Opinion

Who Pays Huge Power Bills for Clark's Gas Plants?

Turning natural gas into liquid sucks electricity. Ratepayers, guard your wallets.

By Bill Tieleman, 7 Feb 2012, TheTyee.ca

Artist's rendering of LNG facility proposed by Apache Canada for Kitimat

Artist's rendering of LNG facility proposed by Apache Canada for Kitimat, BC. Image: handout.

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"Fixation on short term corporate profits and short term political gains to the exclusion of longer term planning is a recipe for disaster." -- David Hughes, geoscientist, on Canada's natural gas exports

There's one big question about the B.C. government's new plan to build three liquid natural gas plants near Kitimat -- how much will this cost BC Hydro customers on their monthly electricity bills?

That's because LNG plants are energy pigs, consuming enormous amounts of power to convert natural gas into a liquefied, transportable form to ship by tankers to Asia.

The electricity needed for just one LNG plant alone is equivalent to that needed by three Catalyst Paper mills -- B.C.'s largest electricity user.

So what BC Hydro consumer should wonder whether LNG will become the Smart Meters of the north -- with expensive BC Hydro costs once again being loaded onto the backs of ratepayers to subsidize private corporate profits.

Safety concerns

And just like the $1 billion Smart Meters program, there are safety questions to investigate further before the province spends untold taxpayer dollars again.

Five past fiery LNG plant accidents have taken hundreds of lives, though industry proponents claims that LNG exports are safe.

Residents of Texada Island banded together to strongly oppose a proposed LNG plant there in 2007 for both safety and environmental reasons.

Premier Christy Clark made another questionable decision last week -- to suddenly reverse the BC Liberal government's 2007 order to make BC Hydro energy self-sufficient by 2016, with power produced in this province.

That policy was ex-premier Gordon Campbell's way to subsidize buying expensive electricity from private Independent Power Producers who built run-of-river plants and other facilities.

The last BC Hydro call for tenders for IPP electricity was priced at $134 per megawatt hour, compared to between $4 to $52 per megawatt hour for power purchased on the open market, and an average $5.81 per megawatt from BC Hydro's publicly owned dams.

Despite that huge extra cost, BC Hydro is on the hook for obligations of $30 billion in IPP energy purchases over the next 25 years.

Someone -- you the consumer -- has to pay the difference.

Artificially created 'liquid gold' rush

BC Hydro rates are already slated to jump by 16 per cent over three years instead of a planned 32 per cent that drew public outrage.

Campbell's Clean Energy Act forced BC Hydro to plan to have enough power for the province without importing any during any period of worst-case water levels -- both a highly unusual circumstance and an incredibly expensive insurance policy that was unnecessary.

But it created the demand for IPP electricity, since BC Hydro has been prohibited by the BC Liberal government from developing new public power alternatives since 2002, creating what energy author John Calvert called the "liquid gold" rush.

So was that policy simply a temporary way of pumping cash into the IPP sector and always the BC Liberal intention to dump it after massive long-term contracts were signed? Or is it a radical departure from the Campbell doctrine?

Certainly we've seen no public consultation, detailed studies or debate over the issue -- just another flip-flop decision from the premier's office.

Flash forward. Will the government's desperate rush to create only 800 permanent jobs at three LNG plants, and temporarily employ thousands of workers during the eight-year construction phase -- lead it to spend billions subsidizing LNG's big oil companies owners?

Has this government ever wasted money or gone over budget before with its ill-considered plans? Smart Meters, Vancouver Convention Centre, 2010 Olympics -- why worry?

China's major stakes

It's also worth noting that the federal Conservative government is crying wolf because some environmental groups opposing the Enbridge Northern Gateway Pipeline proposal to ship heavy crude oil to Kitimat -- also for tanker transport to Asia -- receive minor funding from outside Canada.

Not only is the oil industry overwhelming foreign-owned but corporations outside Canada also control the rapidly developing LNG sector.

PetroChina has major stakes in B.C., partnering with Shell in its global LNG production interests and is part of the consortium hoping to build facilities in Kitimat.

Energy Minister Joe Oliver -- who has led the federal government charge that "foreign radicals" are subverting the Enbridge proposal -- had no problem cozying up to the Chinese Communist government last year in Beijing and offering up Canadian resources.

