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BC Government’s Billion Buck Bungle

May 6th, 2016 · 7 Comments

There’s more to governing than just photo ops.

It’s a useless exercise for any governnmnt to pass legislation it announces will protect BC’s population, resources and environment … but then lack the will or fail to adequately fund those whose job it is enforce those laws.

The Auditor General’s report into the Mount Polley disaster … a disaster many ways beyond the physical devastation … is a devastating indictment of the BC government’s failure to adequately protect British Columbia’s resources and, even more worrisome,  British Columbia taxpayers’ exposed liability if a corporation fails miserably to do things right and then folds to avoid paying up to fix their misdeeds.

The media and the pundits have all outlined well Auditor General Carol Bellringer’s criticisms surrounding the tailings dam disaster at Mount Polley, so I won’t go over them or most of the 17 recommendations here.

But one revelation really DISTURBS and SCARES and ANGERS me!

From The Vancouver Sun’s Gordon Hoekstra:  “The auditor general also found that some mining companies have not provided government with enough financial security deposits to cover potential reclamation costs if a mining company defaults on its obligations. That fund is underfunded by more than $1 billion, a liability that could potentially fall to taxpayers, concluded the report.”

(You can read the entire article here: http://vancouversun.com/business/local-business/b-c-auditor-general-slams-mining-sector )

Underfunded by A BILLION DOLLARS!!!!

That is such a HUGE administrative and/or political breakdown that I believe should be investigated for possible deliberate criminal failure by someone or some group to carry out proper fiduciary responsibility .

It goes well beyond, in my opinion,  a mistake, simple oversight or incompetence.

A BILLION DOLLARS short!!!

As Bellringer noted, in her report “We noted the same issues in the Mount Polley file as we did throughout the audit … that is, too few resources, infrequent inspections and lack of enforcement.”

We NEED to know much more about that: HOW and WHY did that happen?

And regarding the financial security deposits REQUIRED from companies to cover reclamation costs, surely someone  knew in the public service the shortfall was mounting? What did they do about it?  Was it reported to any political officials?  How and when? If not why not? Was anyone instructed NOT to do anything to remedy the underfunding?

Lots of questions .. and despite the Auditor General’s report … not enough answers.

Because what that underfunding does is it exposes the taxpayers to potentially huge cleanup costs  … when and if any sleazy polluter or struggling mining company causes a major disaster … and then just files for bankruptcy rather than pay for their own misdeeds.

Readers of this blog know I openly support mining and resource extraction in the province … as long as it can be done safely, providing jobs for British Columbians, with adequate environmental protection and remediation and as long as the taxpayers benefit with a fair share of any revenues.

But it’s the GOVERNMENT’S job to ensure companies doing business in this province do so legally and fulfill ALL conditions attached to their operations.

And when the REQUIRED  deposit fund is a BILLION DOLLARS underfunded, looks to me like the government is either incompetent or complicit.

Harv Oberfeld

→ 7 CommentsTags: British Columbia

WHY the PUSH is ON for LNG Decisions NOW!

May 2nd, 2016 · 42 Comments

The future of BC’s Golden Dream about millions …or even billions of dollars  … about to flow our way through LNG exports overseas is becoming an even more critical economic issue for Canada.

The US Energy Information Administration  (EIA), in a recent report,   has drawn attention down south to Canadian National Energy Board projections that LNG exports to the US are going to decline  … quite a lot!

“The NEB expects that Canadian natural gas net exports to the United States will fall to 2.5 billion cubic feet per day (Bcf/d) by 2025, shrinking to a negligible volume by 2040.  Net exports to the United States have already decreased from a high of 10.6 Bcf/d in 2007 to 7.4 Bcf/d in 2014,” the American agency reported.

And it suggests the impact on Canada could be more critical than for the US.

“ With the continued development of U.S. shale resources, such as the Marcellus, the United States now relies less on Canadian imports to meet demand.”

In other words, the US won’t need us anyway … at least not very much.

Which, of course, explains the interest, pressure and maybe even slight panic in the BC, Alberta and federal governments (as well as the industry) to get something MOVING (literally!) when it comes to tying up/filling international contracts and markets for our LNG.

And the importance of that was not lost on the US agency … even if many Canadians don’t realize it or care:

“With the decline of natural gas exports to the United States, LNG exports are expected to be the primary driver of Canadian natural gas production growth, with production growing from 15 Bcf/d in 2015 to nearly 18 Bcf/d in 2025. The NEB analyzes two additional cases in CEF to explore the impact of LNG exports on production.  In a low-LNG case, where no liquefaction facilities are constructed, production remains at the 2015 level of 15 Bcf/d through 2040.  In a high-LNG case, where LNG exports reach 4.0 Bcf/d by 2023 and 6.0 Bcf/d by 2030, production increases to 22 Bcf/d by 2040.  Based on these results, CEF anticipates that future Canadian natural gas production growth will rely on the construction of LNG export capacity,” the EIA report pointed out.

You can read their entire report here: http://www.eia.gov/todayinenergy/detail.cfm?id=25972

In fact, it adds …despite the projected decline in Canadian gas exports to the US … the industry’s future in Canada could even double production by 2040.

“Canadian natural gas consumption is also projected to rise, reaching 16.4 Bcf/d by 2025 and 18.6 Bcf/d by 2040.  The industrial sector, which includes refining and oil exploration, is the primary driver of this growth, as well as the largest consumer of natural gas.  Oil sands operations alone currently account for 20% of Canadian natural gas consumption.  By 2040, CEF expects oil sands production to more than double to 4.8 million barrels per day, consuming 3.4 Bcf/d of natural gas.  Another source of natural gas demand growth is electricity generation, whose consumption rises to more than 3.2 Bcf/d by the end of the projection period.”

Interesting info from an AMERICAN agency analysing NEB-sourced information.

It probably won’t change any minds among those who oppose resource extraction projects …but it should help the rest of us understand WHY our governments are now pushing for DECISIONS to get going on overseas export projects/pipelines and even  more domestic pipelines.

Harv Oberfeld

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