The NDP’s trade union base fired another missive today in an attempt to persuade the B.C. government to greenlight the Site C dam, as party insiders and union donors to the party continue to ramp up lobbying efforts in support of the $9 billion hydro project.

The Allied Hydro Council of B.C. held its second press conference in a week attempting to discredit some of the findings of the independent B.C. Utilities Commission (BCUC) investigation into Site C.

The three-month BCUC investigation, which included troubling financial information on Site C uncovered by the auditing firm Deloitte LLP, found that Site C is behind schedule and over budget, with a final cost that could exceed $10 billion or, in a worst case scenario, more than $12.5 billion. The BCUC also determined that a renewable energy portfolio — primarily wind and geothermal — would provide cheaper and more dependable power than Site C.

But at a Wednesday press conference, the council released two short reports it commissioned showing “serious problems” with the BCUC’s analysis of the cost of cancelling Site C, claiming that the option of finishing the project, as opposed to terminating it, is the “hands-down winner.”

One 8-page report was written by economist Marvin Shaffer, a registered lobbyist for the council, which donated almost $100,000 to the BC NDP between 2005 and 2014, according to Elections B.C.

ICYMI: What You Need to Know About the B.C. Utilities Commission and the Site C Dam

ICYMI: Site C Dam Over Budget, Behind Schedule and Could be Replaced by Alternatives: BCUC Report

Shaffer held senior positions with the NDP government in the 1990s, including as the head of the Crown Corporations Secretariat. On November 16, Shaffer registered his intention to lobby the premier’s office on behalf of the Allied Hydro Council during the last two weeks of November.

The second report was authored by lawyer Jim Quail, an energy expert and long-time NDP supporter whose trade union background overlaps with that of Horgan’s chief of staff, Geoff Meggs. Quail’s Vancouver law firm — on whose letterhead the 4-page report was written — donated more than $3,500 to the BC NDP between 2015 and 2017, according to Elections B.C.

The Allied Hydro Council, a bargaining agent for unions at previous large hydro projects, said the BCUC report made “unbalanced” assumptions about power alternatives to Site C, understating the costs, risks and disadvantages of solar, wind and geothermal.

“The new B.C. NDP government has been left a disturbing legacy by the former BC Liberal government but now it has to make the best of it,” said Allied Hydro Council President Chris Feller. “And that means completion of Site C…”

Robert McCullough, a U.S. energy economist hired by the Peace Valley Landowners Association, a group of 70 landowners who will lose homes and property to Site C, pointed out that the Allied Hydro Council had a chance to weigh into the Site C investigation when it submitted a report to the BCUC, but failed to make compelling arguments.

“It’s a bit cheeky,” McCullough said of the new reports. “They presented at the BCUC and they were generally rejected there.”

McCullough, who is neither registered as a lobbyist nor a donor to the NDP, said the cost of clean energy renewables like wind and solar is falling so rapidly around the world that the prices cited in the BCUC report are already too high and “obsolete.”  

“I’m afraid they are building a sand castle with the tide coming in,” said McCullough, whose testimony before a U.S. Senate Committee helped sparked the criminal investigation into Enron’s collapse.

Speaking to press gallery reporters at a regular briefing today, B.C. Premier John Horgan said the government is still collecting information about Site C and has not yet made a decision.

“We’ve heard from people who say the utilities commission work was exemplary, and we’re heard from people who say the utilities commission work was deficient in a number of areas,” said Horgan. “So we have asked for more information.”

#NDP #Union Heavyweights Come Out Fighting for #SiteC https://t.co/Tr1b9s70Gm #peacevalley #BCUC #bcpoli #lobbying

— DeSmog Canada (@DeSmogCanada) November 23, 2017

NDP Donor Unions Lobby Government on Site C and Energy Issues

Running today’s Allied Hydro Council press conference was Bill Tieleman, a former NDP strategist who spearheaded last week’s release of another Allied Hydro Council report that also challenged conclusions reached by the three-month BCUC investigation into Site C.

Tieleman, a columnist for 24 Hours and The Tyee, is a registered lobbyist for 14 organizations, including nine trade unions. Tieleman was also the communications director for former NDP Premier Glen Clark.

Among the unions employing Tieleman as a lobbyist is the International Association of Heat and Frost Insulators and Asbestos Workers, which represents workers involved in B.C.’s insulation industry, including in construction. That union donated more than $22,000 to the NDP in 2016 and 2017, according to Elections B.C.