"We in Canada have the resources that China needs. We are open for business and we are willing to provide their minerals, energy, forestry and mining needs," Oliver told The Globe and Mail after addressing Chinese leaders and business executives.

Left unsaid is that any way you slice it, LNG consumption leads to increased greenhouse gas emissions and global climate change. Burning B.C.'s LNG will only enhance China's status as the world's biggest GHG emitter.

Bad for our energy and economic security?

Lastly, everyone wants more family-supporting jobs in B.C., which would be created in construction and LNG plant operations.

But British Columbians have to ask how much they are personally willing to pay out of their wallets as a subsidy to highly profitable foreign corporations to create those jobs.

As David Hughes, a geoscientist with 32 years service with the Geological Survey of Canada has recently written:

"Canadians, who after all are the owners of Canada's natural gas resources, are served last when it comes to their longer term energy security and environmental interests. The lure of obtaining prices that are double or triple North American prices through LNG exports is impossible to resist for corporations looking at the near-term bottom line."

"The lure of royalty and lease sale revenue, and jobs building infrastructure and producing gas, is impossible to resist for politicians strapped for cash. This does not bode well for Canada's energy future," Hughes concluded.

And at some point, hopefully sooner than later, we also have to ask whether exporting limited non-renewal energy resources like LNG to support the industrialization of foreign countries' economies is a good long-term strategy.

Giving other countries the energy they need to manufacture value-added products that Canada will import, rather than using that power to do it ourselves, will eventually come back to haunt us.

And it likely won't take long.  [Tyee]

31  Comments:

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  • judycross

    15 weeks ago

    I don't understand why natural gas itself won't be used

    to generate the power needed to compress it for export. Why is Hydro even involved in this except to ensnare ratepayers?

  • ron wilton

    15 weeks ago

    Smart gas meteres too?

    It won't be just our hydro bill that will soar to unimagined heights.

    When Gwyn Morgan's cronies can sell their (our?) LNG at three times the price we currently pay Fortis to heat our homes, hot water, swimming pools, factories, etc., to the usual offshore culprits, they sure as hell won't sell it to us for any less.

    I wonder which current Lieberal insider has the 'contract' to supply Fortis with a billion dollars worth of 'smart' gas meters.

    Of course it's only a matter of time before we are told we 'need' 'smart' water meters as well.

    I wonder who has that supply contract?

  • seth

    15 weeks ago

    its filthy thats why

    Gas power is just as bad for global warming as coal, and is a massive air polluter. Using export ready gas to generate refrigeration power cost 16 cents a kwh, compared to 3 cents a kwh using clean and green nuke power

    The NDP claims new clean energy program less clean than the old consisting of motherhood statements from the minister - an ex policeman who couldn't tell a kwh from a toaster - needs competent analysis from the BC utility commission.

    With the payback period on the proposed LNG investment at 16 months BCHydro should simply build the terminals itself and keep the lucrative profits for the taxpayer.

    To meet the demand increase by between 2600 and 3250 megawatts not including a third LNG plant, BCHydro needs at least a 20% capacity increase.

    When are these brainless Campelloni' jackasses running BC, going to get it that clean and green zero environmental footprint nuclear power is the only possible new energy source for the province. Producing dirty electricity by burning export destined NG costs 16 cents a kwh. With BC entire $65B planned investment scam with Campbelloni's stockbroker pals in the IPP business producing little more than 1.0 GW of GHG spewing filth at 13 cents a kwh, Site C at $10B producing only 500 MW of also filthy GHG spewing brew at 12 cents a kwh, spending $9B on clean and green zero environmental footprint nuclear to produce the entire 3 GW needed at 3 cents a kwh is a no brainer. Unfortunately no brainer describes the Crispy-Campelloni government to a T.

    If the $45B in crony contracts at an enormous environmental cost the Campelloni's have signed or in the process had been used to buy zero environmental footprint nuke power instead, BC would already be net GHG free with BCHydro's clean power capacity more than tripled.

    There is no alternative to nuclear energy in Canada as all other forms of power are far too expensive. There is no cogent argument against nuclear power. Cost, terrorism, proliferation, waste disposal, meltdowns, and fuel supply issues have all been resolved. With all the facts on the nuclear side, studies have shown that when the public becomes informed on Nuclear power support becomes overwhelming.

