High Pressure, Explosive Contents

BC Hydro wants to build a gas pipeline across the Strait of Georgia to generate electricity on Vancouver Island. It forgot to account for global warming, skyrocketing gas prices, and angry residents

By STUART HERTZOG
Monday Magazine, Victoria, B.C., November 9-15, 2000

WAKING THE NEIGHBOURS

The view from the veranda of the farmhouse is idyllic, overlooking the scenic rolling fields and beautiful stands of mature trees of the scenic Cowichan Valley. Ducks paddle around a rush-fringed pond. Horses stand in the paddock, snorting as they sniff the fresh Island air. Cows munch contentedly in the adjoining fields.

Air Canada pilot Kevin Maher and his wife, occupational therapist Tracy Drews, purchased this property two years ago, pursuing their dream of running a small farm in this beautiful part of Vancouver Island. It was hard work, but they both loved what they were doing, and everything was going well-until they got a letter from BC Hydro.

It arrived on April 1st, like a bad joke. The letter advised them that Hydro intended to build a gas pipeline to Vancouver Island, and that their property was situated on three of the five possible routes through Cobble Hill. They were invited to an Open House on April 10th to learn more about the project.

They didn't know it at the time, but Maher and Drew were about to become grassroots activists.

"Three things became apparent at that first meeting," Maher relates as we sit in his kitchen. First, Hydro was offering the landowners a puny amount of money in compensation, about $15 per foot of right-of-way-about $4,000 to permanently cut through Maher's property. Second, Maher says the Hydro people didn't seem worried about earthquakes, or the threats to local ground water in the event of a pipeline rupture. The final straw was the panel's arrogance. "They presented the whole thing as a done deal, and that we had no way of stopping it," Maher explains, his face colouring as his anger returns. Hydro was going to take a 50-foot swath for right-of-way, plus a 100-foot buffer zone on either side that could only be farmed to a depth of one foot, and pay almost nothing in compensation. "Basically, BC Hydro was going to steal our land. All the landowners walked out absolutely stunned."

One of those landowners was Gordon Truswell. "I was really shocked," he tells me. The chosen route runs 800 metres through the centre of his Cobble Hill farm. "We had just gone through a year and a half of getting permits for water and drainage, and then this. They started talking expropriation right off the bat-maybe they got away with that years ago, but here they've run into an area with a sense of community."

"I really don't like the way they tried to bulldoze their way through," Truswell complains. "They had a team of highly-paid PR people who just tried to cram it down our throats. I'd give up my land if the pipeline was a necessity, but it's not. We've got reasonably clean air on the Island and they want to dot it with cogeneration plants, which are not as good as what we have now. They dump out tonnes of pollutants, and it doesn't take a lot to tip the balance. There's been a lot of political interference right from the start. It's not a good deal--it's another one of their expensive fiascos, like the fast ferries."

Later, I would find out that Truswell's analysis would prove to be entirely correct.

UNDER THE STRAIT

The Georgia Strait Pipeline Crossing, nicknamed "GSX" by joint owners BC Hydro and the U.S.-based giant Williams Pipelines, is a $180-million project to build a 16-inch (41cm) high-pressure (2,160 psi) pipeline that would bring northeastern B.C.'s abundant natural gas across the U.S. border to the proposed Sumas II generating facility and the refineries of Cherry Point in Washington State, and then on to Vancouver Island. Sixty-seven kilometres of concrete-covered steel pipe would be laid along the bottom of the Strait of Georgia, skirting three Gulf Islands before coming onshore at Manley Creek Park, between Mill Bay and Cowichan Bay. The line would continue another 15 kilometres overland to join the main Centra Gas trunk line northwest of Shawnigan Lake.

The topography of the Strait of Georgia is complex. The deepest point on the route is just east of Saturna Island, where underwater cliffs plunge 330 metres to a narrow and twisting valley, along which the pipe must thread. To the south are the Patois and Soucia marine parks, and the Matia Island National Wildlife Refuge; the pipeline would also squeeze along a narrow strip between Salt Spring Island and Ecological Reserve #67 to the south, which was B.C.'s only marine reserve until recently.

