Over the last few weeks Sonia Furstenau, Adam Olsen and I have tried to provide as much evidence as possible to make the case for cancelling the fiscally-reckless Site C megaproject. In fact, since I first raised the fiscal folly of moving forward with Site C in 2013, the case has become much, much stronger culminating in the British Columbia Utilities Commission report released on November 1, 2017.

In question period I’ve contrasted the escalating costs of Site C to the diminishing costs of renewables and noted the parallels with the controversial Muskrat Falls megaproject in Newfoundland and Labrador. I’ve pointed out that Site C was approved as a ratepayer funded subsidy to a non existent LNG industry. I’ve asked why the Columbia River Entitlement and distributed renewable projects have not been explored. And my BC Green colleagues have asked many more questions as well.

With the rising of the legislature last Thursday and ahead of an imminent decision regarding the fate of Site C, my caucus colleagues and I felt it was important to summarize our case against the project in an open letter that we sent to Premier Horgan. Below I reproduce a text of that letter.

Text of Open Letter

December 1, 2017
Premier John Horgan
Office of the Premier
Parliament Buildings, B.C. Legislature
Victoria, B.C.
V8V 1X4

cc: Hon. Michelle Mungall
Minister of Energy, Mines and Petroleum Resources
Dear Premier Horgan,

As we near cabinet’s decision on Site C, we write to you today to urge you to stop construction of the Site C dam.

Our Confidence and Supply Agreement committed government to sending Site C to the BC Utilities Commission (BCUC), BC’s independent regulatory agency, for an independent review of the project. In undertaking this review, the BCUC marshalled significant evidence and undertook an analysis of the implications of pursuing completion, suspension, and termination scenarios; the implications for ratepayers of different scenarios; and the potential for a portfolio of alternative sources of energy to meet demand.

The resulting report was comprehensive and provided a strong, evidence-based rationale for cancelling Site C. This rationale is founded in a number of key findings presented in the report, including:

1. Site C is already over budget, and is beset by considerable risks of further costly overruns and delays;
2. An alternative portfolio can meet future demand requirements, at the same or lower prices than Site C.

The BC Green Caucus believes that the findings of the report more than make the case that the best course of action for government is to cancel the project, remediate the land and begin the work of developing a 21st century energy system based on options presented in the alternative portfolio.

This argument is laid out in greater detail below.

Costs and risks of Site C

The estimated cost of Site C has escalated throughout its lifespan. Just last month, when the river diversion deadline was missed, the cost increased again from $8.3 to $8.9 billion, accompanying a year-long delay to the construction schedule.

It was therefore unsurprising to see the BCUC Panel determine that Site C will be behind schedule and substantially over budget. In the BCUC Panel’s words, “given the nature of this type of project and what has occurred to date, total costs for the project may be in excess of $10 billion and there are significant risks that could lead to further budget overruns”. The Panel found that these remaining risks include unresolved tension cracks and disputes with contractors. As such, the Panel found that it is unlikely that Site C will be completed on schedule by 2024, and even that construction costs could escalate even further beyond $10 billion.

This cost escalation is significant, and will have substantial impacts on British Columbia ratepayers. Given that we are only 2 years into what is supposed to be a 9-year construction project, we are gravely concerned about the impact on British Columbians of further expected delays and cost overruns.

As cabinet makes its decision, we hope they will also heed the lessons learned from another large-scale dam under construction, Muskrat Falls, in Newfoundland and Labrador. When the Muskrat Falls Project was sanctioned, it was estimated to cost $6.2 billion plus financing. The costs have since ballooned to more than $12 billion. The impact of this cost increase on rates in Newfoundland is profound. Nalcor Hydro now estimates that costs from the Muskrat Falls dam will result in rates almost doubling.

The lessons from this project are significant and relevant. Just last week the Newfoundland and Labrador government initiated a public inquiry into what happened with Muskrat Falls. Richard LeBlanc, the provincial Supreme Court judge leading the independent inquiry, has said “while we cannot undo the past we can learn from it”. While it may have been too late for their government to cancel their project, it is not too late for BC. We hope this government heeds his words and chooses a different path.

The potential of alternatives to meet demand

As part of its review, the BCUC was also mandated to analyze the ability of an alternative portfolio of commercially feasible projects and demand-side initiatives to provide similar energy benefits to Site C, including their potential to meet demand and their costs to ratepayers.

The Panel found that not only could an alternative portfolio of conservation, wind energy, and geothermal energy meet demand and provide similar benefits to ratepayers as Site C, but that it could do so with an equal or lower unit energy cost.

In addition to recognizing the current viability of alternative energy in BC, the Panel found that disruptive trends in technology pose one of the most significant risks to continuing with Site C. Evidence from around the world substantiates the Panel’s warning about technological trends. Prices for wind, solar, and

geothermal energy have plummeted year by year. The pace and scope of technological advance have exceeded even the most optimistic predictions.

