Good riddance to B.C. LNG

There were lots of things wrong with former Premier Christy Clark’s plan to produce liquefied natural gas but let me start with the good.

image: the Tyee

At least it was a plan that labour and business could agree to. It was a provincial strategy that had workers and industry pulling together in the same direction.

It was an ambitious plan but unrealistic from the start. Markets for were weak and no one wanted to develop the plants. Now one of the last players, Petronas, has pulled the plug.

I can only speculate why they bailed out only one week after the BC Liberals were defeated. Was there some deal with the Clark government to provide concessions such that the LNG plant would be built regardless of whether it was viable? It’s not inconceivable considering how much political capital Clark had invested in the project.

Or was it because of Canada’s so-called anti-business climate, including high taxes, environmental reviews, and Indigenous land claims? Instead of recriminations, let’s celebrate the passage of Petronas says economist Jim Stanford.

Stanford has a unique perspective of LNG projects in B.C. and Australia. He’s a professor at McMaster University in Hamilton, Ontario, and lives in Sydney, Australia.

“In fact,” says Stanford, “far from blaming government red tape for the collapse of this misguided project, we should be collectively grateful. Those rules likely saved us from wasting tens of billions of dollars on the biggest white elephant in Canadian history.”

Stanford’s analysis shoots down an impression I had. I wrote that Australia was a LNG success story and that Australia’s early entry into the market was why B.C.’s plants were doomed. I now realize that Australia’s experience was not as rosy as I thought.

When Asian gas prices started to surge in 2009, Australia decided to chase after those markets. Unlike Canada, Australian developers faced few environmental hurdles and Australia’s Indigenous people had little negotiating power.

What followed was a spectacular construction boom in which $200 billion Australian was spent on LNG plants.

The boom had a dramatic effect on Australia’s economy. Their dollar, now at par with Canada, spiked up to $1.30, resulting in what economists call the “Dutch disease.” When Australia’s currency rose dramatically, the price other countries paid for Australia’s products rose. As well, imports were cheaper. Exports fell, imports rose and Australian factories could no longer compete. Australia became deindustrialized including the shutdown of their auto industry.

With the drop in gas prices, Australia’s LNG online plants are marginal. Boom towns that sprung up during the construction years are becoming ghost towns. Housing prices have collapsed.

Gas plants are selling into markets at discounted prices. Unlike Canada, Australian plants don’t have to supply the country first and so, ironically, there is a shortage of gas in Australia and a glut of gas on world markets. Domestic prices have doubled because of diversion to export markets.

B.C. has no economic strategy. Only one per cent of our GDP comes from mining, oil and gas and most from finance and real estate.

Our new NDP government faces a challenge. In our polarized political climate, unifying strategies are rare. Just ask former Premier Clark.

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Electoral reform disappointment #3

I was disappointed but not surprised when Prime Minister Trudeau abandoned his plans for electoral reform. I’ve been let down before.

fairvote.ca

fairvote.ca

The first time was in 2005 when a Citizens’ Assembly was created to study models of reform. After much deliberation, they recommended a made-in-BC type of Single Transferable Vote called BC-STV.

The referendum was coincident with the provincial vote. Only weeks away from the vote, an Angus Reid poll showed that two-thirds of respondents knew “nothing” or “very little” about BC-STV.

Then to everyone’s surprise and my delight, BC-STV almost passed despite the high threshold: 60 per cent of voters had to be in favour as well as 60 per cent of the provincial districts.

The threshold for districts easily passed with 76 of 79 districts in favour. The popular vote came within a hair`s breadth of passing: 57.7 per cent. Support in Kamloops was the lowest in the province at 49 per cent in both districts (Elections B.C.). Bud Smith, the popular Social Credit MLA from 1986 to 1991, led the no vote in Kamloops.

The popularity of BC-STV seemed baffling given the lack of understanding of just what voters were supporting. But not so baffling in light of a recent referenda, such as Brexit. British voters were as much against immigrants as they were for leaving the European Union. Clearly, voters don’t necessarily answer the question on the ballot.

BC-STV was on the ballot but not on voter’s minds; rather, it was dissatisfaction with Gordon Campbell’s BC Liberals. The BC Liberals lost 31 seats, down from their record win of 77 out of 79 in 2001.

