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Russ Francis

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  1. Pensions of BC teachers, public servants, and municipal workers include huge fossilized investments. IN THE BAD OLD DAYS, those wanting to earn a reasonable return in the stock market might have been well-advised to look for what amounted to climate-hostile companies. Sure, there were “ethical investors” who may have had little more than feelings of moral superiority to show for putting their money into the likes of renewable energy producers or makers of vegan bicycles. But many investors were reliably collecting vast payouts from big frackers, tar sands developers, and pipeline companies. That’s where the money was. That was then. These days, financial heavyweights ranging from outgoing Bank of England Governor Mark Carney, the International Monetary Fund (IMF), and the European Union have a warning: firms that do not properly account for and reduce their GHG emissions are headed for financial trouble. The IMF is by definition a conservative organization: its primary mission is to ensure the stability of the international monetary system. But its last World Economic Outlook update, issued in January 2020—the hottest January on record—warned of financial risks posed by the climate crisis, as a result of greater frequency and intensity of weather-related disasters like tropical storms, floods, heatwaves, and wildfires. “Climate change…already endangers health and economic outcomes, and not only in the directly affected areas,” says the report. “It could pose challenges to other areas that may not yet feel the direct effects, including by contributing to cross-border migration or financial stress (for instance, in the insurance sector).” Mark Carney Among internationally recognized financial experts, few have stronger establishment pedigrees than Carney. A 13-year veteran of Goldman Sachs—one of the world’s largest investment bankers—in 2008 he began a five-year stint as governor of the Bank of Canada. Currently, Carney is playing the same role at the Bank of England until March 15, when he becomes the United Nations special envoy on climate change. “[A]ll financial decisions need to take into account the risks from climate change and the opportunities from the transition to a net zero economy,” he said in a January Bank of England statement. Carney warns that it’s not just the fossil fuel industry itself that will be hit hard by the climate crisis: those investing in them should also prepare for losses. Calling the climate crisis a “tragedy on the horizon” in a December 30, 2019 BBC interview, Carney warned pension funds that their fossil investments could eventually become worthless. Carney’s admonitions—which he has been espousing since 2015—may be prescient. The Boston Consulting Group reported this past December that from 2014 through 2018, the oil and gas sector had the worst total return of all 33 industries it tracks. (Total return is the sum of capital gains and dividends.) Despite this, British Columbia Investment Management Corporation (BCI) retains significant investments in fossil fuels. BCI manages the pensions of 598,000 British Columbians, including school and college teachers, BC public servants, municipal staff, and some BC Hydro employees. With managed assets worth $153.4 billion, BCI is one of Canada’s largest institutional investors. (All figures refer to March 31, 2019.) Of those assets, 40.5 percent are in the stock market. The corporation does not break down its share holdings by industry; however, a quick glance at its investment inventory shows that BCI does not discriminate against fossil fuel companies. According to an October 2019 report by the Colorado-based Climate Accountability Institute, 20 fossil fuel companies were responsible for 480 billion tonnes of CO2-equivalent emissions in the modern period of 1965 to 2017. This amounts to 35 percent of total global emissions in that time. Of the 20 companies, 8 are investor-owned and traded on stock markets. (The other 12 are owned by various governments.) BCI has investments totalling $690.14 million in 7 of those 8 investor-owned fossil fuel firms. As another example of its do-not-discriminate-on-the-grounds-of-emissions policy, BCI is invested in all five LNG Canada partners: Royal Dutch Shell ($219.17 million), Mitsubishi ($59.57 million), Petronas ($5.97 million), PetroChina ($34.31 million) and Korea Gas ($0.68 million). It also holds shares in the two companies that are building LNG Canada’s Kitimat facility, Fluor ($6.51 million) and JGC ($0.56 million.) Asked about the fossil-fuel investments, BCI spokesperson Ben O’Hara-Byrne said in an email that the corporation is part of the Climate Action 100+ plan, which works with more than 450 other investors to convince companies to reduce their greenhouse gas (GHG) emissions. “BCI invests in companies and sectors that generate reliable returns—this includes the oil and gas industry, a significant part of the Canadian and global economy,” O’Hara-Byrne said. Divestment is the wrong approach, he added: “We believe divestment eliminates our rights as a shareholder to engage with management and raise awareness of long-term risks and encourage change of practices.” In the last few days of that hottest-ever January, UVic’s board of governors voted to adopt a similar approach for its $225 million short-term investment fund. The university’s investments will move slowly away from fossil fuels, even withdrawing from some, but will not eliminate them, according to a January 28 statement. Instead it will engage with those companies to “encourage” a reduction in carbon emissions of 45 percent by 2030. James Rowe, who teaches in UVic’s environmental studies department, calls this attitude a copout. In an email, Rowe said that oil, gas and coal are high-risk investments. “As energy generation shifts away from fossil fuels, investors who do not respond could be left with stranded assets—investments that are no longer profitable,” Rowe said. “Shareholder engagement with fossil fuel companies in the context of a climate emergency is our Neville Chamberlain moment; it’s a form of appeasement that makes us feel like we’ve addressed the problem, while the threat only grows more severe.” (On September 30, 1938, British Prime Minister Neville Chamberlain boasted that he had signed an agreement with Hitler for “peace for our time.” Eleven months later, the Nazis invaded Poland, leading to the Second World War.) James Rowe Rowe added that for non-fuel industries, engaging companies might help reduce emissions, but for fossil fuel firms, that approach will not work if we are to keep global heating below 1.5 degrees Celsius, as required under the Paris Agreement. “To avoid blowing past our carbon budget, fossil fuel companies need to keep significant amounts of their reserves in the ground, and no company will willingly strand their own assets.” In December, the UVic faculty association voted to support the university withdrawing entirely from fossil fuel stocks. In doing so, it joined a worldwide trend. A growing number of central banks, investment companies, and governments are casting a skeptical eye at fossil fuel investments, often due in part to outside pressure. But their financial risks are also an accelerating worry. In June 2019, Norway’s parliament voted unanimously to order its $1.5 trillion sovereign wealth fund—ironically consisting of income from petroleum—to sell off its $10.6 billion investment in 134 oil and gas exploration firms, though it will retain its holdings in companies such as BP and Shell, which have renewable energy divisions. Last November, Riksbank, Sweden’s central bank, said it had sold off its Alberta government bonds because that province’s GHG emissions were too high. The same month, the European Union’s financing department, the European Investment Bank, said it would stop funding oil, gas, and coal projects by the end of 2021. In December 2019, Carney’s alma mater, Goldman Sachs, announced it would not finance new oil projects in the Arctic. And in January this year, the world’s largest asset manager took its first steps towards decarbonizing the $2.4 trillion it holds in actively-managed portfolios. BlackRock chairman Larry Fink told chief executive officers in a letter that climate change is now a defining factor in companies’ long-term prospects. “[W]e are on the edge of a fundamental reshaping of finance,” Fink said in the letter. To begin, BlackRock will divest all its holdings in thermal coal, due to its high sustainability-related risk. Despite Fink’s inspiring words, the change may not have been entirely altruistic. According to an August 2019 report by the Ohio-based Institute for Energy Economics and Financial Analysis, BlackRock lost an estimated $120 billion over the previous decade, most of it resulting from its investments in just four companies: Royal Dutch Shell, ExxonMobil, BP, and Chevron. To be sure, there may be some fossil fuel stocks continuing to provide strong returns in the short term. But these days, it is a lot easier to be ethical about where to invest and still make good returns. In always-reliable hindsight, there is a way one could have made money from LNG. On October 1, 2018, when LNG Canada awarded Texas-based multinational Fluor Corp the contract to build its Kitimat plant (along with its Japanese partner JGC), its shares traded at $77.95, when converted to 2020 Canadian dollars. A little over a year later, on December 9, 2019, they closed at $21.41—a 73 percent drop. In early February, the stock rebounded slightly, trading in the $25 to $27 range. This hints at how the BC government might have been able to recoup its $6 billion-and-counting donation to LNG Canada: by short-selling, say, $9 billion worth of Fluor; even after borrowing and transaction costs, the government could have picked up enough to cover its multi-billion LNG giveaway gamble. Short-sellers could have made even more money had they waited till February 18, 2020, when the company announced that the US Securities and Exchange Commission (SEC) is investigating Fluor’s past accounting and reporting. By late morning Victoria time, Fluor’s shares were trading heavily at $19.31. This amounts to a 75 percent drop from October 1, 2018. Who says you can’t make money from fossil fuels? Russ Francis is increasingly convinced that there is more wisdom in the Wet’suwet’en hereditary chiefs than in all the BC Liberal and NDP MLAs put together.
  2. While political leaders exude enthusiasm, some large firms involved seem to be looking for the exits. TO HEAR OUR POLITICAL LEADERS TELL IT, liquefied natural gas (LNG) is the solution to all that ails us. For instance, in December 2019 federal Finance Minister Bill Morneau called Canadian LNG a “very positive opportunity.” Premier John Horgan promises $23 billion in new government revenue from the LNG Canada project, where construction is underway on the shores of Douglas Channel, south of Kitimat. Several other LNG projects are in the wings. By far the largest of these is Kitimat LNG, projected for Bish Cove, also on the Douglas Channel, not far from the LNG Canada site. Continuing the tradition of zero Canadian content, Kitimat LNG is a partnership between wholly-owned subsidiaries of California-based Chevron and Australia’s Woodside Energy. The plant would be supplied with fracked fossil gas via the proposed 471-kilometre Pacific Trail Pipeline. While there has yet to be a final go-ahead, things have been churning along. Artist's rendering of proposed Kitimat Lng facility that would be located at Bish Cove. (Image by Chevron) The BC Oil and Gas Commission has issued Kitimat LNG 26 permits for roads, water and site use. The plant site is on Haisla Nation Reserve Land, and Kitimat LNG has signed a benefits agreement with the Haisla Nation. It also has an agreement with 16 First Nations along the route of the pipeline, via the First Nations Limited Partnership (though the Unist’ot’en are still protesting it running through their territory). Construction is due to start in 2022/23. Kitimat LNG’s ambitions are growing. On April 1, 2019, it asked the National Energy Board to approve boosting production from the originally planned 10 million tonnes per annum (MTPA) of LNG to 18 MTPA, and to double the term of its export licence from 20 years to 40, starting when the plant expects to begin operations in 2029. In a December 4, 2019 letter, the National Energy Regulator (which has superseded the National Energy Board) granted the increases. This would make Kitimat LNG nearly as big a player as LNG Canada, which plans on exporting 14 MTPA to start, expected to double to 28 MTPA. Despite the project’s apparent progress, both partners now appear to have cold feet. Woodside Chief Executive Officer Peter Coleman announced he wanted to reduce the company’s 50 percent stake in Kitimat LNG “from a capital management and risk management point of view,” according to a September 11, 2019 report in LNG World News. That’s corporate-speak for: “This costs too much and is too risky.” The other partner is Chevron, one of the world’s largest fossil fuel companies, with 2018 sales of $159 billion US. Less than a week after the National Energy Regulator approval, Chevron announced that it, too, wants out of Kitimat LNG. And—unlike Woodside—it is hoping to unload its entire 50 percent holding. Why? Said Chevron Chief Executive Officer Michael Wirth in a December 10, 2019 statement: “We are positioning Chevron to win in any environment by ratably investing in the highest return, lowest risk projects in our portfolio.” So now both owners of Kitimat LNG believe it is too expensive and too risky compared with other projects. Not helping prospects is the fact that Chevron had previously committed to not only build, but also operate the Bish Cove facility. THE PENDING DEPARTURES of these corporate players are in spite of the BC government’s giveaways to the liquefied fossil fuel companies, including tax cuts and reduced hydro rates. And let’s not forget the royalty credits, which provide huge discounts to the payments that companies make for taking Crown-owned oil and gas. For reasons unknown, until now there has been no way to discover which companies get how much in credits. Even a recent report from the International Institute for Sustainable Development (IISD) could only provide totals—$830 million for all fossil fuel production in 2017-18, with “at least CAD 2.6 billion to 3.1 billion in outstanding royalty credits from fossil fuel producers…[E]ach year, fossil fuel producers claim millions of dollars in credits to reduce the amounts