The newly appointed head of the B.C. government’s communications branch is a former lobbyist for Enbridge Inc., the company that hopes to build the $7.9-billion Northern Gateway pipeline stretching 1,200 kilometres from the Alberta oilsands to Kitimat on the B.C. coast.

John Paul Fraser, who DeSmog Canada has learned became acting deputy minister in charge of Government Communications and Public Engagement (GCPE) earlier this month, worked as a lobbyist for National Public Relations from 2008 until shortly before moving to the B.C public service in 2011.

He previously worked for Burrard Communications Inc. — a company founded by Premier Christy Clark’s former husband Mark Marissen — where he was registered with the Federal Office of the Commissioner of Lobbying of Canada as a lobbyist on behalf of Enbridge Inc.

Fraser is a long-time friend of Clark who worked on her election campaign and, until this summer, was assistant deputy minister for strategic planning and public engagement. He is the son of B.C.’s conflict commissioner Paul Fraser.

It is not the first time Clark has included an Enbridge lobbyist in her inner political circle. Ken Boessenkool, her former chief of staff who resigned in 2012 after admitting to inappropriate conduct towards a female staff member, was also an Enbridge lobbyist.

The question for opponents of Northern Gateway is whether having former lobbyists in government corridors of power could make a difference to how Clark treats the project. Northern Gateway was conditionally given the green light by the federal government in June, subject to Enbridge meeting 209 conditions listed by the Joint Review Panel, but Clark has never been enthusiastic about the project.

Clark has set out five conditions that must be met before B.C. gives its support, including strict environmental protections, adequate consultations with First Nations and a greater share of economic benefits. B.C. also has its hand on the controls through numerous provincial permits that will be needed if Northern Gateway manages to overcome legal challenges launched by First Nations and environmental groups.

It is possible that having high-level bureaucrats who intimately understand the Enbridge file is an advantage as they will know the odds are stacked against the project, said Will Horter, executive director of Dogwood Initiative, a democracy group fighting against the oil pipeline and tanker project.

 “There’s a revolving door of people associated with Enbridge, either directly or as advocates, coming into the close circles of the premier . . . . But they must understand that this is a big mountain to climb or even that this is a zombie project,” Horter said.

Joe Foy, Wilderness Committee’s national campaign director, worries about a system that allows those with partisan or business interests to take up high-level positions in the civil service.

“I do have a concern when we have powerful players in our government that seem to slip seamlessly between the partisan world, corporate world and bureaucracy,” he said.

“I am not suggesting there is anything untoward, but I think it shows up a fairly major flaw in our system of government, because it is very important that citizens know who they are talking to.”

Fraser previously worked for David Anderson, former federal Liberal environment minister and a Northern Gateway opponent.

Anderson said he has no idea whether his opposition to bitumen-laden tankers in B.C.’s coastal waters could have rubbed off on Fraser, but he cannot see that someone as bright as Fraser could have had much to do with the Northern Gateway project.

“I have great admiration for John Paul Fraser. Enbridge has done such an appalling, hopeless, ridiculous job in managing its public relations, they couldn’t have taken advice,” he said.

Fraser could not be contacted for an interview.

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Major industrial power users in British Columbia fear that if the proposed Site C dam becomes a reality, rate hikes could put mills and mines out of business while saddling taxpayers with a costly white elephant and ballooning BC Hydro debt.

A decision on the $7.9 billion plan to build a third hydroelectric dam on the Peace River will be made by the federal and provincial governments this fall.

Economic questions about the mega-project were raised by last month’s joint review panel report, which noted the dam would likely be “the largest provincial public expenditure of the next 20 years.”

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The panel, which did not come out for or against the project, found that, based on cost comparisons provided by BC Hydro, Site C would be the most economical way to provide new power — but said it could not measure the true cost or need and recommended the B.C. Utilities Commission should look at it, an idea immediately dismissed by Energy Minister Bill Bennett. (The commission turned down the Site C project in the early ’80s.)

Strong opposition to Site C is now coming from the unlikely direction of the Association of Major Power Customers of B.C., an organization representing about 20 of the largest employers and industrial customers in the province.

