Thursday, May 29, 2014

Questions asked

If I presented you a professional who holds three university degrees, one a masters, a variety of professional development certificates and has 22 years' experience, what would you say that person should expect to earn in salary?

If I told you that professional is a teacher, would your answer change?


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Good questions

Not-a-nincompoop blogger RossK at The Gazetteer mentioned difficulties faced by Bob Mackin, the province's preeminent investigative journalist, when Bob digs, and pays, for information the government does not want us to know.

This Day In Snookland...Maybe Mr. Mackin Should Take Out A Membership

In comments, reader Lew wonders about the experiences of other journalists if and when they seek information beyond press releases and talking points. Good questions.


Perhaps, a few reporters and commentators are busy with other tasks and cannot afford the time consuming process of digging for information in difficult-to-find places. Those tasks might include speechifying to the province's rich and powerful business interests. I made a comment about that on Twitter and got an angry reaction from someone who thinks his business is nobody's business.

You might wonder if John Winter and the Chamber of Commerce are buying something the sellers do not know they're selling. I don't think so. Here is part of the exchange.


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Tuesday, May 27, 2014

Let them die and decrease the surplus…

Paul Willcocks writes a blog with the perceptive eye of a skilled and experienced journalist and editor. I suspect Vaughn Palmer might even exclude Paul from his description,

"Nincompoops ranting in their underpants is the term for people blogging, for me."

Paul's latest contribution at Paying Attention has a title designed, for purposes of illustration, to grab attention. In KILLED AFTER OFFICE GOLF PARTY NIGHTMARE OF CRASHES. Paul writes,

"…the people who go on about the great quality journalism in the old days - a decade ago, 40 years ago, and a hundred years ago - haven't actually read the old papers. Then, as now, there was some fine work, a lot of average work and some hackery.

I might reminisce about journalism in the old days but I did actually read the old papers each day, local and national, morning and evening publications, when that was an option. I read most sections of each paper, which might have been slightly unusual. However, that reflected the utility of old broadsheets; they were what each of us we wanted them to be.

Some readers scanned the front pages, read a favourite columnist or two and finished with a preferred section, be it editorial, sports, style or another. Others might devour the entire content and feel knowledgeably disadvantaged if they missed anything. Heck, I even scanned obits before they included my acquaintances. One son, asked by a pre-school teacher to sketch a family member, drew man seated behind newspaper.

Papers were sources for news and they taught us about life. Edith Adams appeared in the Sun 90 years ago with tested recipes and instructional tips on pickle making, dieting, extending the life of nylon stockings, "how to make a home-made foot scraper" and, my favourite, "having fun with bleach."

Sports pages had a share of moist and garrulous jock sniffers but there were also the wonderfully creative and plain funny. I grew up on Jim Taylor and learned to regard professional sports as something to smile about. Had I been a decade older, I probably would have loved Province writer Hugh Watson.

He sustained the Howe Sound basketball league for months, though it was composed of phantom teams from lightly populated Squamish, Woodfibre, Port Mellon, Britannia Beach, Gibsons, Horseshoe Bay and Deep Cove. (The last perhaps was an intentional snub of Snug Cove on Bowen Island.) With help from the Vancouver Sun, Watson's accounts of great basketball in unlikely places spread widely. National basketball officials searched for figment Len Schwartz so they could invite the Horseshoe Bay scoring star to play for Canada.

While composing this, I found an article by eastern writer Pat MacAdam, B.C. Basketball Hoax was impressive, but not original. He remembers a legendary, but non-existent powerhouse, the Plainfield Teachers College of New Jersey. Today, harmless and humorous frauds like these would not succeed for 24 hours and that reflects current reality that "facts" do not exist in unchallenged isolation.

The information world has grown small and consumers are in charge of their own filters. With little effort, I can read the young and fearless journalists of The Intercept, a sneering gadfly in Michael Kinsley, bourgeois and popular The Guardian, German points of view at Spiegel Online International, fluff and nonsense of The Mail Online and many more, along with, of course, countless bloggers who are not nincompoops, no matter what The Explainer says.

