Revelations from DeSmog Canada’s exclusive sit-down interview with Harry Swain, the chair of the panel that reviewed the $8.8 billion Site C dam, were raised during question period in the B.C. legislature on Thursday.

Andrew Weaver, Oak Bay-Gordon Head MLA and Deputy Leader of the B.C. Green Party, asked the government about the economics of the Site C dam project in light of Swain’s unprecedented interview.

Swain, a former Deputy Minister of Industry Canada and Indian and Northern Affairs Canada, is thought to be the first review panel member in Canadian history to speak out about a project in this manner. His comments to DeSmog Canada prompted follow-up by the Globe and Mail, CBC, CKNW and CFAX.

“Mr. Swain was very clear that the government was rushed in approving Site C, and British Columbians will pay for their haste,” Weaver said during question period. “As Mr. Swain said: ‘Wisdom would have been waiting for two, three, four years to see whether the projections they’ — that’s BC Hydro — ‘were making had any basis in fact.’ That’s not exactly a glowing endorsement for the fiscal underpinning of Site C.”

The panel that reviewed Site C predicted that the dam will lose $800 million in its first four years of production while it sells excess power for a third of its cost on the export market.

“My goodness, we could use that money to build a state-of-the-art sewage system in Victoria,” Weaver quipped.

Weaver continued during question period:

“Mr. Swain is only the most recent person to suggest waiting a few years to see if electricity demand for the project materializes. We could still build Site C down the road if necessary, but we could use the additional time to properly explore cheaper alternatives like our vast geothermal potential in B.C. We have the time. LNG final investment decisions are delayed or not happening at all or somewhere down the yellow brick road or perhaps in never-never land.”

Weaver asked Bill Bennett, the Minister of Energy and Mines: “Given the massive costs associated with rushing into Site C, will he hit the pause button on construction for two to four years, as recommended by Mr. Swain, and use the time to save British Columbians money and explore viable alternatives?"

Bennett responded saying, “I categorically disagree with the premise of the question” and then went on to say: “Fair enough questions about the need for the electricity, the cost of the project. These are all legitimate issues that we should be debating in this House.”

Bennett then quoted several excerpts from the panel’s report, including that Site C “would be the least expensive of the alternatives, and its cost advantages would increase with passing decades as inflation makes alternatives more costly” and that BC Hydro “has done a responsible job in forecasting.”

The panel's report also said it did not have the information, time or resources to look at the accuracy of cost estimates and recommended that, if the project proceeds, costs and need should be examined in detail by the province’s independent regulator, the B.C. Utilities Commission. The panel noted it could not conclude the dam was needed on the schedule presented and said the province had failed to investigate alternatives — something it was instructed to do 32 years ago, when the utilities commission first turned down the Site C dam on the Peace River. 

Swain called this failure to research alternatives a ‘dereliction of duty’ in his interview with DeSmog Canada.

“Those are very strong words from a very highly regarded senior official from the Canadian government,” Weaver said Thursday in the legislature. “To be even more blunt, it’s recklessness on the part of the government.”

Weaver continued:

"What we need right now is a government that is willing to show leadership on this, willing to put good policy ahead of ideological politics. My question to the minister is this. Will he listen to the call from every member of this side of the House, along with the expert opinion of the joint review panel and countless others, to send the Site C project to the British Columbia Utilities Commission for a proper regulatory review?"

Bennett continued his refusal to send the project for a review by the B.C. Utilities Commission.

Bennett responded:

"B.C. Hydro figures that we’re going to need 1,100 megawatts of electricity in 2024. We set about, over the past two years, to determine what’s the best way to get that 1,100 megawatts of electricity. We looked at absolutely everything, and the decision that we made on this side of the House was to honour the ratepayer. We chose the option that is the fairest, lowest cost to the ratepayer, but that side of the House wants us to do something different."

But the panel that reviewed the Site C proposal found the government hadn't looked at "absolutely everything," as Bennett states.

“The panel concludes that a failure to pursue research over the last 30 years into B.C.’s geothermal resources has left BC Hydro without information about a resource that BC Hydro thinks may offer up to 700 megawatts of firm, economic power with low environmental costs,” the panel's report read.

The Canadian Geothermal Energy Association (CanGEA) has argued geothermal can meet all of B.C.’s future energy needs at a lower cost than Site C with fewer environmental impacts. The association has requested meetings with Minister Bennett with no success.

"We welcome him to become more informed and to engage in constructive dialogue with the association and with our members," said Alison Thompson, chair of CanGEA.

In a press release, Weaver said the minister's talking points are missing the point. “This dam didn’t make sense for B.C. thirty years ago, and it doesn’t make sense now.”