Instead of locking ourselves into the path of the Site C Dam, we should seize this opportunity to build clean, distributed power that puts us on the cutting edge of innovation, and provides jobs and benefits to local communities.

In addition, though beyond the scope of the BCUC review, it is critically important that government also consider the impacts that this project has on First Nations, particularly in light of our collective commitment to implementing UNDRIP. Government must also consider the project’s impact on the environment of the Peace River valley. Through pursuing an alternative energy portfolio instead of Site C, BC can partner with First Nations, industry and local communities to build clean, distributed power across BC. These alternatives will employ more people than Site C and provide local jobs and benefits to local communities.

In the face of these developments, it would be irresponsible for government to continue down the path of Site C. We do not require Site C to meet our future energy needs – alternative sources of energy are more than able to meet demand, and they will enable us to adapt to changing needs, as they provide flexible sources of energy. In contrast, Site C locks us into an energy future that could impose significant burdens on future ratepayers, and we would be forced to sell any surplus power at a loss.

Final considerations

Laid out in front of this government is a choice. The previous government chose to forgo evidence and due diligence, and pushed forward irresponsibly with a project that it is clear should never have been started. What the BCUC report tells us is that it is not too late to correct this mistake.

However, the choice facing your government is not simply about which option will save ratepayers the most money. It’s a choice about what type of province we want to build. All around the world jurisdictions are embracing a modern, 21st century approach to energy policy. Pursuing this future would see the creation of a distributed, integrated power grid where the economic and employment benefits are shared by communities throughout the province.

Site C puts this future further out of reach, doubling down on the energy projects of the last century and undermining our ability to embrace the future.

We hope, as cabinet considers this decision, that they properly weigh this information contained within the BCUC report. Your government made the right decision in agreeing to commission an independent review before we crossed the point of no return. You need now to be guided by the evidence that this report puts forward.

This government has an opportunity to undo the mistakes of the last administration and chart a new, modern path for energy policy in BC. We hope you will seize this opportunity.

Sincerely,

Andrew Weaver
Leader, B.C. Green Party
MLA, Oak Bay-Gordon head

Sonia Furstenau
MLA, Cowichan Valley

Adam Olsen
MLA, Saanich North & the Islands

The Letter

Media Release

B.C. Greens make the case for cancelling Site C in open letter to government
For immediate release
December 1, 2017

VICTORIA, B.C. – B.C. Green MLAs Andrew Weaver, Sonia Furstenau and Adam Olsen sent an open letter today to Premier Horgan and Minister of Energy, Mines and Petroleum Resources Michelle Mungall making the case for cancelling Site C.

The B.C. Greens have been opposed to Site C since costs begun to escalate well past its initial budget, while the global cost of alternative energy has continued to fall.

The letter is attached.

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Media contact
Sarah Miller, Acting Press Secretary
+1 778-650-0597 | sarah.miller@leg.bc.ca

Today in the legislature I rose in Question Period to ask the Minister of Energy, Mines and Petroleum Resources about the escalating costs of Site C relative to the diminishing costs of renewables.

In the days ahead, the BC cabinet will make a decision on whether or not to proceed with the construction of Site C.  It’s critical that cabinet make its decision based on the best available evidence. It’s clear to me that Site C is about to emerge as BC’s very own Muskrat Falls. A public inquiry in Newfoundland and Labrador will begin this January to determine why that hydro megaproject is so many billions of dollars over budget and so far behind schedule. It will also examine why the project was exempt from oversight by the Public Utilities Board much as the Site C project was approved without oversight from the British Columbia Utilities Commission.

Below I reproduce the video and text of the exchange. It is clear to me that the BC Liberals were feeling very uncomfortable with the line of questioning as their heckling was so loud and ongoing that I had to stop several times.

Video of Exchange

Question

A. Weaver: I see the members on the opposite side here are somewhat troubled about question period and are a little feisty today.

I’d like to take us back, hon. Speaker. I’d like to take us back to the previous decade, when Site C was advanced to stage 3 of the approval process. Its price tag then was somewhere between $5 billion and $6.6 billion. Let’s now fast-forward to 2011. The price tag now was $7.9 billion. Two years later, now in 2013, the price tag was $8.3 billion. Then the price tag grew to $8.9 billion, accompanying a year-long delay in the construction schedule.

Now the B.C. Utilities Commission says this directly: “Given the nature of this type of project and what has occurred to date, total cost for the project may be in excess of $10 billion, and there are significant risks that could lead to further budget overruns.” The cost, they found, could end up being $12 billion — and this only two years into a nine-year project.

Interjections.

Mr. Speaker: Members.

A. Weaver: My question through you, hon. Speaker — if I’m allowed to actually ask it over the heckling from opposite — is this. It’s to the Minister of Energy, Mines and Petroleum Resources. Will the minister stop the Site C project…?

Interjections.

Mr. Speaker: Members.

The question, please.

A. Weaver: I’ll try again.

Will the minister stop Site C before it gets any worse and protect British Columbians from a project that already shows signs of having costs that will spiral completely out of control?