To avoid propaganda, we can look at original sources and go beyond opinion that regurgitates press releases and government talking points. Had Vancouver Sun survivor Barbara Yaffe done the same, she would not have written this lately realized information, B.C. no better than 'middle of the pack' economic player in Canada.

Seemingly, Yaffe learns economics from reading the Sun's business pages. She is surprised this province trails others in a number of economic indicators and that BC was "the only province last year to suffer a net decline in jobs."

Yaffe notes, without recognizing the conflict with opposite predictions by the newspaper,

"…consumer prices declined fractionally in B.C. last year because of the HST's cancellation."

Wait a minute. Did not the newspaper insist that prices would decline because of HST? The columnist gets back on track though when she complains that taxpayers are missing an opportunity to fund more business subsidies,

"The province's failure to compensate B.C. businesses for extra costs they now incur as a result of PST reinstatement has them operating at a disadvantage…"

I suspect that daily newspapers cannot regain significant parts of the broad influence they once held if they only aim to be advocates for the business classes. However, established properties might survive if they focus on regional interests and offer a diverse mix of ideas, including controversial opinions instead of ones that conform to a safe list of concepts preferred by editors, advertisers and the world of multinational corporations.

Though not a model for leadership of world opinion, this might be appropriate for journalism that is relevant within a region. When it sold community papers to Glacier Media, Postmedia was separating itself from the small, to support its larger efforts. However, the marketplace might have preferred the opposite.

I believe there is a place for a daily newspaper that connects with its readers, that stimulates, informs and entertains. If they see themselves instead as promoters of particular interests and narrow points of view, let them die. The sooner, the better.

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Tuesday, May 20, 2014

Shill, sham and flimflam

Perhaps Vaughn Palmer has a Red Telephone, a hotline for when BC Liberals want news initiated, altered or decried. The record is public and to evaluate, readers need simply ask, "Who and what is served by Palmer's work?"

The pundit often has no intention of giving a whole story, with background, options and various points of view. The LNG story is only one example but it is likely to cost taxpayers billions in subsidies and foregone revenues. Look through the Vancouver Sun for comprehensive and critical assessments of government actions on natural gas and you will come up empty. It is not an accident or a surprise that Fazil Mihlar could slide from being the Sun's Editorial Editor to become Assistant Deputy Minister for Natural Gas Development and advocate for the public to be hands-off when it comes to natural resources.

I criticized Palmer's service on the gas file but I fault his larger body of work too. Usually, Palmer's commentary makes narrow points that assist Liberals, discredit opponents or explain why the government can do or cannot do particular acts. By example, when social media was reporting that, without immunity, BC Liberal Executive Director Laura Miller refused to speak with police about an economic and political scandal in Ontario, Palmer was quick to echo a defence,

This effort did not last because it was overwhelmed by evidence. For example, the search warrant material sworn February 19 by a detective of the OPP's anti-rackets squad, included this,


In the late 1990's, my mother-in-law reserved the Vancouver Sun front section - I dared not touch it first - until she finished with Vaughn Palmer's revelations of NDP government misdoings. An inquisitor capable of applying flames to feet, Palmer covered fertile ground and did it with relish.

Serving the public, not governments, is what pundits should do. While Palmer no longer does it, Bob Mackin does and Christy Clark's Never Ending Campaign is an example you should not miss.

The Vancouver Sun added an outstanding political reporter when it hired Rob Shaw from the Times Colonist. Now it is time for the Sun to assign Bob Mackin to the pundit's role, enabling Vaughn Palmer to work for PR firm Hill+Knowlton, where he need make no pretense of objectivity.


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Monday, May 19, 2014

Taxpayers, assume the position

Reader who goes by the name of Hawgwash left this comment at the earlier article, Subsidies for some, higher fees for others,
"I see Vaughn Palmer is actually touching this topic and even with the slightest hint of skepticism. I do though think he left the heavy lifting to you and just may have lightly lifted some of your details.

"A start, I guess, but he will likely be spoken to when the treadmill starts up after this holiday Monday.
Having morphed into The Explainer, Palmer once again demonstrates why he should not be called The Dean of the Legislative Press Gallery. Rewriting BC Liberal talking points, he is a pundit who adds a soupçon of skepticism but conveys approved messages. Without that approach, lucrative speaker assignments would be less available, access to politicians and senior civil servants would become problematic. Palmer would have to work much harder to search for and discover real news.