of royalties they pay…These billions in outstanding credits is money that fossil fuel producers will not have to pay in future years and that BC’s citizens will not see put toward social services.” The IISD report, Locked In and Losing Out, says such subsidies are undermining BC’s efforts on climate change. Besides phasing out fossil fuels, it recommends “BC should publicly release all data related to government spending on fossil fuel subsidies each year since currently very little data is available.” Thanks to a two-year battle by Ben Parfitt, resource policy analyst with the Canadian Centre for Policy Alternatives, we now have at least some of that information. After the government rejected his Freedom of Information requests for the data, he filed a number of requests for review with the Office of the Information and Privacy Commissioner, ultimately succeeding. Commenting on the government’s initial refusals, Parfitt said: “To refuse to release information on oil and gas royalty credits is troubling.” Having finally received the deep-well credit royalty data, Parfitt shared it with Focus. These credits earned Woodside Energy and Chevron $3.2 million in the 2016 to 2018 period. The amount handed to all companies in that period totalled $2.1 billion. And while Parfitt was successful in obtaining the data on royalty credits, in December, 2019 he was still trying to learn the amounts that fracked-gas producers actually did pay after the credits were deducted. The government’s usual practice is to publish details of all financial spending and revenue. Royalty credits, like other tax credits, are a type of public spending, known as “tax expenditures.” The data Parfitt obtained shows that when it comes to royalty credits, LNG Canada has handily outdone its would-be competitor down the channel. From 2016 to 2018, the consortium’s five partners and their wholly-owned subsidiaries collected $266.5 million from taxpayers in deep-well royalty credits. A further $167.3 million was shared by Encana, Cutbank Dawson Gas Resources Ltd—wholly owned by LNG Canada partner Mitsubishi—and other unspecified companies. Then there are two infrastructure royalty credit programs, which earned LNG Canada partners Petronas and Shell (and their subsidiaries) more credits worth $23.9 million in 2016- 2018. Plus a further $27.5 million to Mitsubishi’s partly-owned Cutbank. A further handout to entice liquefied, fracked gas comes in the form of carbon tax rebates. A November 7, 2019 cabinet order brings LNG under the government’s CleanBC industrial incentive program. It ensures that producers of LNG will likely never pay more than $30 per tonne in carbon tax, which, for the rest of us, is now at $40 and due to stop increasing at $50 in 2021. Sonia Furstenau, the BC Green house leader, said in an interview that this is an abuse of the industrial incentive program, which was meant to help large, established GHG polluters reduce their emissions. “It was never intended to provide incentives to new fossil fuel industries,” she said. “It’s Orwellian to apply it in this way.” BC Green Party House Leader Sonia Furstenau During the last Question Period before the legislature rose on November 28, a determined Furstenau wanted details of the refunds. In response, Minister of Environment and Climate Change George Heyman confirmed that all present and future qualifying LNG players are eligible for the program, in perpetuity. What is the cost of this additional subsidy? To use government figures, once LNG Canada is up and running with all four trains (production units), the facility alone will emit 4.2 megatonnes (Mt) of GHGs each year. By that time, with the carbon tax at $50 per tonne, LNG Canada’s rebates will cost taxpayers 4.2 million x ($50 minus $30) = $84 million annually. Even $50 is far too low, according to a November 27, 2019 report from Canada’s Ecofiscal Commission. Rather, it needs to be at least $210 if we are to meet the 2030 Paris targets. At $210, BC’s carbon tax refunds to LNG Canada would amount to $180 per tonne, for a total of $756 million annually. Even that is peanuts to the company, but it’s on top of the growing list of other subsidies. The carbon tax refund program is subject to several conditions, including the facilities in question meeting emissions “benchmarks,” according to a detailed response to questions asked of the Environment and Climate Change Strategy Ministry. If it’s any comfort to taxpayers, the rebate program ends if the world carbon tax ever reaches the BC price. As of Focus’s deadline, there were no takers to buy Chevron and Woodside out of Kitimat LNG. What about the Province? That’s not likely, as BC’s finances are no longer in such great shape. On September 27, 2019 Finance Minister Carole James called on the public service to cut $300 million, and the Insurance Corporation of BC may stick us with an additional $400 million charge in the 2019/20 fiscal year. Why not ask the feds? After all, in 2018 they coughed up $4.4 billion for Kinder Morgan, netting Kinder Morgan Canada—which is approximately 70 percent owned by Texas-based Kinder Morgan—a $2.7 billion profit. A Canadian government purchase of Kitimat LNG might even soothe some of Alberta’s hostility towards the rest of us. What’s to lose—besides the end of life as we know it? Russ Francis taught sessions for more than a decade at UVic’s Environmental Law Centre.
  3. Some elephants in the LNG-room. DOUBTLESS INSPIRED BY GRETA THUNBERG'S electrifying September 23 United Nations speech, Premier John Horgan sprung into action. Before you could say “Climate crisis? What climate crisis?” on October 3, a mere 11 days later, the premier left the country. In Seattle, Horgan and Washington Governor Jay Inslee announced—wait for it!—a “Clean Grid” summit in 2020. No time, date or place mentioned. In case some ill-mannered cynics questioned the value of the October meeting, the pair also “reaffirmed” their commitment to collaborate on the economy, environmental protection, and transportation. It’s a little like a long-married couple reaffirming their marriage vows: A pleasant gesture, but having no legal or practical impact whatsoever. BC Premier John Horgan chats with Washington Governor Jay Inslee The meeting was billed as part of the Pacific Coast Collaborative (PCC), an initiative launched in 2008 under Premier Gordon Campbell, linking BC with Washington State, Oregon and California—along with the cities of San Francisco, Seattle, Los Angeles, Portland, Oakland and Vancouver. The goal is to work together on the climate crisis. Besides some cute graphics of electric cars and wind turbines, PCC’s website currently boasts that since 2008, the region’s greenhouse gas (GHG) emissions have fallen by 6 percent. While that’s better than two kicks in the bum, it’s hardly enough to start fixing the planet by the Intergovernmental Panel on Climate Change’s deadline of the end of 2020. But that decrease is for the entire region. And guess what happened to BC’s emissions in the same period? According to the most recent GHG inventory, our emissions have recently been growing. In fact, though they did drop marginally over the nine-year period from 2008 to 2017, BC’s 2017 GHG emissions, at 64.5 megatonnes (Mt) of CO2 equivalent, were higher than in any year since that baseline year of 2008. BC spewed out 4.3 percent more GHGs in 2017 than in 2009, our carbon tax notwithstanding. Meanwhile, California and Oregon managed to cut their 2017 emissions by 13.0 percent and 5.5 percent respectively from 2008. (Washington has yet to report its 2016 or 2017 GHGs, though, like BC’s, they grew in recent years.) No wonder BC loves the PCC: Thanks mostly to California, the region’s overall emissions are headed in the right direction. BC, meanwhile, is that nasty cousin the others wish would fall into line or disappear. The PCC’s US members are going to have to do even better in the near future if they are to counter the highly toxic levels of GHGs that will result from LNG Canada’s operations, estimated to begin in 2025. For example, at the October meeting, Inslee and Horgan each trotted out what they’d been up to recently. In Horgan’s case, it was CleanBC, the December 2018 plan to reduce BC’s GHG emissions. Even if fully implemented as proposed, CleanBC would reduce the province’s annual emissions by a mere 18.9 Mt, with an additional 6.5 Mt reduction yet to come via unspecified methods. Using the BC government’s own figures, GHG emissions from the plant alone will be 4.2 Mt, annually. Then there are the so-called upstream and midstream emissions, amounting to 2.7 Mt, for a total of 6.9 Mt of GHG emissions annually in BC as a result of LNG Canada. So to reach CleanBC's goals, BC will have to find an additional 13.4 Mt per year of GHG reductions from unknown sources, rather than just 6.5 Mt. Not an easy task, given that the province's emissions have been trending upwards. And these BC government estimates have been widely criticized as being far too low. Governor Inslee parts ways with Horgan in several notable respects. For one, Washington has legislated a state-wide ban on fracking for oil and gas—the method currently used to produce virtually all of BC’s natural gas, and the way that the extra gas to supply LNG Canada will be extracted. For another, in May 2019, Inslee announced he is opposed to a small Tacoma LNG plant, proposed by Puget Sound Energy. The project is tiny: It is intended only to supply trucks and boats, as well as provide extra natural gas supply during periods of peak demand. Not a drop for export. But Inslee, quite rightly, rejects the silly claims that LNG is a preferred replacement for other fossil fuels. With close neighbours disagreeing so fundamentally about the seriousness of the climate crisis, surely discussions between the two concerning LNG must have been, well, interesting. In fact, the topic did not even arise, according to Inslee’s acting communications director, Tara Lee, in an email. It didn’t? It’s not credible that neither leader knew of the other’s position. But this meeting was plainly intended as a way of deflecting us plebes from the attention paid to Thunberg and subsequent actions of those she inspires. It wouldn’t surprise me if Horgan’s Chief of Staff, Geoff Meggs (who sat beside the premier during the meeting), discussed acceptable topics in advance with Inslee’s Chief of Staff, David Postman (who likewise sat beside his boss). Perhaps inspired by Basil Fawlty, the pair may have mutually advised their respective leaders: Don’t mention LNG! DESPITE THE APPARENTLY DELIBERATE OMISSION of the topic from the Inslee-Horgan meeting, there is no shortage of developments at LNG Canada. The traditional way of erecting a structure is to ship all the parts to the site, where they are assembled—a method known as “stick-built.” But, as reported in the last Focus, the joint partners on the construction contract, Fluor (Texas-based) and JGC Holdings Corp (Japan-based), had a better idea: They are instead building much of LNG Canada’s Kitimat plant at a huge fabrication yard in Zhuhai, China. The yard belongs to a joint venture between Fluor and a subsidiary of China National Offshore Oil Corporation, entirely owned by the Chinese state. Why use the yard? JGC handily summed up its motivation in a November 8, 2018 earnings release conference: “The use of modular construction for the entire facility and the use of larger modules are expected to cut the amount of on-site construction work by around 70 percent compared to conventional stick-built construction.” In JGC’s 2018/19 annual report released October 4, 2019, the company provided more details on the supposed benefits of modular construction. Referring to the LNG Canada project, JGC Chief Operating Officer Tadashi Ishizuka said “our policy was to minimize local construction work, which we considered the greatest safeguard [against risk].” I wonder if JGC first ran that inspired goal past Horgan, a labour-friendly politician who pushed the project in part by claiming it would create 10,000 construction jobs. Kitimat area residents would be given first dibs, followed by other British Columbians, then Canadians elsewhere. No mention of cheap Chinese labour. Must not have been room in the government’s press releases. If Horgan didn’t want to talk about LNG in Seattle, one national leader does have something to say about the unloading of $7 billion-and-counting in BC and federal taxpayer funds on LNG Canada to create Chinese jobs. “They are just lining their pockets,” says United Steelworkers national director Ken Neumann, speaking in an interview about the owners of the fabrication yard. As for donating public money to the Chinese cause: “That’s just plain wrong.” he added. Neumann is adamant that the facility could be built here. “These products can be made in Canada, using Canadian workers and fairly-traded, market-priced steel, without jeopardizing the project’s viability.” Sadly, Fluor’s brilliant idea to use much cheaper Chinese labour is turning out to be less than a raging success. Fluor invested vast sums in the Zhuhai fabrication yard, but now stands to lose much of it, according to an early-morning conference call with investors on September 24, 2019. During the call, Fluor’s recently-appointed Chief Financial Officer Michael Steuert warned about the yard’s problems: “A significant portion of the $355 million [US] investment in the fabrication yard is at risk due to lower than expected performance.” Oops. Fluor’s investors might also be wondering whether LNG is such a brilliant idea after all, since the same day Fluor told them about the fabrication yard mess, the company slashed its dividend by 50 percent. When the New York Stock Exchange opened soon after the announcement, Fluor’s stock price fell 11 percent. Washington Governor Inslee formerly supported the Tacoma LNG project, but, as noted above, he’s now dead opposed to it. Why did he change his mind? In fact, it was that much-maligned factor: evidence. “[T]he urgency of climate change and the environmental impacts of natural gas make clear the state’s efforts and future investments in energy infrastructure should focus on clean, renewable sources rather than fossil fuels,” Inslee said in a May 8, 2019 statement. “I am no longer convinced that locking in [this] multi-decadal infrastructure [project is] sufficient to accomplishing what’s necessary.” See Mr Premier? A leader can change his mind when there is good reason. You can do it too. Russ Francis recently adopted a five-year-old Alaskan Malamute, his fourth successive one from the SPCA. Like his predecessors, the new adoptee eats really weird stuff: Chopped-up dead animals.
