Thursday, March 31, 2016

Dots that may connect - UPDATED

When first published on March 26, my article referred to "maintenance costing five times what refitting the same ships cost in BC ten years ago." That was based on press reports that BC Ferries would spend $140 million for work on its two largest ships. However, North Van's Grumps of Blog Borg Collective uncovered a confidential order issued by the British Columbia Ferries Commissioner, one of about 20 patronage appointees who "oversees" the ferry corporations' management.

In October 2015, the Commissioner approved $173 million for the project but, as evidenced by the confidential order three months later, increased the approved amount by $46 million to $219 million. Instead of five times cost of the last refits, the 2016 multiplier is eight.

So, whether it is $140, $173, $219 millions or an even higher cost subsequently revealed, whether the contract is completed by 2018, 2019 or later, I predict the refits will be advertised as completed on-time, on-budget. That tag is applied to all BC Liberal projects, no matter how many times the budget or completion date must be altered.

* * * * * * * * * *
The following was first published March 26, 2016:

When BC Ferries added a newly built ferry to its fleet in the 20th century, the vessel was constructed in BC shipyards. During the mid-nineties, two Spirit Class ships, currently the company's finest, largest and most efficient per unit of traffic, were built in lower mainland and Vancouver Island yards for about $134 million each. In 2005 and 2006, $27 million was spent on refits and upgrades of the two ferries, with the work also done in BC.

With proven and efficient designs in hand, the BC Government surprised observers when it decided that three large ferries were to be built in Europe. The vessels cost about $190 million each but have fewer amenities and almost 25% less passenger and vehicle capacity than Spirit Class. Ferry corporation VP Mike Corrigan, its current CEO, claimed in 2004 that BC shipyards were only qualified to build small open-deck boats for short routes. That claim had already been proven false by Spirit Class vessels and by the subsequent federal decision to award BC shipbuilders an $8-billion contract for seven non-combat ships, an average of $1.15 billion each.

Critics argued that ferry construction in BC, even if contracted at higher prices, would have provided net benefits to the local economy. Economists credit the multiplier effect, which says:
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 shipbuilding industry has a significant multiplier. A European economic study reports:
Shipbuilding is labor intensive and therefore provides jobs for a large number of people. ...Moreover, it is technologically demanding and ...also employs a large number of other industries and therefore results in many spillovers...
When contracts for the Super-C ferries were awarded to an overseas builder, people in the labour movement blamed the anti-union attitude held by the Campbell government and its appointees. However, my own conclusion about the motivation remained uncertain. The move seemed to make no sense, particularly since BC Ferries would have a continuing demand because its entire fleet needed renewal. Washington State, where the ferry system has slightly less traffic, has long required that all government-owned ferries be built in-state because of "the benefits to the state of a stable shipyard work force and economic benefits of in-state jobs."

So, capability of building large ferries was not at issue, and benefits of domestic construction to the broad provincial economy were clear. So, why did Liberals decide to go abroad? They spent $700 million (in today's dollars) on Super-C ferries, another $170 million for intermediate ferries built by Poland's Remontowa Shipbuilding and now will spend yet more millions at the same yard for maintenance costing five times what refitting the same ships cost in BC ten years ago.

B.C. ferries will head to Poland for refits, Andrew Duffy, Victoria Times Colonist, March 25, 2016
A Polish shipyard has won a $140-million contract from B.C. Ferries to conduct the mid-life upgrades of the two Spirit-class vessels.

Gdansk-based Remontowa, the largest ship-repair yard in Poland, won the contract...

B.C. Ferries spokeswoman Deborah Marshall confirmed it is the first time the corporation has sent a vessel offshore for refit.
My audit training many years ago taught that if a situation cannot be explained by the ordinary, you must consider the extraordinary. As with BC Hydro, LNG and gas producer deals, I am left with gnawing suspicions; concerns not allayed by news that broke today.

Polish Remontowa shipbuilder management promised €1.2 million bribe, The Baltic Course, March 25, 2016
Polish shipbuilding company Remontowa Shipbuilding president Andrzej Wojtkiewicz and board member Jan Paszkowski transferred about 800,000 euros to the former management of the Estonian state-owned port company Port of Tallinn, while the total bribe was supposed to be 1.2 million euros... ($1.8 million CAN)

"Two people in management positions with the Polish shipbuilding company have been declared suspects in bribe-giving on a large scale. At the end of October employees of a Polish law enforcement agency questioned the men as suspects at the request of the Estonian Prosecutor General's Office, an official of the Estonian Internal Security Service was present during the conduct of procedural acts," Public Prosecutor Laura Feldmanis told BNS on Tuesday.
There are troubling patterns of BC government agencies contracting with companies outside the province that have ethical deficits, subjects even of accusations that bribery gained contracts. SNC-Lavalin is one, Kiewit and Malaysian Government owned Petronas are others. Ethical questions have been raised also about Site C contractors.

When BC Liberals destroy communications and fail to document government business, they are either involved in or setting the stage for illegal activities. Christy Clark runs a government that lacks moral principle.


