Natural Gas Prices Spike BC

Natural gas prices are out of control.  At today's prices, using natural gas to generate BC's electricity will unplug the provincial economy.  That is exactly what BC Hydro will do if left undiverted.  How can Premier Ujjal Dosanjh continue to duck this issue?

Arthur Caldicott, http://www.sqwalk.com, November 22, 2000

When gas was trading at US$2.00/mmBTU back in the 1990s, under Glen Clark's direction, BC Hydro said that natural gas was the low-cost solution for BC's future electricity supply.  They continued to say this when gas shot through $5.00 early this year.  And BC Hydro still pushes aggressively ahead with plans for a pipeline to Vancouver Island to fuel three generation plants.

Within the provincial government, and within BC Hydro, there is a refusal to face reality.  This strategy will bankrupt BC. 

The problem is obvious: gas prices and electricity prices are connected.  If the price of gas goes up, the electricity generated from it goes up.  Experts everywhere are now conceding that the  price of gas will remain above $4.00 for  most of this decade.   $4.00 is BC Hydro's upset price.  Their break-even point.  While this $16.00 winter spike that we're witnessing at Sumas is a freak occurrence in the market, it must be taken as a call to action in BC. 

The cost of producing electricity is borne by BC residents and BC industry.  For residents, expensive electricity comes straight out of disposable income, and will suffocate spending power and quality of life.  For industry, expensive electricity will be the kiss of death in the competitive international marketplace.

The provincial government has ducked this issue long enough.  The incoming Liberal government of Gordon Campbell has already said that they will continue to let the market dictate gas prices, have already said that they will review energy policy in BC.

But this is critical, today.  BC Hydro's strategy is already being implemented.  They have signed contracts to deliver gas to and purchase power from Island Cogeneration in Campbell River.  They are cooking up a deal right now for Port Alberni Generation.  They have plans for a third plant in Duncan.  And they are expected to file a formal application with the National Energy Board within a week or two for the Georgia Strait Crossing Pipeline project to bring natural gas from Sumas (price today: $16) to Vancouver Island.

Each suicidal step of the way, BC Hydro marches the BC economy into yet another megaproject boondoggle.  Designed by Glen Clark.  Implemented, or stopped, by Ujjal Dosanjh.  

Today, the choice yours, Mr. Dosanjh.