“The question that needs to be asked is what’s the rush?” Weaver added. “LNG isn’t materializing along the timeline promised by government. Even if B.C. Hydro’s current projections are true, we still have up to four years before we need to start building the dam. We should use that time to explore alternatives before embarking on the largest infrastructure project in B.C. history.”

The full official transcript of the exchange in the Legislature can be viewed on Hansard.

BC Hydro is scheduled to begin construction on the Site C dam this summer, but the project is facing six legal challenges, including one that alleges that Cabinet erred in dismissing key portions of the joint review panel’s findings on the project.  

The dam would be the third on the Peace River and would flood 83 kilometres of the Peace Valley, impacting 13,000 hectares of agricultural land. The project is opposed by B.C.’s Treaty 8 First Nations, several of which have filed lawsuits.

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Part 1 of DeSmog Canada’s exclusive sit-down interview with Harry Swain, the man who chaired the panel tasked with reviewing BC Hydro’s Site C dam, sparked a firestorm of activity on Tuesday.

Energy Minister Bill Bennett responded to Swain’s critique in the Globe and Mail, the B.C. NDP issued a statement on Swain’s comments and an environmental law expert called the statements “unprecedented.”

Martin Olszynski, an assistant professor in the Faculty of Law at the University of Calgary, said Swain’s comments are extremely rare.

“To the best of my knowledge, this is the first time that a panel member has spoken about a previous report in this manner,” Olszynski, an expert in environmental assessment, said. “To my knowledge, it’s unprecedented.”

The concerns Swain raises are not unusual though, Olszynski pointed out.

“The course of actions taken by the B.C. and federal governments in this case are not atypical,” he said. “They very often will ignore, or pay only lip service to, the recommendations of their expert panels. If you talked to other people who have served on similar panels — if they were willing to talk — they might express similar frustration.”

Geothermal Recommendations for B.C. Ignored …. For 32 Years

Certainly, the issue of recommendations being ignored is a live one in the case of the 1,100-megawatt Site C dam proposed for the Peace River. The dam is facing six legal challenges, including one that alleges that Cabinet erred in dismissing key portions of the joint review panel’s findings on the project.

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But beyond that, one of the key issues the panel raised in its report was the B.C. government’s failure to follow a recommendation to investigate alternatives to the dam, particularly geothermal — a recommendation made 32 years ago by the B.C. Utilities Commission when it first turned down the Site C proposal.

“The province or the province and its wholly owned subsidiary BC Hydro should have taken to heart the admonitions of the utilities commission 32 years ago and done some of the basic work that would allow an industry to develop,” Swain told DeSmog Canada. “But they didn’t do it, so there we are.”

In speaking notes obtained by DeSmog Canada, the province prepares to deflect questions about why it hasn’t pursued geothermal.

“While geothermal energy has a role to play in British Columbia, it has been slow to develop and has not developed the track record to reliably meet today’s growing demand,” read the notes prepared for the government’s Site C announcement in December.

Asked what he makes of that statement, Swain responded: “Dereliction of duty.”

The B.C. government has the principal responsibility for lands and resources under the constitution, Swain said.

“And in that sense, the province owes — in my view — an obligation to the citizens of B.C. to do a lot of basic mapping and exploration,” he said. “I don’t think there’s a major resource industry in this country that didn’t start without governments doing some of the basic work.”

Canada is the only country around the Pacific Ring of Fire that does not produce geothermal power at a commercial scale.

Vast Amount of Data Available From Gas Drillers on Geothermal Potential

In the past three decades, technological advances have led to the discovery of even more geothermal potential in B.C. — including in the Peace Country, where the Site C dam is proposed.

“Up in the Peace, in the very strata that are being drilled for natural gas, there’s a lot of hot water,” Swain said. “Moreover, since the well logs of exploration and drilling companies are supposed to be deposited with the provincial government, there is a vast amount of information available. It was surprising to me that no attempt had been made to exploit that information.”

The challenge is that currently BC Hydro, the province’s crown energy corporation, is forbidden by law to involve itself in projects beyond big hydro and large transmission projects.

“All of the other production stuff is to come from the holy private sector,” Swain said.

To prevent future governments and panels from being “seriously uninformed” again, the panel recommended that, regardless of the decision taken on Site C, BC Hydro establish a research and development budget for the characterization of geographically diverse renewable resources.