This is an extract from the application to the British Columbia Ferries Commissioner for Spirit Class Vessels Mid-Life Upgrades. It demonstrates the degree of transparency that keeps Liberals comfortable.

About four years ago, before the last election, Premier Clark was touting the capabilities of BC shipyards, shaking hands of workers and taking credit for promised federal contracts. However, it was photo-op time so her words were not meant to be believed.

That was then, this is now.


Prosecutor expands Port of Tallinn inquiry to cover purchase of icebreaker, The Baltic Course Magazine, March 3, 2016
"Hence the Internal Security Service and the prosecutor's office are checking over the circumstances related to the purchase of the icebreaker Botnica in the framework of the already ongoing criminal procedure," he added....

Officers of the Internal Security Service (ISS) detained Port of Tallinn CEO Ain Kaljurand and board member Allan Kiil as suspects in bribe-taking on Aug. 26 last year. They were released at the beginning of January and placed under electronic surveillance.

The former Port of Tallinn top executives are suspected of accepting bribes on a large scale over a period of several years at least since 2009. The Public Prosecutor's Office has said the placement of orders for the construction of two new ferries at a shipyard in Gdansk, Poland is a central point of the investigation.

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The real purpose of Site C?

Why Site C must be stopped, Wendy Holm [Consulting Agrologist], Special to the Vancouver Sun, July 28, 2014 the face of overwhelming evidence, the B.C. government and its private sector partners seem quite content to throw tomorrow under the bus and press ahead with the construction of Site C — economics and the public interest be damned.

Why? ...In part, it’s about money: there are lots of significant piggies ’round the taxpayer trough that will make big bucks building it. In part, it’s about leverage: saddled with Site C’s high-priced power, BC Hydro will hemorrhage red ink, fuelling calls for its privatization and, as such, delivering the vision of investors.

And, in part, it may also be about the water itself. Once impounded behind the dam, the previously free-flowing water of B.C.’s Peace River becomes a NAFTA commodity if BC Hydro is privatized and American investors are involved. ...Also interestingly, Site C Dam is smack where it belongs to support the Kuiper, NAWAPA and Grand Prairie schemes for continental water sharing. As water becomes increasingly scarce, the ridiculous becomes profitable...
Water and Free Trade: The Mulroney Government's Agenda for Canada's Most Precious Resource, Wendy Holm

WATER FROM THE NORTH: NATURE, FRESHWATER, AND THE NORTH AMERICAN WATER AND POWER ALLIANCE, Thesis Abstract, Andrew W. Reeves, Department of Geography, University of Toronto, 2009:
...Drafted to address the anxiety of perceived ecoscarcity regarding water shortages in the early 1960s, NAWAPA [North American Water and Power Alliance] emerged after a century of increasingly large‐scale diversion projects, and seemed a logical continuation of such grandiose, “jet‐ age” type thinking. It proposed to re‐engineer the North American landscape to provide water from the North to the arid Southwest...


Executive Summary
Canada has twenty per cent of the planet’s total fresh water supply. Canada’s water wealth raises the possibility of shipping water in bulk, through tankers or pipelines, to regions suffering from drought. On the one hand, bulk water exports could be an economic boon for Canada and a possible solution to the rising concerns over global water security...

Canada can engage in sustainable and responsible bulk water exports if it implements necessary legal and regulatory reforms. First, Canada’s treaties should characterize bulk water exports as a “good” for purposes of international trade and investment law...

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Tuesday, March 29, 2016

Guest post: Paying for Information and Influence

I invited Chris Alemany, a councillor for the City of Port Alberni, to write of his effort to gain information about a subject of broad public interest. It is unfortunate the BC Liberal Government demands that concerned citizens pay exorbitant amounts for information that should be routinely available. What's even worse is that often times, Freedom of Information applications yield little useful information. What is not hidden or destroyed gets redacted for no reasonable purpose. It is too much for one person to pay thousands of dollars for a response that may be of little value. Unless government policy changes, we should act together when a situation demands. I believe this is one of those occasions and, if you agree, please visit the GOFUNDME site and make a small contribution.

I am no philosopher, nor am I even a scholar in democracy or politics, but I do like to know the numbers… and as a politician, I like to see transparency. So I like to submit freedom of information requests when I see a need.

Pay for Information

I submitted a somewhat detailed FOI Request to the BC Government for information on Wildfire contracts. You can see it further down this post. I did expected a modest handling charge, maybe $100 or so. However, when I received a response back from the (very helpful) FOI officer handling my file I was given this bombshell:
As it stands the fee estimation is at $1,210, but inclusion of all contracts would multiply that amount by seven in terms of hours required.
Obviously there is no way I, as an individual concerned citizen and elected representative with a family and no budget for this kind of thing, can pay $1210-$8500 for some binders of paper or trove of PDFs.

I question even whether a media organization, local newspaper or opposition party would be able to swing that kind of money.