Respecting LNG, in the face of outright lies and truths shaded to dark, The Explainer's headline speaks of "downward pressures" on LNG tax revenues.

Get ready taxpayers and citizens, assume the position. No trillions of dollars for the next generation. No bonfires of bonds on a barge. I know that, you know that, Vaughn Palmer knows that. He just won't write about it.
About this carping criticism of our $1.3 Billion provincial debt ... order me a barge, a bow and an arrow suitable for flaming ...

Note:

One reason Christy's minions have to claw back dollars from disabled single moms is so they have tens of millions to pay for public relations experts who dream up things like this new flag for BC: (h/t RossK)


I loved the comment from Mr. Beer N. Hockey:
"...it is about time BC adopted it's own petro-national socialist flag for the inevitable rallies to be held as we march onward into the debt-free Promised Land of Prosperity for All."

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Saturday, May 17, 2014

Subsidies for some, higher fees for others

Replay of article first published in November 2013.

 Despite claims that natural gas will last almost forever and drop massive wealth into BC's treasury, I've demonstrated here, with numbers taken from finance ministry documents, that natural gas production contributes little to BC's public treasury through royalties.

The amount that might otherwise be payable for current production is reduced by credits allowed gas companies; credits that amount to public subsidies of the fossil fuel industry. At the end of fiscal year 2013, $934 million of credits that will reduce future natural gas royalties remain outstanding. Despite previous complaints of Auditor General John Doyle, government has not recorded this amount as a liability of the province.

In an odd conflict of goals and strategies, the credits outstanding in 2013, by which government encourages production of fossil fuel, amount to 84% of the carbon tax collected in 2013, by which government discourages consumption of fossil fuel.

According to page 113 of the Three Year Fiscal Plan, the amount of program credits will exceed royalties in 2016 by $43 million. As the chart below demonstrates, despite Christy Clark's chatter, the natural gas industry is an expensive friend to have.


Of course, since the BC Liberals are foregoing revenue from gas producers and other resource companies, they turn elsewhere for sources of revenue. This is but one example.


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Friday, May 16, 2014

Special treatment for special people


First Call Advocacy Coalition
I write here about natural resource giveaways that amount to billions of dollars. Meanwhile, the Premier stands in the Legislature to justify monthly clawbacks of $187 from a disabled single parent whose family must live on far less than Christy Clark pays for her only child to attend Vancouver's St. George's private school, where annual fees range from $16K to more than $50K. RossK at The Gazetteer has a more complete account but this quote from the Opposition Leader caught my attention:

J. Horgan: I would argue that the $17 million this government spent on partisan advertising last year would have been better spent for children living in poverty. So too $342 million in cost overruns on the northwest transmission line; $341 million in cost overruns on the Vancouver Convention Centre; $464 million in cost overruns on the South Fraser Perimeter Road. That would pay for the clawback for 60 years. How is that respecting taxpayers? How is a billion dollars of cost overruns while people are going without in this province…? How is that respecting taxpayers?

Horgan counts nearly $1.2 billion in cost overruns and RossK adds the $182 million spent on BC's ineffectual ICM system, which the Auditor General is now investigating.

In effect, Christy Clark is saying that disabled single parents are better off when the province foregoes resource revenues and spends hundreds of million in subsidies, with billions pending for LNG, so multinational corporations can export BC's raw materials for overseas processing and manufacturing. Yet, much of the value realized by beneficiaries of BC resource policies leaves the province faster than a speeding bullet.

Teck Resources pockets billions not paying coal, copper, molybdenum, gold, and silver royalties, and pays dividends to major shareholders in Japan, China, and USA. The company's cash rich position, much from BC coal, allowed it to acquire operations in Alberta, Ontario, Newfoundland, Alaska, Washington, Peru, and Chile. When British Columbia foregoes resource revenue, there is no certainty that money stays in the province. In fact, the opposite is frequently true.

However, when a disabled and deprived family has a few dollars more to spend, you can be certain they spend that money quickly and very close to home. The website Economic Online explains:

Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending.

