Kinder Morgan has significantly overstated the benefits of its controversial Trans Mountain pipeline expansion proposal while vastly understating risks associated with increasing the flow of oil to Metro Vancouver.

That’s the conclusion of a new economic analysis by Simon Fraser University and The Goodman Group Ltd. which also recommended that the proposed expansion be rejected as it is neither in the economic nor public interest of B.C. and Metro Vancouver.

“The jobs created are nowhere near the number claimed by Kinder Morgan and the costs are grossly underestimated when the risks of a major spill, particularly one occurring in the Vancouver area, are factored in,” said Doug McArthur, director of SFU’s Graduate School of Public Policy, which co-authored the report.

“The whole project is highly questionable from a public policy point of view,” McArthur added.

The report — Economic Costs and Benefits of the Trans Mountain Expansion Project (TMX) for BC and Metro Vancouver — said Kinder Morgan maintains building the $5.4 billion expansion project would create 36,000 person-years of short-term employment in B.C.

The analysis, however, shows it would only create 12,000 person-years, or less, of employment.

“We correctly anticipated that the benefits from the pipeline would be small in the context of the overall B.C. economy and mostly short-term,” said Ian Goodman, president of The Goodman Group Ltd. and co-author of the report.

“But we were very surprised that the company has exaggerated the short-term jobs associated with building the pipeline by a factor of three,” Goodman said.

In terms of permanent jobs, the report notes Kinder Morgan says operating the expansion project would create only 50 direct full-time jobs in the province but a wide range of spin-offs could push the total up to almost 2,000 jobs.

“Once again, these claims are exaggerated: even with a wide range of spin-offs [the Trans Mountain expansion] will only create 800 long-term jobs,” the 70-page report, released Monday, said.

It also said that, on the cost side, Kinder Morgan’s miscalculations are even more dramatic with estimations of a worst-case scenario for spill damage in a non-urban, non-sensitive area costing only $100 million to $300 (CDN) million.

The analysis found, however, potential costs for a major rupture in a sensitive but non-urban setting could start at $1 billion (USD). Under a worst-case scenario involving a catastrophic rupture in an urban setting, costs could escalate to as much as $2 billion to $5 billion (USD).

The ruptured Enbridge Line 6B that sent more than three million litres of diluted bitumen into a tributary of the Kalamazoo River in Michigan came with a clean up cost of more than $1 billion after more than three years of remediation work.

Brigid Rowan, senior energy economist at The Goodman Group Ltd., said Kinder Morgan has vastly underestimated the worst-case costs for a catastrophic pipeline rupture.

“Contrary to [Kinder Morgan’s] findings, damage and cleanup costs for major accidents are highly correlated with population density,” Rowan said.

“So a worst-case scenario for [the Trans Mountain expansion] would involve a major accident in a more densely populated area (such as Metro Vancouver) damaging and disrupting key infrastructure, and possibly resulting in a spill to water and losses of human life,” he said.

Costs for that type of catastrophe could escalate to the multi-billion dollar range — more than 10 times higher than the Kinder Morgan estimates, Rowan added.

The existing Trans Mountain pipeline already ruptured in a suburban area in Burnaby in 2007 sending 250,000 litres of crude into the community and 70,000 litres into the Burrard Inlet. Over 250 residents were evacuated and more than $15 million spent on clean up.

The report also outlined a major profit disparity between the province and producers when it comes to the pipeline’s financial benefits. B.C. would receive less than 2 per cent of the increased revenues paid to tar sands producers who will retain 68 per cent of the new revenues.

“The lion’s share of the benefits flows to [Kinder Morgan and Trans Mountain], the Alberta tar sands producers and Alberta, whereas the citizens of B.C., and Metro Vancouver in particular, will bear the lion’s share of the risks and receive very small benefits,” the report said.

The Trans Mountain expansion project proposal, which is hotly contested by local residents and municipal politicians, would increase the capacity of oil flowing from Alberta to Metro Vancouver to 890,000 barrels per day from the current 300,000.

The proposed expansion is currently under a controversial review by the National Energy Board.

Image Credit: Kinder Morgan oil facilities in the Burrard Inlet. Photo by Carol Linnitt.

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Sea otters score top marks on the cute and cuddly scale as they float around kelp beds holding hands or hugging fuzzy pups, but when they show up on the marine doorstep, it is like having a pack of badly behaved German shepherds taking over the neighborhood.

“They weigh about 80 pounds, they eat 4,000 calories a day and they just tear through the environment,” said Eric Peterson, co-founder of the Tula Foundation, which funds research at the Hakai Institute, a field science station on Calvert Island on the Central Coast.

Sea otters and the effect they have on the environment became one of the institute’s research projects almost by accident after about 150 of them showed up near Calvert Island two years ago.

“The results have been quite amazing and dramatic,” Peterson said.

Research has centred around the effect sea otters have on sea urchin populations and kelp beds.

Sea otters were almost eliminated from many areas of the B.C. coast during the 18th and 19th century fur trade, but their populations are now recovering — to the point that their status has gone from endangered to a species of special concern.

But they compete with humans for prey species such as sea urchins, abalone, clams and crabs and they change the marine landscape, which brings its own special set of problems.

It is estimated that there are now about 1,000 sea otters on the Central Coast and possibly about 4,000 off the west coast of Vancouver Island where government biologists released 89 otters more than 40 years ago.

Populations have not yet re-established themselves in areas such as Haida Gwaii and the Strait of Georgia.

“Sea otters are a top predator. They are kind of like humans and one of the things they eat is sea urchins,” said applied marine ecologist Anne Salomon, assistant professor at Simon Fraser University, who has led some of the sea otter research.