“It’s probably fair to say that institutionally Hydro really, really wants to build this,” Swain said. “And that’s perfectly understandable. If you ask the Ford company, ‘what would you like to do?’ they’ll say ‘build cars.’ If you ask Boeing ‘what’s the solution to our transportation problems?’ they’ll say ‘airplanes.’ ”

The Canadian Geothermal Energy Association has argued geothermal can meet B.C.’s future energy needs at a lower cost than Site C with fewer environmental impacts. The association has called for a one-year moratorium on Site C to allow time for further due diligence on geothermal.

The LNG Wild Card: Inconsistency in Province’s Statements

One of the B.C. government’s go-to talking points on Site C has been that the dam is needed to power the liquefied natural gas (LNG) industry. In a Jan. 30th letter to the Peace River Regional District, Energy Minister Bill Bennett wrote that liquefied natural gas facilities would drive more electricity demand than the Joint Review Panel accounted for in its report (due to an addition error).

Swain says that, although there was an addition error in the report, it doesn’t change the conclusion: demand for the dam wasn’t proven.

“Given skepticism about LNG and about demand elasticity, I see no reason to modify the conclusion,” Swain said. “Frankly, I think their low-demand figure was probably overstated. So far there is no evidence that even their low usage scenario is likely to take place.”

Beyond that, if the province’s original LNG dreams had come to pass as quickly as they’d stated and if the plants had relied on grid electricity (two big ifs), that power would have been needed well ahead of Site C’s in-service date of 2024. A single LNG plant can require as much as 700 megawatts of electricity to run the giant compressors required to cool gas to 163 degrees below zero; at least 10 plants are proposed for B.C.’s coast, but it’s unclear whether any will come to fruition.

“If the initial scenario took place, the power demand would arise a long time before Site C could be built,” Swain said. “There really wasn’t a compatibility between the two statements of the province if you think of one statement about the development of the LNG industry and the second about the timeframe in which Site C was to be built. By their own story, they had an inconsistency.”

Site C Dam ‘No Ordinary Project’

About 20 B.C. local governments have asked the government to send Site C to the B.C. Utilities Commission to further investigate demand and costs — a recommendation made in the panel’s report and echoed by Swain in Part 1 of his interview with DeSmog Canada.

With a price tag of $8.8 billion, Site C would constitute the largest expenditure of public money in B.C. history.

“Site C is not an ordinary project,” the panel wrote in its report.

Swain said British Columbians should pay attention because “it’s going to effect them in the pocket book,” “destroy valuable bits of landscape” and “affect the constitutionally protected rights of First Nations.”

He suggested British Columbians consider the dam in light of the alternatives.

“Have we really pushed conservation and efficiency as far as they can go? And the answer is no,” he said. “What other kinds of generation or energy production are available and what are their costs and benefits?”

Swain called B.C.’s refusal to consider its entitlement under the Columbia River Treaty “inexplicable” and noted the verdict is still out on how British Columbians will react to electricity prices going up 30 per cent in the next three years (demand could decrease, for example).

Ultimately, the way forward needs to be one that considers all the options, not just large hydro dams.

“The province has defined the role of Hydro as being very limited,” Swain said. “If this were not the BC Hydro company, but simply … the ‘energy company’ whose job it was to make sure that demand was satisfied at reasonable prices regardless of source, regardless of who got to build and own, regardless of those kinds of extraneous considerations, we might have a more balanced view.”

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With 2014 drawing to a close, DeSmog Canada decided to take stock of its most popular stories of the year.

Readers came in droves for our in-depth reporting on climate change, oilsands and oil pipelines, but they also loved articles about potential solutions to our climate change woes. Indeed, two of our Top 10 posts are on Canada’s geothermal potential.

Without further ado, here are DeSmog Canada’s Top 10 articles of 2014. Thanks for reading!

1. Bill 4 Passes: B.C. Parks Now Officially Open…To Pipelines and Drilling. More than 10,000 citizens wrote letters and signed petitions to try to stop the B.C. government from passing Bill 4, which allows for industry (and others) to carry out "research" in provincial parks related to pipelines, transmission lines, roads and other industrial activities that might require park land.

2. PHOTOS: Famed Photographer Alex MacLean’s New Photos of Canada’s Oilsands are Shocking. One of America’s most famed and iconic aerial photographers used his unique eye to capture some new and astounding images of one of the world’s largest industrial projects.

3. Debunked: The Top 10 Stupid Arguments in Neil Young Debate. You may recall that in January last year, Neil Young created one helluva stir with his Honour the Treaties tour. The Alberta media hyperventilated with these Top 10 stupid arguments.

4. Alberta Partners with Major Oilsands Companies to Develop Kindergarten to Grade Three Curriculum. This story created such an uproar that at least one company dropped out of curriculum development.

