Count on Hawaii — tied for No. 1 as the the state with the highest percentage of renewable energy — to deliver yet another blow to B.C.’s lofty liquefied natural gas (LNG) ambitions.

On July 15, the state’s public utilities commission recently shot down a proposed $4.3 billion takeover of the Hawaiian Electric Companies (which provide 95 per cent of the state’s electricity) by Florida-based NextEra Energy in a 265 page ruling.

NextEra, the largest provider of the wind power in the U.S., was positioned to play a key role in financing the importing of 800,000 metric tons per year of LNG from FortisBC’s Tilbury LNG storage facility in Delta for use in an upgraded power plant on the west coast of Oahu.

The deal, struck in May between a Fortis subsidiary and the Hawaiian Electric Company, would have lasted for 20 years beginning in 2021. The LNG would have been exported by WesPac Midstream via its proposed terminal on the Fraser River.

But Hawaii has committed to 100 per cent renewable energy by 2045 — only four years after the LNG contract would expire — which was a major factor in the utilities commission’s decision to reject the takeover.

26 Million Tonnes of CO2 Rejected

Voters Taking Action Against Climate Change (VTACC) estimates the 20-year deal could generate 26 million tonnes of carbon pollution.

“I think it’s a rejection of B.C.’s core argument for LNG: this notion that it’s somehow a useful step in the transition to renewables and a bridge fuel,” says VTACC director Kevin Washbrook. “Hawaii said ‘we’re going to skip that step and go straight to renewables.’ I think it’s a very big deal.”

The contract between the Fortis subsidiary and the Hawaiian Electric Company was cancelled shortly after the decision by the utilities commission.

There were five major components to the verdict, including concerns about benefit to ratepayers and maintained competition. While there wasn’t a specific reference to the impacts of importing LNG as a factor in kiboshing the proposal, the commission clearly stated the parties didn’t “adequately disclose their plans” on meeting Hawaii’s clean energy targets.

Renewables For Profit Over Diversification?

In what could be taken as a bit of a passive-aggressive slight, the commission concluded the section by noting that it was “left to speculate whether this was simply an oversight, or, possibly, indicative of a predisposition for utility-scale solutions.”

NextEra has been criticized for its tendency to only favour renewables “when it serves its own profit goals.” A major subsidiary, Florida Power & Light, has opposed rooftop solar installations and donated to astroturf groups that allegedly attempt to confuse customers.

In June 2015, Hawaii Governor David Ige introduced a series of energy bills, one of which attempts to “democratize renewable energy” by allowing renters and condo owners to buy electricity from sources such as community-based solar farms. Such an approach seems to stand in stark contrast from that of NextEra.

At last count, 17 per cent of Hawaiian Electric customers have rooftop solar, including 32 per cent of customers on Oahu, the most heavily populated island.

Hawaii Utilities Commission Shoots Down Plan To Import #LNG from B.C. https://t.co/f80g49d9jx #bcpoli #cdnpoli pic.twitter.com/JwytsLfpBH

— DeSmog Canada (@DeSmogCanada) July 25, 2016

B.C. a “Big Megaproject Kind of Government"

Washbrook adds that Hawaii’s approach also serves as a rebuke of sorts to the way the B.C. government has approached energy policy in recent years.

“They’re a big megaproject kind of government: whether it’s Site C dam or the Massey Bridge. With LNG, they’re looking for the home run that’s going to do everything,” he says. “They’re slowing scaling back their expectations: a year ago it was going to be everyone’s hip replacement would be paid for by LNG and ‘if you want better schools we better have LNG.’ And it’s not just how the world works anymore.”

In February 2015, FortisBC announced a 10-year contract with BC Ferries, helping justify the company’s $400 million expansion of its Tilbury facility that began the previous October.

In June, the company noted: “A further expansion at the Tilbury LNG facility would be required if a recently announced agreement to supply 800,000 metric tonnes of LNG annually to Hawaiian Electric moves forward.”

Review Process for LNG Allegedly Undermined

In late 2013, the B.C. government issued an exemption to FortisBC’s expansion plans, something then explained by minister of energy and mines Bill Bennett as: “Government wanted to get out of the way and allow the transportation fuel component of the LNG industry develop quickly.”

Then, in June 2015, the federal government decided that B.C. should head up the environmental assessment of the proposed $175 million WesPac LNG terminal in spite of a recommendation from the Canadian Environmental Assessment Agency that the project warranted a federal review.

Washbrook emphasizes that such decisions have undermined the processes, noting that such proposals should be assessed in a cumulative fashion (something the expert review panel of the Canadian Environmental Assessment Agency will figure out in future months).