Besides crossing several rich crab-fishing grounds, the underwater route chosen for the pipeline affects an area that conservationists on both sides of the Canada-U.S. border want to see designated as an international marine park. The proposed Orca Pass International Stewardship Area would preserve a rich marine environment that supports a multitude of species, some of them unique to the area, and including a resident pod of orca whales.

"While a natural gas pipeline may not be fundamentally incompatible with marine or terrestrial park designations," comments Georgia Strait Alliance campaigner Peter Ronald, "it is hardly something to recommend it. We expect the proponents to ensure the ecological integrity of the marine conservation areas, but no such assurance has been forthcoming."

Then there are the shipping and ferry routes. The waters between Vancouver Island and the mainland are probably the most crowded on the west coast of North America, with hundreds of thousands of boat movements every year, including supertankers and nuclear submarines. The prospect of a pipeline explosion on farms like Truscott's or under the crowded sea lanes is terrible, but not impossible: according to the U.S. Office of Pipeline Safety, over the past 14 years 3,116 pipeline "incidents" killed 309 people and caused $436 million in property damage.

GRASSROOTS POWER

Kevin Maher's wife, Tracy Drews, arrives, frazzled after a busy work day. She pours herself a cup of coffee and sits down with us at the kitchen table. "I was infuriated by that meeting," she recalls, her face flushing. "It was obviously a case of 'divide-and-conquer'-short notice, and the meeting a poster session where you just walk from one glossy information panel to another. I wanted a proper town hall meeting where people could ask their questions and everyone would get to hear the answers."

"Fortunately, I overheard another woman protesting loudly and managed to get her name. And our local Cowichan Valley Regional District (CVRD) directors told us to get names on a petition and they would help us."

The other woman was Dodie Miller, a strong-willed and vocal Montrealer who had come with her husband Steve to settle in Cobble Hill 20 years ago. Miller took the petition to the weekly farmers' market in Duncan, and the CVRD stayed true to its word, generating a large-scale map and overlaying the various routes so all the landowners could be identified.

That's the recipe for grassroots democracy: Start with a megaproject dumped on a rural area by a heavy-handed corporation. Add a few determined people, and throw in bit of official help and a lot of luck. But the fledgling Cobble Hill resistance was about to be assisted by another big PR stumble by Hydro.

People started writing letters to Hydro and the National Energy Board (NEB), complaining about the short timeline for comment on the scope of NEB's proposed environmental review of the project, and the lack of opportunities to ask questions. In response, Hydro set up another meeting at the Shawnigan Lake Community Centre, hiring the ex-CBC Vancouver news anchor Kevin Evans to be the moderator. It all went badly wrong.

Computer consultant and Cobble Hill resident Arthur Caldicott was at that meeting. "Hydro started going over the same information," he recalls. "But now they were facing an audience of 80 informed and angry people who had moved beyond mere interest and curiosity. By this time we had managed to find out about the two planned cogeneration plants at Campbell River and Port Alberni, and we had caught wind of a huge 640 MW gas-fired generator slated for Duncan, which Hydro was trying to hide."

Faced again with Hydro's evasiveness, the audience rebelled and started firing off questions. Evans misjudged the meeting, and started rephrasing the questions to Hydro's experts--and the mood quickly became hostile. "It became obvious at that meeting that there were some major policy decisions that had been made about power generation for Vancouver Island that had never been discussed with the community," Caldicott concludes.

The meeting was a turning point. People made hard-hitting, eloquent and informed speeches from the floor. Hydrosaurus, a seven-foot-high monster suit housing the tall frame and booming voice of environmental activist Ted Smith, made its first appearance. Straight talk and street theatre were starting to triumph over patronizing professionalism.

Caldicott started publishing critical analysis of the pipeline on a website called SqWalk! (www.sqwalk.com), which quickly became a tool for citizens' groups in Victoria, in Vancouver, on the Gulf Islands, and in Washington State, where there has been loud public opposition to the proposed Sumas II plant. "SqWalk! evolved into an information hub," Caldicott explains. "It changed the mood from one of incredible anger to something more mature, more focused. We started to address the major issues we would have to take on." The fight was on. The Republic of Cobble Hill was beginning to awaken.