Records show that on July 31 Tieleman registered to lobby Horgan and 10 Cabinet ministers on behalf of that union to promote “the creation and protection of private sector jobs, economic development and fair labour laws in regard to BC Hydro, Site C dam project and other infrastructure.”

The Cabinet ministers Tieleman intended to target included Energy Minister Michelle Mungall, Finance Minister Carole James and Doug Donaldson, Minister of Forests, Lands and Natural Resource Operations.

That same day, on the union’s behalf, Tieleman registered his intention to lobby Horgan and seven ministers, including Mungall, James and Environment Minister George Heyman, on energy issues — including “energy conservation, green energy projects [and] appropriate regulations.”

Tieleman is also paid as a lobbyist by the International Union of Operating Engineers, which represents workers in construction. That union donated almost $500,000 to the B.C. NDP from 2005 to 2017, according to Elections B.C.

On August 16, Tieleman registered his intention to lobby Horgan, his chief of staff, and a slew of ministers and their staff on behalf of Local 115 of the union of operating engineers, with the intended outcomes of improving labour relations and creating and protecting jobs.

Those ministers included Mungall, James, Donaldson, Labour Minister Harry Bains, Attorney General David Eby, Transportation and Infrastructure Minister Claire Trevena, and Bruce Ralston, the Minister of Jobs, Trade and Technology.

Then, on November 6, on behalf of the Construction and Specialized Workers’ Union, Tieleman again registered his intention to lobby Horgan and 10 Cabinet ministers, including Mungall and James, this time focusing his efforts on “developing infrastructure using skilled and training BC labour and apprentices, creating jobs and local benefits.”

The Construction and Specialized Workers’ Union donated $122,500 to the B.C. NDP between 2005 and 2017, according to Elections B.C. — part of an estimated $14 million that was given to the B.C. NDP by unions between 2005 and 2015, according to a Postmedia news report.

On November 17, Tieleman continued his lobby efforts, registering his intention to lobby Horgan and six ministers, including Mungall, to advocate for “job creation and protection” on behalf of the Ironworkers Union Shop Local 712, a union representing steel fabrication workers.

The Ironworkers union donated about $45,000 to the BC NDP between 2005 and 2015, according to Elections B.C.

So What’s In It for the Allied Hydro Council?

The Allied Hydro Council hoped to represent Site C workers.

But BC Hydro dashed the council’s hopes in 2015 when it changed the long-standing labour model for building dams in the province and moved to an open-shop model that sought to curb organized labour activities.

The majority of Site C workers employed by the project’s main civil works contractor, Peace River Hydro Partners, are represented by the Christian Labour Association of Canada (CLAC), formed in 1952 to represent construction industry and other workers on the basis of “Christian social principles.”

CLAC donated about $4,300 to the B.C. Liberal Party between 2012 and 2016, according to Elections B.C., which does not record any CLAC donations to the NDP.

Unlike unions represented by the Allied Hydro Council, CLAC does not belong to the B.C. Federation of Labour, which gave $1.5 million to the BC NDP between 2005 and 2017.

Three unions affiliated with the Allied Hydro Council attempted to raid CLAC members over the summer, but they were not successful. They included two of the unions that employ Tieleman as a lobbyist — the International Union of Operating Engineers, local 115, and the Construction and Specialized Workers Union, local 1611.

Feller said the council is “hopeful” there will be Site C jobs for its members in the future.

What Comes Next in the Site C Battle?

The Allied Hydro Council, which represents all the building trades unions in B.C., warned of a 10 per cent increase in hydro bills if Site C is cancelled, while former BC Hydro CEO Marc Eliesen, calling Site C a “white elephant,” has said rate increases could be as high as 40 per cent if the dam is completed.

Site C’s cost has already ballooned from $6.6 billion in 2010, to $7.9 billion in 2013, to $8.8 billion in 2016 to $9 billion in 2017. The BCUC report warned that figured could easily reach $10 billion due to ongoing risks and uncertainties with the project and its construction.

In Newfoundland and Labrador and Manitoba, where large dams are also under construction, hydro customers now face double-digit rate increases due to cost overruns.

ICYMI: The Startling Similarities Between Newfoundland's Muskrat Falls Boondoggle and B.C.'s Site C Dam

In Newfoundland and Labrador, the $12.7 billion Muskrat Falls dam will add an estimated $1,800 to the annual hydro bill of every household.