  4. Your tax dollars at work: LNG Canada is creating much-needed employment in Zhuhai, China. AN OFT-TOUTED HIGHLIGHT of the liquefied natural gas (LNG) cult is the vast number of jobs it will bring to BC Liberal-voting regions in northern British Columbia. As recently as June 9, 2019, LNG Canada said in a statement that its Kitimat project “will bring 10,000 jobs during construction.” In case any doubting Thomases were still unclear, the federal government enhanced the number in a June 25, 2019 news release, claiming that the LNG Canada facility “will ultimately create over 10,000 jobs.” Alas, it is not to be. According to the latest company overview on the LNG Canada website, the number working at the Kitimat site will peak at “4,500 people.” So where are the other 5,500? The Texas company leading the construction offers a clue as to where at least some of the 5,500 are hiding. Fluor Corporation—which holds the construction contract in a joint venture with Japan-based JGC Corporation—boasted to investors on August 2, 2018 that it had cut on-site jobs by “over 35 percent,” in part due to its use of “fabrication capabilities” to perform much of the LNG Canada work. So where are these wonderful fabrication capabilities? In Prince Rupert? Terrace? Burns Lake? Smithers? Surely in BC? Well, er, not as such. Not even in North America. The site is in Zhuhai, China. The “fabrication yard,” in Guangdong province, not far from Hong Kong, is huge: more than 200 hectares—roughly three times the size of Beacon Hill Park. It’s another Fluor joint venture, this time with the Offshore Oil Engineering Company—controlled by the Beijing-based China National Offshore Oil Corporation. That’s where the LNG “modules” that form the guts of the facility are being built. Well done, BC and federal governments: The $7.3 billion-and-counting handouts to LNG Canada are boosting employment in the world’s second-largest economy—in a country that is not exactly on Canada’s Christmas list these days. Artist rendering of the LNG Canada project at Kitimat Meanwhile, on August 1, 2019, Fluor revealed what executive chairman Alan Boeckmann called “serious” issues with the company’s performance, saying he was “extremely disappointed” in its results. In the three months ending June 30, the company lost $555 million US. It canned both its chief executive officer and its chief financial officer, and to bring in cash, it is selling off real estate and cashing in some insurance policies. Among Fluor’s worries are fixed-price contracts; it will no longer bid on some of them. In a fixed-price contract signed last year, Fluor and JGC agreed to build the Kitimat plant for $14 billion US, even though Fluor has never before constructed an LNG export facility. Fluor’s shares have continued to fall—plummeting from $58.61 when LNG Canada gave the final go-ahead on October 1, 2018 to $17.38 on August 16, 2019—a 70 percent drop in less than 11 months. Newly hired chief financial officer Carlos Hernandez told investors in a conference call August 1 that although the LNG Canada project is in its early stages, it was “on schedule and on budget.” However, Fluor plainly had some concerns about the Kitimat contract. “We brought up a number of expats to augment our critical activity there,” Hernandez said in the call. Apart from all the jobs that the LNG fustercluck is not creating in Canada, what about a much larger worry: How much damage will the LNG facility do to the planet? In June 2019, the San Francisco-based Global Energy Monitor published The New Gas Boom, a report on the 166 LNG export plants now being developed worldwide. The report includes detailed estimates of emissions from LNG production, transport and combustion—and they are a lot higher than what the BC government and LNG Canada would have us believe. For instance, the BC government claims that the LNG facility itself will produce 4.2 million tonnes (Mt) of GHGs per year once the plant is operating at its full capacity, 28 million tonnes of LNG annually. (GHGs are measured in carbon dioxide equivalents, or CO2e.) That’s just the plant itself, not counting the emissions from fracking the gas out of the ground, from sending it through the 670 km Coastal GasLink pipeline to Kitimat, from transporting the LNG to Asia, and from burning it. Using data from the Global Energy Monitor report, LNG Canada’s Kitimat facility alone will, in fact, produce 8.7 Mt of GHGs annually—more than twice the BC government’s claim. And including emissions from all the other parts of the chain, LNG Canada will be adding no less than 124.9 Mt annually to the world’s planet-wrecking emissions. That is roughly one-sixth of Canada’s total GHG emissions (716 Mt) in 2017. Ted Nace is the executive director of Global Energy Monitor, and a co-author of the report. In an interview, Nace pointed to the quickly-dropping total costs of renewable energy, taking into account capital costs, estimated lifetime, the discount rate, and maintenance costs, among other factors. A November 2018 Lazard Bank report found that wind power is now cheaper or comparable in cost to the most efficient gas turbines in all six economies studied. As well, solar electricity and other renewable energy sources are cheaper than many other fossil fuel types. Said Nace: “In terms of displacing coal, economically LNG is not competitive with renewable power in Asian markets.” As for the purported high-efficiency gas turbines that LNG Canada says it will use to compress natural gas into liquid form, GHG emissions from the actual turbines are negligible, resulting in only around seven percent of LNG’s life-cycle emissions. “It’s not going to change much,” Nace said. “It’s shocking that the Canadian and British Columbia governments would shell out billions of dollars for this—it’s crazy.” Not content in doling out $1 billion in tariff waivers for the imported modules, on June 24, 2019, federal Minister of Finance Bill Morneau hiked it up to Kitimat to re-announce Prime Minister Justin Trudeau’s October 2, 2018 $220 million gift to the foreign consortium, purportedly to “help fund highly energy-efficient gas turbines minimizing both greenhouse gases and fuel use.” Reduce GHGs? By how much? The announcement didn’t say, and when I asked Innovation, Science and Economic Development Canada, a spokesman referred me to LNG Canada. Did the feds have no idea of the impact on GHG emissions before doling out their $220 million gift to Royal Dutch Shell and its four equally foreign partners? Still interested in learning by how much the $220 million would cut emissions, I dutifully asked LNG Canada. In response, I received a statement attributed to Susannah Pierce, LNG Canada’s director of external relations. After insisting that the facility is expected to have a GHG intensity 30 percent lower than the best currently operating LNG plants, the statement included this gem: “The grant will not be used for further GHG reductions.” The feds turned over $220 million to LNG Canada to help it buy turbines they were going to buy anyway? It sounds an awful lot like the old “get the money out the door” syndrome that afflicts governments worldwide. Despite all the babble about minding the public purse, etc, etc, in practice, the worst possible outcome for a government agency is to underspend its budget. Why? Because then looms the mortal terror that the agency would get that much less in next year’s budget. The increasing corporate welfare payments that support boosting GHG emissions might be less worrisome if we had another decade or two to start cutting emissions. We do not. According to last year’s Intergovernmental Panel on Climate Change report, if we want to keep the global temperature rise to 1.5 degrees Celsius, we have until the end of 2020 to start cutting GHG emissions. If the Earth is to remain habitable, GHG emissions must peak in a little over one year from now. Here’s a much more effective and much cheaper suggestion to reduce GHGs resulting from the plant: Stop building it—now. With most of the fabrication jobs going to China, the rest of the LNG plant-building ones are a short-term prospect, comparable to hula hoop manufacturing. Still, jobs are needed in those northern BC communities. Federal Green Party leader Elizabeth May has worked out a potential solution: On August 7, she proposed a plan to help workers transfer from fossil fuels to renewable energy, to retrofit buildings for higher energy standards, and to clean up the environmental mess left at wells abandoned by oil and gas companies. Supposing that it finally sees the light, can the BC government get out of the horrendous LNG Canada mess? Of course. In case any carbon-head isn’t convinced, paragraph 15.12 in the March 2019 Operating Performance Payments Agreement between BC and LNG Canada spells it out: “Proponent [LNG Canada] expressly acknowledges and agrees that nothing in this Agreement will be construed as an agreement by the Province to restrict, limit or otherwise fetter in any manner the Province’s ability to introduce, pass, amend, modify, replace, revoke or otherwise exercise any rights or authority regarding legislation, regulations, policies or any other authority of the Province.” Or, as former NDP forests minister David Zirnhelt put it more succinctly in September, 1996: “Don’t forget that government can do anything.” Of course, should BC shut down LNG Canada, corporate lawyers would promptly roll up their sleeves, put down payments on luxury yachts, and see how much more they could extract from the Province for interfering with their natural-born right to help make Earth unlivable. It is entirely possible that they might settle for a lot less than $6 billion. After all, even the most fossilized litigants might come to realize that there are no corporate lawyers on a dead planet. Russ Francis, a former BC government analyst, now wonders whether the climate crisis may soon necessitate a modification of Heraclitus’s maxim: Before long, we may not be able to step into the same river once.
  5. Taxpayer dollars are wasted doing things that are unnecessary or wrong—while important records management tasks are routinely ignored. UPON JOINING THE BC PUBLIC SERVICE, new employees gather in a Downtown auditorium, listen to a few hackneyed words of wisdom from the deputy attorney general, sign the public service oath—and never think of it again. A high-level document, the oath is seen less as something to consult for guidance on how to behave and more as a chance to get a couple of hours’ paid time away from the office—or as yet another annoying little bit of bureaucracy needed to keep the higher-ups content. I don’t recall ever seeing a copy posted in a government elevator, on an employee bulletin board, or stuck onto a lunchroom fridge beside posters advertising yet another dreaded, compulsory, day-long “team building” clambake. For the most part, public servants go about their business serving their respective ministers appropriately, without needing a reminder of what they can and cannot do. But there are also others among the 31,350 full-time equivalent workers in the BC public service (this estimate doesn’t include those in Crown corporations and other arms-length organizations); there are miscreants whose memories could do with more than an occasional jog as to how to keep disrepute out of the public service. One of the more concerning situations I encountered in my 10 years in government involved a fellow employee. Or perhaps “seat warmer” would be more accurate, for he spent most of his days openly running his own business from his government desk. One day, his manager came over to the employee’s cubicle and began describing a new assignment for him. Less than a minute into the manager’s request, however, the employee’s taxpayer-paid desk phone rang. To my astonishment, ignoring his manager, the employee answered the phone, and launched into a conversation with what sounded an awful lot like negotiating with a client of his personal business. Meanwhile, interrupted in mid-sentence, his manager stood there, waiting till the phone conversation ended, some minutes later. And I suspect this wasn’t the first time. There is little more depressing in a workplace than to see a co-worker blatantly act in his own interest rather than for the good of the government (covered by another clause in the oath); even more so to do it in full knowledge of management and get away with it. In my view, he should have been fired, along with his manager—for acquiescing in the employee’s behaviour. The manager’s supervisor, and likely several further up the chain, also knew about the employee, but did nothing. All of them should have been fired too. Yet none were. Another category of public service behaviour, while not as flagrant, is no less worrisome and far more widespread. And it costs taxpayers a small fortune: the abuse of meetings. In one ministry, our assistant deputy minister (ADM) became concerned that a team of about 10 people had been meeting weekly to complete just one task: produce a single, short, relatively simple document. But after more than a year of one-hour meetings, the team—which included several directors and managers—had yet to finish the task. Knowing that I had experience working on tight daily newspaper deadlines, the ADM asked me to step in and wrap up the project. Easier said than done. The team members rebelled, initially even refusing to allow me into the room for the next meeting. Following a direct order from the ADM, they relented, if somewhat reluctantly. The reason for their reticence soon became plain. The endlessly repeating meetings were primarily social gatherings. The well-paid, senior drones began the meeting by discussing not the supposed task at hand, but the “pretty colours” appearing in the latest draft of the document—a result of Microsoft Word’s “track changes” feature, in which each edit appears in a different colour. That afternoon, I completed my own edits of the document, and shipped what I assumed would be the final version of the document back to the team leader. There it sat. Not to be upset by the ADM’s “interference,” the team resumed its regular social gatherings. Attendees at such meetings can spend much of their time trying to look busy to others in the meeting—who are also trying to look busy. Your tax dollars at play. That ADM resigned shortly afterwards, to “pursue other interests.” She obviously did not fit the ministry’s meeting-centric culture. I expect that every single one of those socializing team members knew deep down that what they were doing was of no value to either the ministry or society. That view may be widespread. As London School of Economics anthropologist David Graeber vividly explains in his 2018 book Bullshit Jobs, “Huge swaths of people…spend their entire working lives performing tasks they believe to be unnecessary.” He estimates that up to 50 percent of workers privately believe their jobs accomplish nothing of value. Though his interview-based research primarily deals with the worlds of corporations and academe, his conclusions may apply even more strongly to government. Of course, not all meetings waste time and money. There are some circumstances that call for numerous lengthy meetings. For instance, last year it must have taken an inordinate number of BC government person-hours to spin a new greenhouse-gas-spewing liquefied natural gas project into a planet-saving plan to improve the environment. If the number and length of meetings were to be substantially reduced, what would public servants do with their newfound time? In fact, there is no shortage of important work now left undone. For example, it is current government policy that public servants document significant phone calls, instant messages and the like—the so-called “duty to document.” This rarely happens. The result: There is no complete record concerning the development of many policies. So a freedom of information (FOI) request would draw a blank: “No records exist.” Arguably, not documenting such important interactions brings the public service into disrepute. A few senior government officials are well-informed about the requirements of FOI, and do their best to ensure that appropriate documents are retained—subject, of course, to the political requirements of the government. The same cannot be said of all lower-level staff, including managers. All public servants are required to take an online FOI course. Yet much of its generally welcome content is forgotten or conveniently ignored. For instance, an FOI manager told a ministry meeting that drafts of documents did not need to be retained, so she routinely deleted them. That’s not correct, I said. I was immediately overruled by the meeting chair. After all, I was not the FOI manager. It’s difficult to hold ordinary public servants to account for paying minimal attention to the duty-to-document requirement, since two successive governments have essentially told them not to bother. A March 8, 2017 finance ministry press release—following the BC Liberals’ 2015 “triple delete” scandal—claimed that the government was legislating a duty to document by introducing Bill 6, the Information Management (Documenting Government Decisions) Amendment Act. And as recently as March 31, 2019, NDP Citizens’ Services Minister Jenny Sims said in a statement that new amendments “respond” to recommendations from two former information and privacy commissioners, David Loukidelis and Elizabeth Denham, to legislate the duty to document. But in each case, information activists were quick to denounce both claims. The problem with both the Liberal and NDP announcements is that compliance is left to a public servant, the Chief Records Officer. How is that working out? Darrell Evans, executive director of the Canadian Institute for Information and Privacy Studies, told Focus in June: “As far as I know, there’s never been any enforcement.” The lack of penalties is akin to a bank ditching its locks, cameras and other security measures, and replacing them with a sign imploring customers: “Please do not steal the money. Thank you for your cooperation.” The BC Freedom of Information and Privacy Association’s executive director, Sara Neuert, said in an interview that not only should there be penalties for failing to document, but that those penalties should be enforced by the independent Office of the Information and Privacy Commissioner. “We’d really like to see external oversight,” Neuert said. So it’s little wonder that public servants while away their idle hours looking busy in useless meetings, instead of dutifully documenting. One government lawyer once told me that the government’s internal instant message system—which does not keep records of exchanges—was desirable, because “it’s not subject to FOI.” Of course, he is wrong: under the Freedom of Information and Protection of Privacy Act, instant messages are records just as much as a hard-copy briefing note or a video recording. I rarely heard someone explicitly state: “In order to avoid FOI, do not send an email. Instead, phone, or meet in person.” But it is universally understood that for sensitive issues, personal meetings or phone calls are desirable, precisely as a mechanism—legal or not—to dodge FOI. This is not a great way to improve the public’s view of the government. At least, that’s if anyone knows about the practice. Please don’t tell anyone: it might bring the public service into disrepute. During his time with the government, Russ Francis did his best to follow advice, in the spirit of the Westminster system, from a deputy minister: “What interests the minister, absolutely fascinates me.”
