Helping Bring Alberta Oil to Market

Why we need to bring Alberta Oil to Market

I am 100% in favour of helping Alberta move its oil to market. BC is part of Canada and we cannot simply tell our neighbouring provinces that we object to their resources and so won't help them. At a high level, we must help them because:

1. Canada has people and natural resources, these are our greatest strengths. But we can't realize their value without a market for our resources and jobs for our people.  
   
2. Currently the USA is our greatest market. This is good as long as they remain strong, but if the USA fails, then, because we are tied to them, we will fall with them. They have not failed yet, so we think they never will. This is foolish. The US economy is showing signs of cracking and their debt has exceeded their GNP. Due to the size of their economy we have a number of years yet, but if they do not take steps to correct the problems they have, they will collapse.  In light of this, Canada MUST diversify now. We have time to do it but we don't have time to do nothing.  
   
3. BC is part of Canada. We cannot ignore the needs of the rest of the country without consequences. Even if we do have options to oppose pipelines through our province, what good would an inter-provincial economic conflict do for our nation? Many people think that because they are personally opposed to oil (even though they still use it every day) that they can hold our country hostage to their agenda. Maybe they can to some degree, but the result of that strategy will be to impoverish Canada and in so doing impoverish BC as well. Just as a rising tide will lift all boats, a falling tide will leave us all stranded on the reef.  
   
4. The only way to protect our environment is from a fiscally strong base.  As our economy weakens, our ability to manage our environment weakens. How many third world countries make environmental protection their top priority?  Environmental protection is a luxury of the rich. We need to protect our land and our sea but it must be done hand in hand with our economic growth. A move to limit our ability to grow our economy is ultimately a move to destroy our environmental protection.

How we proceed with environmentally sensitive projects

However, that does not mean that we should be in favour of a pipeline just because it promises prosperity. We must make sure that it is being done sensibly and with environmental protection in mind.  

• A large part of any assessment should be a review of the corporation that is proposing it. A good plan in the hands of a sloppy corporation equals a bad plan.   
  
• Also part of any assessment should be the route. The route should be selected so that the risk is minimized.   
  
• Also we need to evaluate past assessments. We have a moratorium on oil tanker traffic off the central and north coastline. We must evaluate the reasons why that was put in place and how the current plan mitigates those concerns.

I believe we must work with our counterparts to find the right way to move ahead rather than finding reasons to stop. But it must be the right way or else we will be forced to stop until something changes.

This is the fundamental difference between the BC Conservative position and the NDP position. The BC Conservatives are looking for how we can proceed and the NDP are looking for how we can stop.  The BC Liberal’s still have no position. For them the development is ‘take it or leave it’, whichever way the wind is blowing.

What we need to do in the specific instance of the Northern Gateway Pipeline

So, to move ahead, how should we work together to find the correct way to bring Alberta’s oil to market:

1)  We should have been involved in the environmental assessment process instead of deciding to only take intervener status. This was done so as to avoid taking a public stance but it meant that we had NO INPUT into the

• “Successful completion of the environmental review process.”
• putting in place of “World-leading marine oil spill response, prevention and recovery systems for B.C.'s coastline and ocean to manage and mitigate the risks and costs of heavy oil pipelines and shipments”
• putting in place of “World-leading practices for land oil spill prevention, response and recovery systems to manage and mitigate the risks and costs of heavy oil pipelines”
• process whereby “Legal requirements regarding Aboriginal and treaty rights are addressed, and First Nations are provided with the opportunities, information and resources necessary to participate in and benefit from a heavy-oil project”

We could have been involved but we sold out our rights on those 4 areas. 

2) Even as intervener we could have raised the issues. We should have done this before the Dec 22, 2011 deadline or before the Jan 2012 extended deadline.  But again, we sat on the sidelines and said nothing.