    The BC Government needs to get together with Canada's provinces and as a group commit to a purchase of 30 to start new Westinghouse AP-1000 nukes with 3 nukes in BC, 8 nukes required just to green up the Tar Sands and 15 to replace coal at a rough cost of $70B followed by orders for 130 more as factory production gets in full swing. Canada would become the manufacturer centre for Westinghouse factory modules worldwide.

    Canada's GHG emission's gone within 10 years with an enormous saving to the taxpayer. Almost overnight we end unemployment, the global warming/peak oil menace, save the lives of thousands of Canadians every year from coal/gas air pollution and create the greatest construction boom in history and do it at a 40% rate of return on investment.

  • Van Isle

    15 weeks ago

    Seth; nuc power is out of

    Seth; nuc power is out of date. Google Thorium, it's a lot safer.

  • judycross

    15 weeks ago

    Seth, I am old enough to remember

    "Energy Too Cheap To Meter" and we all know what has happened since. I just love the irony of the nuclear industry supporting the Global Warming Agenda with its demonization of a beneficial trace gas CO2 in order to push the possibility of a Chernoble or Fukushima and limitless supplies of Depleted Uranium for bombs and bullets.

  • Van Isle

    15 weeks ago

    Harper and Gordo have the

    Harper and Gordo have the same agenda; spend us into debt. Don't forget, to the economic/financial elite, all debt is good.

  • motorcycleguy

    15 weeks ago

    no bombs

    can be made from a Thorium fueled facility..time to decay is way, way less for safer storage of spent fuel in the interim...Thorium is still a nuclear fuel, but when used in a molten salt reactor there is a lot of inherent safety in the process....not foolproof for sure and not as good an option as reduced consumption (read above article), but neither is disrupting the environment for hydro and fossil fuel sources....some engineering remains to be done but Canada has some very smart people at the AEC...oh...yeah...we sold it

  • RMS

    15 weeks ago

    Maybe Seth was sleeping when Japan had their nuclear misshap.

    Seth:

    Where do you suggest we store the tonnes of radioactive waste produced by your "clean and green" atomic energy? You know, the stuff that will still do serious damage after a minimum of 1,000 years.

    I suggest many more wind farms on the coast where the wind doth blow.

  • seth

    15 weeks ago

    Education for the ill informed.

    Thorium meaning the LFTR a variety of the MSR which also burns nuke waste and uranium. Thorium won't be needed for a thousand years with all the nuke waste waiting to be burned. Yup safer and cheaper than current nuke plants.

    Also the IFR (google it) is design ready to build and so far only the Brits are building interest in one.We could build it here any time.

    Unfortunately, until we can weed out the Big Oil funded antinukers from our Fascist government, the NDP, the Obama admin and Congress these are going nowhere.

    Until then let's not let the perfect be the enemy of the just very good.

    To cheap to meter came out in 1954 in a scifi conference and referred to nuke fusion. Move on!

    Chernobyl was a nuke weapons plant

    The only long term damage from Fukushimi an accident caused by corruption in an ancient 50's designed plant, was to the plant itself. Killed nobody and confirmed nuke powers position as the safest form of energy their us by a larger margin.

    Gen IV nuke power and MOX actually burns the DU so is the only was to get rid of it.

    The tiny amount of current nuke waste is about the same level as high grade uranium after 300 years so storage in a single drift of an old uranium mine is safe enough. In any case it will be burned up as valuable fuel for Gen IV reactors.

    Nuke waste is far safer than the cubic miles of deadly forever toxic waste from mine tailing ponds. What will we do with that?

    Wind energy costs over 25 cents a kwh when 5 times sized transmission is included and produces very little net energy requiring constant and inefficient backup at full name plant capacity. Add green storage and that cost increases by a buck a kwh.

    No solution at all.

  • judycross

    15 weeks ago

    Come on Seth, Big Oil is invested in nuclear too

    That villain doesn't work. Wind is doubly dumb since it needs back-up from natural gas plants which have to stand-by on the ready in case the wind fails or the turbines do.

    http://www.dailymail.co.uk/news/article-1345439/Customers-face-huge-wind-farms-dont-work-cold.html

    http://www.gresshasissues.com/2010/03/danish-wind-power-bust/#axzz1ljqssMWk

  • motorcycleguy

    15 weeks ago

    why not use the gas to make electricity?