Answer

Hon. M. Mungall: Thank you to the member for the question. I find the question very interesting because I think it highlights exactly why this project should have gone to the B.C. Utilities Commission right from the very get-go. The fact that the official opposition, when they were in government, chose not to do that — I’ve said it before, and let me say it again — was the wrong choice.

This government has righted that wrong. We have finally gone to the B.C. Utilities Commission, and we were able to get answers to the questions that British Columbians had, questions that I’m sure that the Leader of the Third Party had as well. This government is taking all of that information into consideration as we deliberate on this very important issue for British Columbians, and we’ll be working and making a decision in the best interests of British Columbians.

Supplementary Question

A. Weaver: Thank you to the minister for the response. In contrast to the grim picture of ballooning Site C construction costs, let’s now take a look at the renewable energy sector. Wind, solar and geothermal power have become cheaper and scaled up faster than anyone predicted. The cost of wind power has decreased by 90 percent since the 1980s. In the last eight years alone….

Interjections.

A. Weaver: I know that members opposite don’t like to hear data, but if you could let me actually get it through, we’d be actually all benefiting from this.

In the last eight years alone, costs for wind power declined by 66 percent. And the costs are predicted to continue to fall. Bloomberg, for example, predicts that onshore wind costs will fall by 47 percent by 2040 and offshore costs will fall by 71 percent.

Now I get that they’re feisty opposite, hon. Speaker, because they don’t like the real data. They’re just living in an ideological world of mysterious data.

Solar energy tells a similar story.

Mr. Speaker: Member, the question, please.

A. Weaver: Thanks. If I could actually ask the question….

Solar energy tells a similar story. Costs have decreased by 68 percent since 2009, and they’re projected to decrease by a further 27 percent in the next five years. We have a window of opportunity now to harness renewables and build power that puts us on the cutting edge of innovation and provides local jobs and benefits.

Mr. Speaker: Member, the question please.

A. Weaver: My question — if I can get it above this background of raucous Liberal members — to the Minister of Energy, Mines and Petroleum Resources, is this: are you prepared to forgo this generational opportunity to harness renewables by continuing in the B.C. Liberal footsteps with building a doomed megaproject?

Answer

Hon. M. Mungall: It’s clear that members opposite sure are feisty today. I’m glad that the member did get his question in.

He will note that part of my mandate letter is to build that road map into the future in terms of B.C.’s energy policy, looking specifically at our opportunities — our tremendous opportunities — at renewables.

But for today, we have to address this issue of Site C. No decision has been made, but we are in the decision-making process, and we take it very seriously. This is a very important decision for British Columbians well into the future, and that’s why we have ensured that we’re doing our due diligence by starting with the B.C. Utilities Commission.

We’re looking at the information that they brought forward as well as the incredible amount of information that has come out over the years about Site C, and we will be making a decision that works for British Columbians today and into future generations.

Today in the Legislature I rose in Question Period to question the Minister of Energy Mines and Petroleum Resources about the need for Site C in light of a nonexistent LNG industry. I further questioned whether or not she would defend the interests of British Columbians and ensure a fair price for our natural gas assets by evoking a cancellation provision with the Progress Energy royalty agreement (as Petronas has not made a positive final investment decision).

In addition, in April, 2015 when Bill 23, The Miscellaneous Statutes Amendment Act was introduced by the BC Liberals, the BC NDP and I spoke out about profoundly troubling changes to the way Royalty Agreements are managed under the Petroleum and Natural Gas Act. Under these changes, the Minister was granted the power to enter into secret agreements with oil and gas companies without the approval of Cabinet. I felt it was important important to see whether the Minister would agree to not undertake such agreements.

Below I reproduce the video and text of the exchange as well as a copy of our accompanying press release.

Video of Exchange

Question

A. Weaver: I think I’m living in some kind of a fantasy world here in question period today. It’s quite remarkable.

To entice LNG projects to British Columbia in 2014, the previous government promised proponents electricity rates of 8.3 cents per kilowatt hour, but that wasn’t good enough. So two years later, they dropped the rate to 5.4 cents per kilowatt hour.

Now, we know the actual cost of power from Site C, if the government continues with this project. It will be over ten cents a kilowatt hour, while residential customers today are paying 8.6 cents at tier 1 and 12.9 cents per kilowatt hour at tier 2.

Not only are residential customers paying nearly twice what hypothetical LNG companies would pay, they’re also financing Site C to provide electricity to a nonexistent industry through a business model that will lose about five cents for every kilowatt hour of energy produced. That’s B.C. Liberal economics for you. Fortunately, for the members of that party, they have one leadership candidate who hasn’t run on their abysmal economic record.

My question to the Minister of Energy, Mines…

Interjections.

Mr. Speaker: Members, we shall hear the question, please.

A. Weaver: My question to the Minister of Energy Mines and Petroleum Resources is this. Will government admit that the only reason to continue with the construction of Site C is to provide ratepayer-subsidized power to a nonexistent LNG industry?

