A new proposal to send power from B.C.’s Site C dam to remote Yukon mines is baffling on both environmental and financial grounds, according to Yukon mining analyst Lewis Rifkind.

Rifkind, a civil engineer who works for the Yukon Conservation Society in Whitehorse, said beyond environmental concerns associated with the mines, the “lunatic” cost of building more than a thousand kilometres of transmission lines for short-term projects makes the prospect nonsensical.

The idea was floated this week by Yukon energy and mines minister Ranj Pillai, who said that proposed new Yukon mines will require additional power sources and that the Site C dam could provide that energy with a $1.5 billion to $2 billion investment in transmission lines.

The catch, explained Rifkind, is that taxpayers would end up footing the bulk of the bill for transmission lines to far-flung mines that might only operate for a few years.

“We’re privatizing the profits and socializing the risk. Mines go bankrupt and the owners skedaddle. And then we have to tidy up the mess.”

Rifkind pointed to the Wolverine mine as an example of the short lifespan of territory mines. That mine — a zinc operation in the Yukon’s southeast — was supposed to be in operation for 10 years after it opened in 2012 but shut down after just three.

And it will cost taxpayers more than $500 million to clean up leaching waste rock and tailings at the Yukon’s abandoned lead-zinc Faro mine, whose toxic waste covers the equivalent of more than 26,000 football fields and lies one metre deep, according to the federal government.

“Since when do we invest massive amounts of public money without having an idea of what it’s going to be for and who will actually be able to use it, and how?”https://t.co/IsRZntA6Jz

— DeSmog Canada (@DeSmogCanada) January 26, 2018

Northern mining boom in the works  

The Yukon is poised for a mining boom, with a half dozen new copper, gold, and silver mines in various stages of permitting, environmental assessments and early construction. The territory currently has only one operational hard rock mine.

The new mines intend to burn fossil fuels like natural gas for power, which Rifkind said is “not necessarily a bad thing” given other considerations such as the “awful” lifespan of Yukon mines, the profound environmental damage caused by Site C, and the greenhouse gas emissions emitted during dam construction and from dam reservoirs.

“Even if they were to build a small local hydro dam we’d be flooding a river and a lot of the rivers are salmon habitat…and usually those dams are built at taxpayers’ expense. Why should we destroy our environment, why should we use our taxpayers dollars to subsidize something that’s probably only going to last for three years?”

Even if the mines operate for 10 years, Rifkind said it is “a crazy idea” to spend billions of dollars to connect them to Site C’s power. “That doesn’t even address the cost of building Site C and the huge environmental harm it’s doing.”

“The [mines] are hundreds of kilometers from the existing hydro grid in the Yukon, never mind the hook-up to B.C. It’s not just a matter of running lines from Site C to the Yukon border. You’ve then got to do another 400 kilometres to get to the Yukon grid. And then some of those mines are another 150 kilometres or 200 kilometers off the grid.”

What’s the story with all those new Yukon mines?

Planned Yukon mines that could use Site C’s energy under Pillai’s scheme include:

• The Casino copper and silver mine proposed by Vancouver-based Western Copper and Gold Corp. on a stream called Canadian Creek that drains into the Yukon River. The earthen dam for Casino’s tailings pond would stretch 285 metres in height and hold eight times the volume of the Mount Polley tailings pond, whose failed dam was 40 metres high. Road access to Casino would be through the range of the Klaza caribou herd.
• The Coffee gold mine planned by Vancouver-based Goldcorp Inc., one of the world’s largest gold producers. Coffee would be an open pit and heap leach mine on the Yukon River, 130 kilometres south of Dawson, operational for 10 years. Last July, the Yukon Environmental and Socio-economic Assessment Board halted its review of the project, saying that Goldcorp did not adequately consult with the Tr’ondek Hwëch’in, Selkirk, and Na-Cho Nyak Dun First Nations, which would be affected by the mine.
• The Selwyn lead-zinc mine in eastern Yukon, proposed by the Chinese-owned mining company Selwyn Chihong. The mine would be accessed through the Northwest Territories, along a road that runs through parts of the Nááts’ihch’oh and Nahanni national park reserves. Trucks carrying lead and zinc concentrates would travel to port facilities in Stewart, B.C.

Rifkind said only one of the planned mines — Victoria Gold Corp’s proposed open pit Eagle Gold Mine in the Dublin Gulch watershed, 350 kilometres north of Whitehorse — is anywhere near the grid.