Stan Marshall, the CEO of Nalcor Energy, the Crown corporation in charge of building Muskrat Falls, has said the project is a “boondoggle” that should never have proceeded, while David Vardy, the former chair and CEO of Newfoundland’s public utilities board, has warned B.C. that it would be folly to continue building Site C.

The government has said it will make a final decision about Site C before the end of the year, based on the best outcome for B.C. ratepayers.

Image: Premier John Horgan. Photo: Province of B.C. via Flickr

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An ugly thread of misspent taxpayer dollars, environmental destruction and conflict-of-interest — backed by a government beholden to the mining industry — runs along the recently completed Northwest Transmission Line, charges acclaimed explorer and scholar Wade Davis.

The $716-million transmission line, budgeted in 2010 at $404-million, snakes 344 kilometres into B.C.’s wilderness, from north of Terrace to Bob Quinn Lake, and, to the alarm of downstream Southeast Alaska residents, the line is opening the area to mining in the headwaters of vital salmon-bearing rivers.

Those concerns have grown exponentially since the Mount Polley tailings dam collapsed in August 2014, sending 24-million cubic metres of toxic debris flowing into Hazeltine Creek and Quesnel Lake, and groups in B.C. and Alaska are warning that a Mount Polley-type disaster in the area known as the Sacred Headwaters, where acidity is likely to be high, would wipe out the multi-billion dollar fishing and tourism industries on both sides of the border.

Davis, a writer, former explorer-in-residence at the National Geographic Society, anthropology professor and B.C. Leadership Chair in Cultures and Ecosystems at Risk at the University of B.C., is appalled at the B.C. government’s decision to encourage mining in the ecologically rich northwest corner of the province and at the lack of government oversight as the pricey Northwest Transmission Line was carved through the wilderness.[view:in_this_series=block_1]

“It’s industrialization of the wilderness. It’s the story of politicians more concerned about the next election than the next generation,” he said.

Davis, who sometimes visits 30 countries a year, loves the wild beauty of B.C.’s northwest corner, which has the world’s largest population of stone sheep, grizzly bears, caribou and wolves.

“It’s not for nothing that it is called the Serengeti of Canada,” he said.

A Sweet Deal for Imperial Metals

All of which makes it inexplicable that the government would forego future high-end tourism opportunities by encouraging mining on a site such as Todagin Mountain where the Red Chris mine, owned by Imperial Metals — the same company that owns the Mount Polley mine— opened in February, he said.

An Energy and Mines Ministry spokesman, responding to questions by e-mail, said the province, Imperial Metals and Tahltan Nation — which approved a co-management agreement with the company in April — have been working to develop wildlife management strategies “to take care of this resource for future generations.”

That does not satisfy Davis, who owns the closest private property to the $650-million Red Chris copper and gold mine and believes the Liberal government has bulldozed ahead with the power line without a proper review and despite public concerns.

“The government was 100 per cent engaged in an effort to make this happen to the point of deceiving the Canadian people and certainly squandering their tax revenue,” he said, questioning the influence of party fundraisers.

Murray Edwards, controlling shareholder of Imperial Metals Corp. — a major donor to the B.C. Liberals — organized a $1-million fundraiser at the Calgary Petroleum Club for Premier Christy Clark shortly before the last election.

B.C. Government Committed to Mining Expansion

It is expected that mining companies will push for concessions, but it is also expected that the government will ask the important questions to minimize environmental damage, said Davis, who has frequently worked with industry and says he has no objection to responsible mining.

“But, here we have a government that is ideologically committed to making (Red Chris) go ahead,” said Davis, who speculates that Imperial Metals was given an easy ride to avoid the perception of a power line to nowhere.

Financial experts believe it was essential for Imperial Metals to get cash flow from Red Chris as soon as possible because Mount Polley remained closed for nearly one year and cleanup costs are estimated at between $67-million and $100-million. In May, the company reported a loss of $33.4 million during the first three months of the year.

The Northwest Transmission Line was billed by government as the engine that would drive economic development in the province’s northwest by powering up revenue-generating mining operations in the richly mineralized area.

So far, Red Chris is the only mine drawing power from the line. After a provincial review, the mine received provincial approval in June to operate the tailings storage pond, which has the same unlined earth and rock dam design as Mount Polley.