The size of the multiplier depends upon household's marginal decisions to spend, called the marginal propensity to consume…

That last phrase needs little explanation. Money in the hands of people lacking necessities quickly enters circulation. It does not purchase expensive cars, foreign holidays, and luxury goods with designer labels. Nor does it go into RRSP and others savings plans, or take flight to the nearest tax shelter. In the word of economist Doug Elmendorf, Director of the Congressional Budget Office (USA), "Increases in disposable income are likely to boost purchases more for lower-income than for higher-income households."

Five hundred million in the accounts of Teck Resources achieves certain outcomes; $500 million in the hands of the province's poor people would realize entirely different results. Politicians who favour the former do not desire general improvement of the economy. At worst, they corruptly intend to reward sponsors. More likely, they hold the belief that poor people deserve their fates.

At the blog Understanding Society, Daniel Little commented,

"This tenor of our politics indicates an overt hostility and animus towards poor people. How is it possible to explain this part of contemporary politics on the right? What can account for this persistent and unblinking hostility towards poor people?

"One piece of the puzzle seems to come down to ideology and a passionate and unquestioning faith in "the market". If you are poor in a market system, this ideology implies you've done something wrong; you aren't productive; you don't deserve a better quality of life. You are probably a drug addict, a welfare queen, a slacker…"

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LNG facilities: siting, safety, regulation


When British Columbia conducts LNG negotiations behind closed doors, without public statements of principles or bargaining frameworks, citizens should worry. I have written about our government's willingness to provide the gas industry with 9-figure production subsidies and their aversion to collection of natural gas royalties but there is another subject to consider. It is the safety and security of LNG facilities, which is vital, particularly if government allows construction without, in the words of Jefferson, the consent of the governed.

I examined much recent political and business reporting in BC and found only one article that briefly discussed LNG safety issues. While there is not much in the Canadian press, there is more to be found elsewhere. These are extracts from a report by the Congressional Research Bureau, written four years ago:

Physical Hazards of LNG


Natural gas is combustible, so an uncontrolled release of LNG poses a hazard of fire or, in confined spaces, explosion. LNG also poses hazards because it is so cold. The likelihood and severity of catastrophic LNG events have been the subject of controversy. While questions remain about the credible impacts of specific LNG hazards, there appears to be consensus as to what the most serious hazards are.

Pool Fires

If LNG spills near an ignition source, evaporating gas will burn above the LNG pool. The resulting "pool fire" would spread as the LNG pool expanded away from its source and continued evaporating. A pool fire is intense, burning far more hotly and rapidly than oil or gasoline fires.

It cannot be extinguished—all the LNG must be consumed before it goes out. Because an LNG pool fire is so hot, its thermal radiation may injure people and damage property a considerable distance from the fire itself. Many experts agree that a large pool fire, especially on water, is the most serious LNG hazard.

Flammable Vapor Clouds

If LNG spills but does not immediately ignite, the evaporating natural gas will form a vapor cloud that may drift some distance from the spill site. If the cloud subsequently encounters an ignition source, those portions of the cloud with a combustible gas-air concentration will burn. Because only a fraction of such a cloud would have a combustible gas-air concentration, the cloud would not likely ignite all at once, but the fire could still cause considerable damage.

An LNG vapor cloud fire would gradually burn its way back to the LNG spill where the vapors originated and would continue to burn as a pool fire.

Other Safety Hazards

LNG spilled on water could (theoretically) regasify almost instantly in a "flameless explosion," although an Idaho National Engineering Laboratory report concluded that "transitions caused by mixing of LNG and water are not violent."

LNG vapor clouds are not toxic, but they could cause asphyxiation by displacing breathable air. Such clouds may begin near the ground (or water) when they are still very cold, but rise in air as they warm, diminishing the threat to people.

Due to its extremely low temperature, LNG could injure people or damage equipment through direct contact. Such contact would likely be limited, however, as a major spill would likely result in a more serious fire. The environmental damage associated with an LNG spill would be confined to fire and freezing impacts near the spill since LNG dissipates completely and leaves no residue.