“We have absolutely no confidence that this is the least cost plan,” association executive director Richard Stout told DeSmog Canada.

“It’s not the right project right now”

Major industrial power users in B.C. have seen a 50 per cent increase in rates over the last five years and are looking at another 50 per cent over the next five years, he said.

“It is unusual for us to criticize a government of this stripe, but BC Hydro has been out of control for a good 10 years,” Stout said, pointing to almost $5-billion in deferred accounts.

“Any other business would have been declared bankrupt by now,” he said.

Site C will take a decade to build and, with changing markets and a burgeoning natural gas industry causing a surplus of generating capacity in North America, it is almost impossible to accurately predict demand and prices, Stout said.

“All we know is the original load forecasts are going to be wrong,” he said. “It’s not the right project right now.”

Craig Thomson, energy and environment supervisor at Canfor Taylor pulp mill told DeSmog Canada that industry in B.C. was built with a foundation of low power rates, but in the last five years that has changed and Site C would be the final straw.

“I think the cost of hydro-electric dam construction is so astronomical that no one will ever do it again and we’re going to have this huge white elephant,” he said.

“Potentially it’s going to drive our industry out of business.”

B.C.’s natural gas hypocrisy

Doubts are growing about cost comparisons made by BC Hydro, which didn’t include the use of gas power because the 2010 Clean Energy Act demands that 93 per cent of the province’s energy needs be met by clean, renewable power.

The act effectively eliminated the use of gas turbines and sent the gas-fired Burrard Thermal generating station into early retirement.

But the province has now handed a Clean Energy Act exemption to the liquefied natural gas (LNG) industry, a move that allows gas plants to meet their massive power needs with natural gas. Meantime, BC Hydro is prevented from using natural gas even as a backup to renewables.

“It’s really hypocritical to allow them [LNG facilities] to burn gas,” Merran Smith at Clean Energy Canada told DeSmog Canada. “The carbon emissions, as well as the air pollution, are inconsistent with the province’s goals.”

“Gas is a fossil fuel. It may be cleaner than coal or oil, but it still has a heavy carbon footprint.”

Should gas turbines be allowed for backup power?

Like many others, Stout believes alternatives to Site C should be considered, including the use of gas turbines as an intermittent source of power — something that would first need the government to change the Clean Energy Act.

Thomson is looking at new technologies coming on stream and, in the meantime, Burrard Thermal, with a similar capacity to Site C, could provide sufficient intermittent power, he suggested.

“Electricity is 32 per cent of our operating cost and, if it goes up and up, someone is going to say the business is not viable and the doors will close,” he warned.

Energy economics expert Marvin Shaffer, adjunct professor at Simon Fraser University, believes Burrard Thermal should never have been eliminated as a source of backup energy.

“I’m not suggesting that an old, relatively inefficient plant like Burrard should be used as a base load facility. What Burrard can do is provide a very cost-effective backup to the hydro system as well as back-up peak capacity exactly where it might be required,” Shaffer said.

Burrard Thermal generating station was sent into early retirement with the introduction of the 2010 Clean Energy Act. Credit: Niall Williams via Flickr.

With Burrard in place, B.C. would have no shortfall of energy until 2033 and, even without Burrard, strategically placed gas thermal plants could supply low cost energy as needed, he said.

Faced with Site C as the alternative to intermittently using gas turbines, even Joe Foy of the Wilderness Committee comes down on the side of occasional gas use.

“It seems a better solution than drowning 100 kilometres of farmland when you don’t even need that power for 300 days of the year,” he said.

Oxford study: Dams routinely come in 90% over budget

Many also have concerns that, when costs such as transmission lines are factored in, Site C’s cost will soar above $7.9 billion.

Fears that costs will run amuck are backed by an Oxford University study of power dams that found construction costs of large dams are, on average, more than 90 per cent higher than their budgets.

Mark Winfield, associate professor in the environmental studies faculty at York University, sees parallels between Site C and costly nuclear power plant plans in Ontario.

“Large hydro projects like Site C and nuclear power plant construction or refurbishment reflect a focus on large, centralized, high-cost, high-risk, high-environmental impact, long-lived generating infrastructure,” he said.

That limits opportunities for the system to adapt to market changes and sets the focus on only one path, Winfield said.