Is this a way to block information? Why are contracts signed with public entities not readily available for the public to scrutinize? Why would this cause so much extra work for an individual in a ministry if we have an expectation for transparency and access to information by default in our public institutions? Or do we actually have that expectation?

Rather than abandon my request, I decided to try something different. A GOFUNDME donation drive to raise the required $1200. It is at:
Thanks to the surprise and common interest of dozens of other citizens I have managed to raise the minimum $1200 needed to pursue the request. Many donations were given ‘under protest’ at the very notion of having to pay for public information to be released. I hope to raise enough to cover up to the $8500 that was suggesting by the FOI office. If I raise more than needed, the surplus will go to the BC Burn Fund.

Please donate. And please ask your MLA why public information is subject to exorbitant fees in order for it to be seen by the public.

Aerial Firefighting and Political Donations

So what was the information request and why did I put it in? Well, say what you will about one plane or another (I’ve said enough), one fire or another or one company or another, when you see a Minister stand in an Airplane hanger (used by ConAir Aviation) and award a contract (and post it on his MLA webpage) you would expect that that is being done on the basis of its merits alone.

What are the merits of this plane? What are the merits of the company? What basis was this decision made and what is the history of aerial firefighting and the historic cost and performance of aerial firefighting groups working for the BC Wildfire Service?

In a time of increasing fire activity and increasing fire budgets, these seem to be critical questions. However, it seems they are questions largely without public answers aside from very broad numbers about the total cost of wildfire firefighting in any given year.

So with that front of mind after the awarding of the ConAir contract for the new jet plane, I submitted this information request to the Province of BC:
Records indicating the number of firefighting aircraft the province had on contract since the 2010 forest firefighting season, broken down annually by company and model and whether it was signed in advance, on call or on a master standing offer basis; The costs associated with each of those aircraft, including the initial contracts, costs to run and fuel the planes, crew costs and any additional costs; A copy of the contract(s) that Conair has signed with the province for the 2016 firefighting season.
The request is roughly in two parts. The first portion is to determine the actual costs of aerial firefighting in BC so that there is some hard data on what each type of aircraft can do, and perhaps how the current strategy and operational mentality helps or hinders the budget and the effectiveness of firefighting.

The 2nd portion has more to do with the relationship between ConAir and the Provincial government based on persistent conversations and concerns brought to me, particularly after someone passed me this link to the BC Elections Campaign Donation website that shows political donations from ConAir and Coulson.

And then a further link to provincial ministry of finance payment records that, when compiled together look like this:

The discrepancy in payment from the government could come down to a number of things that do not have anything to do with favouritism but it does seem something worth investigating. That is why I put in the freedom of information request.

We’ll see if the information I receive answers any of the questions, but at the very least the request has already proven that given a topic of enough public interest, a pay wall, as unjust as it may be, will not prevent the public in the age of the internet and social media, from attempting to gain access to that information. Whether it should be forced to through things like a GoFundme drive should be a matter of debate.

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Monday, March 28, 2016

Can BC Ferry Services be trusted? UPDATED

Coastal communities have reasons to distrust the provincial ferry service and its political masters. One issue is discrimination, because people on saltwater pay onerous fares while inland ferry users enjoy free sailing, services that have cost the province over $200 million during Christy Clark's time as Premier.

The province reports $491 million in tax expenditures in fiscal year 2015-16 for film and television tax credits, which is three times what it contributes to BC Ferries. Despite the importance of BC Ferries to the culture and economy of BC, the BC Liberals refuse to allocate federal infrastructure grants to this purpose. They prefer to spend billions for the benefit of the natural gas companies that are laying off workers in northeast BC.

Another issue is BC Ferries' purchasing policy, which has contributed to the destruction of competitive ship and boat building on Vancouver Island and the lower mainland. About $1 billion has been contracted by BC Ferries outside of British Columbia.

The intermediate-class ferry new-construction, S-Class refits and the planned LNG fuel facilities are proceeding without full disclosure and public discussion of details. To avoid risk to passengers, BC Ferries has long had a policy of restricting dangerous cargoes to special sailings. Now, they plan to sail with LNG tanker trucks fueling vessels while parked beside customers' vehicles.

For example:

Submission by BC Ferries to Ferry Commissioners
“At this time, it appears most likely that the ICFs will be fuelled from LNG tanker trucks parked on the vessel car deck.”
From BC Ferries website:
To replace these vessels, BC Ferries will be introducing its Salish Class of vessels, otherwise known as Intermediate Class Ferries (or ICFs). The Salish Orca and the Salish Eagle will be introduced into service on the Southern Gulf Islands routes starting in 2017. These two new vessels, as well as a third ICF (the Salish Raven) that will serve to augment peak and shoulder season service in the Southern Gulf Islands, are being built at Remontowa Shipbuilding S.A. in Gdansk, Poland.
Would you be comfortable travelling with your family on a ferry where your car is parked alongside an LNG fuel truck? Should we trust a ferry operation that has a record of overpriced under-competent management, supervised by almost two dozen patronage appointees of Christy Clark's government?