Terrorism Hazards

LNG tankers and land-based facilities could be vulnerable to terrorism. Tankers might be physically attacked in a variety of ways to release their cargo—or commandeered for use as weapons against coastal targets. LNG terminal facilities might also be physically attacked with explosives or through other means. Some LNG facilities may also be indirectly disrupted by "cyber-attacks" or attacks on regional electricity grids and communications networks which could in turn affect dependent LNG control and safety systems…

Key Policy Issues

Proposals for new LNG terminal facilities have generated considerable public concern in many communities. Some community groups and government officials fear that LNG terminals may expose nearby residents to unacceptable hazards…

General Accounting Office (GAO) in 1979 testimony to Congress supporting remote siting in the Pipeline Safety Act:

We believe remote siting is the primary factor in safety. Because of the inevitable uncertainties inherent in large-scale use of new technologies and the vulnerability of the facilities to natural phenomena and sabotage, the public can be best protected by placing these facilities away from densely populated areas.

Terror Attractiveness


Potential terrorist attacks on LNG terminals or tankers in the United States have been a key concern of policy makers because such attacks could cause catastrophic fires in ports and nearby populated areas. A 2007 report by the Government Accountability Office states that, "the shipbased supply chain for energy commodities," specifically including LNG, "remains threatened and vulnerable, and appropriate security throughout the chain is essential to ensure safe and efficient delivery."

To date, no LNG tanker or land-based LNG facility in the world has been attacked by terrorists. However, similar natural gas and oil assets have been terror targets internationally. The Department of Homeland Security (DHS) included LNG tankers among a list of potential terrorist targets in a security alert late in 2003.

The DHS also reported that "in early 2001 there was some suspicion of possible associations between stowaways on Algerian flagged LNG tankers arriving in Boston and persons connected with the so-called 'Millennium Plot'" to bomb targets in the United States. Although these suspicions could not be proved, DHS stated that "the risks associated with LNG shipments are real, and they can never be entirely eliminated."

The 2004 report by Sandia National Laboratories concluded that potential terrorist attacks on LNG tankers could be considered "credible and possible."

Former Bush Administration counterterrorism advisor Richard Clarke has asserted that terrorists have both the desire and capability to attack LNG shipping with the intention of harming the general population.

Public Costs of LNG Marine Security

The potential increase in security costs from growing U.S. LNG imports, and the potential diversion of Coast Guard and safety agency resources from other activities have been a persistent concern to policy makers.

…Coast Guard staff have acknowledged that resources dedicated to securing maritime LNG might be otherwise deployed for boating safety, search and rescue, drug interdiction, or other security missions.

Developer Employee Disclosure

Some policy makers have been concerned that LNG terminal developers may engage in nonpublic community lobbying or other similar activities promoting individual LNG terminals. Concern arises that these activities may limit public information and awareness about proposed terminals and, therefore, may impede the federal LNG siting review process. Accordingly, legislation proposed in the 110th Congress would have required an applicant for siting approval for an LNG terminal to identify each of its employees and agents engaged in activities to persuade communities of the benefits of the terminal. Supporters of such a policy view it as a means of ensuring public transparency in LNG terminal siting.
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Thursday, May 15, 2014

With Ian Jessop CFAX1070, May 14

We discuss the province's natural gas revenue, BC Ferries, log exports and public debt.


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Wednesday, May 14, 2014

Premier Clark promised a review


In the two and one half years since that review began, we have evidence of its results.


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Monday, May 12, 2014

BC Ferries still owed $25 million 2nd mortgage

Under leadership of CEO David Hahn and Board Chairs Elizabeth Harrison and Don Hay, in a deal negotiated before completion of construction, BC Ferries lent a real estate developer almost $25 million for The Atrium, a Victoria commercial development. The loan was secured by a second mortgage, even though, when it negotiated the deal, BC Ferries did not know the final terms of first mortgage financing that would rank ahead of its own security.