Victoria Gold Corp. has already said it will pay for a 35-kilometre transmission line to connect to the existing Yukon grid, which gets more than 90 per cent of its power from a single Whitehorse dam.

ICYMI: That Time Trudeau Announced $360 Million for Roads to Yukon Mines That Haven’t Been Approved Yet

Ugo Lapointe, national program coordinator for MiningWatch Canada, said he finds it “sad and disconcerting” that B.C. went through such a harsh debate over the $10.7 billion Site C dam and decided to sacrifice a valley potentially to send power to new Yukon mines.

He said the mines will “come and go” and that he is troubled by the idea that Site C’s electricity could go to Alberta’s oilsands operations or to speculative mines in the Yukon.

“Since when do we invest massive amounts of public money without having an idea of what it’s going to be for and who will actually be able to use it, and how?”

Can wind and solar help reduce carbon emissions for mines?

Both Lapointe and Rifkind said there are far more environmentally sound ways to help meet power needs for new northern mines while reducing their greenhouse gas emissions.

Lapointe pointed to the Raglan Mine, a large nickel complex in Quebec’s Nunavik region that installed wind turbines and a small energy storage facility in 2014. In the first two years of operation, the mining company saved 4.5 million litres of diesel and avoided 12,600 tons of greenhouse gas (GHG) emissions.

Rifkind said new Yukon mines can install solar arrays and small wind turbines to meet some of their energy needs, reducing fossil fuel reliance. Once the mines close, he said the renewable energy infrastructure could be moved to a Yukon community as a legacy from the mining project.

How much would it cost to ship Site C’s power to Yukon mines?

A 2016 report found that constructing a 763-kilometre transmission line from Iskut, B.C. to Whitehorse — either to import or export energy — was not economical. The cost of the line was pegged at $1.7 billion at the time.

In an emailed statement to DeSmog Canada, B.C.’s Ministry of Energy and Mines said no formal discussions have taken place between the B.C. and Yukon governments and “it’s too early to comment on any possible transmission intertie between the two jurisdictions.”

BC Hydro is interested in serving new customers provided that it is economic to do so, but studies would have to be done before deciding on possible transmission line routes and the price of energy “would be subject to negotiations,” the energy ministry said in the statement.

Industry Canada confirmed to DeSmog Canada that a transmission line from B.C. to the Yukon would qualify for funding from Canada’s new Infrastructure Bank.

New funding agreements are currently being negotiated with the provinces, and a transmission line to the Yukon or Alberta would also be eligible for green infrastructure funding.

Rifkind said it would be “insane” to use taxpayers’ dollars to pay for transmission lines to send Site C’s power to the Yukon, in part because of significant power losses when electricity travels long distances.

About five per cent of power is lost through long-distance transmission in B.C., and another five per cent through local transmission, meaning that at least 10 per cent of the power that would be shipped from Site C to the Yukon would be lost.

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By Andrew Nikiforuk for The Tyee.

The B.C. budget claims the province is making money from shale gas. But last month The Tyee showed the province is pouring more cash into the industry than it is getting back.

In fact the only time the B.C. government made any money from shale gas was during a land lease boom nearly a dozen years ago. Ever since then, revenues have dwindled to next to nothing due to low royalties and taxpayer-funded subsidies to the ailing shale gas industry.

Dig deeper, and four more claims made by the B.C. government turn out to be liquefied natural gas whoppers as well.

New information on employment numbers, shale gas reserves, transmission lines and the LNG promise of economic prosperity show that stretching the truth remains a persistent trend in the Christy Clark administration.

Whopper #1: Vastly less gas to sell than claimed

Let's begin with the government claim that British Columbia "has more than an estimated 2,900 trillion cubic feet (tcf) of marketable shale gas reserves," or more methane in the ground than the entire United States. Last year David Hughes, a former analyst with Natural Resources Canada who mapped much of the nation's coal and gas supplies, took a hard look at real reserves and found that the government claim had no basis in reality.

Hughes pointed out in a report for the Canadian Centre for Policy Alternatives that the BC Oil and Gas Commission estimated that B.C. only had 376 tcf of marketable shale resources. (Hughes added 40 tcf to this number for good measure, for a total of 416 tcf, to account for possible resources in developing plays.)