  6. LNG Canada’s lobbying wins $6-plus billion payout. ONE BILLION DOLLARS A YEAR. Not many departing employees can boast of bringing in that much for their employer. In an April 9 statement, Andy Calitz reported that his six years as CEO of LNG Canada had been “extremely rewarding.” No kidding. Just five days earlier, on April 4, BC NDP and Liberal MLAs consummated a temporary fling by passing Bill 10, the Income Tax Amendment Act. The bill finalized a $6 billion giveaway of taxpayers’ money to a gaggle of large, wealthy foreign carbon-spewing companies for a liquefied natural gas (LNG) project in Kitimat. Only the three Green MLAs—Andrew Weaver, Sonia Furstenau and Adam Olsen—stood against this generous handout. South African-born Calitz ends his CEO position July 1 this year, when he returns to Royal Dutch Shell, which is joining PETRONAS, PetroChina, Mitsubishi and Korea Gas in the LNG Canada partnership to build the $40-billion Kitimat plant. How did this unprecedented payout happen? Whatever else one thinks of Premier John Horgan, Environment Minister George Heyman, and other cabinet ministers, they are far from stupid. So why on Earth is the NDP still vigorously pushing LNG in the face of recent, truly terrifying updates to the looming climate catastrophe? Has the premier already forgotten that just a few months before his giveaway bill won royal assent, in November 2018, the Camp Fire in Northern California killed 85 people and destroyed a town—in what used to be called the rainy season? That wildfires have started incinerating suburbia? Does Horgan believe that Kitsilano, Oak Bay and the legislative precinct are somehow immune from what David Wallace-Wells—the author of the recently-published The Uninhabitable Earth—called the “cascading chaos” of climate change? Wrote Wallace-Wells: “[Climate change] can upend and turn violently against us everything we have ever thought to be stable.” And did Horgan miss the April 1 warning from those wild-eyed, radical scientists at Environment and Climate Change Canada that the country is warming twice as fast as the rest of the world? That Yukon and the rest of northern Canada are heating up approximately three times as fast? Green leader Weaver attributes BC’s pro-LNG decision in part to lobbying by the industry. Sure enough, the BC lobbyists registry appears to bear out Weaver’s suspicions. Within three months of the July 18, 2017 swearing in of the NDP government, LNG Canada CEO Andy Calitz registered to lobby Premier John Horgan, and Energy, Mines and Petroleum Resources Minister Michelle Mungall, as well as staff of the Finance Ministry and the BC Oil and Gas Commission. Joining Calitz in this quest were five more LNG Canada staff. The lobbying topic: the “LNG fiscal framework and LNG-related carbon management issues.” Translation: Let’s see how much a bunch of wealthy foreigners can extract from BC taxpayers to help wreck what’s left of the planet. LNG Canada CEO Andy Calitz On top of the $6 billion in tax and reduced hydro rates are what a whistle-blowing retired government analyst called “an ongoing, eye-watering transfer of the provincial tax burden from natural gas producers to the BC taxpayer.” In his letter to Premier Horgan, read in the Legislature by Weaver, the analyst explained that BC has lost approximately $6 billion in existing and future gas royalties, due to a government program (created by the former Liberal government in 2003 and supported by the New Democrats) that applies to nearly all new wells. According to the whistleblower, each year the government issues more royalty/tax credits than the Crown receives in revenue—handing out $2 in royalty rebates for every $1 it receives in royalties. Of course, this $6 billion goes to every BC gas producer rather than to a single consortium. LNG Canada’s lobbying continues. On December 13, 2018, Calitz—along with other LNG Canada staff—re-registered to lobby Horgan and Mungall, as well as government staff. The lobbying extends beyond the provincial border. As recently as January 28, 2019, Calitz lobbied senior officials of Innovation, Science and Economic Development Canada. Calitz and other LNG Canada staff also repeatedly lobbied Prime Minister Justin Trudeau, Finance Minister Bill Morneau, Natural Resources Minister Jim Carr, and Fisheries and Oceans Minister Jonathan Wilkinson, among many others. In all, LNG Canada participated in 149 written and oral communications with federal officials. All that interaction means the foreign-owned consortium was able to bend the ears and develop influential relationships with Canada’s politicians and bureaucrats. The Ottawa lobbying paid off big time: The federal government agreed to waive $1 billion in tariffs on the steel LNG modules, which, like nearly everything about the facility, is imported. Just how much will the LNG Canada project add to BC’s emissions? A government technical briefing released October 2, 2018, claimed that two trains (production units) at the LNG Canada plant will result in an increase in BC’s GHGs of 3.45 Mt/year. So the expected four trains mean 7.69 Mt/year in increased emissions, if you accept the government numbers. I do not. Taking into account the GHGs emitted during extraction of the gas, fugitive emissions, pipeline losses, and the liquefaction process, each tonne of LNG produced results in 0.94 tonnes of total emissions. Consequently, the 28 Mt/year of LNG from the LNG Canada plant would add 0.94 x 28 = 26.32 Mt/year of additional GHGs in BC. That’s nearly four times the 7.69 Mt annual amount that the BC government is telling us. To put that level of emissions in perspective: It is 39 percent more than the 18.9 Mt/year that last December’s much-ballyhooed CleanBC is expected to save in emissions by 2030, compared with 2007 levels. So without LNG, the government could have scrapped CleanBC and still left the province well ahead. Better yet, it could have kept CleanBC while kiboshing LNG. (And none of this includes downstream emissions, including those from shipping, re-gasification, and ultimately burning. While the government claims LNG will replace coal, there is no guarantee of that. It might well just add to coal emissions, perhaps even replacing or delaying the introduction of renewable energy.) Can anything stop BC’s LNG madness? Is this huge contribution to global warming now a done deal? The Coastal GasLink pipeline, intended to ship the mostly fracked gas 670 km from Dawson Creek to Kitimat, remains an obvious weak point. In late April and early May (after the Focus deadline), the National Energy Board (NEB) was due to begin hearings in Calgary to deal with a challenge to the pipeline by Smithers environmentalist Mike Sawyer. Though the Province has granted environmental approval, Sawyer argues that the pipeline requires NEB vetting, since it will be connected to an Alberta pipeline. Even if the NEB decides against Sawyer, he has promised to appeal the ruling to the Federal Court of Appeal. In an April 9 update, Coastal GasLink said construction activities are continuing across northern BC, clearing rights-of-way and preparing housing sites for workers. The statement added that pipeline construction was expected to begin in 2020. Not if the Unist’ot’en can help it. The Unist’ot’en are affiliated with Dark House, one of 13 hereditary house groups in the Wet’suwet’en First Nation. Last January, members of Unist’ot’en and their supporters blockaded access to a portion of the pipeline route, resulting in 14 arrests. Charges against the 14 included civil contempt. However, on April 15, the Crown announced that there was insufficient evidence for contempt convictions. Coastal GasLink also said it would not proceed. Wet’suwet’en hereditary Chief Madeek told CBC News on April 15 that the fight against the pipeline will continue. “We’re still protecting our territories,” Chief Madeek said. “This isn’t over by a long shot.” On May 12, the Unist’oten will begin its sixth annual construction camp on its territory, building a number of cabins. According to a statement on the camp website: “Following the invasion of our territories by RCMP and industry, we are continuing to reoccupy our lands—helping our people reconnect with, reclaim, and protect our homelands.” Despite the assured tone in Coastal GasLink’s April statement, there is no question that owner TransCanada is worried. For one thing, the company is lobbying Indigenous Relations and Reconciliation Minister Scott Fraser. As recently as March 12, several TransCanada lobbyists registered to lobby Fraser and other BC cabinet ministers to discuss the Coastal GasLink pipeline. I’d be surprised if the Unist’ot’en blockades were not the main topic of conversation. Another indication as to the company’s state of mind: TransCanada is currently trying to unload a 75 percent share in the pipeline, having hired RBC Dominion Securities to manage the sale, according to the April 9 Report on Business. In my experience, companies do not sell off majority interests in low-risk, surefire money-making ventures—which most pipelines used to be. Sierra Club BC senior forest and climate campaigner Jens Wieting said in an interview that the October 2018 report of the Intergovernmental Panel on Climate Change plainly showed that it’s impossible to avert catastrophic climate change while continuing to expand fossil fuel production. “I don’t have a good answer as to why the BC government thinks it’s OK to go ahead with the LNG Canada project,” said Wieting. “It appears that the Province believes that it’s possible to take climate action and build new fossil fuel plants at the same time. The question is whether British Columbians will step up to the plate and face this unprecedented global threat.” The provincial and federal governments seem incapable of grasping that we are on an accelerating path towards a hothouse Earth. But many citizens are aware and beginning to feel desperate enough to take action. Witness the Extinction Rebellion Movement taking off in Europe through blockades and now active in Canada. In general, young people are a lot more clued in to the gravity of the situation. On March 15, hundreds of Greater Victoria students left classes to march at the Legislature, calling for much stronger action on climate change. In more than 100 countries, other students held their own rallies. Let’s hope they take over the planet before there’s nothing left to take over. UPDATE Not all is well with Fluor Corporation, the Texas-based multinational company leading the US$14 billion project to build the Kitimat plant for LNG Canada. Bloomberg writer Brad Olesen called May 2 Fluor’s “disaster day,” since on that day shares fell 24 percent to US$29.60 on the NASDAQ stock exchange—Fluor’s biggest-ever decline. (On August 3, 2018, Fluor shares closed at US$50.65.) Fluor announced a net loss of US$58 million for the three months ending March 31, 2019, compared with a net loss of US$18 million for the same period last year. Also on May 2, Fluor said CEO and chairman David Seaton—who boasted to investors in August 2018 that the LNG Canada project was a “big win” for the company—was stepping down immediately. In its 2018 annual report, also released May 2, Fluor said the LNG Canada project marked the company’s “momentous entry” into the LNG field. Translation: The Kitimat plant is its first such project. Fluor leads the joint venture construction project with JGC, a Japan-based corporation. In a May 2 call with investors, interim CEO Carlos Hernandez said that LNG Canada is “on schedule.” On the same call, Hernandez said “we're showing very good [sic] about that project at this point.” Site preparation has been finished, and the project’s Calgary-based managers were working on detailed engineering. Also on May 2, shareholder rights law firm Johnson Fistel announced it was investigating potential claims against Fluor for federal securities violations. (US federal securities law prohibits company officers and directors from making false and misleading statements about company finances.) Russ Francis is a third-generation vegetarian, becoming a vegan decades before the environmental havoc inflicted by the animal industry was widely recognized.
