Arthur's blog

Energy legislation in California can break the BC government's hope of positioning BC as a major renewable electricity supplier to the state. Specifically, the state's Renewable Portfolio Standard (RPS) defines certain attributes of generation facilities which effectively eliminate most of BC's generation projects.

Energy policy in BC appears devoid of sound economic or ecological underpinnings. The marginal cost of new energy is so high, that every new gigawatt hour purchased by BC Hydro is increasingly more difficult to sell into the export market. California, the only market large enough to take up much of BC's export, has a renewable portfolio standard that doesn't permit any of this new IPP electricity produced in BC. The recent lobbying by a team from MEMPR, BC Hydro, and IPPBC (now calling itself Clean Energy BC in another Orwellian linguistic trick) failed completely to win over state legislators. The export scheme of Campbell et al is doomed, yet it has now become the only argument they have to defend what they've been doing for the last ten years.

Kim Murphy of the Los Angeles Times wrote about the shipping boom on Alaska's remote Arctic coast. (A new route beyond the Last Frontier, October 11, 2009)

Eyes and ears we may have, but we're not seeing or hearing. We're pouncing on the melting Arctic, not because it's such a vast manifestation of the consequences - the early consequences at that - of climate change, but because it's become a new land of opportunity for expansion of business as usual - for tourism, fishing, shipping, and resource extraction. "Trillions of tons of coal" may now be ripe for mining, for crying out loud!

We're insatiable vultures, feeding off the newly exposed bits of a dying Earth. Where are the international voices calling for the Arctic to be a global conservation area? Silent, or blind and deaf - national and corporate greed appears to have already won the newly accessible Arctic, with no discussion at all.

On August 6, 2009, the BC Ministry of Energy, Mines, and Petroleum Resources announced a set of royalty reductions designed to attract investment to the gas-rich northeast of the province. (The Ministry's news release)

In terms of climate change and greenhouse gas reduction, these new royalty giveaways are utterly contradictory and counterproductive, as they only serve to get more natural gas out of the ground and more carbon into the atmosphere.

And in terms of the best use of the resource, the market is saying, "We've got more gas than we need to meet demand," so British Columbia should take the cue and leave it in the ground, until the markets turn. Wait at least until no royalty discounts are necessary to attract drillers, better still to wait until no royalty will be too high, and best of all, from the carbon emissions standpoint, wait forever.

But no, desperate to keep cash coming into the treasury, this government has decided to forego the long term revenue stream from gas production (the royalty) in favour of the short term cash hit (drilling and lease auction sales).

If the new giveaways are at all successful, they will only serve to attract investment dollars primarily out of Alberta. Is this the kind of self-serving pissing match that was envisioned as "investment mobility" in TILMA? Indeed, this must be the model the government would like to see with labour too.

A month ago, Bullfrog Power announced that it would be selling green electricity in British Columbia. (See the company's news release, "Bullfrog Power Brings New Choice to British Columbians", March 24, 2009).

In BC, though, most of our electricity already comes from non-greenhouse gas producing sources. And by policy, going into the future, most of our electricity will continue to be green. So what the heck is Bullfrog Power selling that BC Hydro isn't also selling? Selling cheaper, I might add. Nada, folks.

The article, First of its kind tidal energy project closer to reality in Campbell River, (Courier-Islander, April 4, 2009) reports that the BC government has awarded two million dollars to Canoe Pass Tidal Energy Corp. for its proposed tidal energy project in the narrow channel between Quadra and Maude Islands.

The money could be more strategically spent if there were more to it: require a real business plan from the proponent, provide a feed-in tarriff, and require BC sourcing of turbines.

Headline: Natural Gas, Suddenly Abundant, Is Cheaper, by Clifford Krauss, New York Times, March 20, 2009

"The decline in crude oil prices gets all the headlines, but the first globalized natural gas glut in history is driving an even more drastic collapse in the cost of gas that cooks food, heats homes and runs factories in the United States and many other countries."

Arthur Comments: We started this discussion about natural gas prices years ago with the GSX Pipeline. At the time, BC Hydro's energy economist was predicting a long term future price for natural gas of $3 a thousand cubic feet. Gas had recently shot up to $10 with the California energy crisis, so GSX opponents were taking every opportunity to observe that

$3 might be a tad unrealistic. As you can see from our gas price chart at the bottom of this article, BC Hydro and the BC government abandoned their economist and bailed on the Duke Point gas plant and the GSX, just before gas flared up to $16/mcf.