But proven reserves, or what industry can extract with existing technology, were only 44.4 tcf. That's one sixty-fifth of the government's inflated figure of 2,900 tcf. When Hughes noted that the emperor was wearing no clothes, the emperor (Minister of Natural Gas Development Rich Coleman) accused Hughes of misrepresenting the facts.

Coleman wrote an op-ed that said "B.C.'s natural gas supports long-term prosperity." The op-ed did not correct the government's accounting errors.

But according to a series of freedom of information requests just received by Marc Lee at the Canadian Centre for Policy Alternatives, that's not what civil servants were telling politicians.

In several email exchanges, they admitted that the government had used the wrong terminology and "misused terms or values such as 'reserves,' 'resources,' or 'marketable' in describing B.C.'s oil and gas endowment."

Hughes notes that the BC Oil and Gas Commission now estimates raw methane reserves in the province to be 51 tcf. Once processed, that gas might amount to 44.4 tcf.

Yet National Energy Board regulators had already approved 12 export permits totalling 205 tcf at the time Hughes's report was published, and were reviewing seven more with a combined total of 435 tcf (the NEB has since approved another six permits).

If the Clark government's aspirations of five LNG terminals come to fruition, this would require exports of 150 tcf of gas by 2040, or more than three times current proven marketable reserves.

Given the uncertainties in resource estimates compared to proven reserves, coupled with Canada's own needs, Hughes, a conservative energy analyst, questions the wisdom of a strategy hell-bent on liquidating these finite resources as fast as possible, particularly if B.C. and Canada care about meeting the greenhouse gas emission reductions committed to in the Paris climate talks. Yet the dubious figure of 2,900 tcf remains on the government website.

Whopper #2: Vastly fewer LNG jobs than claimed

The next wacky accounting LNG figure concerns the government claim that its non-existent industry will gainfully employ 100,000 British Columbians some great day in some near future, or more specifically 2018. Last year, Lee at the CCPA also dug into that fiction.

He discovered that the impressive and magical number came from a report written by the accounting firm Grant Thornton. The firm only used government-provided data and economic models.

Not surprisingly the government published the report just prior to the 2013 election. In his study Lee found the numbers were highly inflated and bore no resemblance to the real economic world of LNG.

Lee concluded that B.C.'s LNG sector could be expected to support "only 2,000 to 3,000 construction jobs per LNG terminal over three years and 200 to 300 permanent workers once operational." As a consequence, five LNG terminals might create between 15,000 short-time jobs, but not 100,000.

When Lee released his findings last year the government immediately attacked the CCPA report as "misguided and poorly researched."

A freedom of information request, however, has revealed, once again, that email exchanges between civil servants largely supported Lee's version: real job creation numbers might be a few thousand but not 100,000. One email thread confirms that the Petronas Pacific NorthWest LNG project will launch only "330 long-term operation careers."

Clear-headed analyses by the industry around the world also confirm Lee's realistic job assessment and question the government's credibility. The International Monetary Fund, for example, recognizes LNG as a capital-intensive industry with a poor record of job creation. A typical LNG plant will only create a few hundred jobs during the planning phase, a few thousand during the construction phase, and only a few hundred when operating. That's it.

Consider the example of Mozambique, which wants to exploit its rich offshore natural gas reserves. A 2014 report on its prospects emphasized the well-known fact that LNG is not a job-creating industry. "In terms of employment, the capital intensive nature of the industry means that its direct contribution to job creation is extremely limited, at less than 0.5 per cent of formal sector jobs," explained the Oxford Institute for Energy Studies report.

"Of key importance will be the ability to link the extractive sector — which is capital intensive and responsible for few direct jobs — to the wider economy," added the report.

And then the report makes this notable revelation: "Unlike the situation in Tanzania, where politicians frequently promise citizens tens of thousands of jobs in the gas industry, the Mozambique government's expectations of massive job creation have already been moderated. Most estimates put job creation linked to the LNG ventures at around 7,000–7,500."

To date, a million-dollar government website designed to connect citizens looking for work in the LNG industry has not connected anybody to anything. But it has employed one previous politician, Gordon Wilson, a former leader of the BC Liberal party.

Wilson now earns $150,000 a year to advocate for a capital-intensive industry that hasn't created any jobs — except for Clark supporters.