Two and a half years ago, I wrote this at Northern Insight:
In 2008, the company announced plans to move into 90,000 square feet of a building at 800 Yates Street then under construction by Jawl Properties. B.C. Ferries sold its long time head office building, 53,000 sq.ft. at 1112 Fort Street, to the Jawls. By sheer good fortune, the new owners quickly found another tenant: Elections BC.
The deal was made when David Hahn was riding high, enjoying uncritical coverage, particularly from the Legislative Press Gallery, some members of which he courted with studied generosity. Subordinates in Hahn's executive coterie were also treated well and the new head office was to provide luxurious quarters, far superior to the 35-year-old Fort Street head office owned by BC Ferries until they sold it to Jawl. After Hahn was pushed out the door by the Clark government, ferry executive ranks were trimmed but I have no word on whether space sits idle or has been sub-let.

Hahn ensured complete mortgage and lease details were confidential and BC Ferries declined to provide the rate of return earned since money was first lent to Jawl Properties. Pre-completion construction financing is usually among the most costly business financing.

Deborah Marshall, Executive Director, Public Affairs, did report the rate of interest BC Ferries earned during fiscal year 2012-13 was 3.4%. More than three years after the loan was advanced, the $24.5 million principal remains outstanding. When it lent this money, the publicly owned company was paying its own long term lenders almost double the rate of interest it receives from Jawl Properties.


The questions remain:
  • Since the provincial government has numerous departments and agencies renting space from Jawl, did and does that developer have a special relationship with BC Liberals ?
  • Should BC Ferries, which is supposedly under financial pressure, be a low interest lender to a private company not at arms length?
  • Should BC Ferries, a public company, engage in secret deals with one private landlord for a deal worth in excess of $100 million over the rental term and renewals?
  • What are the complete terms of the mortgage and the BC Ferries head office lease?
  • What are the terms of the Jawl / Elections BC lease of the former BC Ferries Fort Street property?
  • What are the terms of all business arrangement between Jawl Properties and publicly funded agencies and government operations?

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Sunday, May 11, 2014

Looking at BC's revenues from natural resources

A replay, first posted October 2013. It is important to consider that the $868 million shown as FY 2013 income from crown land tenures is mostly recognition of exploration rights sold in prior years. Income of this type is deferred at time of sale and taken into current revenue over time. So, BC's financial statements for fiscal years 2012 and 2013 showed revenues of $1.9 billion from "crown land tenures" but the sales in those two years generated only $400 million. This represents actual results from sales of exploration rights.


Article from October 2013:

In the last seven years, provincial revenues from ferry fares and medical services premiums increased almost 40% but natural gas royalties declined by 91%. Actually, that doesn't tell the whole story because government provides credits to gas producers that will offset future royalties. BC Liberals choose not to record the accumulated liability for these credits. That was a factor in Auditor General Doyle issuing a qualified opinion on the last financial statements he signed.

The credits that producers can use to reduce future royalties amounted to $934 million as of March 2013, an increase in the liability of $160 million during the fiscal year. Had generally accepted accounting principles been used, net royalty revenue from natural gas would be stated as $9 million in 2013, not $169 million as reported. A far cry from the almost $2 billion realized from natural gas royalties in 2007.

From Note 28 to the province's audited financial statement for 2013:
"The province offers credits for certain costs incurred by producers including the deep well, road and summer drilling programs. Deep well credits of $913 million (2012: $752 million), road credits of $12 million (2012: $16 million) and summer drilling credits of $9 million (2012: $6 million) have been incurred by producers and will reduce future natural gas royalties payable when wells go into production."
I asked a Chartered Accountant acquaintance to estimate the amount earned by British Columbia from natural gas royalties in the last three fiscal years. He was unsure but guessed the amount would "measure in the billions." When I told him the number was only $63 million, net of the increase of drilling credits owed producers, his reaction was disbelief. I expect that most BC citizens would be similarly deceived.

These numbers are drawn from Ministry of Finance documents with the current dollars calculated by using the Bank of Canada inflation calculator:


Does anyone believe that revenues from the natural gas industry will pay off BC's public debt of $70 billion, as promised by Premier Photo Op?



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Saturday, May 10, 2014

Charting BC natural gas revenues

The following charts are created with production data from Statistics Canada (CANSIM 131-0001) and other reports from government ministries. These demonstrate significant changes of income from exploration and production of British Columbia's oil and gas. I will add commentary in subsequent posts but I invite readers to examine these graphs.