Red Chris is likely to be followed by Seabridge Gold’s Kerr-Sulpherets-Mitchell (KSM) mine, in the Unuk River headwaters, which will be one of the world’s largest open-pit copper and gold mines. KSM has received federal and provincial approval and is tying up funding for the $5.3-billion project while obtaining permits. The mine is expected to employ more than 1,000 people for 50 years.

The transmission line is also bringing power to the Tahltan community of Iskut, whose 350 residents previously relied on diesel, and to the $725-million, 195-megawatt AltaGas Forrest Kerr run-of-river independent power project.

AltaGas contributed $180-million of the cost and Imperial Metals contributed $69 million of the $209 million cost to build the Iskut extension. BC Hydro then purchased the extension for about $52 million.

Davis charges that the environmental insensitivities of Imperial Metals were revealed during the extension’s construction when the company clearcut to the edge of the scenic Stewart-Cassiar Highway, instead of leaving a buffer zone of trees as shown in the original plans.

Cutting trees adjacent to the highway is allowed and the company had all necessary permits, according to the ministry.

“As much as possible, the cutting is contained within the right-of-way of the highway to reduce impact to the visual quality of the surrounding landscape. In some instances, due to geotechnical and safety concerns (i.e. slope stability,) the power lines are located away from the highway,” said the ministry spokesman.

Taxpayers on the Hook?

The Iskut project enabled the province to obtain $130 million from the federal Green Infrastructure Fund. But, according to Davis, that is something that should make taxpayers uneasy when they look at the bill of almost $400,000 per resident and he questions labelling the project as green when, during construction, the equivalent of 14,000 logging truckloads of wood were burned.

BC Hydro has said the timber was burned because it was marginal and the long distance to roads and markets made selling it uneconomical.

 A Mining Association of B.C. study estimates the transmission line will attract $15-billion in mining investment, 10,000 jobs and $300 million in annual tax revenue.

However, energy economics expert Marvin Shaffer, adjunct professor at Simon Fraser University, would like British Columbians to look carefully at those figures, especially as the province decided to go ahead with the project without a B.C. Utilities Commission review.

“The rate policy in B.C. effectively subsidizes new mines and this was a line that was heavily subsidized,” he said.

Metal mines require large amounts of electricity. The standard industrial rate charged in B.C. is $40 to $50 per megawatt hour, but the draw on power means more power sources are needed and producing electricity from new sources, such as the Site C dam, will cost about $90 per megawatt hour, Shaffer said.

“An individual mine will consume up to 10 per cent of the output of Site C and the price doesn’t cover even half the cost of a new supply,” he said.

“The government argues that it is economic development, so then you have to ask: what are the benefits in subsidizing mining developments?”

Many of the jobs are likely to go to people living outside the province, Shaffer said.

“There might be some stimulus, but it’s not as if it’s going to be employing a lot of British Columbians who would otherwise be unemployed,” he said.

Image Credit: BC Hydro

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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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Every day British Columbians flick on light switches, power up their computers and cook dinner, confidently expecting the power supply will not fail them.

The expectation that reliable electric power will be available is emphasized by BC Hydro as it touts benefits of the proposed Site C dam on the Peace River and the resulting “clean” energy that could theoretically power 450,000 homes each year.

“Our forecasts show the demand for electricity will increase by approximately 40 per cent during the next 20 years,” said Charles Reid, BC Hydro president.

“And an emerging liquefied natural gas sector could further increase the demand for electricity.”

But, looking into the future is an unreliable art and, while BC Hydro insists that the power will be needed by the time the $8-billion project is completed in 2024, opponents say that, especially at a time when the energy market is undergoing rapid change, the mega-dam will end up as a costly white elephant.

The unknowns include changes in demand because of economic development, the cost of electricity, public policy changes and development of alternative energy sources.

Need for Site C dam not proven: joint review panel

The joint review panel assessing the Site C dam concluded that, although there will be an increasing need for power in the future and Site C is likely to be the most cost-effective option, BC Hydro failed to prove that the new energy would be needed within the timeframe set out in the proposal. [view:in_this_series=block_1]

“The panel concludes that the proponent has not fully demonstrated the need for the projects on the timetable set forth,” says the report submitted this month to the federal and provincial governments.

The panel makes it clear that federal and provincial government decision-makers need to be sure the power is needed before giving the go-ahead.