  7. Baseball games, $258,000 “retirement” allowances for the unretired, and truckloads of alcohol: How did it come to this? Earlier this year, we learned that highly paid officers of the legislature have been picking taxpayers’ pockets over the years to the tune of millions of dollars. At least, that’s the claim made by Speaker Darryl Plecas in his January 21 report focusing on unusual activities by Legislature Clerk Craig James and Sergeant at Arms Gary Lenz. On November 20, 2018, before details of the alleged shenanigans were made public, Lenz and James were suspended with pay and banned from the legislative precinct. One need have no fear about the pair’s immediate financial situation. James takes home $347,000—approximately $1,400 per day, while Lenz scrapes by on $218,000, or a trifling $850 per day. (Figures are from the 2017-18 fiscal year.) But these impressive salaries—both of which exceed the $205,000 paid to the BC premier—may be just the start of their emoluments. BC Parliament Buildings at dusk In his report, Plecas alleged flagrant overspending on luxurious overseas trips, tens of thousands of dollars in personal purchases charged to taxpayers, using work time to make trips for other than legitimate work purposes, as well as thousands of dollars in alcohol and equipment that may have been misappropriated from the BC Legislative Assembly. On top of this, Plecas alleged that steps had been taken to conceal the inappropriate spending. Plecas turned over his findings to the RCMP, which is investigating. Two special prosecutors are on the case, along with the BC auditor general, and in late February an internal inquiry was due to begin. James and Lenz have denied any wrongdoing. Neither have been charged with any crime. HOW COULD ALL THIS HAPPEN, in an era of purportedly enhanced public transparency? Why did the press gallery—to which I belonged for 12 years—not pick up on this funny business sooner? MLAs’ own spending, and that of their employees, which include the officers of the legislature such as the clerk and the sergeant at arms, is supposedly governed by the Legislative Assembly Management Committee (LAMC), made up of—you guessed it—MLAs. My experiences attending the committee’s meetings as a journalist during the 1990s soon became highly predictable. After a few formalities, the committee would go in camera, forcing me to leave. No Hansard, and no real minutes: only those select MLAs and attending officers of the legislature had any idea what happened behind those closed doors. The committee has an infamous history of secrecy, even though it oversees annual public spending that has now grown to more than $83 million in 2019-20. Following a scathing report by then-Auditor General John Doyle in July 2012, Hansard now produces transcripts of the public portion of the LAMC meetings, and MLAs are required to file quarterly reports of their expenses, including even photocopies of their ferry tickets. In keeping with this historic secrecy, the Old Guard among the officers of the legislature were perhaps the most paranoid group of overpaid one-percenters I have met, and through “Vote 1”—the legislature’s own budget—they exert overwhelming control over not just the legislature, but over the press gallery, which numbers about 30 members. In exchange, press gallery members received more than a few perks. During my time in the gallery, we got free 24-hour parking directly behind the legislature, year-round use of the invaluable legislative library, free office space, free long distance calls, and most important of all, virtually unfettered access to the legislature building. Stepping into some of the legislative officers’ dens was like being transported into the Dark Ages. One day, as I was entering the building via the back steps next to the library, one of the officers leaned out of an open window above, and beckoned to me. We sat down in his plush office, and he rang a little bell to summon a female assistant. Coffee please, he said, and she dutifully complied, closing the door as she left. The officer told me he’d heard I’d been asking about an aspect of Vote 1 spending, and was clearly unhappy about it. “There’s no need to do this story,” he said, in a firm, condescending tone. Thanks to the secrecy of the legislature’s finances, I could not have published the story anyway without the co-operation of his gagged staff, so it died. Another time, a legislature staffer invited me into his office, and closed the door. He didn’t waste time on the niceties. “YOU WRITE ONE FUCKING WORD ABOUT THIS AND YOU’LL NEVER SET FOOT IN MY OFFICE AGAIN!” he yelled. It took a few seconds for me to even cotton on to which story he had in mind—and it was one which, until his outburst, I had not connected with any missteps by the officers. Now I knew there was a connection. The story ran in Monday Magazine. On one occasion, another Monday story apparently annoyed the clerks. Wrongly thinking I had gained information for the story by rifling through the garbage cans placed along the Speaker’s Corridor, within hours of the story appearing, somebody ordered all of the cans removed. After 12 years in the press gallery, I stopped working as a reporter and, in 2007, entered UVic’s public administration program, beginning work as a BC government analyst the following year. In all, I worked for more than a decade in a number of positions in various ministries. Among the dozens of courses provided free to public servants are those in ethics and financial management. If James and Lenz ever attended such courses, it seems to me that they could have done with a refresher. ON FEBRUARY 7, JAMES AND LENZ provided what they said was a rebuttal of many of the Plecas claims. At the heart of some of those rebuttals were statements to the effect that Plecas either signed off on the questionable purchases, or condoned them at the time. For instance, Plecas said that in March or April, 2018, James came into his office asking the speaker to sign off on a $300,000-plus “retirement allowance,” to be paid to James upon his retirement. As Plecas wrote, there was no apparent justification for the allowance. After all, James already had what Plecas called a sizable pension. Nor had the payment been approved, or even discussed, by LAMC, nor by the finance and audit committee. Not only that, but in 2012, James had already received a $258,000 benefit that was also classed as a “retirement benefit”—even though James did not retire. Despite serious concerns, Plecas signed the document approving the additional $300,000. Plecas stated, “In the moment, I thought that if I declined the request, Mr James would leave with the piece of paper and I would lose any evidence that this inappropriate request had been made. As a result, I decided to sign it so that Mr James would not dispose of the draft, and I resolved to later rescind the benefit, which is what I did….” In his February reply to the charges, James said that the “retirement benefit” was Plecas’ idea. “If the Speaker had concerns regarding benefits payable to executive employees…he could and should have asked a question. If he wanted to keep the piece of paper as ‘evidence,’ all he had to do was ask me to leave it on his desk so he could think about it,” wrote James. The issue has turned into a war of words. In his February 21 statement, Plecas said that James’ claim that the idea for retirement benefits came from him was “simply a lie. If I had proposed it, why would I have called [then deputy clerk] Ms Ryan-Lloyd immediately afterward in disbelief about the request? It was she who informed me about the earlier payout that Mr James had taken of $257,000, and that caused me to inquire into that issue further and learn a great deal more about it.” Having once worked undercover for a US non-profit organization, I fully concur with Plecas’ decision to withhold objections at the time. For me, the undercover role was justified for results unobtainable in any other way. In my view, Plecas’ acting as a quasi-undercover agent was entirely appropriate. If he had instead done what Liberal House Leader Mary Polak and James suggested, you can be sure that documents could have been shredded, emails deleted, and tracks covered as fast as you can say, “What expenses?” Purchases by Lenz and James are detailed in Plecas’ January 21 report, and enhanced in a second report released February 21. Over the years, I had dozens of conversations with James in his former position as clerk of committees, as well as in his role as editorial board member of the Canadian Parliamentary Review, while I was writing an article for the periodical. I struggle to understand how James, a friendly, quiet-spoken man, could possibly think it acceptable to hit up taxpayers for subscriptions to Arizona Highways, Sunset, Wired, Flightradar24, Palm Springs Life, Bicycling, India Today, Popular Mechanics, and a host of other publications (or find time during off-hours to read them all). Many of the subscriptions were digital, and were set up to renew automatically each month. Plecas reports that James filed claims for digital subscriptions totalling more than $5,000 for the period from April 2017 to December 2018. In his response to the Plecas claims about subscriptions, James said: “I accept that I did not take the care I should have in reviewing these invoices before they were processed for reimbursement to segregate out personal subscriptions (i.e., a Bicycling magazine) from subscriptions that were for business use.” This is utterly unconvincing. I do not understand how even the busiest of well-paid officials could be so sloppy in submitting reimbursement claims, which any school kid would know to be little short of attempted theft. And $500 for a pair of Bose noise-cancelling headphones in 2017—on top of the ones expensed in 2011 for $447? James explains them this way: “I suffer from a condition which causes ear problems when flying, arising from a combination of sound and cabin pressure. The noise-cancelling headphones were purchased to alleviate that condition.” What a crock. Noise-cancelling headphones do not form an hermetic seal around the ears: they have no effect at all on cabin pressure. Moreover, good quality noise-cancelling headphones can be had for a lot less. On February 11, a pair of Sony noise-cancelling headphones was listed at Best Buy for $59.99. The list of questionable financial misdeeds keeps growing. Besides the first-round of allegations involving woodsplitters, travel, pricey suitcases, alcohol and more, in his follow-up report released February 21, Plecas said that in August 2017, British Columbians coughed up more than $1,000 for eight people to take a whale-watching trip—billed as “Tsunami Watch.” Three days later, ever-generous BC taxpayers kindly donated more than US$1,000 for 13 tickets to a Seattle Mariners baseball game—billed as “Safe passages: Large-Scale Evacuations.” Evacuations from where? Why, Safeco Field, Seattle, of course, where the Mariners just happened to be playing at the time. Among the 12 people taking part in the trip were James, Lenz and their spouses. During my ten years in public service, neither I nor my colleagues ever dreamed of asking taxpayers to cough up for such absurdities, no matter how much our ears rang from flying on government business nor how desperate we were to watch overpaid, expectorating men chuck balls around. And none of us pulled in anything close to the $347,000 that James collects annually—not counting the $51,000 he stuck taxpayers with for travel in 2017-18. Again, neither James nor Lenz have been charged with a crime, and both deny they have done anything wrong. IN READING THROUGH THE ALLEGATIONS of over-the-top expensing, one overriding impression is that James and Lenz were thinking: We’re entitled. In an email to Focus, prominent UVic political scientist Michael Prince summed up the issue neatly: “The pressing need is to instill a culture and practice that this is the people’s house—not some private club.” Darrell Evans has been involved with information access for more than 25 years. Now president of the Vancouver-based Canadian Institute for Information and Privacy Studies, Evans is familiar with the genesis and evolution of cultures of entitlement. “It starts with some little thing,” Evans said in an interview. “Then it gets looser and looser.” When financial details of an organization like the legislature remain secret, members of the club can be tempted to test the limits of what they can get away with, he said. Starting in the early 1990s, Evans was among the first to call for the legislature’s administrative functions to be covered by the Freedom of Information and Protection of Privacy Act (FOIPPA). “Whenever there’s power without transparency, it’s human nature to empire-build and get what you can,” Evans added. “The legislature is the last bastion of imperial privilege.” On February 5, BC Information and Privacy Commissioner Michael McEvoy, Ombuds-person Jay Chalke, and Merit Commissioner Fiona Spencer called for the administrative functions and operations of the legislature to be subject to FOIPPA. As McEvoy told Focus: “It’s fair to say that when public bodies know their actions will be fully transparent, people tend to act accordingly.” Attorney General and NDP House Leader Mike Farnworth said the government intends to implement the recommendations. Will the proposal from McEvoy et al work to turn around the culture that seems to have led to an abuse of power by officers of the legislature? Sara Neuert, executive director of the BC Freedom of Information and Privacy Association, thinks more is needed. “I don’t think it will solve the problems,” she said in an interview. “The act is old enough that we need to discuss what is working and what is not working. They need to quit tinkering with it.” Neuert noted that this is hardly the first time anybody has proposed bringing the legislature under FOIPPA. “How many commissioners have we heard say the same thing?” Among the other changes that Neuert would like to see are requirements that public servants have an enforceable “duty to document.” Though public servants are currently supposed to create a digital record of any substantial policy-related phone conversations and instant messages, it is rarely done. Neuert joins others in calling for penalties for violating the rule. Is there anything else which might help open up the secretive club that is LAMC? New Democrat Tom Perry, who was minister of advanced education, training and technology during the 1990s, is also a physician. “Whenever there are entitlements, most people will push them to the limits,” he said. “But wealthier people tend to feel more entitled than poorer people who can’t afford to be fired.” His medical background hints at an intriguing suggestion that might finally bring the legislature’s drunken sailors under control: appoint lay people to LAMC, who would be untainted by any possibility of conflict. Their role would be solely to ensure that the public’s interests are protected. Could that work? To judge from another regulatory body, yes. The Board of the College of Physicians and Surgeons of British Columbia oversees the protection and safety of patients, ensuring that physicians meet expected standards of practice and conduct—something that some officers of the legislature and MLAs appear to have violated. The college’s board consists of ten peer-elected members and six members of the public, appointed by the health ministry. Did all of the legislative officers drink the Kool Aid, somehow becoming bereft of moral scruples? Fortunately, no. There is at least one standout among them, according to the January 21 Plecas report. Kate Ryan-Lloyd, who at the time was deputy clerk and clerk of committees, initially accepted a “retirement allowance” similar to that paid to James, but later returned it because, suggested Plecas, she did not believe it to be a legitimate benefit. Not an easy thing to do in a highly controlling environment when other officers, all very much her senior, willingly accepted it. By actually adhering to some basic moral principles, Ryan-Lloyd has done BC taxpayers past, present, and future a sterling service. At the time of Focus’ deadline, Ryan-Lloyd was the acting clerk; maybe she should be made permanent clerk of the legislature. While a member of the BC press gallery from 1995 to 2007, Russ Francis campaigned extensively in Monday Magazine and other news media outlets against the secrecy surrounding the administrative functions of the Legislative Assembly.