3) We should not have made the first 4 demands that are already being addressed in a process that we chose not to participate in. At this point we should go behind closed doors with our concerns on these 4 points and apologize for missing the deadlines and ask to be heard anyway. Let’s quit embarrassing ourselves on the national stage. I believe we could get the rules bent if we tried and still be allowed to be involved in a meaningful way in the ongoing process that to date we have snubbed.

4) Early on, we should have engaged the parties involved, (Enbridge, Alberta, Ottawa) to negotiate benefits for BC like; Sharing the right-of-way; training British Columbians; export taxes; maybe even refining in BC, etc. We should have known what we wanted and collaborated to ensure

• “British Columbia receives a fair share of the fiscal and economic benefits of a proposed heavy oil project that reflects the level, degree and nature of the risk borne by the province, the environment and taxpayers.”

We are off to a very bad start but we can still engage in a collaborative discussion on this one.

5) We should not however, pick a fight with Alberta over royalties to pretend to achieve the 5^th demand!   This position has dubious legal ground to stand on. It appears to have only been done once, in 1969 when Quebec put the screws to Newfoundland and Labrador over their Hydro project. That only worked because Ottawa looked the other way when they could have stopped Quebec.

The BC Liberal position was NOT taken to get BC its fair share. It was done solely to provoke a fight so that the BC premier could be seen as championing the rights of British Columbians. We should stop the games and back out of that as gracefully as possible. Then engage in some real negotiations.

MLAs and Community Development

Some people in Salmon Arm have asked me to comment on the situation of the Smart Center coming to Salmon Arm and I believe my attempts to clarify my position have not been completely successful. I have decided to lay out what I see as the process. This involves many aspects and levels of government and what I believe my role would be at each step, if I were your MLA. I will go through the process in general but use the Salmon Arm Smart Center as my example.

I am pro business and development in general, but when an opportunity for new business presents itself to a community, I see 3 stages that must be gone through before it can become a reality.

1. Democratic Decision:
   

   Does the plan fit into the vision that the community has for itself? I affirm the community's right to self determination and would govern my actions with that foremost in mind.
2. Regulatory Approval:
   

   Does the plan conform to all social regulations? I support the regulatory process to ensure that business is conducted in a responsible manner.
3. Legal Challenge
   

   Does the plan negatively impact anyone who would contest it in court? I support the right of any individual or group to bring their case to court.

In general, at each of these stages, I would comport myself the following ways:

1) Democratic Decision:

In order to affirm the community's right to self determination, as an MLA I would not insert myself into a community's decision making process and indeed I believe that even if I live in that community, as I do in Salmon Arm, it would be wrong to use my provincial influence to attempt to direct the outcome of a community visioning process. I am pro business and will seek to bring business opportunities to the Shuswap but I would do so in accordance with the local community plans. If, as an MLA, I was able to encourage a specific business to come to a community in my riding, I would facilitate talks with the local government there to present the opportunity. I would then back out of the process until the community had decided if they wanted it or not.  This is primarily why I have not given my opinion on the Smart Center, because I affirm the community's right to self determination.

There are a number of ways that we elicit input to the democratic process including public hearings, referendums and elections. In the Smart Center case, we did have a long set of hearings and we did have an election where the community voted for leaders that were clear on what they would do in this regard. The result is that the city of Salmon Arm has approved the Smart Center plan as fitting into the vision for the city. I support this decision 100% as a democratically arrived at local vision.

This brings us to the regulatory stage.

2) Regulatory Approval:

In this stage, I would support the regulatory process to ensure that business is conducted in a responsible manner. The plan is looked at to determine if it meets the broader regulations that we as a society have chosen to adhere to. This includes zoning, safety, environment, etc. and will likely hit on municipal, provincial and federal jurisdictions.