TURNING ON THE GAS

By now you've seen the newspaper ads or the brochures in your mail. Hydro says we need the GSX to meet a growing demand for power on Vancouver Island, and to replace the aging submarine cables that supply the Island with up to 80 percent of its electricity.

But GSX is not just a pipeline, it's a whole new energy strategy. The entire project is designed to deliver 2.4 million cubic metres of B.C. natural gas every day to industrial users in western Washington State, and to three new electricity generating plants on the Island. Some of the obsolete underwater power lines across the strait would be removed, and Islanders would switch to on-Island, gas-fired generators-thereby achieving, Hydro says, "greater electricity self-sufficiency", even if it means relying on gas from northern B.C.

At least, that's the plan. But the 640 MW Sumas II electricity plant proposal in Washington State has met with fierce resistance, and has not yet received permission from U.S. officials to proceed. No industrial customers for B.C.'s gas have been found at Cherry Point. And only one of the three planned generating units has been built on Vancouver Island.

The Island Cogeneration Plant (ICP) at Campbell River is the one project that has gone ahead. Powered by combined-cycle gas turbines (CCGTs), it can supply 135 tonnes per hour of process steam to the Fletcher Challenge Elk Falls pulp mill, plus up to 254 MW of electricity for sale to Hydro. Perhaps "could supply" is more accurate, since this facility, scheduled to come on line this fall, is experiencing teething troubles and is not expected to be operational until February, 2001.

Because it will supply both steam and electricity to the mill, ICP is a called a "cogeneration" plant, more efficient than a generator alone, because it captures a higher percentage of energy from the burning gas. Cogeneration plants must be sited next to an industrial facility to be able to use or supply excess heat or process steam. Campbell River's ICP will enable the adjacent pulp mill to shut down two polluting and inefficient oil- and hog fuel-fired boilers, and downgrade another gas/oil-fired unit to standby.

Another plant slated to be built in Port Alberni has been on hold since February of this year, when Hydro and joint proponents ATCO and PanCanadian Petroleum failed to reach a deal. Rumour has it that this week Hydro will unveil a revamped project-the 260 MW Port Alberni Generation (PAG) plant, which won't be attached to a pulp mill, and will have to reapply for provincial environmental approval. It most certainly will be vigorously opposed by citizen groups.

Even without cogeneration, CCGTs are more efficient than old-style gas boilers, and far cleaner than a coal-fired power plant. However, CCGTs burn gas at a high temperature, creating nitrogen oxides (NOx), precursors of smog and acid rain, and extremely fine particulates (as tiny as 2.5 microns), which have been associated with increased asthma attacks, especially in children and the elderly.

Burning natural gas also creates huge amounts of carbon dioxide (CO2), the notorious greenhouse gas and a major concern for the pipeline's opponents, who believe that any environmental review of the GSX must include the full environmental effects of burning the gas it carries. (Hydro says the effects should be evaluated separately for each part of the project.)

Greenhouse gas reduction is becoming a major public concern as the world tries to grapple with the implications of global warming. On October 6, the federal government announced an annual target reduction of 65 megatonnes of greenhouse gases. On October 17, the B.C. government unveiled a $13.4-million, three-year Greenhouse Gas Business Plan to cut provincial emissions. So why would government-owned BC Hydro, which has gigawatts of clean hydroelectric power, suddenly want to build a gas pipeline and purchase gas-fired energy from independent power producers?

HYDRO GETS ITS ORDERS

To answer that question, you have to go back to the early 1990s, when Glen Clark was B.C.'s minister of employment and investment. The NDP government was trying to prove it could be fiscally responsible, and Clark, fresh from his stint as finance minister, was looking for anything that would bring income to the provincial coffers. For several years, independent power producers had been beating on the doors to be allowed to sell electricity to Hydro. Clark decided it was time to let them in--especially if they would burn B.C. gas to generate electricity.

Northeastern British Columbia has huge reserves of natural gas, and the province makes money at every stage of exploring, extracting, transporting, and selling it. What could be better than letting the independent producers build and run gas-powered generation plants, which would also give Hydro surplus electricity to sell to the U.S.? And if Hydro became the gas supplier, it would have more clout to buy gas at a lower price on the deregulated open market. It sounded like a winning strategy to Clark and the cabinet.