Answer

Hon. M. Mungall: Thank you to the member for the question. He is aware of the process that is undergoing right now. We’ve just completed the B.C. Utilities Commission review of Site C. That report was delivered just a week ago, and this government has announced that we are now moving into our analysis, and then we’ll be doing proper deliberations.

Next week myself and the Minister of Indigenous Relations and Reconciliation are actually going to be formally consulting with Indigenous communities and First Nations leaders who are directly impacted by Site C. Saying anything at present about future decision-making would likely prejudge that, and I’m just not going to be doing that.

Supplementary Question

A. Weaver: The previous government did everything industry asked them to make their LNG dreams a reality. “Jump.” “How high? How often? Where to? How many times?” They wanted to deliver unicorns to each and every one of our backyards, and when they couldn’t squeeze water from a stone, they tried desperately to squeeze even harder.

They even changed the natural gas royalty legislation so that the minister could negotiate sweetheart deals in secret. They signed a deal with Progress Energy.

Interjections.

Mr. Speaker: Members.

A. Weaver: They signed a deal with Progress Energy and its partners that would have locked in low royalty rates for years and cost B.C. millions. But that contract had an escape valve. One of its conditions was a positive final investment on Pacific Northwest LNG by June of 2017. Yet Petronas decided to kill the project.

My question to the Minister of Energy Mines and Petroleum Resources is this. When will the government stand up for the people of B.C., demand a fair price for our natural gas assets and terminate the long-term royalty agreement with Progress Energy? And will the minister confirm, for the record, that this government will not negotiate royalty agreements in secret with any other gas companies?

Answer

Hon. M. Mungall: I think there’s no doubt that anybody on this side of the House would agree with the member that the previous government made large promises and absolutely failed to deliver on those promises. I think we’ve canvassed a few of those: the jobs with LNG, the LNG prosperity fund, the “Debt-free B.C.” Families first, as well.

That being said, moving forward, we have committed to work with industry but also to make sure that our regulatory oversight bodies are doing their due diligence, as well, and that they have the resources to do so. On this side of the House, we want to make sure that government is working for all British Columbians and that we’re all together building a better B.C.

Media Release

November 8, 2017
For immediate release
Site C, Hydro finances demonstrate need to reverse trend of failed Liberal economic management: Weaver

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, is calling for an overhaul of BC’s approach to the energy file. Weaver says that the politicization of energy has got in the way of sound fiscal management and evidence-based policies that would protect ratepayers and allow BC to become a leader in alternative energy.

“Energy has been treated like a political tool in this province, depriving British Columbians of the leadership and sound fiscal management they deserve from their government,” said Weaver.

“Today, the NDP announced that they are freezing Hydro rates. B.C. Hydro is in a dire financial position due to the utter failure of the B.C. Liberals to responsibly manage our finances. They raided B.C. Hydro of more than half a billion dollars in dividends last year alone. ICBC is facing a similar financial mess for the same reason.

“Since the Liberals used LNG as a Hail Mary pass to clinch the 2013 election, they have been hell-bent on developing an industry that was never going to materialize. Due to Liberal enticements to LNG companies, British Columbians pay nearly twice as much as hypothetical LNG companies for their Hydro.

“Site C is yet another piece of this disturbing puzzle – it is billions of dollars over budget and was pushed through without proper oversight by BCUC to satisfy the LNG pipedream. BCUC, an independent body whose purpose is to protect ratepayers, was blocked from doing its job because of the Liberals’ blind pursuit to get to yes at any cost.

“The NDP is at a crossroads. They can continue down this path of reckless Liberal fiscal management, or they can keep their promise to be better. While I’m glad they’re reviewing BC Hydro, there are concrete steps they can take to reverse the trend of energy policy being used as a political tool. They can and should cancel the Long Term Royalty Agreement with Progress Energy, who, by the way, is responsible for the two largest unregulated dams in North Eastern BC. They can, and should stop the pilfering of BC Hydro by requiring dividends that, if not stopped, will amount to $2.8 billion by 2020.

“We cannot keep making political decisions while saddling future generations with debt. If the NDP truly want to make life more affordable, freezing hydro rates without developing an energy strategy – which will simply saddle our children with these costs – is not the solution. We have a generational opportunity to use this minority government to chart a new path for BC, one that takes us away from the BC Liberals fiscal mismanagement. It will require us to think big and to take bold action, but that is exactly what British Columbians deserve from their leaders.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Yesterday during budget estimate debates I took the opportunity to question the Minister of Energy, Mines and Petroleum Resources on a number of topics involving clean energy projects, the Columbia River Treaty Entitlement and the folly of proceeding with Site C.

The line of questioning was designed to get the Minister to recognize that continuing to construct Site C is a fiscally reckless way forward. My questioning culminated with me asking the Minister directly:

Why are you not making a decision today to terminate Site C?