The audio file below is a recording of my time on CFAX1070 with Ian Jessop March 28, 2016. We talk of BC Ferries, Site C and Laila Yuile.

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BC's intended major LNG partner

Petronas LNG Decision a 'Watershed Moment' for Trudeau Liberals, Say Critics, Mychaylo Prystupa, The Tyee, March 10, 2016
...On Wednesday, a letter signed by 130 Canadian and international scientists urged the Trudeau government to reject a recent Canadian Environmental Assessment Agency (CEAA) report that concluded the Petronas-backed Pacific NorthWest LNG project could be built safely for the environment.

The scientists jointly called the report "flawed" and showed "inadequate consideration" of the project's cumulative effects...
While there are questions to be answered about the financial and environmental impacts on British Columbia, there is another one as well:
Do we really want to do business with this Malaysian company?

Joseph Welch's famous quote could be directed to Rich Coleman:
Have you no sense of decency, sir?

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Friday, March 25, 2016

BC Liberals' special partners

Again, a contribution from an In-Sights reader who is closely following the situation in Malaysia and asking why British Columbia wants to trust part of its economic future to these people.

On Friday an Australian Broadcasting Corporation news story - written by Linton Besser, Jaya Balendra, Elise Worthington – was published in Malaysia.

"I think there is an atmosphere of total terror."
It's a story of intrigue, corruption and multiple murders, stretching from the streets of Malaysia's capital Kuala Lumpur, to Switzerland, France and the US as well as Hong Kong and Singapore, all the way to Australia's doorstep.

"He said,
'You know I can't talk much, he said, because my phone might be bugged'".
The money involved is astonishing.
"The person who made the gift must be extremely rich to be able to just give away US$681 million."

"The fact that it's going to the personal account of the Prime Minister is unprecedented."


It may have been another routine application of media-repression-as-usual but perhaps it wasn't clever once again to arrest, detain and then kick out another team of Australian journalists.

This time the ejectees weren't a band of Australian stringers working for Al Jazeera but instead a “4 Corners” Australian Broadcasting Corporation team reporting from Malaysia.

Unlike Canada's steadfast media passivity the Aussies are joining European and American media in exposing the specifics behind collapsing democratic standards in Malaysia.

Included in the Malaysia Chronicle article above are 3 especially informative videos which further develop the story's background.

The date for release of the 4 Corners video appears in the link below...

State of Fear, reported by Linton Besser and presented by Sarah Ferguson, goes to air on Monday 28th March at 8.30pm EDT. It is replayed on Tuesday 29th March at 10.00am and Wednesday 30th at 11pm. It can also be seen on ABC News 24 on Saturday at 8.00pm, ABC iview and at

For those interested in why so many news outlets are covering Malaysia, these stories are what all the fuss is about.


Opponents of Malaysian PM Najib Razak step up drive to oust him, The Straits Times, March 27, 2016
KUALA LUMPUR (AFP) - Leaders from across Malaysia's political spectrum said on Sunday (March 27) they plan to present a petition to the country's Islamic royalty seeking the removal of scandal-plagued Prime Minister Najib Razak over a corruption crisis.

The highly unusual grouping of heavyweights from the ruling party, the opposition and civil society groups was formed in early March, when it issued a call to "save" Malaysia from disaster by removing Mr Najib.

A succession of speakers pressed that demand during a rally attended by several hundred supporters on Sunday, accusing Mr Najib of using his office to thwart scrutiny of the graft allegations and avoid justice.

"(Najib's) leadership undermines the very existence of our institutions," said former prime minister Mahathir Mohamad, around whom the movement has coalesced.

"We want the rule of law and the actions of Najib has destroyed it. He no longer deserves to be the prime minister," he said at the gathering near the capital....

Mr Najib, 62, is under pressure over allegations that billions of dollars were stolen from a state firm he founded, and over his own acceptance of a mysterious US$681 million (S$935 million) payment from overseas....

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Late for the party - Updated

$40 Billion LNG Project In Australia Cancelled Amid Low Prices, Charles Kennedy,, Mar 24, 2016
The crash in LNG prices has claimed a major victim. Woodside Petroleum and its partners, which include Royal Dutch Shell, BP, and PetroChina have decided to cancel a massive LNG project in Australia because the economics no longer work.

...Citing the “extremely challenging” market, the project was scrapped on March 22. “It’s very, very difficult for us to invest in this price environment,” Woodside’s CEO Peter Coleman said.

“We’ve got a glut of LNG at the moment and a large number of potential projects out there,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co., told Bloomberg in an interview.

...with LNG prices a fraction of what they once were, the decision does not come as a surprise. A handful of other large LNG export facilities that have been planned for Australia are also getting second looks. Browse had failed to secure any customers for its planned capacity, and with LNG prices now down to multiyear lows, it would be much more difficult for this project to turn a profit than for some competing projects that sealed contracts years ago.
The forces of no, or market economics?

We're so lucky in BC. Aren't we?