    It appears to be an economics issue, though I am also curious....how about comments from industry? This is a good summary of pros and cons, some excerpts are.... "the success of any LNG plant is fostered by low capital investment (CAPEX), low operating cost (OPEX), and high production efficiency. A third party, external grid power solution can
    satisfy the capital investment and low operating cost drivers"...and.... "careful attention is required when evaluating the project economics. For example, what is the value being placed on the fuel gas? Is there credit for reducing CO2 emissions? Is there sufficient real estate for the LNG plant and power plant solution? Does it make sense to export power?"

    http://lnglicensing.conocophillips.com/EN/publications/documents/GastechElectricMotorPaper.pdf

  • Dan the socialist

    15 weeks ago

    WAC Bennett must be rolling

    WAC Bennett must be rolling in his grave. The Liberals are sure hell bent on destroying Hydro and us people should brace ourselves for large hydro increases which in turn will raise prices from rents to groceries....

    Just too bad so many people are sheep and are more concerned about the latest sport score or fast food special than real issues that effect them. The 18 -35 crowd will pay dearly for being asleep down the road. Not just with hydro but from pensions to health care but that is for another topic.

  • seth

    15 weeks ago

    renewables

    Sorry Judy Big Oil has little or no investment in nuke power. As you state it does have enormous investment in not so renewable energy as most of the energy in the renewable/gas backup scam comes from gas.

    For those who think wind is a solution remember that wind must be backed up at 100% nameplate capacity.

    If BC Hydro was to try to build wind to carry the three Gw average load predicted it would have to build transmission capacity for backup of 12 Gw at cost higher than the $8B of the nuke option.

    Roughly 1500 sq. miles of forest land would have to be denuded to clear the way for the wind farms. 100 times the steel and concrete used in the nukes would be needed.

    It's just not possible.

  • Cool Hand

    15 weeks ago

    So... Let Me Get This Straight...

    WAC Bennett created BC Hydro and its dam network to power BC industry as part of economic development, job generation, and additional future guvmint revenue. The BC NDP opposed the dams at that time. Brilliant.

    During the late 1990's, the BC NDP under Glen Clark proposed several aluminum smelters (Humongous consumers of electrical power) inclusive of one in Port Alberni, because of BC Hydro's low power cost. (Forget about the fact that's not how the aluminum smelting business even operates).

    And now ... potentially $100's of billions in private capital investment (that includes NE BC field development, SASOL's proposal, other proposals not mentioned, etc., etc.) should all be thrown out the window because of idiotic BC NDP group-think?

    And potentially the BC guvmint should lose another $2 billion in annual general revenues? To pay for ever increasing health, education, and social services?

    Sigh. The Manitoba NDP must be laughing at their idiotic BC counterparts.

    My question is... If the BC NDP ever form government in BC how long will it take before they crash and burn and assume 3rd place in public opinion polls?

    6 months? 1 year ? OK 1 1/2 years. That's all the time it took for the 1991 BC NDP guvmint to crash and burn. (same as 1972 and 1996)

  • crankypants

    15 weeks ago

    Questions needing answers

    I have some questions that I think deserve some answers or at least discussion.

    1. Under the assumption that these proposed LNG plants are to be created to sell natural gas obtained by fracking and the fact that fracking is under an environmental review by the BC government, isn't it premature to assume that there will be enough product available to liquify and make this a viable industry?

    2. Fracking requires copious amounts of water to extract the natural gas from the shale. The government just recently signed a contract with a company which allows them to remove thousands of litres of water per day from the Williston reservoir which happens to make one of BC Hydro's dams a producer of electricity. Considering that the LNG plants will require so much power to operate does it make sense to possibly hinder the production of this power?

    3. One of the selling points BC Hydro has been extolling regarding smart meters is how much quicker they will be able to identify a power outage. A spokeperson for BC Hydro also stated in either a TV ad or newscast, I don't remember which, that the smart meters being installed on our homes will send their info to a relay device on the hydro poles which will then send that info to BC Hydro's nerve centre. Wouldn't it be cheaper for BC Hydro and by extension, its customers, for them to just install these relay devices on the poles to gain the same effect?