“It’s ironic that in Hawaii, it was the utilities commission that said ‘we’re not going to allow you to import LNG because it’s not in the public interest,’” Westbrook says. “B.C.’s fettering of its utilities commission of doing its role and it was up to some other jurisdiction’s utilities commission to say ‘no, this is a bad idea.’ It kind of came back to bite them.”

Image: Province of B.C./Flickr

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With news of the Port of Vancouver ruffling the feathers of the federal government by issuing a permit for a jet fuel pipeline without so much as a heads up, the port authority’s integrity has been thrust into the spotlight yet again.

While the port has apologized to Transport Minister Marc Garneau, the thorny issue of the port conducting environmental reviews of projects, while profiting from the same projects, remains.

Complicating matters, the Vancouver Fraser Port Authority (which regulates the Port of Vancouver) is a member of the Coal Association of Canada — a lobby group that glosses over the impacts of burning coal on climate change and that has gained notoriety in recent weeks for spreading misinformation about the phase-out of coal-fired electricity in Alberta.

The port authority has also been outed in the past for a covert and intimate relationship with the Vancouver-based Coal Alliance, an aggressive lobby group with a membership that includes rail companies, export terminals and other lobby groups.

Meantime, the port authority was responsible for reviewing the $50-million Fraser Surrey Docks coal-transfer terminal that would export more than four million tonnes of thermal coal to Asian markets — which it approved in December 2015.

“If you’re going to be a member of some other organization or alliance and you approve the projects that are related to that membership, it puts into question the fairness of the decision-making process and leads one to question whether or not they’re biased — whether or not things are predetermined,” says Paula Williams, who co-founded Communities and Coal, a Vancouver-based organization that opposes the export of thermal coal from the port.

Port Authority Part of Coal Lobby, Also Responsible for Regulating

The transportation of coal has been critical to the port’s recent financial successes. In 2015, the port sent out 35 million tonnes of the stuff, compared to 25 million tonnes of grain, speciality crops and feed and 23 million tonnes of forest products — and that was a slow year on the coal front.

If the port authority was just serving as landlord, it would make sense for it to collaborate with coal lobby groups to push for increased exports and generate as much profit as possible for its owners.

But the port authority’s mandate also requires it to fulfill duties such as the “safety and security of all land and waters” and the “permitting of all projects proposed for the use of federal port land.” In a single word: regulating.

“They shouldn’t be doing both,” says Voters Taking Action Against Climate Change (VTACC) director Kevin Washbrook, who notes the port authority has approved every coal export project that’s come before it in recent years.

VTACC is one of four plaintiffs that have taken the port authority to court on allegations of bias and failing to consider climate change impacts when approving the permit for the Fraser Surrey Docks coal terminal.

A federal court is currently evaluating a request by Vancouver Fraser Port Authority and Fraser Surrey Docks to toss out the lawsuit filed against them.

“That’s really why we’re taking them to court: we think the public interest isn’t being met by this dual mandate,” Washbrook told DeSmog Canada.

Port Authority Covertly Sponsored Coal Conference in 2013

A series of disturbing revelations about the port authority’s intimate relationship with the coal industry came out in late 2013, courtesy of digging by Voters Taking Action Against Climate Change.

First came the news the port authority had been swapping e-mails with National Public Relations (a firm connected with the Coal Alliance that has lobbied the federal government on behalf of Fraser Surrey Docks). The Vancouver Sun described the exchange as seeming “as if they were allies, rather than as a public regulator and private proponent.”

In one instance, the two entities traded information on a VTACC protest, with the port authority directing media inquiries to Alan Fryer, a senior consultant for National Public Relations and lobbyist for the Coal Alliance.

A month later, it was revealed the port authority covered up its sponsorship of the 2013 Coal Association of Canada conference, including a $5,000 contribution and golf swag, because it was concerned about “press and public backlash.” The Vancouver Sun noted the Vancouver Fraser Port Authority had publicly sponsored the conference in 2012.

“They get it in the sense that it doesn’t look good,” Washbrook says. “Whether they think that it’s actually a bad thing: I’m not sure.”

Washbrook notes the port authority’s response to pressure for more regional involvement and transparency has been to launch a Twitter feed, YouTube channel and run some TV commercials. None of those PR products mention coal at all, he says.

Tangled Web of Business Relationships 

Williams of Communities and Coal suggests it may also be worth paying attention to some other business relationships that encircle Vancouver Fraser Port Authority and Fraser Surrey Docks.

In 2011, SNC-Lavalin, the embattled Montreal-based engineering services firm, bought a 23 per cent share in AltaLink (an electricity transmission company) from Macquarie Essential Assets Partnership .