As to the libs' staunch resistance to prudent counsel, advice they don't want to hear?

Their logic is dazzling. If a project is made Too Big it can't be allowed to fail. To guarantee inevitable success just make sure every project is Too Big to back away from.

There is one concept that pound foolish ideologues like Princess Enron, Stephen Harper, and his newly transferred acolytes are anxious to disinvent.

The fact of Business Risk
"The probability of loss inherent in an organization's operations and environment (such as competition and adverse economic conditions) that may impair its ability to provide returns on investment. Business risk plus the financial risk arising from use of debt (borrowed capital and/or trade credit) equal total corporate risk."
Despite proof after proof of losses - worldwide - how could the insistence upon further massive LNG investment now be anything less than a catastrophic error?

The typical the BC response? Confidence, “We're Not Worried”.

Though it makes entertaining if financially absurd theatre, unfortunately for BC taxpayers political grandstanding is irrelevant. It offers zero leverage and has no bearing on whether this effort will be seen later as either a brilliant initiative or a barking mad Ponzi scheme.

The argument that pushing massive projects like Site C still is "necessary" [says who? what are the facts?] and the belief that all those other LNG fantasies ever were invaluable to taxpayers now looks more like attempts to pretend that the risk of such investments failing simply doesn't matter.

Like a sinking Titanic the bridge believes it can all be managed. Just Remain Calm.

To the passengers paying for this ride and noting the degree to which the ship is sinking this is one more resource exploitation managed by people with a ministerial track record of zero organizational genius and astonishing contempt for real oversight.

Reliance on PR to mask a non-stop string of failures to perceive economic and social reality? That's just Politics...As usual, devoid of ministerial responsibility.

While other nations are shutting down mass expenditure plans, in China, Japan, South Korea, the US and elsewhere, the risk of failure increases for those still determined to make reality subordinate to ideology. An ideology which opposes realigning expenditures to suit reality looks more and more madcap and incompetent. Alice's Tea Party.

We're so lucky in BC. Aren't we?

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Thursday, March 24, 2016

Industry - policy maker or welfare bum?

Many people believe that BC Hydro's current job #1 is enabling the delivery of water and cheap power to northeast gas fields and heavily subsidized energy to remote mine sites. If true, that proves government policy is being dictated by the favoured natural resource industry - an industry that presently employs only a tiny proportion of the province's workforce.

In the current fiscal year, natural gas royalties, net of the drilling and infrastructure credits allowed producers, will be negative. Sales of rights, including fees, rents and bonuses amounted to $16.2 million, a tiny fraction of any year since monthly sales began.

Shall we recall Premier Clark's 2013 election promise of a debt-free province with a $100 billion Prosperity Fund and sufficient revenues to fund increased spending on education and social programs?

How's that promise coming along?

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Bald Eagles break injunction,build nest in the path of Site C clearing.

Readers may be aware that late March 23, the website 'No Strings Attached: Laila Yuile on politics and life in B.C.' was taken down by a malicious attack aimed at quieting her online voice. Her Twitter account - which gains between half and one million monthly impressions - was also affected. You can now find Laila on Twitter at @reallailayuile.

In my view, it was not Laila's work that was attacked, it was an aggressive action against the entire population of British Columbia. She is an investigative journalist and commentator, operating a non-commercial website that addresses issues vital to all citizens. Some of the people affected by Laila Yuile consider themselves SPECIAL INTERESTS, above criticism and independent review.

The attacker may turn out to be an individual sociopath lacking normal perceptions or this might be actions of unprincipled people hired by those who see their financial well-being harmed by exposure and disclosure.  

I will update this section as more information becomes available.

This is Laila Yuile's March 23 post, which was apparently a final straw to someone yet unknown. You can read other recent material written by Laila Yuile in this extract from a webcache.

I was in the courtroom the day that BC Hydro was granted their injunction to force the land stewards camp at historic Rocky Mountain Fort. As I listened to the justice give his preamble and reasons for granting it,one knew what the result was going to be. He listed what he could and could not consider within the confines of the law for the purposes of the application, and even acknowledged there were many compelling and persuasive arguments the construction of the dam should not proceed at this time.

That statement surprised me as it did others and was akin to rubbing salt on a raw wound, because like the land stewards of Rocky Mountain Fort, I too believe construction of the dam must be halted.

The campers honoured the law and removed their camp. And within days BC Hydro was clearing. This is the before image of the stunning Peace River valley that held Rocky Mountain Fort, a site that was selected by explorer Alexander McKenzie in 1793 for the abundance of the area and traditional lands of Treaty 8 First Nations. *click to see a larger version

Incredible,isn’t it? Rich in wildlife, of traditional medicine and sacred land enjoyed and used by First Nations,explorers and settlers for hundreds of years.

Until now. This is the view of Rocky Mountain Fort, after the injunction.

And here is a closer look at the devastating clearing that when viewed for the first time, brought tears. A local ongoing art project in Surrey called ‘I Grieve’ came instantly to mind : I grieve over the loss of these trees and this land and what that loss will be for generations to come if one of the court cases doesn’t stop it.