In Australia, LNG has left another poor employment horror show that the government in B.C. has failed to study or acknowledge. Unfettered LNG exports in Australia not only increased both natural gas and electricity costs for consumers, but also reduced the manufacturing sector's ability to compete and create jobs.

"U.S. policymakers should look to the Australian LNG export example as a warning for what can occur due to escalating LNG exports," recently warned one industrial energy consumers' group. In other words, a successful LNG business could kill the province's manufacturing base by inflating natural gas prices.

Whopper #3: No, LNG prosperity is not close at hand

Along with the jobs fiction, the government has also manufactured a prosperity fiction. In February the Conference Board of Canada published a glowing report on the province's proposed 21 LNG projects called "A Changing Tide: British Columbia's Emerging Liquefied Natural Gas Industry."

Even though not one project has proceeded to the construction phase, the optimistic report concluded that just three large LNG terminals could export 30 million tons per annum (MTPA).

Such activity would generate 33,000 permanent jobs and $7 billion in investment and raise GDP. It would also double the amount of shale gas production by an additional five billion cubic feet, and carpet-bomb much of northeastern B.C. with gas wells.

But these figures are all pie in the sky and again bear no resemblance to reality.

Here's one bitter taste of reality. Most readers will recall that Apache Corp., a Houston-based energy firm, conducted some of the largest frack jobs in northern B.C. and was one of the first companies to champion an LNG terminal. But in 2014 it sold its interests in its Kitimat proposal along with an Australian project. Here's why: last year the shale fracking company posted a loss of nearly $25 billion. That's right: $25 billion. Fracking shale gas, an exercise in declining returns, rarely pays the bills.

More reality can be found in a 2015 report by Oxford Institute for Energy Studies, a rigorous non-profit educational group based in London that analyzed the prospects for North America's LNG industry.

It was blunt: "Despite Canada's abundance of gas resources and the plethora of proposed LNG export schemes, the current business environment, characterized by low oil prices and industry consolidation, does not indicate that any Canadian LNG scheme will be commissioned before the middle of the next decade."

Moreover, "the window of opportunity to capture premium Asian markets has eluded the Canadian projects" because of deep uncertainty and falling demand in those markets. U.S. LNG projects are also cheaper.

The report concluded that the fate of Canadian projects is tied to the price of oil, and they would only succeed if oil were selling for somewhere between $76 to $90 a barrel, "which does not seem competitive with the first generation" of U.S. LNG projects.

In other words there is no emerging LNG industry in Canada, and if one does appear it won't arrive until 2025, or nearly a decade from now. And even that is uncertain.

The Conference Board (which makes no mention of the Oxford Institute report) was funded by Progress Energy, which is owned by Petronas, the Malaysian state-owned oil giant backing the Pacific NorthWest LNG project.

Most media stories on the report failed to mention this apparent conflict of interest. But the government of B.C. is only too happy to cite this as gospel while cheerleading a fantasy industry.

Whopper #4: Yes, Site C dam is for powering frackers

Last but not least come some wacky accounting numbers on the Site C dam, a $9-billion public works project that analysts generally agree will increase everyone's electricity bills. Although provincial authorities swear the project has nothing to do with LNG, Ben Parfitt, an investigative journalist, has revealed otherwise in a DeSmog Canada article.

Last January, the province announced a new $300-million transmission line to power shale gas development in the south Peace Region. Two other transmission lines are also being proposed. The lines will allow shale gas drillers to use electricity to power their operations instead of methane.

As a consequence they'll have more gas to export and access to cheap energy subsidized by taxpayers.

What the press release did not explain, notes Parfitt, is that "virtually all of this new transmission infrastructure is being built at public expense to provide power to one entity and one entity alone — the natural gas industry."

Two other proposed lines reinforce the story. One 140 kilometre-long project will fragment the forest to bring power to the Pink Mountain Region in the north Montney basin. It will benefit one shale gas extractor in particular: Progress Energy.

That shale gas drilling company is owned by Petronas, which successfully lobbied the government to lower its LNG tax rates. Meanwhile, Progress Energy paid for the boosterish Conference Board report.

Petronas is also one of the backers of the controversial Pacific NorthWest LNG project off Lelu Island at the mouth of the Skeena River.

ATCO, the anointed builder of the Petronas transmission line, recently argued that no public review of the project was necessary and asked for an exemption under Section 22 of the Utilities Commission Act.