5. Top Five Craziest Things Climate Change Recently Did in Canada. From the mass die-off of sea scallops on the West Coast to a jump in Lyme disease because more ticks are suriving the winter, this Top 5 list attracted a lot of eyeballs.

6. Top 5 Reasons Why Geothermal is Nowhere in Canada. Canada is the only country on the Pacific Ring of Fire without any commercial geothermal power plants, despite having abundant potential and, ironically, Canadian energy companies running geothermal power plants around the world.

7. Top 10 Quotes from Canada’s Muzzled Scientists. Environics Research collected dozens of quotes from scientists who allege the Harper government is muzzling them, interfering with their research and ignoring their findings — particularly when it comes to evidence that covers issues such as climate change and other impacts of unsustainable industrial development.

8. Energy Executive Quits Trans Mountain Pipeline Review, Calls NEB Process A ‘Public Deception'. Marc Eliesen had some scathing words for the National Energy Board when he dropped out of its review of Kinder Morgan’s Trans Mountain oil tanker and pipeline project. He called the review process “fraudulent” and a “public deception” and called for the province of B.C. to undertake its own environmental assessment.

9. New Maps Reveal B.C. Has Enough Geothermal Potential to Power Entire Province. As B.C.’s politicians contemplated flooding the Peace Valley for the Site C hydroelectric dam, a new report from the Canadian Geothermal Energy Association said the province is sitting on a figurative gold mine of geothermal power with low environmental impact.

10. Only Four in 10 British Columbians Have Heard Of This $7.9B Mega Project — Have You?. The Peace River Country, which spans the Alberta-B.C. border, feels a world away to the 75 per cent of B.C.’s population that lives in the Lower Mainland or on Vancouver Island. But, as the biggest infrastructure project in the province’s history, the $8 billion Site C dam stands to impact all British Columbians — from the implications for our electricity bills to the flooding of some of our province's most valuable agricultural land.

Photo: Alex McLean. Surface oil on tailings pond at Suncor mine near Fort McMurray.

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The provincial and federal governments have issued an environmental approval certificate for the Site C dam despite acknowledging it will cause significant adverse environmental effects.

“Those effects are justified in the circumstances,” says the decision statement signed by Leona Aglukkaq, Canada’s minister of environment.

The province must still decide whether to proceed with the 1,100-megawatt project based on an investment decision, expected by the end of this year.

“The final decision still has to go through the cabinet, so we’ll still be working to convince them it’s not the best decision,” said Andrea Morison of the Peace Valley Environment Association, a group that has fought the dam for decades.

The $8 billion project would be the third dam on the Peace River and would be located seven kilometres from Fort St. John, B.C.

The dam has been opposed by local farmers, ranchers and the Treaty 8 First Nations because it will flood 87 kilometres of the Peace River, impacting wildlife and flooding 30,000 acres of farmland, including an area the size of the city of Victoria within the Agricultural Land Reserve.

West Moberly Chief Roland Willson has already vowed to challenge the decision in court and has said the province can’t have both the Site C dam and liquefied natural gas (LNG) development, which requires gas from Treaty 8 territory.

The environmental assessment certificate is subject to 77 conditions, including establishing a fund of $20 million to compensate for lost agricultural lands and activities.

In May, a federal-provincial Joint Review Panel issued its report on Site C. The panel was ambivalent in its findings, saying both that the dam could provide cheap power but also that the costs needed to be examined further and that it’s not clear that the power will be needed on the timeline provided.

“The Joint Review Panel considering the dam’s impacts determined that they are so significant that only an ‘unambiguous need’ for the power would justify them. And BC Hydro did not demonstrate such a need,” said Karsten Heuer, president of the Yellowstone to Yukon Conservation Initiative (Y2Y). “We don’t understand the basis on which the B.C. and federal governments could issue their approvals.”

Y2Y has argued that the Site C reservoir would seriously impede wildlife movement in the region.

“The Peace River Valley is located at the narrowest width of the Yellowstone to Yukon region and the existing Williston Reservoir already is a major blockage to wildlife movement,” Heuer said.

The joint review panel’s report included a recommendation to refer the project for review by the independent B.C. Utilities Commission, saying the panel didn’t have the time or resources to comment on the cost of the project.

“All British Columbia Hydro ratepayers should be concerned about that,” said Gwen Johansson, mayor of the District of Hudson’s Hope.

The panel also found that the province has failed to look at alternatives to the Site C dam for the past three decades. New maps released this month indicate B.C. has enough low-impact geothermal energy to power the entire province. 

Read DeSmog Canada's 12-part series on the Site C dam.

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