So much for treaty rights.

So much for history.

So much for peoples lives.

But ironically,when the injunction was served, no one told the eagles that no one was allowed to get in the way of clearing…

It is thought that this is the same bald eagle pair whose nest was destroyed last fall in clearing that was decried by locals at that time,because an eagle was photographed at the nest right before it was taken down.

Arlene Boon, a third generation resident of the Peace Valley who along with her husband Ken stand to lose everything they have worked their entire lives for, was among those camping at Rocky Mountain Fort site.In a moment of levity, she posted this after hearing of the eagles nest:

That Arlene can speak with grace and humour in a situation that is anything but funny, speaks to the strength and quality of her character.

That the bald eagles have chosen to build in the path of clearing for site C, some might say is divine intervention. Across cultures and faiths, eagles hold significant spiritual significance, particularly for First Nations and Native Americans.

BC Hydro has committed to a 300 meter buffer for all active nests during Site C construction so this nest is safe according to their link. And, this site is now documented and actively being watched so it doesn’t “fall down due to the backwatering caused by the channelization and diversion of the river” as per the BC Hydro link embedded above.

As for the pair of eagles? They may very well be considered the John and Jane Doe named in the BC Hydro civil suit and the injunction application, so if you can spare some cash for the legal fees associated with fighting this damn dam, it would be appreciated:

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Wednesday, March 23, 2016

March 23 with Jessop of CFAX1070

The audio file below is a recording of my time on CFAX1070 with Ian Jessop March 23, 2016. We talk of BC Hydro and deceitful government.

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When regulators don't believe in regulation

I thought this headline at the March 22 National Observer was an April Fools' Day joke published too soon:

It is not. Therefore, citizens of BC expecting a changed approach ought to know a little more about the province's new deputy climate minister. The following was published here about two years ago:
 * * * * * * *
The precautionary principle states that before taking risky actions, initiators must prove the proposed actions are benign. Stewardship is an ethic that requires people acting as surrogates of others to manage responsibly and protect assets of the commons.

For many citizens of Canada, the concepts are incontrovertible but the avaricious care little about consequences for others, particularly for others yet unborn. Sadly, BC Liberals like Christy Clark, Rich Coleman and Bill Bennett don't see themselves as stewards of public assets, they are facilitators of exploitation by anyone willing to pay to play.

The Clark government is negotiating agreements with multinational gas operators but is in trouble because there is not much left to give. In recent times, drilling credits almost completely offset natural gas royalties and the exploration rush ended so most gas related land tenure revenues vaporized too. We're told that known reserves are sufficient for the long term and prices are weak so industry sees little need to search for more gas.

The subsidies discussed by potential LNG exporters are for transport and shipping infrastructure and for capital and operating costs, particularly for powering liquefaction plants. Additionally, LNG operators want sales tax concessions and assurance that foreign workers can be imported for construction and operation of facilities.

Expansion of BC's gas industry depends on LNG but liquefaction plants are non-starters unless government agrees to subsidies and concessions. Of the latter, a significant issue is government willingness to let gas producers set rules for production. Hiring mossbacked Fazil Mihlar as Assistant Deputy Minister for oil and strategic initiatives signalled that government will not allow environmental standards to interfere with production. Mihlar is a self-proclaimed risk-taker and an opponent of state involvement in matters of business.

This is unfortunate because the weight of new science, at least that which is independent of the fossil fuel business, declares that increases in gas production involves previously unrecognized dangers. The latest, from the National Academy of Sciences, is discussed in the linked article below.

New Study Finds U.S. Has Greatly Underestimated Methane Emissions, New York Times, November 25, 2013
"A comprehensive new study of atmospheric levels of methane, an important greenhouse gas released by leaky oil and gas operations and livestock, has found much higher levels over the United States than those estimated by the Environmental Protection Agency and an international greenhouse gas monitoring effort. The paper, “Anthropogenic emissions of methane in the United States,” is being published in the Proceedings of the National Academy of Sciences..."
I published the following on Northern Insight two months ago. It is worth repeating.


Fracking in Wyoming
With Put the brakes on LNG until impact of fracking investigated, Laila Yuile draws attention to deficient science surrounding hydraulic fracturing in British Columbia.
"The rush to develop LNG resources is appalling, considering several countries, states and provinces have already banned or put a moratorium on fracking until the considerable environmental concerns can be addressed. Here in B.C., there are grave concerns about the massive amounts of fresh water being used for the process, and how an expansion will impact local water supplies, and the sustainability of rivers and streams..."
Many issues are at play in development of natural gas production in this province. Protection of water resources is but one. Undeniably, persons in positions of authority in the federal and provincial governments care little about water and other environmental elements or about fair economic returns to citizens: the putative owners of natural resources. As Noah Scape commented at Andrew Nikiforuk's report on the Encana contamination lawsuit,
"This case is evidence that Govt works for Corporations and not the citizens..."
Is hydrofracturing safe? I'm a layperson but I've done considerable study so I can respond to that question. The answer: yes and no. However, even that may be uncertain.

