have to be shipped 7,000 km across the Pacific Ocean, which uses energy.
    That's probably why Petronas doesn't want to pay LNG tax, federal tax etc.
    LNG export appears to be an economic sinkhole.

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  2. Regular readers of this and a very few other serious blogs, should be watching the Legislature very closely over the next 6 to 8 weeks; regardless of their political views.

    Your last 2 or 3 blogs Norm have fully and clearly demonstrated just exactly what is wrong in Victoria. How out of control, incompetent and corrupt things are.

    BC Ferries, Ministry of Health firings, Public Accounts, subsidized energy to business and the whole Basi/Virk “inducement” should be enough to keep the opposition going flat out. Horgan, Carrigan and their cohorts should be dominating the news every night. If not, then they are no better than those on the Liberal side of the house.

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    Replies
    1. The MSM will not report their comments as they are in bed with the BC Liberals.

      Delete
  3. The energy return on energy invested (EROEI) for LNG export is low, making it economically marginal. So we shouldn't expect huge benefits to BC from exporting LNG. At least that's my theory.

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  4. "So we’d pay for Site C, through our Hydro bills, to sell the electricity it produces for less than half what it cost us…"

    That doesn't matter, Norm — as long as the BC Liberals can keep the sheep thinking about "Fast Ferries" "Forged memo to file" and "Bingogate." They'll readily ignore the cash drain of billion$, as long as they are reminded to keep their eyes on the relative nickels and dimes that were lost by the BC NDP.

    We need more wolves like you, Bob, Alex and Laila to get the sheep's attention. It would be nice to hear Mason and Fletcher howling their outrage… but that's the stuff of dreams.

    ReplyDelete
  5. But in BC, we have the best politicians that money can buy.

    As the "Eye" grows grey with age and wearies of the daily calamities that beset this once wonderful province, I have come to the conclusion that the voter is ignorant and by extension, a great portion of the province is ignorant. Want to turn lead into gold, buy into natural gas; are you afraid of a commie takeover, vote Liberal; if you want a developer controlled city, vote Vision. The populace in BC and especially Vancouver, seem to be lost in an ennui so strong, they will let schools close, roads and bridges be tolled, and let politicians and bureaucrats run their daily lives with little or no whimper.

    This first appeared in an UK transit oriented magazine, reprinted in a national tabloid describing Vancouver and transit and reprinted in the RftV blog.

    Read and weep.

    Vancouver is at first glance a beautiful city. It is surrounded by sweeping vistas and a dramatic skyline.

    The climate is moderate but spend some time here and scratch the surface and it becomes far less attractive. It is a city that is divided politically; it is parochial, narrow minded and shallow. The people are characterless, flaky and disingenuous. Vancouver is the scam capital of North America, a skill set for which the local population is particularly adept.

    There are times when I am certain that Vancouver is something straight out of Conrad’s Heart of Darkness.

    It is a cold place, people in the same business do not interact of share information they do not network or help each other. There is an almost a Darwinian or Hobbesian social culture – Vancouver is an empty void.

    The political environment is polarized and doctrinaire. The left adheres to ideas that are at least a generation out of date. Vancouverites think that Naomi Klein is an intellectual when in reality she is a very silly charlatan. To Vancouverites the secret is a serious work of self help. The right is equally foolish in the banality of their free market ideology.

    You don’t meet people of substance here. You meet flakes. The press is dominated by yellow journalism. Rarely if ever have I read a real piece of investigative journalism. You do not meet people who form their opinions based upon facts. When you encounter Vancouverites and engage them in the discussion of social issues the argument usually become circular and they end of talking only about themselves. There is a kind of deep insecurity that comes from profound feeling of self loathing that is hard wired into the political culture here. Narcissism is the dominate religion and worshipping at the Temple of Mammon – real estate speculation is the Holy Grail.

    People here (generally speaking of course) are stuck up, materialistic yuppies. The downtown scene used to have decent variety, now it’s full of “cookie-cutter” clubs and bars that cater to Armani clones.
    Go east of here, or especially south of here, and you’ll find friendlier people that aren’t so consumed with cliques and materialism. If one hails from Harare, Timbuktu, Tripoli, or Darfur then yes, Vancouver appears pretty good, but “the most liveable city on Earth”?

    Not only is this pretentious, it’s just plain wrong.

    No where is the contrast more apparent, than in Coquitlam and Port Moody; cities like Surrey, Delta and Langley, South of the Fraser River and east along the Valley to Abbotsford and Chilliwack.

    Politicians, planners, decision makers, wealthy Vancouver suburbanites and the `movers & shakers’ contemptuously dismiss the communities beyond downtown as the boondocks; the disdain for the citizens of the Greater Vancouver Regional District and the Fraser Valley is illustrated in the attitude of the Ministry of Transportation and Infrastructure, BC Transit and TransLink, to public transport in these areas.

    The Emperor has no Clothes and no Transit.

    ReplyDelete
  6. You have been doing some great work Norm. The sad fact is there is no independent media. Take a look at this interview which will never see the light of day in the Western MSM.

    http://www.paulcraigroberts.org/2014/10/05/german-journalist-reveals-cia-turned-western-journalism-propaganda/

    By the way read Paul's articles on his site. ( a former true insider ) for what is really going on.

    I have to admit I'm still coming to terms in how Clark and Company got back in to power this last election. I keep thinking if they couldn't lose last time with all the rampant corruption - what will it take. I suspect you are right in saying the the next big resource giveaway is coming to a theater near you.

    Rob

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  7. Anon. 8:03am

    It would be nice if the MSM covered anything the opposition questions the government on during question period. According to CKNW's website the NDP got into the firing that led to the suicide of one of the people that got the nine of hearts. They may have covered other subjects as well, but if one watched the early news on Global and the 6:00pm news on CTV one would not even know the Legislature was in session. Where were Baldry's or Watson's reports on on the goings on in Victoria?

    Here we have a husband and father taking his life because he couldn't handle how he was treated by our provincial government and all our health minister offers up is some lame apology to the family. I guess one can't expect much more from a veterinarian who probably had much practice informing his clients that their pet didn't survive a medical procedure. My perspective on this lame reaction from Terry Lake is simple. Our governance is no longer about the citizens of a government's jurisdiction because we are expendable. The only time we are considered valuable is when there is an election. Maybe that is why many countries on this earth find it difficult to embrace the idea of democracy as is practiced by those of us that do. We just pretend that we are fair in picking the winners and losers while they just impose their might to achieve the same results.

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  8. Further to my last comment, I just viewed a rebroadcast of Global's 6:00pm newscast and they did actually cover a bit of today's question period at the Legislature. Whether it was enlightening is subject one's perspective but at least they did broadcast something.

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  9. Holy Smokes! This is scary. I took up Engineering when I went to University and now I are one. Chrispy went to University and took up space, ....and now she is a Space Cadet? Astronaught?
    In any case, neither of us is equipped to deal with Petronas, one of the biggest corporations on the planet. For goodness sake, and before she sells another farm, GET HER SOME HELP! Thankfully she's gonne to India on a 'Trade Mission'. Perhaps she can trade her beguiling smile for some accumen. Please don't let her deal with this alone.

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  10. Bridges and bitumen .families first is just on pab press release .?
    Billions for site C.Not a penny for geothermal.!

    ReplyDelete

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