Monday, October 4, 2010

Site C, the Neoliberal Plan B

Gordon Campbell selling Site C, April 2010. Photo Vancouver Sun

Many in British Columbia have noticed the curious coincidence between the ongoing agony of the “run-of-river” private power scheme, and the sudden resurgence of Site C as one of our government’s top priority policy objectives.

That timing is not coincidental, but reveals instead an organic link between private power and Site C - a publicly managed 900 MW dam project to be located on the Peace River. Put simply, Site C is Gordon Campbell’s Plan B in his pursuit of the neoliberal agenda, in the event that the collapse of the private power adventure is confirmed in months to come.

For those opposed to private power in this province, what an extraordinary year 2010 has been! No doubt (and barring any last minute catastrophe) this will go down in our collective memories as our finest hour, our annus mirabilis. Let’s summarize.

January. Plutonic Power announces its decision to put its gigantic Bute Inlet private power project on hold for 12 months. Two months later, in March, it announces that the project is suspended indefinitely. It is probable - although none of it has transpired publicly - that General Electric, the project’s financier, killed the Bute once it realized that the risks involved in this $4bn project had escalated dramatically, both in terms of its disastrous public image and the increasing uncertainty about whether BC would even be allowed to sell its energy to California.

April. The modest-size Tyson Creek private power project is temporarily shut down, two months after going online, due to large amounts of sediments being deposed in the nearby fish-bearing Tzoonie river. The incident has brought the entire environmental assessment process into disrepute, as regional districts have discovered to their dismay that some of the most textbook risks such as - duh - the potential sedimentation impact of a lake delta, have been completely left out of the impact studies.

May. BC’s other private megaproject, Kleana Power’s Klinaklini project in Knight Inlet, is killed by BC Hydro after environment minister Barry Penner publicly voices concerns about the project’s potential environmental impacts. The rumour goes that this project was so disastrous environmentally that the government could simply not afford to support it. I will also argue that at that stage of the game, the BC Liberals had already decided to shift their priorities back to Site C.

September. The California legislature says no - again! - to importing BC’s private energy, in spite of the Campbell government’s herculean lobbying efforts. California’s renewable power bill died of neglect on the senate floor, without even being voted upon. Not that it changed much for Campbell anyways, since the California legislators refused to change that bill’s language to qualify BC’s private power as “green”. And why would they? Their political duty is to protect the state’s fledgling solar energy industry - and its badly needed jobs - from the unfair competition of their northern neighbor’s subsidized private energy.

This year’s amazing developments are coming after another pretty good year, 2009, which saw among other things the West Kootenays rise against the Glacier-Howser private power project, and the BC Utilities Commission deliver a resounding slap in the face to the Campbell government by ruling that its private power scheme was “not in the public’s interest”.

On the face of it, Site C signals that Gordon Campbell has finally received the message from the public loud and clear. You don’t like private power? Well okay, he appears to be saying, let me give you instead a good old-fashioned
Bennett-style public project, one that puts BC Hydro back in the driver’s seat, one that even the NDP won’t be able to object to.

Politically, it’s a savvy narrative. But the problem lies in its failure to address two nagging questions:
  1. British Columbia does not need the additional power provided by Site C, any more than it needed that provided by Bute Inlet and the Klinaklini. That point was made clear time and again during the anti-private power campaign. Even BC Hydro acknowledged that fact in its 2007 Marbek Report. And if the purpose of producing this surplus energy was to export it, as the Campbell government was finally forced to acknowledge in 2009, that route has now been closed by California’s lawmakers.

Question #1: if we don’t need it and California doesn’t want it, for whom exactly are we producing Site C’s energy?

  1. The BC government is actively pursuing a transmission line project which is under-reported in mainstream media and therefore remains mostly under the public radar, the Northwest Transmission Line. This $400 to 600m project consists of a 500-kilometre line from Terrace to Dease Lake. Whoa, hold it there - from Terrace to Dease Lake? What’s up there? A handful of diesel-powered rural and First Nations communities which, by the admission of the BC government itself, will not get linked to the grid after this new transmission line is completed.

Question #2: why are we spending half a billion dollars to build a Transmission Line to Nowhere, one which will fail to get a single community off diesel?

With incredible candor, the Mining Association of British Columbia provides a compelling answer to both aforementioned questions in the form of the following map, appearing in a 2008 report which underscores the benefits of the projected transmission line for the mining industry:

The MABC’s report further acknowledges that “demand for power in the northwest is driven largely by the mining sector”, and adds that “the potential economic benefits to the province of constructing the Northwest Transmission Line appear considerable” and are “extremely dependent upon the various mining projects identified in this report”.

And it’s really as simple as that. Site C’s excess energy, paired with this new transmission line, will serve to power private mining ventures in Northern BC. Mines consume enormous amounts of energy, and none of those projects north of Terrace would be economically viable without a very large supply of cheap, publicly subsidized energy. It’s one of the oldest tricks in the neoliberal hat, one being used today all around the world. Large transnational corporations apply their enormous political leverage to obtain from local governments full access to the country’s public resources - both energetic and financial - to the detriment of local populations. It’s a textbook case of the “enclosure of the commons”. 

Campbell’s initial plan was to cater to two of his constituent groups in a single move. (a) Hand BC’s rivers over to the private power industry - the so-called IPPs -, purchase the entirety of the energy produced at outrageously high rates (~$100/MWh) on public funds through exclusive 40-year contracts, and sell that energy back at half the cost (~$50/MWh) on the North American spot market, while (b) catering to the mining industry by providing them with an ample oversupply of cheap energy thanks to the IPP gold rush, and by “investing” provincial and federal taxpayer money in a transmission line which would serve no other purpose in life but to power up those mines. This has nothing to do with sound economics or rational market-driven cost cutting measures. It has everything to do with the looting and pillaging of public resources by an elite class constituted of mutually serving corporate executives and government officials.

Part (a) of Campbell's plan is now falling apart, partly because of the massive public outcry, partly because of the greater economic context of a deepening recession which is now morphing into an outright depression, a situation which exacerbates the likelihood of an energy oversupply in North America, and which has, in turn, triggered California’s lawmakers to deny entry to BC’s private energy. 

And so Campbell is now adapting to the new circumstances and refocusing on part (b) of his plan, the mines. What used to be a sophisticated scheme involving multiple players and several interrelated markets, has now devolved into a coarser and more classical case of good old “third world” appropriation of public wealth by a small group of private players. According to the new Plan B, corporations will now be allowed to make money by purchasing dirt cheap energy from the public, instead of selling it at outrageous rates to the public as was initially envisioned. This shift in the looting strategy reflects the simple fact that, since the 2008 financial meltdown, the energy market has become a buyer's rather than a seller's market.

Frankly, after the promising year 2009 and the glorious year 2010, I am a little worried about 2011. I don’t think that the activist community has fully grasped yet the scope and magnitude of the danger looming ahead, if the BC Liberals are allowed to carry out their plan. If we don’t react rapidly and mount a strong response to this latest phase of the neoliberal assault on our common resources and wealth, 2011 could become a year of major setbacks and great disillusion. Let’s gear up for that next battle.