The National Science Foundation funded a study titled Impact of Shale Gas Development on Regional Water Quality. The environmental engineer who led the review stated,
"This is an industry that's in its infancy, so we don't really know a lot of things."
As in most situations where the science is evolving, interested parties turn to trusted sources who will deliver opinions or make presentations that suit their own needs. Vancouver saw an example in December 2012 when Charles Groat of the Energy Institute at the University of Texas delivered, as Mark Hume reported,
"a definitive statement that the widely held environmental concerns about fracking were simply unfounded."
It turned out that the only thing truly definitive was that Mr. Groat had ethical and independence issues that troubled the University of Texas, itself not a paragon of virtue when business and academic interests conflict. Mr. Groat was encouraged to move on from UT Austin.

Risks of producing hydrocarbons by hydraulic fracturing relate to more than water. One of the hazards comes from methane leakage during production and transport of gas. This audio clip is from an interview with Cornell University's Dr. Robert Howarth, taken from a program produced by scientists at Cambridge. (The full program, What is Fracking? is a podcast that can be found at The Naked Scientists. Here, I present only a four minute segment.

Dr. Howarth challenges the assumption that shale gas has a low GHG footprint and he cites work by Cornell colleague Dr. Anthony Ingraffea and scientists at Duke University. Of course, science that doesn't promote the oil and gas industry is quickly targeted by hired guns, most involved with lobbying and public relations rather than science and technology. (Follow the link to Ingraffea's story of Halliburton and the black olives.)

In all likelihood, in particular geologic situations, fracking can proceed with acceptable risks, provided that scrupulous attention is paid to the integrity of fracked wells.

Writing about the methodology in the northeastern U.S., Scientific American noted,
"There are many ways for things to go wrong with a natural gas well during the fracking process. A new well—or the 100,000 or so existing but forgotten wells—can allow natural gas from either the Marcellus or shallower deposits to migrate up and out of the rock and into water.

"...One reason there is no such irrefutable evidence [of ground contamination] is because of a lack of publicly available baseline data for the condition of groundwater prior to any drilling and fracking. That data is collected, often by the gas companies themselves, but not shared due to privacy issues...""
In Canada, with regulators dedicated to eliminating obstacles to expanded oil and gas production, oversight is minimal or non-existent. Industry has almost a free hand to do what suits their economic interests and, if dealing with wastewater and preventing or solving gas leaks is too costly, contaminated wastewater and slippery gas will be allowed to escape.

The preceding article at Northern Insights, They assume we're feckless idiots and they might be right, demonstrates that recently, contrary to public messaging, the natural gas industry has barely contributed to public coffers in BC. Liberals encourage expectations that tens of billions of dollars from natural gas production will pay down debt and provide public services. However, in the last fiscal year, royalties from gas producers added $8 million to the province's bottom line. That's only half the profits claimed by B.C. Ferries after it booked subsidies of $210 million and paid bonuses to management for the result.

The net amount of royalties that government receives from natural gas production surprises everyone I know who has not examined public accounts in detail. Certainly, the financial situation indicates the political influence wielded by extractive industries in British Columbia. Another indicator is the appointment of Fazil Mihlar as Assistant Deputy Minister, Oil & Strategic Initiatives, BC Ministry of Natural Gas Development.

Mihlar has moved from the Fraser Institute to the Vancouver Sun and now to a senior position in the BC government's ministry of gas promotion. This latest move will please industry immensely. A regulator who doesn't believe in regulation is akin to a banker who turns off the security systems, unlocks the cash vaults and leaves the doors open.

However, there is much more to Fazil Mihlar's idealogy than his belief that business should operate without restraints imposed by governments. I looked through newspaper archives and Tweeted a number of statements and assertions by or about Mihlar. Collectively, they paint an incomplete but useful portrait of the man. See if you agree.

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Tuesday, March 22, 2016

Birds of a feather...

Clark Cabinet or BC Hydro Board?
He might not be Person of the Year, but TIME is paying attention to BC Liberals' favourite Malaysian politician and LNG partner. In These 5 Facts Explain the State of Global Corruption, Ian Bremmer writes:
In 2009, Malaysian Prime Minister Najib Razak established a sovereign wealth fund called 1Malaysia Development Berhad (1MDB) to help the country attract foreign investment and boost its economy. Long story short, by 2015, 1MDB owed investors $11 billion. As investigations of the state fund got underway, it was revealed that $681 million dollars had been deposited into Najib’s personal account. The prime minister copped to the money transfer, but claimed it was a “gift” from the Saudi royal family, about $620 million of which he says he has returned. Two weeks ago, the 1MDB investigation uncovered that the total routed into Najib’s personal account was actually about $1 billion.
In an earlier TIME article, Nash Jenkins wrote:
...a series of overseas investigations into the Malaysian money trail, including one initiated by the F.B.I., are still pending.