But Hydro had its own plans for Vancouver Island's energy future. "We felt we had a better resource on our system," says Hydro's resource planning manager Graeme Simpson. Hydro's engineers were convinced they could upgrade the existing six-cable 500 kV link to the Island with a seventh cable and a fast switching device-and thereby create an additional 1,000 MW capacity. This would enable them to replace 40-year-old 138 kV circuits with modern 230 kV lines, and remove obsolete high-voltage direct current equipment, and old cables that are in danger of leaking cooling oil into the strait.

Adding that 1,000 MW capacity would be enough to meet 10 years of growth in demand on the Island, Simpson explains. Hydro didn't see the need for building new generating stations on the Island, and a pipeline to feed them. After all, it already had a gas-fired generator that could supply all of the Island's foreseeable needs: the Burrard thermal generating plant, located in Port Moody on the Lower Mainland. Hydro preferred repowering Burrard with CCGTs, and perhaps even retaining its old steam turbines to capture additional energy. A repowered Burrard would pump out less NOx and CO2 for each megawatt of power, and could be configured to provide up to 1,400 MW of power.

Repowering Burrard looked attractive to Hydro, but not to Glen Clark and his energy planners. They wanted a second pipeline to wed future electricity generation to (what seemed to be) an abundant supply of cheap B.C. gas. As an additional benefit, a second Island pipeline (the GSX) would offer excess capacity for other big projects-such as a much-touted aluminum smelter, once considered for Port Hardy or Port Alberni-and fuel economic growth on the Island.

All that was needed was a rationale to combat Hydro's planning.

WARPING THE PANEL

That problem was resolved in April, 1996, by the time-honoured technique of setting up a committee to study the proposals. An "independent review panel" was appointed to compare the social costs of the final five shortlisted projects against the social costs of repowering Burrard. ("Social costs", in energy planning parlance, are capital costs plus an estimate of external costs such as new transmission lines and pollution, offset by employment gains and payments to the province.) And as its analysis proved, there's nothing like a panel dominated by upper-level bureaucrats to find a way of giving a minister what he wants.

Hydro argued that because rebuilding the cables would free up 1,000 MW of transmission capacity, there should be no transmission credit for generation facilities of less than 350 MW on Vancouver Island. The panel disagreed, and offset the social costs of Island generation with a transmission credit of $43 per kW/year.

The result was to rank the ICP in Campbell River just ahead of adding one new 350 MW gas turbine to Burrard. The Port Alberni project was ranked third.

"I think they were looking for a way to rationalize going ahead with ICP," Simpson states. "Campbell River buys time to delay the transmission upgrade. The result was ICP, no upgrade to Burrard, and no improved transmission to the Island for six years." In September of 1996, Hydro received a directive from Clark to proceed immediately with negotiations for the ICP.

The Campbell River plant didn't appear to be a big problem on its own, since it only required gas from the existing Centra Gas pipeline, and it received provincial environmental approval on this basis. "But the Port Alberni proponents were upset at being ranked third, and complained to the government that their plant was similar to ICP and should be treated the same," Simpson says. "There really wasn't a great difference between them all, only about half a mill [one-tenth of a cent] per kilowatt-hour."

Clark came back with another directive to Hydro: that Port Alberni should be considered ahead of repowering Burrard. "We never did see that analysis," says Simpson, with a wry smile. And that second cogeneration project confirmed the need for a second gas pipeline, the GSX. "We knew that Centra Gas would have to spend $100 million to double its existing pipeline up the Sunshine Coast to supply Campbell River. But GSX would cost only $180 million, which meant that for only another $80 million we could have all the gas capacity we would need for on-Island generation, and we wouldn't have to spend $200 million to upgrade the [high-voltage] circuits."

"The whole balance was tipped by deciding to build ICP," Simpson concludes.

FLAWED ANALYSIS

My curiosity was roused. I turned to the review panel report to see how it had reached its conclusions-and what I found startled me.