I was not very impressed with the responses I received.

Video of Exchange

Video of Exchange

A. Weaver: I have a series of very short questions on the Columbia River entitlement. My first question is: how much power is British Columbia entitled to under the Columbia River entitlement?

Hon. M. Mungall: The Columbia River treaty is under the purview of the Minister for Children and Family Development. It’s not under this ministry, unfortunately.

A. Weaver: This line of questioning is very germane to the topic at hand. I would suggest the minister should be able to answer this question, because the amount of power that British Columbia is able to get under the Columbia River entitlement is exactly the same, almost precisely the same as the amount that Site C would provide.

My question, then, to the minister is: how much is British Columbia getting, on average, from electricity sold to the U.S. spot market that could otherwise come to B.C. under the Columbia River entitlement?

Hon. M. Mungall: It’s $125 million at current market prices.

A. Weaver: What does that translate to in terms of per kilowatt hour or per megawatt hour, in terms of costs, that is being sold?

I didn’t mean this question to take so long. It was almost a rhetorical question, because the answer is about $40 per megawatt hour, and that calculation is done very, very quickly.

The reason why I wanted to ask that question is I would have hoped that the minister would be on top of this file. Because $40 per megawatt hour is less than half what the projected future cost…. The revenues being brought to the province are $127 million a year. Why is B.C. Hydro not considering power available under the Columbia River entitlement to meet this hypothetical demand in either the low or medium forecast?

Hon. M. Mungall: Sorry I was taking so long. There’s no need to be antagonistic. I was just trying to get some further information to provide to the member in reference to his question. He doesn’t want that, so okay.

The reason why B.C. Hydro isn’t looking at the Columbia River entitlement is partly that the Columbia River treaty is up for renegotiation. I would hope the member would know that. As a Columbia Basin resident, it’s one of the things that we’ve been working on since well before 2014, the first opportunity to give notice for renegotiation because the treaty comes to an end at 2024. It’s one of the reasons we’re not able to ensure that it’s with any certainty.

I see the member for Kootenay East. He will know this as well. Any Kootenay MLA will know this and know what’s going on presently with the Columbia River treaty.

A. Weaver: Frankly, I find that answer quite remarkable. Of course I’m aware about the Columbia River treaty, and Site C is not to be built any time before 2024…. I mean, it will be 2021 before that’s built. The reality is that there is power available today, firm power to the amount available for Site C for any interim costs.

My follow-up question to the minister is this. Why is it that we have about 170 megawatts — or 117, I believe it is — in the standing offer program that’s gone through and there’s no call for power? Why is it that B.C. Hydro did not put a call out for power at ten cents a kilowatt hour and take, accepting those applications in the standing offer program…? Because we know that the price of Site C, as noticed by the BCUC and the ongoing tension cracks that we’re seeing, is going to come in higher than that. Why was no call for power at ten cents per kilowatt hour issued?

Hon. M. Mungall: First, the standing offer program and calls for power were different types of programs.

The call for power — B.C. Hydro did calls for power in 2003, 2006, 2008. After the last one, the recommendation to the previous government was to go forward with Site C rather than another call for power. Their rationale, at the time, was that B.C. needed more firm power, not more intermittent power and that intermittent power was being generated at a higher cost than what B.C. Hydro felt they could do in terms of constructing Site C.

That’s the reason why there hasn’t been a call for power since then. The member will note this government took action in terms of bringing Site C to the B.C. Utilities Commission, as that decision to move forward without a review by the B.C. Utilities Commission was done by the previous government, not ours.

A. Weaver: I correct my previous statement. There are 137 megawatts in the standing offer program ready to go, including 15 megawatts of an amazing solar facility by Rocky Mountain Solar in the Cranbrook area ready to go — on private land, with support of the local community, transmission lines through the property, ready to go, scalable to 50 megawatts. Give them a price. They’ll deliver. We have examples of pump storage on Vancouver Island and in the Kootenays as well, ready to go, but again, B.C. Hydro is not bringing them into the fold.

So my question to the minister is this. In light of the fact that we have the BCUC, why are you not making a decision today to terminate Site C? For four years now, the B.C. Greens have pointed out the fiscal folly of moving down this path solely to deliver to below-market contracts that were signed with LNG proponents that have left British Columbia. Why, based on all the evidence, are we kicking the can down the road until December when a decision could have been made in May, it could have been made in June, it could have been made in September, and it could be made today?

Hon. M. Mungall: I just wanted to ask my staff a quick question. The member brought up pump storage, and I interpreted that to mean pump storage that is active in the Kootenays, and that was something I wasn’t aware of going on. The reason why I wasn’t aware of it is because it’s actually not taking place in the Kootenays. There may be proposals that are currently being developed by some entrepreneurial individuals, but in terms of it actually existing right now, it doesn’t. So I was just curious about that.

To answer the member’s question about why a decision isn’t being made today, why a decision wasn’t being made in May or in June. I think looking back in terms of what has happened over the summer…. The member was very active in it, so I think he knows the answer to those particular timelines.