The otters’ diet of sea urchins then affects the kelp beds, Salomon said in an interview after making a presentation at the Hakai Research Exchange in Sidney last week.

“The sea urchins are herbivores and they graze like elephants or giraffes, they are sort of lawn mowers.”

So, when sea otters eat the sea urchins, kelp beds, without urchins to keep them under control, turn into kelp forests.

That has some benefits as the kelp forests are carbon sinks and provide good habitat for fish, but shellfish harvesters prefer a marine environment with clams and abalone.

“Lots of humans have become very used to a coast without sea otters,” Salomon said.

The recovery of sea otters, which started in 1911 after they were protected through one of the first international conservation treaties, has been an incredible conservation success story, Salomon said.

“But it’s also really problematic.”

Until colonial rule, sea otter populations were kept somewhat in check because the otters were hunted by First Nations, but now there is little to control their population growth.

“People see them as a threat to abalone and that is eliciting major conflicts on the coast,” said Salomon, adding that her research shows that abalone and otters can co-exist as the abalone adapt and learn to hide in crevices.

But then there is the question of the otters’ behaviour.

“They do have a lot of sex,” Salomon said.

And it is often rough sex, with the male grabbing the female by the nose and holding her underwater.

“They’re not particularly nice to each other or to other animals,” said Josh Silberg, a master’s graduate student in Salomon’s laboratory.

“They are intelligent and charismatic and they may look cute and cuddly, but they are really a big weasel,” he said.

Image Credit: Marcio Cabral de Moura via Flickr.

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Media policies in most Canadian government departments do not effectively encourage open communication between federal scientists and journalists, says a report released Wednesday.

Published by Evidence for Democracy (E4D) and Simon Fraser University (SFU), the report said more than 85 per cent of the 16 departments studied were assessed a grade of C or lower in terms of openness of communication, protection against political interference, rights to free speech, and protection for whistleblowers.

The 22-page report also said that when compared to grades for U.S. departments (scored by the Union of Concerned Scientists), all but one Canadian department performed worse than the U.S. average.

“Overwhelmingly, current media policies do not meet the basic requirements for supporting open communication between federal scientists and the media,” Katie Gibbs, E4D’s executive director and an author on the report, said in an accompanying media release.

“These policies could prevent taxpayer-funded scientists from sharing their expertise with the public on important issues from drug safety to climate change,” Gibbs said.

The report — “Can Scientists Speak?” — gave the Department of National Defense the highest mark, a B grade, while the Canadian Space Agency, Public Works and Government Services, Industry Canada, and Natural Resources Canada each received an F.

Policies governing science-based departments received on average a C- for how well they facilitate open communication between scientists and the media, the report added.

Described as the first of its kind in Canada, the report comes after a 2013 survey of federal government scientists commissioned by the Professional Institute of the Public Service of Canada (PIPSC) found 90 per cent feel they are not allowed to speak freely to the media about their work.

The PIPSC survey also found almost 86 per cent of the scientists felt they would face censure or retaliation for speaking about a departmental decision that could harm public health, safety or the environment.

The survey, which is included in a report titled “The Big Chill,” is described as the first extensive effort to gauge the scale and impact of “muzzling” and political interference among federal scientists since the Stephen Harper government introduced communications policies requiring them to seek approval before being interviewed by journalists.

On Wednesday, PIPSC President Debi Daviau said the C- average for policies that govern science communication with the media is not something to be proud of.

“This is a grade that says Canada is failing its most fundamental obligations to keep Canadians adequately informed of urgent science matters such as climate change,” Daviau said.

E4D, a national non-partisan, non-profit organization promoting evidence-based public policy, provided several key recommendations in its report that departments can implement to improve communication between federal scientists and the Canadian public.

Policies should be easily available online for scientists, journalists and the public, E4D recommended, and it should be explicit that scientists can speak freely about their research to facilitate clear and timely communications.

Another recommendation said scientists should also have the right to final review of media releases that make substantial use of their work to protect against political interference.

In addition, scientists should be able to express their personal opinions as long as they make clear they are not representing the views of their department.

The report also recommended there be provisions to protect whistleblowers and effectively resolve disputes.

Federal government scientists play an important role in keeping Canadians safe and healthy by providing their expertise to both the public and decision-makers, the report said.

“The safety of our food, air, water, and environment depends on the ability of federal scientists to provide information to Canadians,” it added.

CBC News said it requested comments about the report from several government departments, who redirected the request to Ed Holder, minister of state for science and technology.

Holder did not respond directly, CBC said, but stated in the House of Commons on Wednesday afternoon that “ministers are the primary spokespersons for government departments yet scientists have and are readily available to share their research with Canadians.”

Arne Mooers, an SFU professor of biodiversity and an advisor for the report, said federal scientists are important public servants with critical expertise.

“They should be encouraged to inform the public in their areas of expertise because only an informed public can evaluate what governments are doing on their behalf,” Mooers said.

“Strengthening communication between scientists and the public strengthens our democracy.”

The E4D report was published one day after Julie Gelfand, the Commissioner of the Environment and Sustainable Development, released an audit showing Canada will almost certainly not meet its international greenhouse gas emission reduction target by 2020 and doesn’t even have a plan showing how the nation might achieve its climate change goals.

Image Credit: Zack Embree

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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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In early January, Vancouver’s Mayor Gregor Robertson announced that a part of the city’s iconic seawall would be closed for major repairs following damage from winter storms over the previous month. Mayor Robertson, in no uncertain terms, attributed the unusually serious damage to rising sea levels and climate change. “Seawall damage = cost of climate change + sea level rise,” he posted to his more than 30,000 Twitter followers, along with Vancouver resident John Woakes’ startling December 17 video of violent waves crashing past the beach and demolishing a walkway. 

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