My second disappointment was the defeat of the BC-STV referendum again in 2009. With the earlier referendum being so close, I hoped, against discouraging opinion polls, that earlier support was not a fluke. This time, even in Kamloops, electoral reform would prevail. I joined city Councilor Arjun Singh, Gisela Ruckert, and others in Fair Voting BC. In a column for the Kamloops Daily News (May, 2005), I implored:

“This is a limited time offer.  The chance to change our electoral system comes once in a lifetime, . . . Don’t let this chance to make history pass you by.”

It was not to be. A disinterested electorate, 51 per cent of eligible voters, returned the BC Liberals for a third term, defeated BC-STV by 61 per cent and buried electoral reform for decades.

Trudeau raised my hope federally by proposing unilateral legislation. But Canadians want a referendum (73 per cent in an Ipsos poll).

A referendum would doom electoral reform to failure. Voters like the idea of proportional representation but have trouble understanding the voting systems that would accomplish it. The outcomes of referenda in B.C., P.E.I and Ontario made that clear. The same would be true of a federal referendum says pollster Environics. The vote would be split between three alternatives –the current system and two types of proportional representation:

“In a referendum, not one of these three alternatives would achieve majority support — leaving the reform project to die, along with virtually every other proposal ever put to a referendum in this risk-averse country.”

And that assumes they vote on the ballot question.

Why drivers text and drive

Fines in B.C. for driving while using phones will double to $368 on June 1. But will it change phone use? Psychology provides some clues.

shutterstock_116889370

“At any moment in time,” explains psychology Professor Gerald Wilde, “people assess risks and compare them with the amount they are willing to take,” on CBC Radio’s Spark. While risk factors may change, the amount of risk for any individual remains constant. If the perceived risk goes down, for example, people will engage in more risky behaviour to keep their risk level constant. Professor Wilde calls this “risk homeostasis.”

Risk homeostasis is best demonstrated by a famous experiment called the Munich taxi experiment conducted in the 1980s. A taxi company had to reduce their accidents or pay more for insurance.

So they installed anti-lock braking systems on one-half their fleet. To their surprise, the accident rate didn’t drop. In fact, over the three-year period of the experiment accidents actually increased slightly in the cars with ABS brakes.

It seemed like the drivers in safer cars were taking more risks. To find out, they hired expert observers to monitor driver habits such as speed, lane changes and so on. The drivers didn’t know that their passengers were paid observers and the observers didn’t know which cars had ABS – a classic double-blind experiment.

Sure enough, the observers found that taxi drivers increased risky driving behaviour: they maintained a constant risk.

In frustration, the taxi company decided to try a different approach. They told drivers that they would be financially responsible for damaged cars. Then the number of accidents went down.

Risk homeostasis is not a conscious decision but rather an intuitive calculation involving costs and rewards, including the cost of car repairs due to accidents and fines from traffic violations. Think of the calculation this way, says Prof. Wilde: “You set your thermostat such that there is a balance between comfort and cost of energy.”

Based on this psychology, increased driver fines will reduce distracted driving. But since looking away from the road is pretty drastic, there must be something beyond risk homeostasis.

When air bags were introduced into cars, drivers drove faster as explained by risk homeostasis –safer cars, riskier driving. What doesn’t add up is that the death rate to pedestrians and bicyclists went up. Yet, knowing that, drivers didn’t slow down. It seems like the risk to others was not part of the calculation. If it were, drivers would have slowed down.

Drivers who text and drive do so because it doesn’t appreciably increase their risk. Air bags, ABS brakes, seat belts and impact-absorbent car bodies reduce the risk to drivers but not to vulnerable people outside the car.

Add to that sound-proofing, cruise control, comfortable seats, deluxe sound systems, and drivers are easily lulled into a false sense of the degree of attention required while hurtling down the road in a two-tonne iron shell. Driving becomes secondary to fiddling with the radio, texting on their phones, applying makeup or rummaging through the glovebox.

Stop calling royalties a tax

In raising royalties, Rachel Notley’s NDP government is simply returning Alberta to its roots. Former premier Peter Lougheed urged a sensible development of the tar sands and fair royalties. After flying over the tar sands in 2006, he remarked:

Bust

“I was just up there on a trip, just helicoptering around, and it is just a moonscape. It is wrong in my judgment, a major wrong, and I keep trying to see who the beneficiaries are. It is not the people of the province, because they are not getting the royalty return that they should be getting.”