In terms of today, well, we’ve been very clear with our process. We’ve sent things to the B.C. Utilities Commission, as we committed to the electorate that we would do, as we committed that we would do in our supply agreement with the member and other members of the Green Party. That process has now finalized in terms of the BCUC’s report on November 1. And as we’ve said, to answer the member’s question, we have to do our due diligence. We have to provide appropriate analysis of the B.C. Utilities Commission report. We have to do that due diligence, and we have to take the time appropriate to do so, and so we are doing that.

That being said, we also recognize that there is a lot of uncertainty for people. I mean, I can absolutely empathize with people in the north. I know that members opposite in the B.C. Liberal caucus are representing their interests very well in terms of wanting to make sure that a decision is done in a timely manner, and that’s why we’ve committed to doing that by the end of this calendar year.

Today in the legislature, Shirley Bond, the MLA for Prince George-Valemont and I quizzed the Minister of Energy, Mines and Petroleum Resources about the delays involving approval of a permit expansion for Borealis GeoPower.

As I have discussed numerous times in the past, British Columbia is the only jurisdiction throughout the entire Pacific Rim that isn’t using its geothermal resources. As noted in a 2014 Canadian Geothermal Energy Association (CanGEA) report,

• Geothermal unit energy cost conservatively estimated at 7.3¢/kWh compared to BC Hydro’s 2014 estimate of 8.3¢/kWh for Site C.
• Geothermal plant construction equalling the energy output of the proposed Peace River dam is estimated at $3.3 billion compared to at least $8.8 billion for Site C.
• Geothermal plants provide more permanent jobs that are distributed across British Columbia.
• For the same power production, the total physical and environmental footprint of geothermal projects would be substantially smaller than Site C.

Below I reproduce both the text and video of the exchange between Shirley Bond, Michelle Mungall and me. As you will see from the discussion, I was troubled by some of the responses we received from the Minister. Nevertheless, the overall conversation was generally positive and bodes well for the future of  this particular geothermal energy project.

Text of Exchange

S. Bond: I’d like to spend a couple of minutes talking about a project that is incredibly important when we’re talking about clean energy in British Columbia.

I’m wondering if the minister can give me a sense of her understanding and the status of the project that’s being suggested by Borealis GeoPower.

Hon. M. Mungall: To the member, I know that she is very interested in this project. It’s in her region. And I’ve been fully briefed on it by staff.

We’re very supportive of this project. I think it poses some pretty interesting opportunities. So far to date, in terms of geothermal production, which is what Borealis is, there hasn’t been any exploration that has proved up to be viable, but Borealis is doing that exploration. They’re confident that they can actually prove a viable geothermal source, and so we’re very supportive of them doing that work.

S. Bond: Thank you very much to the minister for her response. I appreciate that.

Certainly, in my riding, and particularly in Valemount and other parts of the region, the opportunity to diversify the economy is absolutely essential. One of the things that’s critical to that is a secure supply of power, because it’s very hard to attract industry and others if you can’t guarantee them a stable source of power. And there has been ongoing and…. I admit, over my 16 years as the MLA for this area, secure and stable power has been a significant issue.

So looking to diversify the economy, looking to create jobs — not a big number, but in our riding, you know, even one new job matters. So this project being proposed by Borealis GeoPower is a geothermal project. I have, certainly, over the course of a number of ministers, talked about the importance of looking at the portfolio, including alternative energy sources like geothermal.

The concern I have is that there continues to be a need for a permit expansion on the Canoe Reach geothermal project. I know that the proponents have been here. I have actually met with the leader of the Green Party about this project. And apparently, the permit is sitting somewhere waiting for approval.

Can the minister perhaps explain to us if and when that permit for expansion may be approved?

Hon. M. Mungall: As I said earlier in my response, our ministry is supportive of the project. We see a lot of potential. We’re excited about the opportunity for geothermal to potentially be proved up in this province. To date, it has yet to be done. We’re glad that Borealis is looking to do the work.

The ministry is actively engaged with them and is working with them throughout that permitting process. As the minister knows, there are statutory decision-makers involved in those stages. So my understanding at this point is that their applications are under consideration, and they are actively working with the ministry, and the ministry is actively working with them.

S. Bond: I appreciate that answer. I just don’t feel overly encouraged by it.

I appreciate the support for the potential of the project.

I think it is essential, as we’re having a major discussion in our province about clean energy, particularly in a region of the province that really needs to be able to diversify their economy.

I just want to walk through some of the…. I’m the first to admit that this permit was provided to the previous government — us, basically. This is not a short-term issue. In fact, the initial feedback about this application was provided in February of 2017. That was nine months after the original request from the Ministry of Energy, Mines — where it was stated that the ministry had completed the pre-tenure referral process. However, they were waiting, at that time, for the development of regulations. That wasn’t completed. The writ period came, the election came, and the new cabinet wasn’t formed until July 18.