“In both cases there are significant uncertainties about future demand and, therefore, substantial risk of making major investments in projects which may turn out not to be needed or which are overtaken by newer, better technologies,” he said.

Site C’s legacy: cheap power or wealth destruction?

Dan Potts, former executive director of the Association of Major Power Customers of B.C., believes the lasting legacy of Site C would be wealth destruction.

“The huge cost will rob the province of valuable resources that could be used to deliver other needed government services as well as burden the B.C. economy with debt and high electric power rates that will sap our competitiveness,” he said.

Times have changed from when previous dams were built on the Peace and Columbia Rivers, said Potts, who has calculated that gas prices would have to almost quadruple before power from Site C would be economically viable for export.

“B.C. Hydro has filed information that the cost of electric power from Site C will be in the range of $100 per megawatt hour. Current market prices are in the range of $30 per megawatt hour. If Site C were now operational, the market value of the power produced would be $350 million per year less than the cost,” Potts said.

Site C will lose $800 million in first four years: report

The possibility of exporting excess power to help fund the dam was discounted by the joint review panel, which predicted that, unless prices changed radically, B.C. Hydro operations would lose $800-million in the first four years of operations:

These losses would come home to B.C. ratepayers in one way or another. B.C. Hydro’s expectation is that it might sell Site C surpluses for only about one-third of costs, leaving B.C. ratepayers to pay for the rest.

But the panel also says that Site C, after an initial burst of expenditure, would lock in low rates for decades and produce fewer greenhouse gas emissions than other sources.

Ignoring the Clean Energy Act is not an option for BC Hydro and there is no doubt Site C compares favourably to other clean energy costs, said Hydro spokesman Dave Conway. In comparison to Site C power at $100 per megawatt hour, new generation from wind or micro-hydro comes in at $128 per megawatt hour, he said.

However, the panel noted that geothermal energy would cost about the same as Site C power — and as a firm source of power could present a viable alternative to the dam. Geothermal could be built incrementally to meet demand, eliminating the early-year losses of Site C, the panel noted.

Even without Site C, customers are looking at a 28 per cent increase in rates over the next five years, but British Columbians should bear in mind that they are paying one of the four lowest energy rates in North America, Conway said.

However, Foy would like all British Columbians to consider what else could be done with almost $8-billion.

“Maybe better education for kids or health care?” he asked.

“If we spend $8-billion on Site C, what community doesn’t get a health care facility?”

Image Credit: An area of the Peace River Valley threatened by Site C. Photo by tuchodi via Flickr.

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The proposed Site C dam on the Peace River is the best alternative for providing B.C. with reliable cheap power, but BC Hydro has not proved that the power is needed in the immediate future, says a much-anticipated report by the federal Joint Review Panel.

The report does not give a definitive yes or no answer to the planned 1,100 megawatt dam, which will flood about 5,500 hectares of land, but includes 50 recommendations on issues such as threats to endangered wildlife, health effects for those living in the area and destruction of First Nations heritage sites.

If approved, project construction would begin in 2015 with completion projected for 2023.

The ambivalent report says B.C. will need new energy and new capacity at some point and “Site C would be the least expensive of the alternatives and its cost advantages would increase with the passing decades as inflation makes alternatives more costly.”

However, “the panel cannot conclude that the power of Site C is needed on the schedule presented.”

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There are also important environmental, social, economic, health and heritage costs, panel members concluded.

Risks to fish and wildlife include harmful and irreversible effects on migratory birds and species such as the western toad and short-eared owl.

“Justification must rest on an unambiguous need for the power and analyses showing its financial costs being sufficiently attractive as to make tolerable the bearing of substantial environmental, social and other costs,” it says.

High costs yet alternatives not considered

The report notes that BC Hydro has not looked closely enough at alternatives such as geothermal energy.

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

The estimated $7.9 billion cost raised questions, but panel members said they do not have the information, time or resources to look at the accuracy of cost estimates and recommended that, if the project proceeds, costs should be examined in detail by the province’s independent regulator, the B.C. Utilities Commission (BCUC).