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

The findings have sparked more questions about the need for Site C power, especially as annual figures show B.C. is usually a net exporter of energy

“This opens the door for us to have conversations about alternatives – local projects with benefits for local people – projects like smaller hydro, wind, natural gas and even geothermal,” said Treaty 8 Tribal Chief Liz Logan.

LNG argument has cracks

Even the LNG argument — used by Premier Christy Clark in last year’s election campaign as a major reason for building Site C — is losing traction as most companies indicate that, for compression and liquefaction of the gas (which takes vast amounts of electricity), they will generate their own power by burning natural gas already flowing through their pipes.

In order to burn natural gas, the LNG industry has been handed a blanket exemption from the Clean Energy Act, raising concerns about the government’s commitment to cutting greenhouse gas emissions.

The Pembina Institute estimates that if five LNG facilities are built, the industry would more than double B.C.’s carbon pollution, single-handedly emitting nearly three-quarters as many greenhouse gases as Alberta’s oilsands.

However, even those who argue that LNG plants should be powered using renewable electricity, don’t necessarily point to a need for the Site C dam. Clean Energy Canada, for instance, argues that the LNG industry can power itself on regionally produced clean electricity, mostly wind power on B.C.’s north coast.

Even under that scenario, LNG plants will need power from BC Hydro for ancillary needs, such as running the site, said Dave Conway, BC Hydro spokesman.

Initial estimates said increased capacity would be needed by 2027/28, but, with taking LNG plans into account, even a “low LNG load forecast” moves the need for energy up to 2024.

“Mining is also one of the big drivers so, with or without LNG, new capacity and new power is needed by 2024,” Conway told DeSmog Canada.

In B.C., about one-third of electricity is used by residential customers, another third is used by commercial customers and another third goes to industrial customers, he said.

“The need for this project comes from growing demand,” Conway said. “Economic development is the primary driver.”

BC Hydro overestimates demand for power: retired federal economist

That need continues despite residential customers reducing power use because of conservation and BC Hydro’s own documents showing it plans to meet 70 per cent of future demand growth through conservation. It is essential that BC Hydro is able to meet peak load requirements, Conway said, even though peak demand may come only one day a year.

However, retired federal economist Erik Andersen said BC Hydro has a chronic problem with over-estimating the demand for power.

“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 BC Hydro has been telling,” he told DeSmog Canada..

Andersen crunched the numbers and is questioning Hydro’s estimates of a population growth of one million people in the next 20 years, which he says doesn’t fit with B.C Statistics forecasts.

“There has been one heck of a rollback in population growth, but BC Hydro seems to want to ignore that,” he said.

Future demand analysis based on "serious market failure"

Energy economics expert Marvin Shaffer, adjunct professor in the school of public policy at Simon Fraser University, said BC Hydro’s analysis of future demand is based on a “very serious market failure” in the pricing of electricity.

“The only reason Site C is ‘needed’ is because the government is preventing BC Hydro from using gas-fired thermal units to back up its hydro system when needed,” he told DeSmog Canada.

“If the project is built as planned, it will be surplus to forecast requirements for many years and sold in the export spot market at a significant financial loss.”

Even if some power was sold to LNG plants, which would otherwise use gas-fired thermal power to meet their energy needs, it wouldn’t be at a price that would begin to recover Site C’s full cost, Shaffer said.

It is unlikely that surplus power could be exported because energy produced at Site C would be too expensive, agreed NDP opposition leader John Horgan.

“With the advent of shale gas everywhere in North America, the price of electricity has plummeted because people can get gas and turn it into electricity at a relatively low price,” he told DeSmog Canada.

Is the era of building big dams over?

Government will decide this fall whether to proceed with Site C, but Energy Minister Bill Bennett already seems convinced of the need for more power.

“We don’t need the electricity today or tomorrow or the next year, but we are pretty darn sure we are going to need it 10 years from now,” he told reporters after the release of the joint review panel report.

However, Paul Kariya, executive director of Clean Energy BC — an industry trade association that represents independent power producers, including gas generators —told DeSmog Canada that predicting power demand is a “mug’s game” and there is a way to meet power needs incrementally.

“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. What we offer is a more incremental approach.”

Up next: Part 3 of our Site C series will explore the alternatives to building the Site C dam.

Photo: "LNG Canada joint venture agreement signing" by Province of British Columbia

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