This company, which is working very hard to…. It is one of the projects where I’ve seen significant support in my region, where people have stepped up and said: “This is something that we would like to see happen.” The delay has continued. The last information that certainly the company received was that the permit request was “with cabinet operations and the minister.”

It sounds to me like the permit is ready to be signed. I’m wondering if the minister can at least agree today that the ministry will look at where the permit request is and when it will be signed.

Hon. M. Mungall: I appreciate that Borealis and the member for the region would like to see this moving forward in a timely manner. I heard her comment about the length of time it already took under her government, that there was a nine-month time frame. If she’s wondering if, in the last four months, we’re moving at a more speedy pace, I can say yes.

A. Weaver: I’d like to follow up on the questioning from the member for Prince George–Valemount on this issue of Borealis. I, too, have met — with the member for Prince George–Valemount — several times with the proponents of this project. My understanding is identical to the former minister’s understanding, in that the permit is actually in the OIC process, waiting for signature.

My question would basically repeat, initially, the question made by the member: will the minister commit to actually looking, in terms of what’s in the queue in the OIC approval process, to determine whether or not she can expedite the signing of this permit? It is — I believe, as the member does — in her jurisdiction, not in the jurisdiction of a statutory decision-maker.

Hon. M. Mungall: I should let the member know that, due to the oath that I signed, I’m not at liberty to discuss cabinet agendas.

A. Weaver: I accept that as an answer. I do bring it to notice, though, as the member opposite did, that the answer that we did receive was one that, I would argue, is not the relevant answer, because permitting is not before a statutory decision-maker. It is before cabinet as we speak, in my understanding.

I’m coming to a question, then. This particular project, this Borealis project, is the at the end  of a transmission line in a community, Valemount, that’s subject to brownouts already, at the same time as there’s an approval process for the development of a major ski resort, Glacier Destinations.

This is a community where the Simpcw Nation wants this to happen. Valemount wants this to happen. The company wants to develop. The holdup is primarily, almost exclusively, in the minister’s office. Will the minister commit to actually looking at this project so that we don’t lose yet another investment — not of taxpayer money but investor money — in a community that’s dying to get this forward?

Hon. M. Mungall: I’m glad that we have members from both of the opposition parties — the official opposition and the Green Party as well — who are supportive of this project. As I mentioned to the member for Prince George–Valemount, government is very supportive of this project. We have to do our due diligence. That’s government job, as a regulatory body. I believe members of the Green Party were just asking questions in question period to that effect — that government has a job to do in terms of a regulatory function. We are doing that.

The Borealis project — as I’m very happy to see that members from all sides of the House agree — is a positive project and a good opportunity for British Columbia, if they are able to prove up any exploration that they’re able to do of the geothermal resource. As I mentioned, there has been past exploration of geothermal resources in B.C. that have not been able to prove up a sufficient resource to generate electricity. We’re hoping that that may change with Borealis.

That being said, as I’ve said to members already, I cannot discuss cabinet agendas, but the due diligence around this project has been done. Our ministry, our government, is very supportive of it, and we look forward to continue working with them into the future.

A. Weaver: I’m surprised that the minister would suggest that exploration has been done in geothermal that has not proven up a resource when B.C. Hydro has done precisely no exploration on geothermal and companies associated with the Canadian Geothermal Energy Association have done exploration to say that we have an enormous potential. In fact, we are only the jurisdiction in the Pacific Rim that does not have a geothermal capacity — not because we don’t have it but because there has been no will to develop it.

I come back to this issue of Valemount. Valemount is at the end of a transmission line, a transmission line that leaves Valemount to brownouts all the time in the winter. B.C. Hydro has to upgrade that transmission line, and there’s a massive capital cost involved in doing that. B.C. Hydro produces power, is the sole purchaser of power and also is responsible for the development of transmission of power.

My question to the minister is: how does she ensure that the transmission component of B.C. Hydro actually talks with the part of B.C. Hydro that purchases power so that they recognize that the cost benefit of developing up transmission line power is there to avoid the unnecessary expense of capital to upgrade transmission lines? If you upgrade the power at the end point, you don’t need to bring up the transmission line to give more power to the end point. Will she commit to ensure that B.C. Hydro starts to talk between the different branches so that the actual full capital cost of moving forward is recognized when this is done?

Hon. M. Mungall: I just want to address something that the member said before I get to the actual answer of the question. The member said that B.C. Hydro had never done any exploration of geothermal. That is actually not the case. Let me take this opportunity to make sure he is aware of what happened in the 1980s.

B.C. Hydro actually explored a site at Mount Meager, as part of the federal geothermal program that existed in the 1970s and 1980s. They drilled dozens of holes to understand the temperature at that location. They drilled three production wells to attempt to find commercial resource. Unfortunately, they had no commercial success.

They spent about $25 million doing this activity, and the result was that there was just not enough steam or water to move into full electrical production. So I just wanted to make sure the member was aware that, actually, that work has been done by B.C. Hydro. I should also mention that further work has been attempted since then in that site, but yet with the same result.