The partnership is owned by a subsidiary of the Macquarie Group, a member of which owns Fraser Surrey Docks.

In 2013, Fraser Surrey Docks contracted SNC-Lavalin to prepare the environmental impact assessment, which was described by Vancity credit union as “entirely inadequate” and criticized by activists as being limited in scope.

Then, in 2014, SNC-Lavalin sold AltaLink to Warren Buffett’s Berkshire Hathaway, which owns BNSF Railway, the company transporting the coal to the Port of Vancouver. Both BNSF Railway and Fraser Surrey Docks are members of the Coal Alliance.

Williams emphasizes that a trail of prior business isn’t necessarily a problem. But given the port authority’s habit of getting a bit too cozy with private industry, it’s a trend that might be worth paying attention to in the future.

“[Vancouver Fraser Port Authority] should not have a say in the decision of whether or not to approve a project at the port,” she reiterates. “This should not happen. They should be removed from that. They can have an opinion and give their input, but they shouldn’t be part of the decision-making process.”

Citizens Push for More Input

Opposition to the way the port is doing business continues to build.

Washbrook notes that people in North Vancouver are fighting the proposed G3 grain terminal, while folks in Delta are concerned about the Roberts Bank Terminal 2 project. Meanwhile, people in Richmond worry about Agricultural Land Reserve property being bought up and the small leaseholders the port is “shaking down” for exorbitant increases in water lot lease rates.

All have common interests, he says: more regional inputs, more representation, a more transparent and open processes.

If the VTACC lawsuit doesn’t get derailed by the port authority and Fraser Surrey Docks, the verdict could help shape the future conversation. But ultimately, solving the issue seems to come back to the federal government and its power to amend the Canada Marine Act to redefine the mandate of port authorities.

“I think there are discussions happening in Ottawa right now about how to reform the ports,” Washbrook says. “The question will be about how much of that is an inside discussion that tweaks things, and how much of it brings about meaningful reform.”

Image: Jason Mrachina/Flickr.

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Isn’t it ironic? A little too ironic?

On the very same day the UN climate summit kicked off in Paris, Vancouver’s port authority approved a cost-saving amendment allowing for the proposed Fraser Surrey Docks terminal to export massive amounts of thermal coal to Southeast Asia on ships rather than barges. The irony hasn’t been lost on environmental activists.

“It was just such a stark contradiction in the timing around this most recent approval where the port authority is improving a new thermal coal port on day one of global climate talks,” says Laura Benson, Dogwood Initiative’s Beyond Coal campaign director. “One foot’s going backwards into the 19th century and one foot’s trying to move ahead into a brighter future where we can fight climate change.”

Fraser Surrey Docks, owned by a Macquarie Group-managed investment company, currently exports lumber, steel and containers. Since 2012, the company has pushed for permission to construct a new $50-million coal-loading terminal to export up to eight million tonnes of thermal coal — which is burned to generate electricity, unlike metallurgical coal which is required to smelt steel — to Asia from mines in Montana and Wyoming’s Powder River Basin.

A company update from late 2012 anticipated shipping would start in 2013. It hasn’t exactly turned out that way. The Vancouver Port Authority is now facing lawsuits from Voters Taking Action on Climate Change (VTACC) and the Musqueam Indian Band over an alleged failure to adequately consult.

“The port is both the landlord and the regulator,” says Kevin Washbrook, the director of VTACC. “They have an interest in seeing these projects go ahead. So there’s no public assurance this process isn’t biased in favour of the industry. Rather than going through the show of attending the open houses, we’ve been saying from the start the port needs to sit down with the public and talk about these concerns and engage local governments from the start.”

Coal prices have cratered in recent years, stymieing Fraser Surrey Docks' efforts to find a customer to buy into the barging scheme. The company's amended proposal allows it to also load coal directly onto ocean-going vessels, which doesn’t resolve concerns about climate change, traffic in the Fraser River or ramifications for air quality. “We can’t build these coal ports and avoid runaway climate change: it’s contrary to what we need to do," Washbrook says.

In late 2013, Port Metro Vancouver hired Edelman — a public relations firm that previously represented other pro-coal organizations — to help boost its image. Unfortunately, as Chinese coal imports declined and a global coal glut emerged, such appeals to economic arguments largely flopped. Benson notes the thermal coal market in the Pacific Rim is oversupplied and that companies are scaling back exports despite giant penalties. Potential environmental impacts such as increased air pollution, noise and greenhouse gas emissions have only added to concerns. The hiring of the hellishly controversial SNC Lavalin by the docks to conduct environmental assessments and Port Metro Vancouver’s decision to ignore calls for a full health impact assessment kind of capped it all off.