The Liberal government previously exempted Site C from BCUC scrutiny and, although the recommendation was applauded by groups such as the Peace Valley Environment Association, Energy Minister Bill Bennett immediately threw cold water on the idea.

“This project has been poked, prodded and analyzed for the last 35 years,” he said

“I think subjecting it to another review after all the years it has been studied, is not a good use of public money.”

Bennett believes BC Hydro will keep to its budget, despite reports showing mega-dams around the world often run 50 per cent over budget.

BC Hydro has included $1.52 billion for inflation and contingencies, he said.

“Of course with large projects like these, there’s no guarantees, but with such a large contingency fund and such a large fund for inflation and all the work that BC Hydro has done, I think we can have confidence in that final number,” he said.

The proposal must gain the approval of the federal and provincial governments and Bennett said he will take a recommendation to cabinet this fall after further environmental and First Nations consultations.

Indecisiveness not all around

Bennett, who said he views the Joint Panel review as “mostly positive,” emphasized that he has not yet made up his mind about the dam, which, if approved, would be the most expensive project built in the province.

“I am right square in the middle of this,” he said.

NDP leader John Horgan said the report shows the Liberal approach to Site C has been reckless and does not have a foundation in the realities of the North American energy market.

“The challenge ratepayers have is they are facing 28 per cent rate increases over the next five years and we have a government proposing to spend $8 billion on power that we may not need, at a time we don’t have the money to spend,” he said.

Former BCUC chair Mark Jaccard, professor in the school of resource and environmental management at Simon Fraser University, said he is impressed the panel tried to address big questions such as climate impact.

“But I was a bit frustrated that the panel waffled so much. I think I wanted them to say yeah or nay,” he said.

It is a difficult decision, because there are compelling arguments on both sides, and politicians will ultimately have to take a stand, but it would have been good to have a definitive opinion from experts who listened to presentations at the hearings, Jaccard said.

“They are trying to say all the things for all the people,” he said.

Signs of optimism

In the Peace Valley, the report is generating some optimism and Andrea Morison, Peace Valley Environment Association coordinator, applauded recommendations that show the panel has significant concerns about impacts.

“It shows the proponent has not fully demonstrated the need for the project and that there are other sources they should be looking at. Another key point is they can’t conclude the accuracy of the cost estimate,” she said.

Morison believes that once Bennett has studied the report he will decide to follow the key recommendation of referring it to BCUC for a cost review.

“One thing we can count on with politicians is that they do change their minds and it’s not solely his decision,” she said.

Hudson’s Hope Mayor Gwen Johansson also wants Bennett to pass the project to BCUC for scrutiny.

“It would be disappointing if he did not follow that recommendation,” she said.

Treaty 8 First Nations Tribal Chief Liz Logan said the core message to government is why build a project that is not needed. Alternative solutions such as wind power or smaller hydro projects must be considered instead, Logan said.

“We are still going to be vocal about it,” said Logan, who hopes British Columbians throughout the province will put pressure on the province.

“This project doesn’t just affect us on the ground, it’s going to affect the pocketbook of every British Columbian,” she said, adding she wants the project’s cumulative effects studied.

Those living in the area that will be affected by the dam see the report as validation of their belief that the adverse effects outweigh any benefits.

Spring is finally coming to the valley, said Ross Peck, a retired guide outfitter whose family has lived in the area since 1924.The grass is greening up, the leaves are about to pop and the valley is full of animals. I saw the first osprey today he said.

If the dam goes ahead, part of his property will be flooded, roads will cut close to his home and Peck believes he would have to leave.

“I don’t think we could sit on our deck and watch them clearcutting for the reservoir,” he said.

Esther Pederson, who would lose part of her farmland and her home to the dam, has little faith in any consultation process.

“The consultation so far has been ‘do you want to sell your farm now or later,’ ” she said.

Armed with the concerns raised in the report, it should be possible to stall approval at least until the next election, Pederson said.

“It could be dragged out forever and the First Nations people are lined up to take the government to court,” she said.

Photo: Peace Valley courtesy of Andrea Morison and Don Hoffmann.

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Opponents of the proposed Site C dam are hoping a report from the Canadian Environmental Assessment Agency panel, to be released Thursday, will emphasize potential environmental damage from the massive dam and persuade the federal and provincial governments that the project should be scrapped.