  • Skywalker

    15 weeks ago

    @ Cool Hand

    What happened. Did time stop at 2001 for BC Hydro? Has nothing happened to BC Hydro since?

  • Skywalker

    15 weeks ago

    @ crankypants

    Not only that, if the power goes out on one house do you think they will send out repair crews without verifying the outage. BC Hydro still asks you to report outages and it doesn't matter if you have a smart meter. They could install a meter every half dozen blocks of housing. They could then have verified any theft by matching usage on conventional meters by what was recorded in the overall total. No, just made too much sense.

  • Tieleman

    15 weeks ago

    Bill Tieleman blows up nukes

    Amazing - that's the only way to describe Seth's outrageous comments above: "There is no cogent argument against nuclear power. Cost, terrorism, proliferation, waste disposal, meltdowns, and fuel supply issues have all been resolved."

    I must have been mistaken on Fukushima and other nuclear disasters!

    Seth thinks the public will support nuclear once well informed: "With all the facts on the nuclear side, studies have shown that when the public becomes informed on Nuclear power support becomes overwhelming."

    Strangely, his language echoes nuclear lobbyist Patrick Moore: "Once people see nuclear energy for what it truly is - safe, reliable baseload power with no greenhouse gas emissions - they will wholeheartedly support their government's forward-thinking policy." See: http://www.independent.co.uk/opinion/commentators/patrick-moore-nuclear-energy-yes-please-436399.html

    Yikes! Nuclear power - no thanks!

  • jimmy_laroux

    15 weeks ago

    Trebles all round!

    Clark has dropped the onerous self-sufficiency requirements the BC Liberals imposed on BC Hydro and replaced them with an onerous requirement for BC Hdyro to subsidize new LNG plants.

    Everybody wins! The oil and gas companies win with subsidized hydro rates, and the IPPs win, because BC Hydro will inevitably be forced to buy their high-priced power.

    Well, everybody wins but the BC families forced to pay for these subsidies through higher electicity rates.

  • jimmy_laroux

    15 weeks ago

    @Cool Hand

    Quote:
    If the BC NDP ever form government in BC how long will it take before they crash and burn and assume 3rd place in public opinion polls?

    I guess we'll find out after they form the next government. Or maybe we can look at the BC Liberals. How long did it take BC Liberals to crash and burn?

  • gamedev

    15 weeks ago

    Don't believe it

    Do not believe the pro-nukers that nuclear energy is safe or cheap. The Fukushima disaster is still in full swing. Reactor 2 is heating up again and TEPCO doesn't know why. It may be going critical again. The fuel has melted and burned through the containment and no one, not TEPCO, no one knows where the fuel is, at this point. They claimed it went into "cold shutdown" a month or so again, because the temperature in the reactor vessels had dropped below 100c. The only reason that temperature dropped was because the fuel is no longer in the reactor.

    It is now far below the reactor. No one knows what is going to happen. I would hardly call that a stable situation. As far as "no one was killed" by Fukushima, well, thats just absurd. Even TEPCO has admitted to over 500 deaths and the reality is far higher. Did you know that Canada and the US also had large nuclear fallout? The elevation in infant deaths in the US during March-April 2011 was shown as approximately 14,000. That doesn't include the infant death increases in BC. They were reported in the media at the time, but never tied to Fukushima. Apparently the Iodine 131 released is likely responsible, as there was a correlation that was similar with Chernobyl.

    High radiation was detected in our rainwater here in BC as well. Unfortunately we have to search for information on all of this because the nuclear industry lobby is so powerful. When Fukushima first occured there was ample coverage in the news, then, on March 21st ALL the media dropped coverage of the meltdowns. ALL of them. On the same day. At approximately the same time of that day. Coincidence? I seriously find that hard to believe. The federal and provincial governments had been promising to ramp up radiation testing, but, they suddenly STOPPED the radiation testing almost entirely.

    We are not being told the truth about Fukushima. It is orders of magnitude worse than Chernobyl. I'm sure that is why there is a big push to get licenses for more nuke plants before the results of Fukushima's disaster are known. The nuclear industry knows that when the truth comes out, they are finished.