 

Unfair Share: How Oil and Gas Drillers Avoid Paying Royalties
, Abrahm Lustgarten, Propublica, August 2013
"...In many cases, lawyers and auditors who specialize in production accounting tell ProPublica energy companies are using complex accounting and business arrangements to skim profits off the sale of resources and increase the expenses charged to landowners.

"…Once the gas is produced, a host of opaque transactions influence how sales are accounted for and proceeds are allocated to everyone entitled to a slice. The chain of custody and division of shares is so complex that even the country’s best forensic accountants struggle to make sense of energy companies’ books.

" 'If you have a system that is not transparent from wellhead to burner tip and you hide behind confidentiality, then you have something to hide,' Jerry Simmons, executive director of the National Association of Royalty Owners (NARO), the premier organization representing private landowners in the U.S., told ProPublica…

" 'They just wait to see who challenges them, they keep what they keep, they give up what they lose,' said Root, the NARO chapter president. 'It may just be part of their business decision to do it this way.' "
It couldn't happen here because gas producers in British Columbia are keen to pay fair value to the owner of natural resources, which happens to be all citizens of the province. No company would cheat just to add profits to the bottom line.

Although, if they did do that in BC, they'd likely be home free because, as part of its red tape reduction program, the Liberal government has pretty much given up its ability to do anything more than cursory examinations of production records and it certainly is not willing to have "the country’s best forensic accountants struggle to make sense of energy companies’ books."

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Friday, May 9, 2014

John Horgan on resource revenues

This is from Ian Jessop's CFAX1070 program, May 9, about 1:45pm


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I'm all right Jack! - updated

At The Tyee, Bob Mackin contributed Ex-Head of Troubled SNC-Lavalin Named Chair of BC Crown Corp. Like all work from this diligent investigative journalist - one of the few in BC - the article is worth your time. The comments are fun too although the web magazine's censors have been at work.

Commenting at The Gazetteer, regular reader motorcycleguy reminded me of an article about Gwyn Morgan published here in 2011. It's repeated below. In this item, I mentioned that Morgan's little Saanich bungalow was assessed at $7.5 million. That was based on the assessed value of 2007. The BC Assessment Authority pegs its 2014 market value as $5.9 million.

That his house was valued 29% more seven years ago is surprising. Perhaps it's unfair for taxpayers to be paying this influential man only $1 a year after he suffered a $1.6 million loss in value in his residential real estate. I suppose he was just unlucky since many of the capital area's residences have gone up in value over the last seven years. But, at least he's saved huge amounts in property taxes and he's made clear he does not like paying good money to governments.

I'm still wondering about why people who choose to live in secluded waterfront luxury, overlooking a sheltered seascape with precisely zero movements of oil tankers and coal barges, would aim to gift all this to the environment that is home to hundreds of thousands of aboriginal people of British Columbia and Alberta.

* * * * *
A quiz for readers. First person to identify this gentleman wins a free subscription to Northern Insights. He
  • was a major backer of Premier Photo Op during her bid for Liberal leadership;
  • served as a transition adviser to ensure BC's provincial government maintained the right direction while Gordon Campbell stole away (h/t: Lew);
  • is a director of several large corporations in Canada;
  • is on the board of trustees of the Fraser Institute;
  • is a Director for The Manning Centre for Building Democracy;
  • was appointed by Stephen Harper a Member of the Order of Canada;
  • linked rising gang violence in Canada to immigrants;
  • says "green alarmists" kill jobs;
  • favours export of water from B.C.’s remote coastal mountain streams;
  • served as the 2008/09 Jarislowsky Fellow in Business Management at the Haskayne School of Business, a part of Canada's centre of neo-liberalism, The University of Calgary, but, nevertheless, he claims that Canadian universities sing inadequate praises of free-market capitalism;
  • says power projects on the province's great rivers, such as the Peace, will create many jobs while providing clean competitively-priced energy;
  • demands government "Just say no to more stimulus spending [despite being Chair of a corporation grown fat on government contracts] because, rather than stimulating economic recovery, government spending has had the opposite effect"
One other thing. He opposes the plan to treat Victoria sewage now pumped offshore into Juan de Fuca Strait and claims that treatment may instead harm the environment. He does not want tax dollars being wasted nor care about obligations to neighbouring Washington State. The Seattle Times editorialized in August 2010:
"...After almost four decades of willful neglect, abuse and arrogance, the British Columbia government has agreed to treat the raw sewage pumped into the water between Vancouver Island and Washington state. "This was never Victoria's secret. As noted in a Seattle Times story in 2006, "Victoria, B.C., is the only large city in North America that has made no effort to stop pumping its raw sewage into a waterway." "An estimated 34 million gallons of raw sewage are pumped every day into the Strait of Juan de Fuca. Treatment amounts to passing the effluent through a screen to filter out flushable debris..."
Final clue: When in British Columbia, our subject resides on the forested ocean front of North Saanich in a modest little house assessed at $7.53 million,