  8. The BC government’s concerted efforts at message control nearly overwhelm its new climate plan. THE GOOD NEWS IS that the BC government has now stated publicly that it really, really cares about climate change. While jurisdictions from Ontario to Brazil are thumbing their respective noses at the looming annihilation of life as we know it, the BC government released plans to move towards a low-carbon economy. While there are numerous holes in the plan, the “CleanBC” document, released December 5, 2018, is substantial. It lays out a road map as to how the Province will attain its legislated target of a 40 percent cut in GHG emissions from 2007 levels by 2030. Despite the government’s unfathomable decision in 2018 to bend over backwards for the liquefied natural gas (LNG) industry, considerable credit is due for pulling together so many parts of the climate puzzle. CleanBC is “aimed at” reducing greenhouse gases (GHGs) while creating more jobs and economic opportunities, according to the news release’s opening blurb. It is now standard government jargon for policies to aim at doing something, rather than to actually do it. If a plan merely aims at a reduced GHG emissions target but ends up missing it, the government can still say it carried out the plan: it tried. Under 2018’s Climate Change and Accountability Act, BC set a reduction of 25.4 megatonnes (Mt) in annual GHG emissions by 2030, compared with 2007. CleanBC—if implemented according to projections—is expected to take us to an 18.9 Mt reduction, leaving another 6.5 Mt yet to be found. That’s far from the only big “if” in the plan. For instance, the plan claims that taking carbon dioxide out of the atmosphere and storing it, known as “carbon capture and storage” (CCS), will help reduce annual GHG emissions to the targeted levels in 12 years. It’s a great idea, but one that has yet to work, other than in small demonstration projects. As British author George Monbiot put it in a November column in The Guardian Weekly, the only proven CCS process that works on the required scale is allowing trees to return to deforested land. And that means some big changes in the way most people live, of which the most important, globally, is eliminating meat and dairy from our diets—a suggestion that rates not even a passing mention in CleanBC. Rapid deforestation, as in the Johnson Strait area (above), continues in BC despite the provincial NDP government's good intentions to reduce carbon emissions. Given the immediacy and seriousness of climate change, one has to wonder why natural gas remains in the CleanBC picture for the foreseeable future. After all, methane, the prime component of natural gas, is one of the very worst of all GHGs, between 25 and 36 times worse than carbon dioxide in its global warming potential, according to the US Environmental Protection Agency. Making the indefinite continuation of the huge natural gas industry even more troublesome are fugitive emissions: those from the production, processing, transmission, storage and delivery of methane not used to generate useful energy. They include leaks, deliberate venting into the atmosphere, line cleaning, and other emissions that do not make it to the other end of the pipeline. How big are such fugitive emissions? According to government figures, BC’s oil and gas industry released 3.47 Mt of fugitive emissions in 2016, a figure that even the government suggests is unreliable. A group of scientists from the David Suzuki Foundation and St Francis Xavier University used a “sniffer truck” to measure actual emissions at more than 1,600 well pads and facilities in the huge Montney gas field in northeastern BC, which is planned to supply LNG Canada’s Kitimat plant. The scientists’ results, published in the January 2018 issue of the journal Atmospheric Chemistry and Physics, point to actual methane emissions that are at least 2.5 times higher than what the BC government reports. Doubtless stung by the Suzuki work, the Province realizes it may have drastically under-reported fugitive emissions. According to the CleanBC report, the government is now working on ways to more accurately gauge fugitive methane releases, relying on—you guessed it—actual field measurements with sniffers. Speaking in an interview, Canadian Centre for Policy Alternatives senior economist Marc Lee said of the volume of fugitive emissions: “We have no idea what they really are.” A large part of the CleanBC exercise appears to have involved branding. The very name, “CleanBC,” with no space between Clean and BC, along with a multi-hued green and blue stylized logo at the top of every page in the CleanBC documents, suggest that it is indeed intended as a brand. Answering questions from Focus, an environment ministry spokeswoman said that while the reports themselves were produced in-house, “strategic brand development and initial creative development and production” cost approximately $65,000. Following a competitive bidding process, the contract was let to NOW Communications Inc, whose clients include mostly trade unions and the NDP in BC and other provinces. (During the 1990s, NOW attracted news media attention after the then-NDP government paid it $4.5 million from 1991 till March 31, 1995 for communications work. However, then-Auditor General George Morfitt found that the government appropriately managed NOW contracts, apart from “a limited number of significant exceptions.”) The December 5 news release itself indicates just how much message control went into the issuance of the strategy. Of the six-page release, a scant one-and-a-half pages were devoted to the actual plan. The last four pages contained nothing more than effusive reactions to the plan from just about every segment of society, beginning with comments from three Americans-—the governors of California, Oregon and Washington. This unusual release was doubtless pushed by the all-powerful Government Communications and Public Engagement (GCPE) unit. Why go to so much effort to collect comments on the plan? Isn’t that what news outlets would do anyway? Not any more. These days, nearly all major news outlets have little more than skeleton crews, following repeated layoffs and buyouts. Beat reporters are few and far between. But newspapers still have to fill the space between the ads, and if copy is provided, ready to cut and paste into stories, publications can retain the appearance of distributing actual content. The obvious benefit for the government in this arrangement is that it gets to control the message and the reactions. Should California governor Jerry Brown, for example, have stuck in a snarky comment about the insanity of the BC government’s recent push for LNG, the control freaks at the communications unit would have edited it out. My suspicion is that rather than sending pre-release drafts of the 66-page CleanBC report to the busy governor of a state with more than eight times BC’s population, GCPE concocted a two-sentence comment and asked Governor Brown’s communications staff if it could attribute the “quote” to him. Brown himself may not have even seen his “quote.” Repeat for the other 22 CleanBC quotees. Besides the usual environmentalists, among the 23 reverential authors were representatives of giant mining company Teck Resources Ltd and the Business Council of British Columbia, which represents around 250 of the province’s largest corporations. In her statement distributed with the news release, Teck senior vice-president Marcia Smith called CleanBC “a tremendous economic opportunity.” Meanwhile, Teck is doing its bit for climate change, if in the wrong direction. As Judith Lavoie reported in the July/August 2018 Focus, the company is developing the $21-billion Frontier Oil Sands project near Wood Buffalo National Park in northeastern Alberta. Expected to begin operations in 2026, the reputedly largest-ever open-pit tar sands mine is expected to produce 260,000 barrels of bitumen every day. And as if to rub it in the noses of the NDP-Green government, Teck plans to be a client of the BC government-opposed Trans Mountain pipeline expansion. According to a report in the May 5, 2017 Globe and Mail, Teck has booked capacity on the expanded pipeline, which the federal government bought from Kinder Morgan in 2018. In his message fronting the full CleanBC report, Premier John Horgan credits the government’s own Climate Solutions and Clean Growth Advisory Council. And guess who is one of the council’s two co-chairs? Teck’s Marcia Smith, no less. Yet if it weren’t for Teck and innumerable other similar players, Earth would not now be in what writer Monbiot calls a “death spiral,” requiring not gradual changes in our way of life, but a complete and immediate upheaval of the current economic system. Fossil fuels don’t belong in the new world. “At the end of the day, this is carbon, safely ensconced underground for eternity,” said the CCPA’s Marc Lee. Instead: “We are putting that out into the atmosphere.” The professionally produced CleanBC documents are studded with lovely colour photographs of mostly young people staring at a waterfall, wearing hardhats and looking busy, or riding bikes along a trail through a springtime meadow. Nary a burned tree, nor sky darkened by forest fire smoke, nor flooding river in sight. Not one of the smiling models in the photographs displays the slightest concern for the catastrophe that is about to hit us unless we move much faster than the CleanBC requirements. We need to switch very quickly onto something like a war footing. Increasing the proportion of zero-emission new car purchases by 2030 is a step forward, but a minuscule one: a drop in BC’s annual emissions by 1.6 Mt—or six percent of BC’s legislated cuts. Happy sailors dancing on a sinking ship. For more on CleanBC, see: https://cleanbc.gov.bc.ca For details on carbon capture and storage, see: https://www.carbontracker.org/ccs-important-but-not-a-get-out-of-jail-free-card Russ Francis is a former BC government analyst. In his spare time, he takes care of an aging Alaskan Malamute, a yearling banana slug (free range), and a contrabass rackett.