With all that said, Alan Fryer — spokesperson for the Coal Alliance, a lobbyist organization that petitions for British Columbia coal businesses, including the Fraser Surrey Docks — maintains optimism the industry will rebound given global demands for coal. He argues the Fraser Surrey Docks are a “flashpoint” triggered by an upswing in anti-coal activism in the United States’ Pacific Northwest, and that the industry provides tens of thousands of jobs and hundreds of millions in tax revenue.

“We’re a trading nation,” he says. “We are a port city. I don’t think we get to pick and choose, necessarily, the products that we export. It’s a tough time in the resource sector generally. I know a lot of people are hurting and have lost their jobs. I think anytime you have the opportunity to create even a few well-paid unionized jobs, that’s a good thing.”

Coal mining in the Powder River Basin.

In late November, Fryer sent congratulatory emails to 33 British Columbia-based MPs (including three cabinet ministers), providing background on the province’s coal industry and an invitation to get in touch if they wanted more information. The communications report in the federal lobbyist register initially appears startling given most lobbying efforts tend to include a half-dozen or so MPs at the most. Fryer notes the Coal Alliance “registered it out of an abundance of caution” even though it wasn’t sit-down House of Cards-esque lobbying. Kudos on that front. But Benson suggests the Coal Alliance has a “heavy influence” on decisions made by the port authority, so perhaps the communication wasn’t so innocuous (in September, Freyer also lobbied a dozen MPs on behalf of the Coal Alliance).

It’s as a result of such pressures that Washbrook calls for a fundamental reformation of how port authorities are governed. He suggests local communities — such as Surrey and New Westminster, which have both joined the lawsuit against the port authority as interveners — need to have a more significant voice in the consultation process and that ports should take into consideration a wider range of concerns, including climate impacts of the commodities they export. In mid-2013, University of British Columbia political science professor Kathryn Harrison noted that seven of the 11 members on the Port Metro Vancouver’s board of directors were appointed by the federal government based on suggestions from “Port User Group,” which includes coal organizations.

Fraser Surrey Docks still has to jump through a number of “permitting hoops,” in the words of Washbrook, most notably the acquisition of Metro Vancouver’s air quality permit. He suggests the project shouldn’t go ahead with construction until it receives such a permit given the impacts it could have on design, and that coal is “already dead and everyone knows it.”

Fryer acknowledges the world will eventually have to transition away from thermal coal to renewable forms of energy “but the reality is we’re not there yet and fossil fuels, including coal, are going to be a very important part of the energy mix for sometime.” The recent amendment won’t affect the court cases as it’s the original permit that’s being challenged.

While Benson suggests the port authority has clearly signalled it’s not going to address the concerns voiced by groups like Dogwood and VTACC, she expresses optimism: “We have more avenues now given the new federal government to have the voices of citizens heard. In terms of a citizens’ movement, we’re stronger than ever. So I’m very optimistic we’ll eventually find a way to either get the answers we deserve or just block this project from ever moving forward.”

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Coal, the fossil fuel that largely sparked the industrial revolution, may be facing the beginning of the end — at least in terms of generating electricity.

There are increasing signs of the demise of the world’s dirtiest fossil fuel, from a global oversupply to plummeting prices to China starting to clean up its polluted air.

Last week, the Carbon Tracker Initiative published an analysis — Carbon Supply Cost Curves: Evaluating Financial Risk to Coal Capital Expenditures — identifying major financial risks for investors in coal producers around the world.

Saying the demand for thermal coal in China, the world’s largest emitter of toxic greenhouse gases, could peak as early as 2016, the analysis also highlights $112 billion of future coal mine expansion and development that is excess to requirements under lower demand forecasts.

“In particular it shows that high cost new mines are not economic at today’s prices and are unlikely to generate returns for investors in the future,” said an accompanying media release.

“Companies most exposed to low coal demand are those developing new projects, focused on the export market . . . With new measures to cap coal use and restrict imports of low quality coal in China, it appears the tide is turning against the coal exporters.”

The analysis added that China’s desire to reduce imports will impact prices and asset values for export mines in the U.S., Australia, Indonesia and South Africa.

“King Coal is becoming King Canute, as the industry struggles to turn back the tide of reducing demand, falling prices and lower earnings,” Anthony Hobley, CEO of Carbon Tracker Initiative, said.

A recent article in Mining Weekly also says the coal industry is indeed facing tough times.