...activists from across the Southeast Asian nation released a statement condemning the Prime Minister, whose actions, they wrote, “have jeopardized and will sacrifice the future of Malaysia.”

...Most Malaysians have resigned to the fact that corruption is a systemic problem but the quantum of the 1MDB allegations has shocked everyone.”

A reader/contributor of In-Sights who has long followed the Najib Razak and Petronas stories had this to say,
That Time mentioned Malaysia at all, and compared it with Brazil, South Africa, China, and Russia?

That's not a ranking or inclusion that generates confidence.

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Favoured friends

After the Campbell Liberals were  elected in 2001, influences of special business interests grew rapidly. Under Christina Clark's leadership, non-renewable resource companies wield great political power and they use it to minimize regulations and taxation and maximize subsidies.

In fiscal year 2016, mining companies and gas producers contribute a small fraction of the provincial budget. The current year's gas rights sales and royalties are bringing in about ⅓ of 1% of the province's cash income and, despite the government's 2013 pre-election promises of fabulous gas wealth, there is little improvement in budget estimates to 2019. In 2001, the contribution was over 5%.

Petroleum, metal and mineral companies now pay less in resource rents than government spends regulating them, so it is fair to say that, through political contributions, the BC Liberal Party profits more from resources than do the province's taxpayers. The largest source of BC's natural resource revenue is now water rental and most of that is paid to generate hydro electricity and is charged back to us in utility bills.

This graph shows that while income, sales and provincial property taxation nearly doubled under the Liberals, natural resource revenues declined by half:

Some people assume the difference can be explained by production volumes and prices but that is incorrect. Below is a 15-year look at natural gas royalties and production volumes. Buried in earlier In-Sights articles are comparisons of metal and mineral production levels that show similar trends:

The situation is even worse than shown above because, when producers spend money on drilling or road building, they gain rebates to be applied against future royalty payments. Those outstanding credits are not recorded by government and the liability increased about $800 million in Clark's first four years. In other words, the apparent royalty revenue is actually half of what is shown. (The current year change in accrued credits owed producers will not be revealed until the Auditor General reports in mid-summer.)

It is fairly clear the present government, particularly under Clark, prefers to reward the natural resource companies that have provided, according to Elections BC, contributions of more than $16 millions dollars to the BC Liberal Party.

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Friday, March 18, 2016

Caution BC Liberals, the temperature's rising

Listen to more of John McComb's show HERE.

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Twenty years ago...

In 1996, BC Hydro was a company with total assets of $12.1 billion, delivering 42,834 GWh of electricity to BC's residential, commercial and industrial users.

Ten years later, BC Hydro had total assets of $12.5 billion and it delivered 50,602 GWh of power to the same customers, an 18% increase in domestic consumption with only a 3% growth in assets.

Ten years along, in 2016, BC Hydro's domestic consumers needed only 49,142 GWh, down 3%, but the utility's assets had grown by 136% to more than $29.6 billion.

Incredibly, from 1996 to 2016, purchases from independent power producers (IPPs) soared by 839% to 14,877 GWh, which cost about $1.3 billion in the current fiscal year. According to BC Public Accounts, the obligation to IPPs is $1.85 billion in the year ended March 2017.

Many of IPP deals were made when BC Liberals thought they could find a profitable export market in the USA. Since private operators didn't want to put their own money on the line, it was decided that the public would carry almost all financial risks for the private power system. It didn't take long for every sharp operator in the province to join in the frenzy of activity. As a result, a few people cashed in and the public utility is stuck with buying power they don't need at prices they can't afford.

Unfortunately, Liberal politicians learned nothing - or perhaps learned they could easily get away with financial fraud - and they've taken a similar approach to LNG. Billions of public money are committed to benefit gas producers and future governments are locked into decades with no substantial revenues from gas. Like high prices in the California power crisis at the turn of the century, a short period of elevated Asian LNG prices had BC Liberal hearts beating fast. Foolishly, they dealt with the gas industry with the same expertise they applied to electrical power markets.

The values of IPP generating facilities are not included in BC Hydro assets although the company is obliged by contracts extending up to 56 years to pay a reported $56.2 billion for the produced power. Had the public operation built and owned these many producing sites, its asset growth at Hydro ould have been substantially larger.

At BC Hydro, what citizens have is a spendthrift corporation gone mad, bent on delivering billions into the hands of BC Liberal friends. The company has plans for more than $20 billion additional capital spending in the next decade, has the stated intention of buying larger volumes from IPPs at higher prices and the utility's managers have proven inability to either tell the truth of future needs or to forecast them without massive error.

The company is led by BC Liberal apparatchik Jessica McDonald who says her lack of experience in utility management is OK because her predecessors were equally lacking in experience. One qualification of hers cannot be denied; she's married to a person Premier Clark called "one of my oldest friends."

McDonald acts with a Board of Directors that has zero experience in large utility management and the most important qualification to serve appears to be political loyalty. We must accept that McDonald - who would not have been hired in a private company with assets over $25 billion - can trust her job to be secure at least until the next election.

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