The report from the Joint Review Panel into BC Hydro’s $8-billion plan to build a dam that would flood 83 kilometres of the Peace River, putting 14,000 hectares of farmland under water, was submitted May 1 to federal Environment Minister Leona Aglukkaq and the B.C. Environmental Assessment Office, but there was no obligation to release it to the public for 45 days.

“The fact that they decided to share it just after they got it themselves is a little bit surprising, but we are feeling optimistic and hoping for the best,” said Andrea Morison of the Peace Valley Environment Association.

The panel’s recommendations, put together after 26 days of hearings, are not binding on government, but are likely to outline issues and possible solutions as well as indicating whether some environmental problems are insurmountable.

“There’s nothing binding, but I think it holds a considerable amount of weight,” Morison said.

The report will be posted on the Canadian Environmental Assessment Agency’s website Thursday. The provincial and federal governments must make their own decisions within 174 days, or six months, of the report being issued.

“The province has been very clear from the get-go that they support Site C,” said Joe Foy, Wilderness Committee’s national campaign director.

However, if the federal government decides it can’t support the project, Site C would probably die, Foy speculated.

“It’s clearly a matter that would require the federal OK. There are massive impacts that are clearly in the federal arena,” he said.

In February, the federal government rejected the New Prosperity Mine near Williams Lake, despite it having provincial support, after concluding the mine would have environmental effects that could not be mitigated.

There is speculation that even within the B.C. Liberal party there are doubts about whether Site C is necessary, although Premier Christy Clark has made it clear she is a supporter and much of the last election campaign was built on proceeding with Site C as a key building block of developing a liquefied natural gas (LNG) industry.

However, Energy and Mines Minister Bill Bennett has consistently been more cautious and said shortly after the election, when revelations were made about BC Hydro’s new capital costs and construction cost overruns, that he wanted to make sure that government would not be facing cost overruns with Site C. Because BC Hydro is a Crown corporation, cost overruns would be borne by taxpayers.

“Bill Bennett frequently seems to be keeping the door open on Site C,” Foy said.

“He told us in January that he had a team of researchers looking at alternatives to Site C.”

Bennett also recently told the Globe and Mail that there could be another level of screening on Site C costs. Government previously decided to circumvent the Crown corporation’s regulator, the B.C. Utilities Commission, which would have looked at financial issues. The environmental review is not expected to look closely at cost, necessity or practicality.

Questions have also been raised about whether LNG plants would find hydro power too expensive and would be more likely to use gas to feed their massive electricity needs.

Paul Kariya, executive director of Clean Energy BC — an industry trade association that represents independent power producers, including gas generators — recently told DeSmog Canada that the major LNG companies are looking at powering their plants via natural gas.

“Times have changed. We’ve been through an era of building big dams,” Kariya said. “When you build a dam, you get this one massive lump of power and that’s not the way that energy is planned for anymore.”

Kariya says independent power producers offer a more incremental approach to meeting demand.

However, even with a report from the World Convention on Dams — which says that projects routinely come in at 50 per cent more than estimated — and mounting evidence that the power produced by Site C is not needed and is likely to be sold at a loss, it is doubtful that the province will back down, said retired federal economist Erik Andersen.

“They are addicted to big photo-op projects,” he said.

“Over the course of the past four decades, the need for a Site C generation facility has been part of the larger and exaggerated demand narrative that BC Hydro has been telling.”

Site C — which gets its moniker from being the third dam proposed for the Peace River — has been on the books since the ’70s. It was first turned down by the independent B.C. Utilities Commission in the early '80s, which said BC Hydro hadn't demonstrated that the power was needed or that the dam was preferable to all other sources of power. In the ’90s, BC Hydro suspended the project again because the need for power was still considered insufficient.

Morison is hoping that, with release of the panel’s report, Site C will start catching the attention of people throughout the province, especially if they learn their Hydro bills are likely to rise beyond the 28 per cent increase already expected over the next five years.

“They need to realize that this is going to cost them,” she said.

— With files from Emma Gilchrist

Photo: The Peace River Valley Near the Halfway River by Tuchodi via Flickr.

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