  9. Canada’s biggest-ever white elephant may never produce one gram of LNG—if we’re lucky. ON OCTOBER 2, Prime Minister Justin Trudeau, Premier John Horgan and LNG Canada CEO Andy Calitz announced the joint venture foreign partnership would go ahead with its “green” greenhouse gas (GHG)-spewing facility in Kitimat. In the days leading up to that announcement, several government news releases provided hints of what was to come in the effort to make it somehow compatible with realizing climate action targets. This is an old trick: When a government is planning to announce a significant project certain to be unpopular with a substantial portion of the population, not to mention climate scientists, chuck a few popular, green crumbs out the door beforehand. Sure enough, on September 24, a mere eight days before LNG-Day, a news release told of a $10 million top-up for the existing Clean Energy Vehicle (CEV) Program. If the government will chip in $5,000 to help buy a Tesla Model 3 or a Nissan Leaf, what’s not to like? The additional 2,400 CEVs expected under the top-up should avoid a total of 144,000 tonnes of GHG emissions over the vehicles’ lifespans, which government documents typically estimate as 15 years. In other words, 9,600 tonnes annually. Four days later, the government told us of another green-oriented taxpayer handout. On September 28, barely making it under the wire before the announcement, came the EfficiencyBC program, a revamp of an earlier version. In its present incarnation, each homeowner can collect up to $14,000 in incentives to upgrade heating systems, windows and doors. Commercial businesses can receive up to $200,000. The $24-million federal-BC program is expected to result in GHG reductions totalling 490,000 tonnes, accumulated through 2030. Over 12 years, that averages to approximately 40,800 tonnes annually. Increasing home and business energy efficiency is a praiseworthy, job-intensive move. And like the CEV program, even voters who are not especially green love getting subsidies for upgrades that will save them money. So will the CEV and energy efficiency programs make up for the extra 8.14 megatonnes (Mt) of GHGs emitted annually by the Kitimat plant when fully operational? Hardly. Together, the CEV program and energy efficiency program add up to a total of 50,400 tonnes of annual avoided emissions. This is less than two-thirds of one percent of LNG Canada’s annual BC emissions once fully operational. To look on the bright side, that leaves a mere 99.33 percent to go. And while the $34 million in federal and BC funds for the two programs may not be peanuts, they amount to just one-half of one percent of the $7 billion cost of the federal-BC tax and hydro giveaways to LNG Canada. But one really, really important goal will have been reached: Increasing the chances that the NDP will be re-elected in 2021. Maybe. The BC government’s promised climate action strategy, purportedly aimed at reducing the province’s GHG emissions targets as laid down in last spring’s Greenhouse Gas Reduction Targets Act, is expected in late November or early December. I would be surprised if the CEV and building efficiency programs were not part of the strategy. In 2015—the last year for which figures are available—BC’s emissions totalled 61.6 Mt. Under the Act, these would need to drop to 38.8 Mt by 2030, 25.9 Mt by 2040, and 12.9 Mt by 2050. So the rest of the strategy is going to have to make a much bigger dent in emissions than encouraging a few more electric vehicles and heat pumps. And even those targets in the Act may not be nearly sufficient to keep the planet liveable, as we shall see below. The Province’s account of BC’s emissions in 2015. Total emissions were 63.3 megatonnes. The Province estimated offsets at 1.7 megatonnes, reducing the official count to 61.6 megatonnes. Under the accounting rules for GHGs, emissions from burning fossil fuels are counted in the country where they are ignited. As mentioned, LNG Canada will release 8.14 Mt annually in BC once operational. However, the global result of LNG Canada proceeding to full operation is 76 Mt, when the 68 Mt of GHGs produced by burning the natural gas in Asia are counted. After all, the BC government has insisted that a prime reason for approving the Kitimat plant is to help reduce global emissions. The reasoning, if it can be called that, is that since natural gas burns cleaner than coal when used in aging plants to generate electricity, displacing the coal with natural gas will reduce emissions worldwide. It’s a convenient argument, made by virtually all supporters of LNG. The only difficulty with the argument is that it’s complete hogwash. In its October 2 statement, LNG Canada said the following: “LNG Canada will provide natural gas to countries where imported gas could displace more carbon intensive energy sources and help to address global climate change and air pollution.” [Emphasis added.] “Could displace”? If the foreign-owned partners are so sure, why didn’t they say “will displace”? Will there be clauses in every gas sale from the Kitimat plant demanding that an equivalent coal plant be shut down when a new natural gas-fired one starts up? LNG Canada had yet to respond by Focus’ deadline to an emailed request as to whether sales contracts would contain such clauses. Nor did they return a phone message in time. Sierra Club BC senior forest and climate campaigner Jens Wieting agreed there is no requirement that coal plants will shut down to be replaced by gas ones. “There is no such mechanism,” he said in an interview, adding that LNG’s relatively low cost when used for purposes such as generating electricity may have a secondary negative effect on the planet. “The real risk is that LNG will compete with renewable energy,” said Wieting. Construction having begun at the Kitimat plant, LNG Canada projects finishing the plant in around six years. Does that make it a done deal? Not quite. For all the hoopla, for all the tens of billions of dollars in private and public funds poured into it, the Kitimat plant may never produce one gram of LNG, making it, to paraphrase Trudeau and Horgan, Canada’s largest-ever white elephant. First, the projected completion date for the plant leaves plenty of time for the appeal by Smithers environmentalist Mike Sawyer—now before the National Energy Board—to force a review by the energy board of TransCanada Pipelines Ltd’s proposed 675-kilometre Coastal GasLink pipeline, designed to ship gas from Dawson Creek to Kitimat. A decision is expected by the end of the year. If the board rejects his application, he plans to take it to the Federal Court of Appeal. “There’s a real possibility they’ll have to shut the whole bloody thing down,” Sawyer said in an interview with Focus. In case anyone suggests Sawyer is tilting at windmills, let’s not forget that in 2017, Sawyer surprised experts by winning a similar case concerning a different pipeline, when the appeal court ruled that TransCanada’s since-abandoned Prince Rupert Gas Transmission pipeline required federal approval. The second threat to LNG Canada ever operating is admittedly more speculative: It is that our government, industry and societal leaders—at last awakened perhaps by the October 8 release of an Intergovernmental Panel on Climate Change (IPCC) report—take the radical actions urgently required to decarbonize the economy. The report summary for policy makers, Global Warming of 1.5°C, makes for some disturbing reading. For instance, the goal of limiting global warming in 2050 to 2° Celsius above pre-industrial levels is too high if we are to avoid a range of catastrophes. Since those 1850-1900 levels, the globe has already warmed by 1° Celsius, and on current trends will probably pass 1.5° some time between 2030 and 2052. If we do reach 2° Celsius, it is very likely that there will be at least one ice-free Arctic summer each decade, that much more permafrost will thaw, coral reefs will all but disappear, food production will drop significantly, and heat waves, flooding and droughts will all become worse. Based on an earlier draft of the IPCC report, Hannah Askew, an environmental lawyer and now the executive director of Sierra Club BC, wrote to Horgan, Environment and Climate Change Strategy Minister George Heyman, and Energy, Mines and Petroleum Resources Minister Michelle Mungall. In her September 20 letter, Askew called for sharp cuts in BC emissions, warning that “2°C would be a nightmare; and 3°C or more would likely precipitate a breakdown in the global economy and human civilization as we have known it.” If we cut net global emissions to zero by 2050, however, it is possible to avoid the 2° increase. The needed actions will be drastic: Nothing less than a U-turn is called for. As of last year, global carbon dioxide emissions were going the wrong way. Energy-use emissions of carbon dioxide hit an all-time high in 2017, according to a June 13, 2018 Bloomberg News report, supported by data from the International Energy Agency. Despite this, worldwide at least, there are some signs of hope. On October 10, two days after the IPCC report summary’s release, Members of the European Parliament voted to boost the European Union’s emission cuts by 2030 from 40 to 55 percent. At the Vancouver October 2 announcement, a cargo-cult atmosphere prevailed in the room, the carefully-chosen rah-rah crowd repeatedly applauding as untold goodies were promised. As with the original Melanesian cargo cults, the anticipated bringers of incredible gifts from afar are all foreign entities. The other defining characteristic of cargo cults may also be present in the case of LNG Canada: Those life-changing goodies, bringing eternal joy and happiness for all, may never show up. If things go well, the $40 billion plant will become a giant dust-catcher, a stranded asset, a tribute to the present government’s vision-free attitude toward the planet’s future. That would be the best outcome of all. Russ Francis formerly taught energy policy at the University of Western Ontario, and has toured Fortis BC’s largest LNG plant, at Mount Hayes, northwest of Ladysmith. He has been published widely.
  10. The horrors of proportional representation? Faster climate action, more women elected, lower debt, increased voter turnout. THE SITUATION SOUNDS AS THOUGH it were tailor-made for scare-mongering by defenders of BC’s current First Past The Post (FPTP) electoral system. Nearly a month after the New Brunswick election, it is far from clear which party will form the government. Two longstanding, mainstream parties are just one seat apart, neither with a majority. Two much smaller parties each hold a handful of seats. One, populist and right-of-centre, was formerly regarded as fringe. An agreement between either of the two smaller parties and one of the mainstream ones would resolve the impasse. But weeks of uncertainty have produced no such agreement. One week before the legislature was to resume, the continuing standoff between the two main parties meant that the legislature may be unable to elect a speaker. In that case, another general election would be called. But this is not an example of the kind of untold disasters that anti-democrats love to claim befalls jurisdictions under Proportional Representation (Pro Rep). Rather, it occurred in New Brunswick after the general election last September 24—under FPTP. Liberals won 21 seats, Tories 22, Greens 3, and People’s Alliance 3. The People’s Alliance supports economic conservatism and opposes parts of the Province’s official bilingualism and language duality policies. And until this September, it had never won more than 2.1 percent of the popular vote nor elected an MLA . After the September election, however, it potentially held the balance of power, though neither the Liberals nor the Tories wanted to link with them. As of Focus’ deadline, a new general election appeared likely. All this could have been avoided had New Brunswick been operating under a Pro Rep electoral system, as the accompanying table (below) shows. Under Pro Rep, New Brunswick would now have a Liberal majority government, with a workable three-seat margin. And the NDP, which was wiped out in the seat count despite winning just over 5 percent of the popular vote, would have ended up with two seats in the 49-seat legislature. To be sure, minority governments not only occur under Pro Rep, they are more likely except in special circumstances, such as when the electorate is evenly divided between just two parties. But it’s false to suggest that FPTP inevitably results in stable, majority governments, while Pro Rep does not. Look at both New Brunswick and, to a lesser degree, BC. Stephanie Smith presides over the 76,000-member BC Government and Service Employees’ Union, which represents the majority of non-executive BC government staff. “You don’t have to look far to find examples of how our current first-past-the-post system delivers skewed results that essentially waste votes,” she said in an email to Focus. “I’m not sure why anyone would say no to having a stronger voice and more robust democratic institutions,” Smith added. The FPTP system is so completely undemocratic it’s hard to believe it has any defenders at all. But it does. Consider Bob Plecas and Lawrie McFarlane. Both are former BC deputy ministers. Also on the status-quo side are former Glen Clark sidekick Bill Tieleman and former (unelected) NDP Premier Ujjal Dosanjh. And, naturellement, those well-known defenders of democracy, the Fraser Institute. Plecas and Tieleman are both directors and founders of the No BC Proportional Representation Society. McFarlane was deputy minister of health during the 1990s NDP government. He said in an email that he knows of no deputy minister in favour of Pro Rep. “For that matter,” McFarlane said, “I don’t know a single former colleague from government who supports it. That doesn’t mean there is no support, only that the people I know are opposed.” In a Times Colonist December 29, 2017 column, McFarlane wrote that Pro Rep could result in perhaps a half dozen parties, some of them representing single issue constituencies such as anti-abortionists. Because the commitment of such parties may be to single agendas, they have little room to compromise, he wrote. “This isn’t a legislature, it’s a chamber of irreconcilable differences.” Admittedly, Pro Rep can allow parties without a hope under FPTP to hold seats. However, the risk of minuscule parties blocking any chance of compromise is partly alleviated by the proposed 5 percent popular vote threshold for a party to be awarded any district seats for the only Pro Rep system currently in use, the Mixed Member Proportional (MMP) system. (For details, see the Elections BC site.) What do FPTP’s defenders find so loveable about the system? Research on the respective electoral systems provides a hint. Netherlands-born political scientist Arend Lijphart compared 36 democracies over 55 years and found that Pro Rep countries outperformed FPTP ones in 16 of 17 measures of sound government and decision-making. His work is summarized on the Fair Vote Canada website, from which this information was taken. Countries with Pro Rep electoral systems have lower income inequality, faster climate action, more renewable energy, lower national debt, enhanced civil liberties, higher voter turnout and more women elected. No wonder the Fraser Institute hates Pro Rep, except maybe the bit about debt. But why do deputy ministers dislike it, assuming McFarlane is right about that? Evert Lindquist is the editor of Canadian Public Administration, and teaches in the University of Victoria’s School of Public Administration, where he has served several terms as director. Among his numerous research specialties are the public service and government transitions. Responding to emailed questions from Focus, Lindquist said he knows of no published research regarding senior government executives’ attitudes towards electoral systems. However, he said that all other things being equal, one would expect deputy ministers and other public service executives to prefer more certainty to less, and more clarity in direction to less. “Adding even more ongoing, rolling negotiations (which of course is already a part of their jobs) is not something they would likely prefer,” added Lindquist, “unless they thought it might provide more opportunities for dispassionate advice to be heard and considered.” Even if deputy ministers might prefer FPTP, Lindquist said a switch to Pro Rep should not be career-changing for them. “Preferences are one thing, but could they adapt and function well in such an environment? Yes, of course.” Over the coming few weeks, BC voters have the chance to ensure the first general election after June 30, 2021 will be held under Pro Rep. All BC households were due to receive a voter’s guide by late October, and registered voters a voting package by November 2. Voters can answer either one or both of two questions: (1) Choose between FPTP and Pro Rep (2) Choose between 3 Pro Rep systems, only one of which (MMP) is currently in use. Completed mail-in ballots must be received by Elections BC no later than 4:30 pm, November 30. For more information, see: www.elections.bc.ca/referendum/ Formerly a political columnist and reporter, Russ Francis recently returned to journalism after a stint as a BC government analyst. During his 10 years with the government, he worked in strategic policy, legislation and performance management for a number of ministries.