The article noted Coal Association of Canada president Ann Marie Hann agreed that about half of the global coal output at current pricing was being produced at a loss.

“Until a global rebalance between demand and supply takes place and the global economy rebounds, the coal industry will unfortunately probably see some more bad news over the coming months,” Hann said.

The story added that the prices for thermal coal, which is used to generate electricity, had fallen in recent years from about $190 per tonne in mid-2008 to $75 per tonne this year, while metallurgical coal (used to make steel) had dropped from a high of more than $300 per tonne in late 2011 to less than $120 per tonne.

To perhaps make matters worse for the coal industry, it is being publicly attacked by the oil and gas sectors, which are trying to position themselves as cleaner fossil fuels.

According to the Responding to Climate Change website, a number of the world’s leading oil and gas companies voiced their concerns about climate change at last week’s UN Climate Summit, arguing they can offer a future coal cannot.

“One of our most important contributions is producing natural gas and replacing coal in electricity production,” Helge Lund, Statoil’s chief executive, was quoted as saying.

Kevin Washbrook, a director for Voters Taking Action on Climate Change, a Vancouver organization that has fought against a proposed new coal export facility at Fraser Surrey Docks, agrees the thermal coal sector is in decline.

“I think coal is in everyone’s sights these days because coal is climate change,” Washbrook told DeSmogBlog. “Coal has to be on the chopping block for sure.”

Washbrook added the UN, the International Energy Agency, big banks and insurance companies are acknowledging that the vast majority of coal must stay in the ground if humankind is to avoid catastrophic, runaway climate change.

“We need to see this current downturn [in the thermal coal sector] for what it really is — our last good opportunity to leave coal behind and start the transition to emission-free energy sources.”

Photo Credit: Arnold Paul, Wikimedia Commons

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A new U.S. proposal to dramatically reduce carbon dioxide emissions from coal-fired power plants could result in more thermal coal being shipped to Asia through existing and planned port facilities in Metro Vancouver, people attending Port Metro Vancouver’s annual general meeting were told Tuesday.

“[President Barack] Obama’s administration is changing the game,” Steven Faraher-Amidon said during a question period.

Faraher-Amidon also told the meeting that five schools in Delta and Surrey are within 700 metres of the contentious Fraser Surrey Docks coal handling proposal while medical studies in the U.S. have found that living within five kilometres of coal dust and diesel particulates presents significant health risks. A former Port Metro Vancouver environmental impact assessment that looked at the Fraser Surrey Docks terminal was criticized for being limited in scope and failing to adequately address public health concerns.

The 64-year-old retired Surrey teacher added a proper health impact assessment needs to be done before the Fraser Surrey Docks coal facility — which could eventually handle eight million tonnes annually — can be approved.

Faraher-Amidon’s comments came a day after the Obama administration announced a plan that would result in a 30 per cent drop in coal-fired electricity plant emissions below 2005 levels by 2030. According to an Environmental Protection Agency media release, the reduced emissions will protect public health, move the U.S. toward a cleaner environment and fight climate change.

“Climate change, fueled by carbon pollution, supercharges risks to our health, our economy, and our way of life. EPA is delivering on a vital piece of President Obama’s Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source — power plants,” EPA Administrator Gina McCarthy was quoted as saying.

“By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids. We don’t have to choose between a healthy economy and a healthy environment — our action will sharpen America’s competitive edge, spur innovation, and create jobs.”

Location of Fraser Surrey Docks via Google Maps.

Responding to the EPA plan, the Metro Vancouver environmental group Voters Taking Action on Climate Change said Monday some analysts predict that the new rules will eventually lead to the closure of hundreds of coal-fired power plants in the U.S., leading to increased pressure to export American thermal coal from B.C. ports.

In a letter to B.C. Health Minister Terry Lake and the port authority, the United Fishermen and Allied Workers’ Union, Unifor, and the T. Buck Suzuki Environmental Foundation all called Monday for a full health impact assessment of the Fraser Surrey Docks coal export proposal.

Concerned about health and climate change implications from burning thermal coal, the B.C. Conference of the United Church of Canada has also asked the port authority to reject the Fraser Surrey Docks proposal.

Currently, no ports in California, Oregon and Washington export thermal coal.

Port Metro Vancouver says it treats materials for export as safely as possible. It also says it is up to the federal government to decide what materials are traded internationally.

In a later interview, Faraher-Amidon said it seems the port is ignoring the new U.S. plans and what they might mean for increased trainloads of thermal coal into B.C. for export to Asia. “We are a natural conduit for where they are going to bring the coal,” he said.

Image Credit: BNSF train by Contemplative Imaging via Flickr 

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