  • seth

    15 weeks ago

    Seth shames Tieleman

    You know Bill I just didn't see any cogent argument there. You wanna have at er so I can kick your ass on the subject.

    The antinuclear community use the same junk science community uses all coming from Big Oil. If you polled folks with technical background acceptance of nuclear would approach 100%.

    Since its unlikely you would risk the thrashing ole Seth would give your efforts at cogent argument perhaps I could leave you with some words of wisdom from Greenie superstar George Monbiot.

    http://www.guardian.co.uk/commentisfree/2011/mar/21/pro-nuclear-japan-fukushima

  • seth

    15 weeks ago

    gamedev nonsense

    Man you gotta loosen that tin hat.

    All that spew all coming from dubious sources. Please 500 deaths from Fukushima per Tepco? Extraordinary statements require extraordinary proof.

    Nothing you have stated has the slightest element of truth in it. But be my guest start posting links from reputable sources and I'll knock em out of the ballpark for ya.

  • RickW

    15 weeks ago

  • gamedev

    15 weeks ago

    seth

    http://www.yomiuri.co.jp/dy/national/T120204003191.htm

    I'm sorry, that story was from a Japanese newspaper that states 573 deaths were related to the nuclear accident. This, of course, does not include any of the expected cancers. I doubt those financial payouts would have been done if there was any other way to explain them.

    RickW was kind enough to post the link to a peer reviewed study regarding the 14,000 excess deaths.

    There is a massive amount of material available if you are willing to research it. If you are just a nuclear apologist or employee then i'm probably wasting my time. Just remember, whether or not you believe it won't make any difference. It will still affect you and your family.

    Google Arnie Gundersun. He is a nuclear whistleblower that was a vice president of a nuclear company in the US. He has many video's on the disaster.

    The canary in the coalmine is here http://www.sc.edu/news/newsarticle.php?nid=2872#.TzNpfrFuksJ

    I'm sorry if I come off as crazy but this stuff is happening and we are being lied to about it by our governments who have been bought off by the nuclear lobby. Our media won't touch one of the biggest stories of our time for the same reason.

  • wiley

    15 weeks ago

    "8 nukes to green up the tar sands"

    Oh dear Seth, how do you find room to chew your irradiated food when your feet are so firmly planted in your mouth?

  • gamedev

    15 weeks ago

    seth

    http://www.youtube.com/watch?v=gtT4ymoa1kk&feature=related

    This fellow bought his own Soeks radiation meter and checked several areas in bc and alberta. Our rain was highly radioactive...

  • seth

    15 weeks ago

    more junk science

    Still no cogent argument.

    I always get a kick out of fools that claim minute amounts of radiation are deadly. Yet to find on of them who can explain why Ramsar, Iran where normal radiation levels are hundred times what was ever measured anywhere outside the Fuku front gate, yet cancer rates are very low.

    Didya all know that the land surrounding Fukushima is covered with an oily sheen from the giant deadly area oil refinery destruction and all the other Big Oil and chemical facilities destroyed by the tsunami. Do you understand that while outside the Fuku front gate rad levels are less than downtown Denver, but those chemicals coating the land are forever?

    Gunderson got a masters in nuclear engineering thirty years ago then worked a year or two as a flunky in a paper pushing consulting firm. For the last twenty years he was a high school teacher. He has no experience in the field and is not qualified for state registration as an engineer.

  • gamedev

    15 weeks ago

    I have my answer

    Well, I now have my answer. Seth is a nuclear apologist and nothing will change that. You simply dismiss anything that doesn't fit your views, so there is no point "discussing" it with you. I have heard your worn out, inaccurate stories from others, such as Ann Coulter. I suppose hormesis is a valid theory as well, lol. Have a nice day.

  • RickW

    15 weeks ago

    Hey Bill!

    Christy has announced that building the dam at Site C will provide the power to liquify NG. The way she worded it, Site C is an alternate for cancelling some of the R-O-R projects.........

  • Tieleman

    14 weeks ago

    Seth - George Monbiot? Really?

    I'm not a fan or follower of Monbiot but regardless, his change of heart arguments for nuclear power in one column are unconvincing. I'll put the problem with nuke plants on my list for a future column though and we'll have at it but I've opposed nukes since the 1970s and Fukushima just reinforces my conviction on that.