  11. The company for which Victoria MP Murray Rankin testified as an expert witness won tribunal ruling in May. TAXPAYERS COULD BE ON THE HOOK for more than $580 million after a court rejected Canada’s appeal of a North American Free Trade Agreement (NAFTA) tribunal ruling. In a written ruling released May 2, Federal Court of Canada Justice Anne Mactavish turned down Canada’s appeal of a NAFTA tribunal’s finding, in favour of Delaware company Bilcon. The company was planning a quarry and marine terminal on the Bay of Fundy. As Judith Lavoie reported in the October, 2015 Focus, after a joint review panel recommended against allowing the project—a decision supported by the Nova Scotia and federal governments—Bilcon filed a claim under NAFTA’s Chapter 11, which governs so-called investor-state dispute settlement issues. Victoria MP Murray Rankin testified for Bilcon as an administrative law expert. On March 17, 2015, the tribunal decided in favour of Bilcon. Two years of appeals and legal wrangles later, Bilcon asked for reparations of US$443 million, or approximately C$580 million. In addition, the company asked that Canada pay all fees, costs and disbursements. Though the submission is marked “confidential,” it is publicly available on the website of the Permanent Court of Arbitration. The NAFTA panel has yet to rule on the size of that claim. In her recent ruling on Canada’s appeal, Mactavish found that the court had no power to intervene in the tribunal’s decision. Her ruling followed hearings on January 29 and 30, 2018 in Ottawa. Though Canada could have appealed Mactavish’s decision to the Federal Court of Appeal, it failed to do so within the 30-day time limit. Why would Ottawa let sit a ruling that paints such gloomy prospects for the value of environmental panels reviewing foreign-owned resource projects, not to mention hefty compensation bills? One environmental expert believes the government was reticent for fear of upsetting its current negotiations with the US over the free trade agreement itself. Gretchen Fitzgerald is national program director of Sierra Club Canada Foundation. “It’s touchy, obviously, with the US right now,” said Fitzgerald, who attended the January court hearings. Sierra Club Canada Foundation was an intervener in the government’s appeal, supporting Canada’s position, along with East Coast Environmental Law. Fitzgerald said that by failing to appeal to the higher court, the government is telling foreign investors that they need no longer fear Canadian environmental review boards and the like: “The corporations can have expectations of approval when they start investing.” Despite deciding against Canada, Mactavish noted that the tribunal’s ruling raised significant policy concerns. These include “potential chill” in the environmental assessment process, Mactavish wrote. Bilcon’s March 10, 2017 submission can be viewed online at: https://pcacases.com/web/sendAttach/2123. Other Bilcon documents available here: https://www.italaw.com/cases/1588 Formerly a political columnist and reporter, Russ recently returned to the fold after a stint as a BC government analyst. During his 10 years with the government, he worked in strategic policy, legislation, and performance management for a number of ministries.
  12. As LNG Canada’s Final Investment Decision looms, a fatal error sits stubbornly at the heart of the government’s case for LNG. THIS SPRING, the BC government told us of its innovative plan to save the planet: Burn more fossil fuels. After what Premier John Horgan openly admitted were extensive consultations with the big players in the Liquefied Natural Gas (LNG) industry, his government announced reduced carbon tax and electricity charges, kiboshing the LNG export tax, and providing a temporary exemption from provincial sales tax. These cuts were worked out in consort—“jointly conducted,” a so-called backgrounder assured us—with the biggest still-active player, LNG Canada. The consortium is made up of wholly-owned subsidiaries of five foreign companies (Petronas, Royal Dutch Shell, PetroChina, Mitsubishi, and Korea Gas Corporation). The March 22 backgrounder added that this financial analysis “corroborated evidence and information from internationally recognized LNG analysts that BC has a competitiveness issue.” Internationally recognized LNG analysts? Anyone from the Canadian Centre for Policy Alternatives? David Suzuki Foundation? Navius? Pembina Institute? Sierra Club? Pacific Institute for Climate Solutions? The document didn’t say. More likely a bunch of corporate carbon-heads who can’t see the future through the haze of thick forest fire smoke that now almost routinely covers large parts of the province every summer. It isn’t hard to imagine that the “joint financial analysis” went something like this: BC Government to LNG Industry: What do you want? LNG Industry: We’ll take no LNG export tax, a sales tax holiday, reduced carbon tax, and hydro at half what the hoi polloi pay! BC Government: Done! And thanks for the insightful analysis! What the March 22 government release called a “new framework for natural gas development [that] puts [the] focus on economic and climate targets,” BC Green Leader Andrew Weaver referred to as giving away BC’s Crown-owned natural gas. “There’s no doubt in my mind that the BC NDP will do anything the industry wants to get LNG here,” commented Weaver in an interview. “They have taken ‘sellout’ to a whole new level.” An “Update and Technical Briefing” on the framework presented March 22 by Don Wright, Premier John Horgan’s deputy minister, claimed that economic development, climate action and First Nations reconciliation are “parallel and mutually dependent priorities.” The thrust of the presentation was that economic development necessitates creating huge carbon-intensive LNG plants. The rule of thumb for government briefing notes is to provide three options. The first is the status quo: Do nothing. The second and third list possible actions to deal with the situation at hand. There are few issues for which there is only one active option. But Wright’s 35-page PowerPoint briefing offered just two choices. Slightly paraphrased, they were: 1. Don’t give away the climate farm to a group of multinational fossil fuel companies. But, as a result, accept that First Nations reconciliation will stall, BC’s climate action will become inaction, and we’ll all be in the poorhouse. 2. Turn over taxpayers’ fossil resources to foreigners for next to nothing, so we can make nice with First Nations, get really, really tough on climate change, and start rolling in money. The outcome? Concluded the presentation: “After extensive analysis and deliberation, government has elected to proceed with Option 2.” One doesn’t have to look far to spot the false dichotomy in Wright’s presentation. Lynda Gagné is a University of Victoria economist with a longstanding interest in the environment. Economic development should not be about producing and consuming more resource- and energy-intensive goods and services, said Gagné, who teaches in the School of Public Administration. “Our economic system already draws far more out of the Earth than it can sustain,” she said in an emailed response to questions, “and more business-as-usual development can only worsen the situation and eventually lead to a crash.” Meaningful climate action is widely regarded as incompatible with a large LNG facility. Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, pointed out that the facility will make it far more difficult for BC to meet its emission targets. In an August 2, 2018 submission to the BC Government’s Climate Solutions and Clean Growth Advisory Council, Lee estimated that LNG Canada’s emissions from fracking, processing, transportation and liquefaction for the Kitimat project will add from 9 to 12 megatonnes (Mt) of CO2 annually to BC’s emissions (in 2015, 63 Mt). An LNG plant in Australia The government claims the facility, when it’s finally built out with four units, called “trains,” will emit 8.14 Mt. Yet in 2015, BC’s existing oil and natural gas industry emitted 12 Mt (mostly from natural gas-related activities). Here’s the problem: The Province’s renewed climate targets are for 13 Mt of total emissions in 2050, just when LNG Canada would be humming along at full tilt, in all its 8+ Mt CO2/year glory. That 13 Mt target is for everything: heating, transportation, industry, mining, deforestation, cattle burping, human breathing—the works. Yet 8 + 12 = 20, therefore the emissions from natural gas production and the one LNG facility alone are 54 percent above the 13 Mt target for everything. Concluded Lee: “Any way you slice it the rest of BC’s economy would have to fully decarbonize very quickly in order to accommodate emissions from LNG Canada and stay within the new legislated targets.” Nor is it received truth that First Nations reconciliation and fossil fuels are inextricably linked. While a number of First Nations support TransCanada’s Coastal GasLink pipeline, needed to ship gas to LNG Canada’s facility, several Wet’suwet’en hereditary chiefs, in contrast to the elected Wet’suwet’en band, oppose the route. Unist’ot’en protesters plan to block the pipeline construction at their camp, which their website refers to as indigenous re-occupation of Wet’suwet’en land. UVic’s Gagné questions the government’s connecting First Nations reconciliation with more carbon-intensive development: “Reconciliation and addressing climate change can only be done by recognizing the limits we face.” A new report by a 16-strong international team of experts bolsters Gagné’s concerns. “Trajectories of the Earth System in the Anthropocene,” published August 9 in the Proceedings of the National Academy of Sciences, pulled together ten climate change processes—such as the reduction of northern hemisphere spring snow cover that amplifies regional warming, and CO2 release from boreal forest dieback, including through forest fires. The researchers suggested that when such positive feedback loops are considered together, the longstanding glacial-interglacial cycle might be replaced with a runaway “hothouse earth” beyond human control. To avoid this, said the researchers, we may need to act on multiple fronts, including decarbonizing the global economy. SO WHY DID THE NDP make such generous concessions, ones that boost the risk of an uninhabitable planet? One reason might be the current seat distribution. The NDP’s presence in the legislature is concentrated in the Lower Mainland and Vancouver Island: It holds just four seats outside BC’s southwest corner. The NDP-Green government’s 44 seats versus the Liberals’ 42 means we are just a few heartbeats away from a different government. The Liberals could even add to their seat count following this fall’s municipal election, in which New Democrat MLA Leonard Krog is expected to win the October 20 Nanaimo mayoralty election. Krog would then resign his legislature seat, prompting a by-election. Though the Nanaimo riding has been traditionally NDP-safe, the Greens have promised to run a strong candidate, possibly splitting the non-Liberal vote. A Liberal win in Nanaimo would put the NDP-Green alliance and the Liberals in a 43-43 dead heat. Depending on how independent Speaker Darryl Plecas rules, there is a real threat to the NDP-Green government in the months ahead. Horgan’s solution? Continue to impress Islanders and Lower Mainlanders with vehement opposition to the unpopular Kinder Morgan project, while simultaneously regaling the pro-resource-development Hinterlanders with cries of “Jobs ahead! Damn the GHGs!” And because the Liberals will likely vote in support of LNG development, the NDP doesn’t have to worry about the Greens being opposed. To hear the NDP government tell it, the proposed LNG Canada facility at Kitimat will have as many as 10,000 construction jobs in 2021. (Though permanent jobs would be only “up to 950.”) And LNG Canada has agreed that local residents will have first dibs at that work, promised Deputy Minister Wright. But some of those 10,000 jobs may already be disappearing. David Seaton, the chairman and CEO of Texas-based Fluor Corporation, one of the two main contractors, has boasted to investors that his company has cut on-site jobs for the LNG Canada contract by more than one-third: “[W]orking with the client, we were able to leverage our supply chain and fabrication capabilities, allowing us to reduce needed on-site [labour] by over 35 percent, which is probably the largest risk on that project,” Seaton told an August 2 investors conference call, according to a company-edited transcript. Seaton added later that the LNG Canada contract was a “big win” for his company. Veteran Earth scientist David Hughes is the author of Canada’s Energy Outlook, a 180-page report recently published by the Canadian Centre for Policy Alternatives. He has also analyzed in detail BC’s prospects for LNG. Asked which of the two estimates of LNG Canada construction jobs is more credible, Hughes replied: “I would tend to believe Fluor.” In Lee’s submission, he pointed out that greening the economy can be job-intensive. For instance, a 10-year, $2.2 billion program to make homes—especially older homes—more energy-efficient would support 12,000 direct jobs. The Greens’ Weaver dreams of a new BC economy that could even involve a Tesla Gigafactory in Kitimat, rather than an LNG plant. He adds that he has already spoken to the company about the prospect. “It’s not about saying ‘no’ to LNG,” said Weaver. “It’s about saying ‘yes’ to the new economy.” As well as the likely mayoralty win by Krog, several other events this fall may alter LNG’s political landscape. LNG Canada said it is anticipating making a “final investment decision” in the next few months. About the same time, the government will release an updated BC climate plan. How the two work together—or don’t—could shake things up as well. Should the foreign-owned LNG Canada facility actually go ahead, us locally-owned British Columbians had better start eliminating our emissions. And take only very small breaths. Formerly a political columnist and reporter, Russ recently returned to the fold after a stint as a BC government analyst. During his 10 years with the government, he worked in strategic policy, legislation,’ and performance management for a number of ministries.
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