In terms of the transmission that the member asked about, everyone is in agreement. Whether it’s B.C. Hydro or whether it’s the ministry, we all agree that there are definite benefits and reliability to the transmission site should Borealis be successful and be able to prove up this resource.

Again, I feel like there’s a little bit of a characterization from members opposite that somehow this government isn’t supportive of the Borealis project when in fact we actually are. I’m very pleased to see that that support is shared by all parties in the House.

A. Weaver: I’m sorry, my last question. I just to want to comment on the statement about Mount Meager.

Mount Meager was done in the 1980s — one location. There has been an entire report published by the Canadian Geothermal Energy Association in 2014 outlining the myriad places in British Columbia where geothermal capacity exists. To suggest that one study by B.C. Hydro in the 1980s represents a feasibility analysis in British Columbia is misleading. B.C. Hydro has not taken the proactive steps to explore geothermal capacity in British Columbia.

I reiterate. We are the only jurisdiction in the Pacific Rim that has no geothermal capacity — none — and it’s because B.C. Hydro builds dams. That’s what they do. In fact, they’re not actually tasked in their mandate to build geothermal, so why would we expect them to explore it?

I would suggest…. I do appreciate that the minister is supportive of this, but I think it’s important that the minister not dismiss the fact that B.C. Hydro has not explored British Columbia for geothermal capacity. It’s not me saying that. It’s the National Energy Board review of the Site C project that’s said that. It’s the Canadian Geothermal Energy Association report in 2014 that’s said that. It’s submissions to the BCUC process now that said it. So I would suggest the minister recognize that B.C. Hydro has not done exploration of geothermal in B.C. Experts across British Columbia and across North America have said exactly that as well.

S. Bond: Apparently, the minister didn’t feel there was a question there, so I’ll provide another one.

It’s like we have a raging agreement going on in this Legislature. It’s not about divulging cabinet secrets about the agenda, it’s about asking for reasonable explanation to these proponents about when they can expect the permit for expansion to be signed.

It’s a simple question. Can the minister or her staff provide us with some sense…? You know, this proponent and this community…. I appreciate the comments made by the leader of the Green Party. This matters a lot. This has taken enormous consultation. It is a community that is in agreement with this. The minister has said she supports the project. When can we expect to see the signed permit?

Hon. M. Mungall: As I’ve said before, we appreciate the value of this project to the region. We appreciate the opportunity it has to provide for British Columbia, for Prince George–Valemount in particular. That being said….

I appreciate that the member opposite would like a conclusive answer today. She knows the process of estimates. If I was able to provide that, I would have.

I’m not able to provide that for her today, but I will commit that we are working on it in a timely fashion. It’s unfortunate that her government was not able to approve it in such a way. We, however, will be doing that.

S. Bond: I just want to quote from a note that said “we have heard back from a staff member in the ministry on October 13, who said the permit request was with cabinet operations and the minister.” I hardly think that that is timely. We’re well into November now. It’s just a matter of actually sorting out who is going to advocate for that permit to be signed to get the matter completed.

My final question relates to B.C. Hydro. I understand that in a conversation with the BCUC, they are suggesting that B.C. Hydro partner with industry to develop geothermal projects. I’m not sure if the minister is aware of that. If she is, can she also tell me whether or not she has had a conversation with the minister who is responsible for Columbia Power Corp and the Columbia Basin Trust to talk about whether or not the Columbia Power Corp could be included in a discussion about a partnership of that nature?

Hon. M. Mungall: So first off, I just want to state for the record that B.C. Hydro is interested in geothermal and proved-up sources and working with companies like Borealis, should they be successful.

The member’s question was whether I’ve spoken with the Minister of Children and Families, who is also responsible for the Columbia Power Corporation. My understanding is probably coming from a letter she would have received from Borealis. Borealis was looking for funding, is my understanding, from Columbia Basin Trust and perhaps maybe a partnership, is my guess perhaps, with the Columbia Power Corporation in terms of moving forward and seeking some financial support. That is not within my ministry.

To her question of if I’ve had an opportunity to meet with the minister responsible for CBT and CPC, I have not yet to date.

S. Bond: Thank you very much for the opportunity to ask these questions.

As we’ve heard in this House today, Valemount has either the most power outages in the entire B.C. Hydro grid system or is at least one of the communities that has the most.

There is an opportunity with a geothermal project in the Robson Valley to actually do some very significant things, which actually has important trickle-down effects. Growing the economy — hard to do if you can’t say there is a secure and stable power source.

Certainly, as we’ve reviewed this file and met with Borealis, in the community and numerous times here in Victoria, what’s standing between getting to drill on the land and move toward operations is an outstanding geothermal permit.

I would simply urge the minister to advocate on behalf of this — getting the permit signed and getting on with what is an essential opportunity to look at alternative sources of energy in a part of the province that needs them significantly.

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