Regulations and assessments are a 2-way contract. They are a contract with the people of British Columbia that the government will manage their land responsibly. But they are also a contract with the businesses seeking to work here. They promise that if a business meets the standards then they will be allowed to operate within our province. If we do not honour this then no company would invest in BC. Why would they spend millions to meet our codes only to be told that the public doesn't like it so they can't continue. The average business spends 15% of the start up costs to get to the green light. That is a lot of money to risk without a concrete goal line. However, if the plan does not meet regulations, then it cannot continue until it is adjusted to do so, period.

As an MLA, I would work to ensure that the process was allowed to proceed without being unduly delayed and without unfair interference from either side to skew its outcome (both sides may have input but without interference). And I would uphold the outcome of a fair process, whatever decision was made. This is also why I would not give an opinion. I support the process and the decision it comes to.  I would be more than happy to help in any way possible to find solutions, if a proposed plan could not met the regulations (i.e. find ways to adjust the plan, not ways to adjust the regulation), but in general, the process should be allowed to run its course.

In the case of the Smart Center, the process worked fairly smoothly. All assessment permissions, permits and zoning have been given with the only thing outstanding being a permit with the ministry of transportation for the design of the off ramp. I support this outcome 100% as showing that the Smart Center Plan is compliant with the regulations in our community, province and country and should therefore be allowed to move to the next stage.

3) Legal Challenge:

In order to support of the right of any individual or group to bring their case to court, once a plan is in place and the regulations have been met, I would not stand in the way of any legal action.  Individuals or groups that believe that the proposal will negatively impact them in some way have a right to seek legal recourse. If there was an opportunity to negotiate an out-of-court settlement of any issues, I would aid that any way I could, but if that is not forthcoming, I would wait on the legal process to run its course and uphold its ruling.

This kind of action generally arises near the end of the regulatory process because it is not relevant if the project is re-directed during that process. As frustrating as this is in the delays and costs that it entails, we are a people that govern ourselves by the rule of law and that is more important than any given business opportunity.

As an MLA, again, I would not insert myself into a legal case once it has begun, though if I had relevant information and was called on to participate I would do so within those limits. It is up to the courts to listen to the evidence and decide what the correct outcome should be. A legal challenge may be used by those who do not like the decision made in the regulatory stage. They may argue, for example, that the environment will indeed be damaged. That is their right, although they would have to prove that there was some reason to disbelieve the results of the assessment process. 

Currently, the Smart Center is in this stage and as an MLA I would not interfere with the due process of law. If the courts uphold the findings to date, I will be among the first to welcome the Smart Center to Salmon Arm. If the courts find that the Neskonlith band has or will suffer harm, then I hope, as I would for all such cases, that a workable solution can be arrived at. I trust that the Smart Center, which the City of Salmon Arm has said they want and the Regulatory process has affirmed, will be able to move forward soon, in a way that upholds the final decision that the courts will make.

Summary

I believe that the principles I have outlined here are integral to how an MLA should comport themselve and I will strive to act in this way on behalf of the people of the Shuswap.

• Affirming  the communities self determination without influencing the direction it takes.
• Upholding our regulatory process for the protection of our land and the encouragement of investment and development.
• Upholding our legal system and courts so that all people have access to justice.

Why I still care about the BC Rail Scandal

Just before all the details of the BC Rail sale were about to come out, the 2 men on trail changed their pleas to guilty and 6 million dollars were illegally paid to cover their costs, they were given house arrest rather than hard jail time and put under a gag order to not say anything ever about what happened.  Since then, enormous effort and additional money has been expended by the government to keep all the details buried. 

I think a 10 year old can figure out the plot here. If there is nothing to hide then you don’t waste effort hiding things.  Anybody who cares to look at this knows that it stinks. If Christy Clark and other Liberal leaders are not guilty, then who are they protecting? The only thing we don’t know for sure is the details and who is being protected?

I have talked with a few dozen people about this and I have only heard 2 opinions. Most of the time, I hear that we must have an inquiry, get the details and move on. Sometimes however, I talk with people who say there is no sense because all politicians and parties are corrupt and we just have to accept it.  I have never met anyone who thinks there is nothing to hide.

