Alcan can't 'justify' smelter deal

More Lies, Deceit, and Cover-Up.
Robin Mathews, Vive le Canada, 07-Jan-2007

Alcan can't 'justify' smelter deal
Andy Hoffman, Globe and Mail, 05-Jan-2007

See Utilities Commission kills Alcan deal for more information about Alcan deal and the Alcan-BC relationship.

Robin Mathews
Vive le Canada
January 07 2007

The headline doesn’t read: “B.C. Utilities Commission blocks attempted breach of trust”. The Globe and Mail supports big corporations, not the democratic population. So the headline reads: “Ruling puts smelter in limbo”.

The story of the Gordon Campbell/Alcan attempt to hi-jack the Nechako River for pure profit and rape B.C. electricity users with costs that are almost incredible is disguised as much as the Globe can disguise it. And what about reports for CanWest, owner of the Vancouver Sun, the Province and a lot more? The Robert Gibbons “report” for CanWest News Service on January 3, has the following lead-in.

“MONTREAL – A long-simmering dispute over power is threatening to delay the launch of Alcan Inc.’s $1.8 billion U.S. project to modernize and expand the capacity of its Kititmat aluminum smelter in northern British Columbia.”

Back up a little.

The “long-simmering dispute” is really the Alcan intention to dismantle its 1950 agreement with the people of B.C. and to grab the whole Nechako River for itself, for its power, for Alcan to sell at kidnapper prices (with the active support of Gordon Campbell).

In 2002 Alcan presented a Province wide river energy plan to Gordon Campbell, a planned privatization – in fact a suggested policy of theft of every hydro capable river. And in this case – of the Nechako River - it wanted the people’s ownership delivered to it before New Year.

Working as he does for Private Corporations and not for the B.C. people, Gordon Campbell used the Alcan presentation as a model for all B.C. rivers being transferred into private hands under “his own” new energy policy. He has been wrenching rivers from public ownership and guardianship as fast as he can, delivering them to private, often foreign corporations.

Campbell is doing that in an active breach of trust, lying, deceiving, using secret deals, and gag-legislation, hiding all that he can from British Columbians (with the active support of the Private Corporate Press and Media in Canada).

Globe and Mail coverage is “poor Alcan”. Or as Konrad Yakabuski has it: “Alcan might rue the day in 1952 it set up shop in B.C. were it not for all that money it’s made.” (Globe and Mail, Jan 1 07 B1)

A few facts leak into the Globe and Mail coverage, and Konrad Yakabuski does a fair job under the misleading headline: “How B.C. threw Alcan a curve”. That’s intended as another “poor Alcan has been unfairly wounded” lead.

From Yakabuski’s article and from research we know (1) Alcan is the author of Campbell’s water energy policy. (2) Campbell supports actively the betrayal of B.C. energy users. (3) Kitimat municipality has a suit “against the government which the town argues has failed to enforce the original 1950 agreement that gave Alcan Kemano water rights to produce electricity only to make aluminum and not to sell power willy-nilly”. (Yakabuski, Globe, Jan 1 07 B7)

The Kitimat town’s case is strong. But it needs to be defeated so Gordon Campbell can hand the Nechako – no strings attached – to Alcan. To do that Wally Oppal, Attorney General of B.C. and highest law officer of the Crown, has his name on the case as fighting the people of Kitimat on behalf of Alcan. Pretty.

(4) In typical fashion, Alcan tried to argue – with Gordon Campbell’s support – that its quiet $2 billion contract with B.C. Hydro should be kept secret. Some of the secrecy was broken by the demands of citizen groups. (Remember the dirty, secret, still not-fully-disclosed sale of B.C. Rail – with criminal court cases still hanging on to it?) In Yakabuski’s words about Alcan, “everything about the sales contract [just stopped by the B.C. Utilities Commission] – its negotiation, its terms, its objectives – is shrouded in mystery”.

Worse still (5) only the implacable determination of Kitimat’s mayor, Richard Wozney, has forced the matter into the light. Like the sale of B.C. Rail, Gordon Campbell would have kept it secret in a flagrant breach of the trust placed in him by B.C. voters.

(6) Opponents of the Alcan deal point to what is probably a key to the whole scam. Gordon Campbell travelled to Kitimat, did not see the Mayor or Council, but instead inked a quiet offer to Alcan of $2 billion for power and decided to cloak it as expansion money intended for the aluminum smelter there. He didn’t mention the planned (secret) change to the status of the Nechako water resource. Many believe the whole smelter expansion announcement was a fraud, set up to divert attention from the real plan. That was to end aluminum production (already cut down), close the town of Kitimat, and unloose Alcan to be a major, highest price seller of water energy power into the U.S. – into the so-called power grid.

Alcan (as the headlines I’ve quoted suggest) claims the water energy power sale deal is part of the aluminum smelter expansion program.

That is simply false. The people of Kitimat know that. They’ve experienced such dealing before.

The proposed deal for power handover to Alcan – is to sell to B.C. users energy at $71.00 a megawatt hour that costs Alcan a little less than $5.00 to produce. That means British Columbians’ energy prices would soar perpetually so that Gordon Campbell’s corporate buddies could glut themselves on obscene profit “forever” – as far as B.C. users are concerned. Moreover, the proposed sale is NOT tied to the building of the theoretical 2 billion dollar aluminum smelter expansion (as is ballyhoo’d in the Private Corporate Press). The theoretical expansion, it appears, is simply part of what we have come to know as Gordon Campbell’s deceitful style.