in this neighbourhood (SW corner of photo) near Victoria:





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Tuesday, May 6, 2014

Short term gain for long term pain, updated

BC Stats updated data on raw log exports and the volume shipped out of province in March 2014 was up 24% from the preceding month. In the fiscal year ended March 31, producers exported 2.8 times the wood volume exported five years ago.

In fiscal years 2012 to 2014, log exports of BC accelerated, measuring10 times the volume of raw timber shipped in the three final years of the nineties. In the last five years, the volume of logs exports more than quadrupled from the volumes shipped out of province in the last five years of NDP administration.

The following Northern Insight article was first published April 17, 2014.
Yes, things were different in the nineties. In three years ended 1998, log exports totaled little more than $200 million but in 2011-2013, the value was nearly $1 billion. However, growth has not come without consequences.

250news.com, December 2013
"While one Canfor mill shuts down, another opens up, in China."
Business in Vancouver, January, 2014:
"The constant flow of B.C. logs to overseas sawmills is hurting local custom cutters and lumber remanufacturers who rely on the fibre. They are finding it hard to source what keeps them in business..."
The Globe and Mail, October 2013:
"...West Fraser announced that it will close its mill in Houston, B.C., by mid-2014, while Canfor plans to shut down its mill in Quesnel, B.C., next March..."
Ecology and Society, 2013
"We found that the specialty mills ...contributed more jobs per volume of wood consumed and produced, produced more diverse primary and value-added wood products, targeted more diverse markets, and did more trading in logs of different species...

"Although all these activities resulted in more logs flowing toward their highest value use, we found that the specialty mills lacked a secure and adequate timber supply..."






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Economics, by and for lay people

George Osborne, Chancellor of the Exchequer and Second Lord of the Treasury of the United Kingdom, boasted recently about his nation's modest economic growth. If expansion continues, Britain will soon have an economy equal to the size it was in 2008, although population growth leaves the GDP per person about 7% less than in pre-crash days.

English comic Marcus Brigstocke appeared on BBC's The Now Show and he expressed atypical views about economic growth. With wage suppression and the Temporary Foreign Worker Program current issues in Canada, these amusing words from England are worth a listen:


On the same Now Show episode, British comedy writer and actor John Finnemore reshaped an ancient folktale to provide a lay person's explanation of the Royal Mail privatization. Although government denies it sold the 500-year-old public service too cheaply, private shares traded well above the sale price from day one until now. Do you imagine that ordinary investors profited from the price rise? Well, that is not how the financial system works.

When Prime Minister Cameron's government privatized the Royal Mail eight months ago, it allocated huge share blocks to priority investors. More than half of the global bankers, vulture capitalists and friends of government given special treatment quickly flipped shares and profited tens of millions of pounds.

The British public learned this story slowly because transparency is never high on the agenda when dirty dealers do dirty deals. According to an April 29 article by The Bureau of Investigative Journalism,
"Until now, the identity of the priority investors was one of the City’s most closely guarded secrets. The government, in fact, blocked freedom of interest requests on the grounds that disclosing who they are would breach commercial confidentiality even though it is clear the majority of these firms have profited handsomely from a public asset."
The need to protect commercial confidentiality is a statement much repeated but it is often only covering reluctance to be honest about transactions hidden from public view. Finnemore provides a concise account of deceit that cost British taxpayers more than a billion dollars.


Do not think for a moment that we have no frogs and scorpions in British Columbia. We do.

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