Corporations like to confuse royalties and taxes because they would rather not pay anything to government, regardless of merit or ownership. Royalties are “rents” says Gordon Laxter, economist and founder of the Parkland Institute of the University of Alberta.

“Many think of royalties as taxes. Any government fee must be a tax. Wrong. Private woodlot owners and musicians collect royalties. No one calls them taxes. When governments collect royalties they aren’t taxes either. Royalties are one way to capture economic rents. Leases, ecological charges and corporate taxes are other ways. Government ownership of resource companies is the only way to collect all the rents,” he says in the Monitor magazine.

By rents, Laxter means the profit from a piece of land or real estate. A tax is not that, it’s a levy on income. Royalties are rents, compensation for the use of public land.

When Lougheed flew over the tar sands moonscape, he was being rhetorical when wondering who the beneficiaries were. As former premier, he knew that the beneficiaries were Big Oil and not primarily those who owned the land.

Despite Lougheed’s pleading for Albertan’s to “think like an owner,” successive Alberta governments fell sway to the push from Big Oil who threatened to leave Alberta if royalties were increased. It was an idle threat, of course. Other governments, like Norway’s, impose higher royalties and Big Oil still continues to profit.

Western provinces tend to think small when it comes to their economies.  Like a young adult, no longer a teenager, provinces fail to think in grown-up ways. Western provinces have trouble seeing beyond living their parent’s basement and working at the equivalent of a fast-food restaurant – quick and easy natural resource extraction.

Mel Watkins, one of Canada’s foremost political economists, foresaw adult economies in his 1963 “staple theory of economic growth.” Simply put, his three pronged maturation involved the export of resources only after they had been processed; then on to the production of finished products instead of importing them; and finally, mature economies which become self-supporting and not dependent on resource extraction.

It hasn’t dawned on Western Canadians that we are there, at the third stage. We have cities with populations over a million; we are large enough to be self-supporting. Unfortunately, the quick-and-easy resource extraction mentality is hard to shake. B.C. Premier Clark imagines our future as the exportation of LNG and has lowered rents to please investors.

The reality is that B.C. and Alberta have the population, the talent and ingenuity to complete the last prong of Watkins’ vision. We need to think like grown-ups.

 

Sand mining and fracking

Standing on a beach, the sand seems infinite but it’s being mined at an alarming rate to make concrete. Standing on the edge of an open pit sand mine used for fracking is hazardous and the pit is an ugly scar on the earth.

sand

Sand is necessary for fracking. Once the shale deposits are fractured under high pressure, sand holds the pores open to allow oil or natural gas to flow.

Fracking operations have been suspended as cheap oil floods the market. But fracking will be back and so will the need for frac sand. When that happens, the B.C. Liberals will once again be flogging international markets with our natural gas under the pretence that it’s a clean fuel.

As it is, B.C.’s frac sand must be brought in from other provinces at a cost of $250 to $300 a tonne. Since single fracked well can use 10,000 tonnes, it’s obvious that oil and gas companies would like to have frac sand closer to home.

Not any sand will do; not what you’d find on a beach says Sean Cockerham of McClatchy News:

“Rounded quartz sand is needed because it’s strong enough to handle the pressure and depths involved in fracking. Beach sand is too angular and full of impurities.”

Descriptions for frac sand take on the connoisseurs’ appreciation of the soil for fine wine: the terroir of a particular region’s climate and soils that affect the taste of wine. The “Northern White” sand of Wisconsin is excellent for fracking. The hickory, or brown, sand of Central Texas is less desirable but has the benefit of being close to the home of the best oil and gas fields in the U.S.

Unlike the making of fine wine, the landscape is destroyed in the extraction of fine frac sand. Not only have that, but the piles of sand present a health hazard that’s worsened as a result of the slowdown in fracking says Ryan Schuessler for Aljazeera. Victoria Trinko lives one-half kilometer away from one of these drifting piles of sand.

“’That particular mine started in July 2011,’ Trinko, 69, said. ‘By April of the next year, I had developed a raspy voice. I was wheezing. Sore throat.’ She said her doctor later diagnosed her with asthma resulting from her environment. Her cows have started coughing, too, she said.”

What’s blowing in the wind is c, released into the air during frac sand mining. The mining company is supposed to keep the sand piles damp to keep it from blowing away but with the slowdown, maintenance is not profitable. Silica is a carcinogen and can cause silicosis, an incurable lung disease that can lead to death.