This resignation to accept that our government cannot be held to account is why I believe we MUST have an inquiry. This is not a vendetta against any person or persons involved. It is much more important than that. An inquiry is required to restore voter confidence in our democracy and public process.

Clean Liquefied Natural Gas (LNG)

In my May 10, 2012 blog I noted that I didn’t think the LNG goals being touted by the BC Liberals were realistic. Although I didn’t go into all my reasons, I note in general that we are not ready to expand quickly enough to achieve what is being presented. Primarily, we do not have the infrastructure in place, nor has the government presented any plan for how we would create that infrastructure. 

It comes as no surprise to me that we now have an announcement that Natural Gas is being redefined to be clean energy. Our BC Clean Energy Act requires 93% of our energy to be clean.

There was no way we could power the LNG plants from our existing grid. For them to work, they must be self sufficient by creating the vast amount of electricity they require from a portion of the natural gas they are buying. This would not be legal under the existing Clean Energy Act unless the natural gas they use was exempted from the Act. To do that, it must be determined to be a clean source.  So we are creating a new category. Basically, dirty energy is clean if it will replace even dirtier energy.  

I believe this must have been the plan since the beginning as I don’t want to believe that the governance of our province is in the hands of people who didn’t think about how to power a plant before deciding to build a set of them.

I am not opposed to the logic of the change. If we really are enabling China or Japan to stop burning wood and coal and use LNG then we should be able to justify LNG as a transitional energy source. I am completely in favour of finding ways to make smooth transitions to cleaner energy.  However, I would argue that the way this is being done is not above board. If we truly want to use that logic, we should re-examine the Clean Energy Act and correct it so that we have a clear definition of transitional energy and how we will measure it.  We don’t need more slight-of-hand politics to avoid thought-through, debated legislation.

And while we are thinking about the infrastructure needed for the LNG industry we are being promised, have we really considered how we will deal with the growth in other areas. The BC Liberals are promising 1 million new jobs with six or seven hundred thousand immigrant families to help staff them. In her heart, Christy Clark would see our province grow around 25% in a decade. What about housing, police, schools (including significantly more assistance for non-English speaking students and ESL for adult students), hospitals, roads.  Is there a plan to manage the growth or not? Or will it just come out when the government thinks the public needs to know?

Supporting the right team

Although we in the Shuswap had hoped to be able to select our riding's candidate before summer, we have been asked to wait until the fall. For me, this was somewhat disappointing initially but I am actually very glad that the BC Conservative party it taking this stance.

We are moving carefully so that before any candidates are selected, we will have the support in place to help them in their approach to their campaign. Our party values the grass roots and independence of our candidates. We are the only party in BC that insists that our MLAs must put their riding constituents first before the party. But that doesn't mean that we don't share a common focus and are not working together to improve the life of British Columbians. Having our party organized to support us is exactly what we will need as we move toward the provincial elections next May.

I am glad to see that our party and its leader, John Cummins, has the good sense move at a pace that will best prepare us all and protect us. The calibre of the men and women coming forward to run for candidacy is exceptional and we will be fielding an excellent team into the next election for BC.

Liquified Natural Gas in BC

The scene is the Dragon's Den and a new prospect has just walked in.

Hello Dragon's, I am Christy Clark, the leader of the British Columbia Liberal government and I am looking for a $50 billion dollar investment for a 15% share in the BC Liquefied Natural Gas industry (LNG)

The questions start:

Dragons: That is a $600 Billion valuation of your product.  Do you have a plant or any sales?
CC: Why yes we do. We have a plant at Kitamat that is ready to start production in 2015. We have some purchase agreements and should be ready for 5 mmtpa (million metric tonnes per annum)

Dragons: LNG worldwide sells about 300 mmtpa (or $200 Billion) and is anticipated to grow by another 200 mmtpa (or $135 Billion) by 2020. What percentage of that new growth do you expect to capture?
CC: We are ready to capture 15% or $20 Billion a year, with 30 year agreements to make up the $600 Billion valuation.