"The project is being developed on an aggressive schedule to meet with Progress [Energy] timelines. Failure to meet these timelines reduces the feasibility of electrification and poses a substantial threat to the project proceeding."

Energy Minister Bill Bennett supported the corporate request in a Business in Vancouver story: "My understanding right now is that if I do not direct the BCUC [British Columbia Utilities Commission] to allow these projects to go ahead, that we may lose some interest on the part of the gas companies…. They just don't feel that they can wait for a long BCUC process."

When politicians elect to bypass mandated legislated safeguards to protect the public purse by evaluating the need for projects (and that's what the BCUC does), then they are no longer working for taxpayers.

But the logic is clear, says Parfitt. "The more transmission lines erected to allegedly 'green up' the field operations of fossil fuel companies, the more fossil fuel industry activity. The more such activity, the more the government and BC Hydro can justify Site C."

It's all a self-serving story. The government produces wacky numbers and accounting figures to justify corporate LNG scheming that no longer make any economic sense.

Years ago Jacque Ellul, the French philosopher, noted that "propaganda is called upon to solve the problems created by technology, to play on maladjustments, and to integrate the individual into a technological world." It's how government and industry now work.

In B.C. the government uses propaganda not only to integrate its citizens into its wacky LNG fantasy, but to subsidize foreign companies and pay for unneeded dams and transmission lines at the same time. It is designed to make taxpayers smile while they are being robbed. 

Image: Facebook

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On January 20, BC Hydro issued a press release singing the praises of a new hydro transmission line not far from where preliminary work has begun to build the $9-billion Site C dam.

The release, headlined “New transmission line to power development in the south Peace,” featured boosterish quotes from Premier Christy Clark, Energy and Mines Minister Bill Bennett and BC Hydro CEO and president Jessica MacDonald, but made no mention of the dam.

Yet it highlighted for many one of the most vexing questions about why the dam, which is the single-most expensive megaproject in the province’s history, is being built at all: Why this project at this time?

“This line doubles the amount of power we can provide to the region,” enthused MacDonald. “We know it’s a growing region and BC Hydro needs to be one step ahead and ensure we can get power to where it is needed most. We want industry in B.C. to use clean power that comes from BC Hydro’s hydroelectric facilities.”

What MacDonald didn’t say, and Clark and Bennett did nothing to elaborate on either, is that the $300-million and counting transmission line is but the first of at least three in the region. Another two lines, which the provincial government wants exempt from review by the provincial electrical utilities regulator the BC Utilities Commission (the province also exempted the Site C dam project from similar review), will add hundreds of millions of dollars more to the tally for taxpayers.

Also not explained anywhere by MacDonald, Clark, Bennett and company is that virtually all of this new transmission infrastructure is being built at public expense to provide power to one entity and one entity alone — the natural gas industry. An industry, ironically, which has used and continues to use small portions of the gas that it drills to fire turbines that provide the power to move the gas through pipelines to processing plants and then on to consumers.

The Only Credible Explanation for Building the Site C Dam

Now, in the name of making “dirty” natural gas companies marginally less so, BC Hydro at the behest of the provincial government is aggressively pursuing a policy of providing “clean” hydroelectricity to the gas industry so that its greenhouse gas emissions are lowered here in B.C. It is this policy that provides the only credible explanation for why the Crown corporation is rushing to build the controversial dam at this time.

Indeed, BC Hydro’s own records show that in the absence of a vastly expanded natural gas sector in the province there is simply no need for the dam now or in the foreseeable future. It has told the B.C. Utilities Commission that it will be 2028 before domestic electricity consumption actually exceeds domestic production. And even then, according to BC Hydro, there is good reason to believe that that critical point may be even further down the road.

After filing its most recent load forecasts with the utilities commission, BC Hydro produced a quarterly report noting that its earlier forecasts for large industrial and commercial users were overstated. New information suggested that those consumers will likely use even less electricity in future years and that such declines could be most pronounced in key industries like the pulp and paper industry that directly and indirectly employ thousands of people.

Ironically, one of the main reasons why B.C.’s pulp and paper industry is in trouble is the rising cost of electricity. In 2014, hydro rates increased by 9 per cent, the first in a planned five years of increases totalling at least 28 per cent. The increases mark just the beginning of what could be years of steadily higher bills as customers repay the billions of dollars that BC Hydro must borrow to pay for Site C and the new transmission lines.

