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Time for a turnaround, says think-tank report Government accused of undermining B.C.’s energy security; Neufeld says industry is vital source of employment, revenue Gary Park Petroleum News Calgary Correspondent
Just as British Columbia is battling headwinds in its efforts to tap coalbed methane and offshore oil and gas deposits, it has been buffeted from the side by a report that argues the province’s energy policies should be concentrated on conservation and security, not the extraction and export of resources in fragile eco-systems.
A 60-page report commissioned by two think-tanks – the Canadian Centre for Policy Alternatives and the David Suzuki Foundation – accused B.C.’s government of being fixated on shipping as much oil and gas as quickly as possible to the United States.
Dale Marshall, author of Running on Empty: Shifting to a Sustainable Energy Plan for British Columbia, said the province needs to make a dramatic change to the way it produces, consumes and exports energy.
The report noted the government of Premier Gordon Campbell released a plan in 2002 that promoted the objectives of sustainability and security.
But Marshall said that it is now clear the government is ready to undermine energy security, by ignoring the dangers of climate change and making only token gestures towards conservation and renewable energy.
He said the strategy is focused more on building new coal and gas-fired power plants, and building transmission systems to export oil, gas and electricity to the United States, along with developing coalbed methane.
The result, he said, is the loss of jobs across the Canada-U.S. border and the production of greenhouse gases that the study links to drought, declining salmon stocks, insect infestations and forest fires.
Based on Environment Canada statistics, the report concludes that greenhouse gas emissions from electricity rose by 175 percent from 1990 to 2001 and by 45 percent from the hydrocarbon sector. Neufeld makes no apologies B.C. Energy Minister Richard Neufeld replied that British Columbia is actually a net importer of oil and consumes 45 percent of its natural gas, with the balance going to the United States and Eastern Canada.
He made no apologies for the incentives offered to oil and gas companies to entice them to the province and generate “solid employment and a good revenue stream for social programs.”
Even so, Neufeld insisted the government has put a high priority on renewable and clean energy sources by urging “anyone marketing electricity ... to get 50 percent of their new energy from clean sources. B.C. Hydro has managed to meet that so far, in fact, has beat it.”
He said the greenhouse gas emission figures cover the previous left-wing New Democratic Party government’s time in office, while the numbers have gone down since the current Liberal government was elected in 2001.
Neufeld brushed aside as “left-wing talk,” the report’s recommendation that all oil and gas subsidies should be eliminated, royalties should be increased and a permanent fund should be set up paralleling those of Alaska, Alberta and Norway.
He said programs to encourage horizontal, deep and summer drilling are not subsidies, but have “benefited British Columbia hugely.”
The permanent fund concept was rejected in favor of eliminating a budget deficit and retiring a “pretty large debt.”
Meanwhile, the government’s push to exploit its estimated 90 trillion cubic feet of coalbed methane reserves is colliding with more than just opposition from the Montana government, which objects to the auctioning of drilling rights to two large blocks of land in southeast British Columbia because of the dangers to water being pumped from coal beds and finding its way to the Flathead River Basin. Coalbed methane development not imminent Some experts say that only 20 percent of the coalbed methane reserves can be extracted economically and others suggest commercial development is far off in the future.
While most of neighboring Alberta’s coalbed methane is in dry coal fields, B.C.’s fields would produce large volumes of water along with the gas, creating environmental problems like those associated with coalbed methane production in the United States.
Alberta has the added advantage of an extensive network of roads and pipelines in its coalbed methane areas. B.C.’s infrastructure is minimal.
Tom Ebbern, an analyst at Tristone Capital, said the fact that no company has yet present plans for commercial coalbed methane development in British Columbia suggests no one has figured out how to do it economically.
But it is not all bad news for the B.C. government. A report issued Aug. 9 by the B.C. Business Council said the resource sector, including, energy, mining and forestry, accounts for 13 percent of the province’s gross domestic product, compared with 11.1 percent for the rest of Canada.
Resource-based goods make up 75 percent of British Columbia’s merchandise exports, yielding C$22 billion in annual earnings and provide 180,000 direct jobs, or one in every 10.
B.C. Finance Minister Gary Collins, commenting on the critical dependence on resource extraction and processing said that sector “isn’t going to go anywhere anytime soon,” regardless of efforts to diversify.
He said regulatory and tax regimes would be kept competitive with neighboring jurisdictions, although the province would never “bail out a particular company.”
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