Dragons: Currently you appear to be on track to only capture 1/6th of that with your Kitamat plant. And $20 Billion/year is more than your entire oil and gas industry currently produces. How do you intend to increase production to the point where you will be able to take 15% of the growth in the market from the existing players who are also vying for the same industry increases?
CC: That is where your $50 Billion comes in. We need to double the size of the Kitamat plant and built at least 2 or 3 other plants.  Of course we only need $7 or $8 Billion up front and then the rest as the gas purchase agreements are signed.

Dragons: So you need $7-8 Billion to do the ground work in order to make the sales so that you can expand this industry to a size larger than you entire oil and gas industry to date and do it all quickly enough to capture 1/6th of the new growth in an industry where the other producers have been working for decades and have close ties with all the clients you are hoping to sign up?
CC: Yes, I am confident because I believe in jobs and this will make thousands of jobs.  It is a staggering number but we can do it if my government is given another term.

Dragons: This is a great opportunity that needs to be aggressively pursued but your valuation is at least 5 times over inflated, so I am out.

The numbers that Christy Clark is glibly throwing around ($600 Billion over 30 years) represent 10% of our province's GDP. Those numbers apear to be for re-election consumption only. This is a growing industry to be sure but we are late adopters. If we can capture 5% of the growth in this industry we would be doing exceedingly well and would likely be at the highest capacity that the Kitamat plant can be expanded to handle. (10 mmtpa). That would be only $6-7 Billion/year or $200 Billion/30 years. Even this would be an enormous goal.

I am not saying that we shouldn't strive for this and more, I am just saying that the numbers don't appear realistic and I would like to see the plan to reach them. Otherwise, this is just massive exaggeration to sell a government that is in desperate need of some good news. I know I wouldn't want my performance evaluation to be tied to hitting those targets.

short list of sources reviewed to find the math behind the promises:
http://www.vancouversun.com/news/Clark+embarks+second+trade+mission/6595365/story.html
http://www.kitimatlngfacility.com/
http://en.wikipedia.org/wiki/Liquefied_natural_gas
http://www.bcstats.gov.bc.ca/Files/5fba2481-01e9-4579-83d3-6b6c6c1c15c8/BCGDPbyIndustryCurrentDollars.xlsx
http://armiesofliberation.com/archives/2010/06/19/yemen-natural-gas-sold-at-one-third-of-market-price-193ton-vs-689ton/

Success of Nazinga Game Reserve

The Nazinga Game Reserve is just south of Ouagadougou, where I worked in Burkina Faso, West Africa. It was founded by 2 Canadian brothers, Clark and Robert Lungren. They believed that when human prosperity is generated through sustainable management of natural resources, both people and environments win.

The wildlife in the area had been decimated by poaching and drought. So they built dams to maintain the water supply and roads to access the area. Then they hired the best poachers as game wardens. Even before the herds began to recover, they started culling them and selling the meat in the local markets.

By providing jobs to the local villagers and allowing hunting, they got the cooperation of the local municipalities and with the large amount of meat becoming available at reasonable rates in the markets they effectively put the rest of the poachers out of business.

Although they took a lot of criticism for the dams, roads and culling of the herds (including elephants), this is what allowed them to manage the resources and make them profitable. The result was that within 10 years the herds had increased ten fold including 800 elephants and 5000 warthogs. The local communities also benefited and the children were healthier due to the better meat supplies and reduced poverty.

The success of the Nazinga Game Reserve demonstrates that if we want to preserve our natural resources, the best way is to develop them. When they are profitable, they can be protected. If they are not profitable, they will be neglected.

The BC Conservative Party believes in managing our natural resources through environmentally sensible development. This will provide jobs for British Columbians, taxes to support our social structure and value that will allow our natural resources to be protected in perpetuity.