The panel had assumed that the social costs of pollution were represented in the ICP's capital costs by the NOx pollution control equipment and paying for CO2 "offsets" (alternative measures of reducing greenhouse gases such as replanting trees or capturing methane from landfills). But none of these costs were actually budgeted for in the project. The B.C. Environmental Assessment Office allowed ICP to go ahead without NOx emission controls on the basis that it was saving pollution from the redundant hog-fuel boilers, and only directed the company to prepare a "greenhouse gas mitigation plan" without actually having to do anything about it. (No existing provincial or federal legislation regulates CO2 emissions or mandates greenhouse gas offsets.)

In other words, the whole GSX project-in fact, Hydro's entire Island energy policy-rests on an economic analysis that woefully underestimates the social costs of local pollution and global warming.

So it's no surprise that the ICP is an environmental nightmare. The 240 MW ICP will emit 612 tonnes of NOx annually, five times the NOx pollution of 940 MW Burrard and triple the 214 tonnes of NOx per year estimated for the 640 MW Sumas II plant on the B.C.-Washington border. Worse still, the ICP will also emit 912 tonnes of carbon monoxide per year, about 10 times the rate of Sumas II.

To me, Clark's review panel began to look like a carefully orchestrated exercise aimed at pushing Hydro into gas-fired generation. If the panel had not based its calculations on unreal assumptions, it's likely that the ICP may have proved more socially costly than repowering Burrard--and we wouldn't be considering building a second gas pipeline to Vancouver Island that inevitably will result in more greenhouse gas emissions at a time when the world's atmospheric scientists are warning that we should be reducing them.

The GSX pipeline is the last gift from Glen Clark to the people of British Columbia. Despite trumpeting its new Greenhouse Gas Business Plan as a way of addressing B.C.'s contribution to climate change, the NDP government is still following Clark's revenue-oriented, damn-the-environment policies. As Gerry Scott, climate change campaigner for the David Suzuki Foundation puts it, "The province's greenhouse gas plan makes no sense when placed next to the decision to proceed with the GSX pipeline."

If Premier Dosanjh really wants to distance himself from the "brown" policies of his notorious predecessor and attract the green vote, he could order pollution controls to be installed on the ICP cogeneration plant at Campbell River, and cancel the GSX pipeline to Vancouver Island. It's not too late--the ICP plant has not been put into production, and no deal has been signed for a cogeneration plant at Port Alberni. In fact, Hydro hasn't even formally applied to the National Energy Board for a permit to build the GSX.

THE FUTURE

The problems with the GSX aren't just limited to its contributions to pollution and global warming. It may also prove to be far more expensive than anyone predicted.

Over the past 18 months, wholesale prices of natural gas have increased by around 120 percent in North America, and the reason why is directly related to projects like the GSX. Ever since the North American electricity market was widely deregulated in the 1990s, utility companies have been rushing into gas-fired power generation: over 54,000 MW of new gas-based generation has been recently built or planned for the western North American regional grid by 2007. (To get an idea of how large an increase in demand this is, consider that BC Hydro's total generating capacity is currently around 10,000 MW.) According to a July 10 article in Canadian Business, experts estimate that the demand for gas in electricity generation could triple over the next decade-at the same time that large new reserves of natural gas are becoming much harder to find.

In other words, the economics of the Island cogeneration plants have compeletely changed, but Glen Clark's old energy policy commits Hydro to gas-fired electricity and the GSX. Add up all the costs of the separate pieces-Sumas II, the GSX, and the three plants on the Island-and we're looking at the bill for a $1.4-billion megaproject. And if it's built and gas prices keep going up, an increase in our electricity bills won't be far behind. Is all this starting to sound familiar?

The outcome is by no means inevitable. Letters to the National Energy Board from concerned Islanders like Maher, Drews, Truswell, Miller, and Caldicott have already had an effect: although GSX sponsors favoured a limited environmental study of the project by the NEB, after considerable public pressure, on October 4 federal environment minister David Anderson announced that the GSX will go to a full review before an independent panel. The NEB's public hearings will begin in about six months-if the GSX survives.

The Republic of Cobble Hill has won the first battle. But the war over the GSX and the B.C. government's energy policy for Vancouver Island has only just begun.

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