For certain pulp mills that rely more on power than chemicals to break down wood fibre, just the most recent increases in hydro rates threaten to put some of them out of business. Provincial Finance Minister Mike de Jong was told as much in June in a letter signed by the CEOs of four major forest companies including Canfor, West Fraser, Catalyst and Paper Excellence.

“While our industry prides itself on cost-cutting through constant innovation and improvements in efficiency, the magnitude and timing of the increase in B.C. Hydro rates combined with the increase in [provincial sales] tax, may result in many of the mills shutting down,” the letter reads in part.

No wonder, then, that BC Hydro believes that there could be possible declines in hydro usage among some industrial users. If just one mechanical pulp mill in the province shuts down, enough power to supply 70, 000 homes is freed up.

LNG Industry Could Spike Electricity Demand

The only scenario in which BC Hydro envisions hydro usage in the province exceeding available supply is in the event that one or more Liquefied Natural Gas or LNG plants are built on our coast. Such plants require enormous amounts of power to super-cool natural gas to the point where it turns to liquid form and can be loaded onto tankers for shipment overseas.

According to BC Hydro filings with the utilities commission it is only with the arrival of an LNG industry in the province that hydro consumption begins to outstrip domestic supply, and only then in about eight years.

Despite the fact that fossil fuel giants such as Shell and Petronas have yet to commit a dime to building LNG plants, the rush is on to supply them with hydroelectric power to offset some of the emissions associated with producing and potentially one day liquefying natural gas: a gas that no matter how you slice it is a climate-unfriendly fossil fuel that contributes significantly to global greenhouse gas emissions.

New Transmission Lines Encourage Gas Production

Whether or not an LNG industry emerges, however, the provincial government and BC Hydro are forging ahead with plans to supply hydroelectricity to companies drilling for natural gas in the Montney Basin. The basin, which extends out a considerable distance from the Peace River, contains B.C.’s largest remaining reserves of natural gas.

The basin has considerable “wet” natural gas deposits, which in the current environment of generally depressed natural gas prices is a good thing for the companies involved. Dry gas is generally made up of methane whereas wet gas may contain ethane, butane and pentane, or natural gasoline — all valuable hydrocarbons.

By extending transmission lines into the Montney Basin, the province and BC Hydro are encouraging increased gas industry activity. None of the gas that the companies drill for and produce will have to be used to fire turbines that move the gas through pipelines. Instead, all of the gas saved through electrification can be sold, especially the wet gas with its higher market value.

“Before, industrial customers had to burn gas to power their facilities. The new transmission line not only makes more projects possible, it means they’ll be even cleaner,” Premier Clark said in BC Hydro’s January 20 press release.

Greenwashing A Climate Unfriendly Industry

Of course, what neither Clark, Bennett or MacDonald say in the release is that there is actually no net benefit to the earth’s overheating atmosphere in making the gas industry here at home somewhat cleaner. While the gas industry’s greenhouse gas emissions in B.C. may be less bad than they would otherwise be, all of the gas saved through electrifying gas company field operations is simply sent down pipelines to the financial benefit of the sellers. The gas is then burned somewhere else at a collective loss to the planet.

For people who have been hunkering down at a protest camp near the Site C dam construction zone where temperatures have sometimes dipped down to a bone-chilling -25 C, every new announcement extolling the virtues of a new hydroelectric transmission line reinforces the notion that BC Hydro and the provincial government have a build-it-and-they-will-come attitude with what is the single-most expensive megaproject in the province’s history.

The more transmission lines erected to allegedly “green up” the field operations of fossil fuel companies, the more fossil fuel industry activity. The more such activity, the more the government and BC Hydro can justify Site C.

The transmission line that Clark and company enthusiastically praised in the BC Hydro press release of January 20 is known as the Dawson Creek-Chetwynd Area line or DCAT. The project consisted of building two new lines of 12 kilometres and 60 kilometres in length, construction of a new substation and upgrades to two other facilities.

Transmission Lines Exempted from BCUC Review

BC Hydro’s press release states that DCAT’s cost is $296 million. But a document that the Crown corporation filed last fall with the B.C. Utilities Commission tells a different story. In that document, the actual cost of the project as of September was just under $302 million or nearly $6 million higher than that stated in BC Hydro’s press release. And the document, which is signed by BC Hydro’s chief regulatory officer, Tom Loski, notes that the project is not yet completed. So there will be further costs, including those associated with taking down all of the lower kilovolt lines that the new transmission infrastructure replaced.