Alcan could have said (had it not been stopped by the B.C. Utilities Commission): “We’re not tied to smelter expansion at Kitimat. We’re quitting that. Close down the town. We can make billions more WITHOUT a smelter operation. So get lost.” Incredibly, at the BCUC hearings the Sierra Club supported the private power producers (the private operators being given the B.C. rivers the people of B.C. own). Perhaps Sierra Club and other environmentally concerned people don’t know that the river power deals create “carbon credits” – which means those private companies can set up fossil fuel burners in your back yard and wave “carbon credits” in your face.

Yakabuski – retreating into the corporate fold – tells readers that the “New Democrats gave Alcan its Kemano water rights in perpetuity, so B.C.’s bargaining power, unlike Quebec’s, is limited”. That’s just plain balderdash. B.C. government could support rather than oppose the Kitimat argument, and it could fix for Alcan the price of extra energy Alcan has for sale to B.C. Hydro. It could rule, moreover, that all other power generation on the Nechako will be undertaken in staged operations by B.C. Hydro. It could protect the public interest by allowing power sales and taxing them at 95%. It could do any number of things to protect the assets of the B.C. people. All the chatter in the private corporate press about Alcan’s “private property” is an attempt to make British Columbians think their government is powerless to act on their behalf.

Gordon Campbell is destroying B.C. Hydro to make actions on behalf of the B.C. people impossible. And as Yakabuski says the sweetheart deal between B.C. Hydro and Alcan “was thrust upon the utility by its political masters in Victoria….”

That’s the long and the short of it. It’s the key to understanding what seems an irrational, insane set of conflicts. Many are convinced that Gordon Campbell (with his corporate clones) has engineered the whole attempted breach of trust. British Columbians must, therefore, concentrate all their efforts on getting rid of Gordon Campbell – by criminal or civil court actions against him, by largescale public protests, by whatever constitutional means are open to them – and as soon as possible.

(But …British Columbians shouldn’t expect any support from Gordon Campbell’s big corporate friends who now own B.C. Rail and who own The Globe and Mail, The Vancouver Sun and Province, the National Post, CTV, BCTV, and many B.C.neighbourhood papers owned by the big corporations, papers B.C.’ers often think are small and therefore“independent” of the big, ugly, corporate press.)

For more information on the B.C. rivers sell-out go to hydrofacts.ca

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ANDY HOFFMAN
Globe and Mail
5 Jan 2007

Alcan Inc. will scrap the $2-billion expansion of its Kitimat smelter in British Columbia if it is not allowed to sell excess power at market rates, a company executive warned yesterday.

Michel Jacques, who was recently appointed president and chief executive officer of Alcan's primary metal group, said the aluminum producer could not accept a deal to sell the surplus power it generates from its Kemano hydroelectric station at prices below the market average, because it would be unfair to shareholders.

"With the economics we understand today, with the rules of the game as they were laid out for an investment in B.C., we cannot justify an investment unless we are sure we will be able to sell the power at market rates," Mr. Jacques said in an interview.

The British Columbia Utilities Commission (BCUC) rejected Alcan's long-term electricity agreement with British Columbia Hydro and Power authority last week. The accord would have allowed Alcan to sell up to $97-million worth of electricity a year to the province for 20 years.

Mr. Jacques said the price of $71 per megawatt hour that Alcan was to have received from B.C. Hydro was based on the average price paid by B.C. Hydro to other independent power suppliers.

It costs Alcan between $5 and $10 to produce a megawatt hour.

"Why would we accept today less than B.C. Hydro is paying to other producers for exactly the same commodity?" Mr. Jacques said. "How can we justify that to our shareholders and to the pension funds that own Alcan shares?"

In a letter announcing the decision to reject the power sale agreement, the BCUC panel said "B.C. Hydro should not have agreed to the pricing provision" of the accord with Alcan. "In particular, it should not have agreed to pricing provisions based on the [fiscal] 2006 Call," the letter said.

The full reasons for the decision are expected to be released later this month.

Analysts have said that Alcan will have to renegotiate a less lucrative rate with B.C. Hydro if it wants to build a new smelter and expand capacity at Kitimat to 400,000 tonnes a year from 275,000 tonnes.

However, Mr. Jacques said that without guaranteed revenues from the sale of power, the expansion may not be economically viable.

"These revenues are helping us justify the investment in the smelter. If it wasn't for that, if people say 'you can't sell the power,' then there's no deal. It makes no economic sense for us to build a new smelter in B.C."

Alcan was granted water rights and the ability to generate power by British Columbia back in 1950 in exchange for constructing Kitimat and Kemano. At the time, the $500-million project represented the largest private investment in Canada to date.

Kemano produces between 700 and 890 megawatts of power a year, depending on rainfall and water levels. The aging Kitimat smelter uses slightly less than 550 megawatts.

The proposed new smelter will use between 670 and 690 megawatts, once it is running at full capacity, which could happen by 2014.

Alcan has come under fire in recent years from critics who say it is more interested in selling the power it produces in B.C. than aluminum from its smelter.

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