Stikine Energy Corp. of Vancouver thinks it’s found a solution to B.C.’s frac sand problem. Stikine president Scott Broughton says his company has discovered very promising deposits, large enough to support open pit mining. Despite the slowdown, the deposits 90 kilometres north of Prince George are still listed in B.C.’s major project website, waiting to be mined.

The dangers of frac sand should be another nail in the coffin of fracking but once the price of oil soars, watch for a resurrection.

Bush as peacemaker biased by one-sided religious view  

The popularity of religion may declining but not its power.  According to a survey done by Statistics Canada, Canadians increasingly say they have no religion.  The Yukon and B.C. lead the country in non-believers.

Billy Graham and G.W. Bush

Billy Graham and G.W. Bush

But fear not. Our fallen province is about to be saved by American Baptists.  They have designated Vancouver a “strategic focus city.”  Professor John Stackhouse from Vancouver’s Regent College says that U.S. evangelicals see Vancouver as “shockingly pagan, with our low numbers of church attendance and high numbers declaring no religion (The Daily News, May 31, 2003).”

The idea of British Columbians being saved by Southern Baptists is mildly amusing.  What’s not funny is the influence that religious forces have over the world’s hyperpower. An unholy union of state and religion guides President Bush and the U.S. government.  Some of these religions are obscure.

I bet you’ve never heard of The Fellowship, for example.  That’s the way they want it.  The Fellowship is not like most religions that seek to convert the masses.  It’s more like an covert council.  Their goal is to sway the world’s decision makers, not to win converts.

“A Fellowship employee, went so far as to say that ‘there is no such thing as the Fellowship,’ even as she helped lead a group of 250 college students around Washington this month, part of a Fellowship-sponsored national leadership forum on faith and values,” writes Lisa Getter in The Los Angeles Times (Sep 27, 2002).

Even those who are influenced by The Fellowship don’t know exactly who they are.  The administration of U.S. government is so closely entwined with The Fellowship that they appear seamless.  Their annual big public event is the National Prayer Breakfast in Washington. It has been attended by a succession of ambassadors, foreign dignitaries for years.  Most attendees think the event is sponsored by Congress or even the president.

A Los Angeles Times review of the Fellowship’s archives kept at the Billy Graham Center reveals that The Fellowship has had extraordinary access and influence on foreign affairs for the last 50 years.

The Fellowship’s leader, Douglas Coe, 73, has befriended a succession of presidents and world leaders since arriving in Washington in 1959. Former U.S. President Bush Sr. once referred to Coe as “an ambassador of faith.”

Jeffrey Sharlet infiltrated The Fellowship at their boot camp for recruits in Arlington, Virginia.  They don’t like to call themselves The Fellowship.  They prefer “the Family.”   They don’t even like to call themselves Christians.  It’s “a term they deride as too narrow for the world they are building in Christ’s honor,” says Sharlet in the March issue of Harper’s magazine. Instead, they are “believers.”

The Family believes that the way to advance Christ’s will on earth is through intense personal bonds, or covenants, with world leaders.  While in Arlington, Sharlet met Douglas Coe as he was counseling a congressman from Kansas about commitment to the Family.  Coe summed up the influence of their minimalist religion, “That’s what you get with a covenant, Jesus plus nothing.”

It’s not just shadowy quasi-religions that influence the world’s most powerful nation.  U.S. President Bush’s foreign policy is affected by Evangelical Christians who make up 25 per cent of the U.S. population.

Many of Bush’s supporters are Christian Zionists – – they believe that the return of the Jews to Israel is part of God’s plan.  They include Evangelical groups headed by Pat Robertson, Oral Roberts, Billy Graham and Jerry Falwell.

Their biblical interpretation of God’s plan was popularized by a maverick Irish Anglican priest, John Nelson Darby (1800-1882).  He proposed history as a series of epochs in which mankind moved from catastrophe to catastrophe.  First there was the expulsion from Eden, then the flood, the crucifixion of Christ.  Now, with the return of the Jews to Israel, we are in an epoch which God will soon bring to a shuddering halt.

In the apocalyptic imaginations of Christian Zionists, Yasser Arafat and Saddam Hussein compete for the role of Antichrist.

President Bush hopes to bring peace between Israel and Palestine with his “road map.”  His credibility as peacemaker is stretched, not just by his inclination to make war, but by his religious bias. How can his plan succeed when he regards one side as God’s chosen people and the other as evil terrorists?