BC Hydro is required by law to file information on DCAT because that project was subject to B.C. Utilities Commmission review. The public therefore has access to details on the $302 million and counting transmission line. But the provincial government has indicated that two other proposals to build massive new hydroelectric transmission line infrastructure in the Peace region — infrastructure explicitly intended to foster more natural gas industry developments — will not be subject to such reviews and therefore the public may learn next to nothing about them.

Last November, Energy Minister Bennett explained why the government did not want the projects brought before the BCUC. In a Business Vancouver story, Bennett said: “My understanding right now is that if I do not direct the BCUC to allow these projects to go ahead, that we may lose some interest on the part of the gas companies . . . They just don’t feel that they can wait for a long BCUC process.”

Bennett’s position leaves Karen Goodings, Area B director for the Peace River Regional District, decidedly uncomfortable.

“Our concern, of course, is once again the avoidance of going through the process that is in place to examine these things,” Goodings told Business Vancouver. “It’s almost as though this is another excuse for building Site C.”

An unusual wrinkle of one of the proposed transmission lines known as the North Montney Power Supply Project is that the 140 kilometre-long line will be built and operated by a private company. ATCO Power will build the transmission infrastructure to deliver electricity to the remote Pink Mountain area well to the north of Fort St. John. The area is the site of major gas-drilling and fracking operations by Progress Energy, owned by the Malaysian state-owned corporation, Petronas.

‘Ministerial Exemption’ Sought to Speed Transmission Line

In a letter last March to Les MacLaren, an assistant deputy minister in Bennett’s ministry, ATCO vice-president Dale Friesen explained why neither ATCO nor Petronas want the project subject to BCUC review.

Friesen said a “ministerial exemption” exempting the project from BCUC review was being sought because of the “aggressive schedule” required to build the project.

“Progress Energy is developing gas production capacity in the North Montney Basin in support of the Pacific Northwest LNG project proposed by Petronas, Progress’ parent company.”

“ . . . By utilizing BC Hydro supplied power instead of burning natural gas, Progress expects to decrease emissions in the region by approximately a third. Progress further expects to realize improved equipment performance, decreasing the risk associated with gas delivery to LNG facilities.”

“The project is being developed on an aggressive schedule to meet with Progress timelines. Failure to meet these timelines reduces the feasibility of electrification and poses a substantial threat to the project proceeding.”

Nothing in the information obtained by the Regional District indicates what the projected costs to build the line and related infrastructure are. But given that the line is twice the length of the DCAT line and goes through rugged and remote terrain, it seems reasonable to conclude that it will be a vastly more ambitious and expensive project.

And somehow, despite all of the costs associated with building the line and all of the ongoing costs of purchasing electricity carried by the line, Goodings believes that Petronas will be financially ahead of where it would be if it produced its own power with natural gas.

“They are extremely aware that they can produce their own power. There has to be a benefit there,” Goodings says. “If they can produce their own power cheaper than hydro, they will do it.”

Unfortunately, nothing by way of information supplied to the Peace River Regional District by ATCO sheds light on relative energy costs or on what, if any subsidies, ATCO and Petronas may benefit from in the event the line is built.

Given that three separate transmission lines are either built or about to be built to supply electricity to an industry that has for decades produced its own power from the gas it draws from the ground, Goodings thinks the need for an independent review of all new transmission line projects in the Peace region and the Site C dam is obvious. Especially when the government’s long-touted promise of an LNG industry appears more remote with each passing day.

“Are these transmission lines the reason for Site C? If that’s the reason we’re spending $9 billion then yes, there’s an impact on the taxpayer, and they should not be exempt from review,” Goodings says.

No amount of boasting about all the clean energy supplied by Site C and an emerging network of new transmission lines gets around the fact that an awful lot of public money is about to be dropped in the Peace Region.

Goodings, like others who have called on the government to subject the Site C project to B.C. Utilities Commission review, believes it’s in our collective interest to know if we are about to spend billions of dollars on a new dam and hydro lines that, at the end of the day, may benefit the public very little while benefitting one industry very much.

Ben Parfitt is a resource policy analyst with the Canadian Centre for Policy Alternatives.

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