Another look at the Trans Mountain Pipeline Expansion Project from the lens of a pragmatic environmentalist

This week the Federal cabinet will decide whether to proceed with the Trans Mountain Pipeline Expansion Project (TMX). In response, opponents of the TMX have been out in force making ridiculous claims about the project. This has caused me to summarize some older post explaining why a pragmatic environmentalist supports the project. What follows are a series of short-takes addressing the major arguments used by activists fighting the pipeline and a conclusion explaining why I support the project.

More capacity for light crude and refined fuels to the west coast

A common myth about the TMX is that it is all about moving bitumen. That is not true. The TMX has two major components:

  • Line 1 – existing pipeline segments (with pump upgrades) able to transport 350,000 barrels/day (bbl/d) of refined petroleum products and light crude. It has the capability to carry bitumen but at a much reduced volume per day.
  • Line 2 – a new pipeline with a capacity of 540,000 bbl/d. It is intended to transport heavy crude oil.

So while Line 2 is about bitumen, Line 1 is intended to help mitigate the supply bottleneck that has Vancouver drivers paying such high prices for gasoline and diesel while supplying the light crude needed by the Parkland Refinery in Vancouver and US refineries in the Puget Sound.

Admittedly Line 1 could be used for heavy crude but even a little bit of heavy oil in Line 1 eliminates the benefits of the upgraded Line 1. Meanwhile Alberta recently completed the Sturgeon refinery and now has a glut of diesel. As such, it makes logistical and financial sense to operate the pipeline in the manner consistent with the NEB proposal which means that Line 1 will almost certainly be used for what it was intended: light crude and refined fuels.

Asian Markets

This weekend Mr. Anderson repeated a common claim: that there is no market for Alberta heavy crude in Asia. That claim is bogus. As pointed out in BiV: more than $1 billion worth of Alberta crude was exported by oil tanker via Vancouver in 2018, with China accounting for about one-third of the sales. Remember, this is from constrained pipeline that often didn’t get a full marine allotment to Westridge.

As for Mr. Anderson’s argument that the world is awash in light oil and that heavy oil is somehow inferior to light oil. That is simply false. Heavy oil and light oil are different liquids with different chemical properties and different markets. This argument is akin to claiming that diesel is inferior to gasoline. If you own a diesel truck you need diesel not gasoline. As for refining capacity, Asia has lots of refining capacity for heavy oil and not enough supply, as does California.

According to GlobalData’s report on Chinese refining capacity:

The country’s total coking capacity, catalytic cracker capacity and the hydrocracking capacity is expected to increase during the outlook period. The total coking capacity is expected to increase from 1,991 mbd [thousand barrels per day] in 2018 to 2,371 mbd in 2023. China’s total catalytic cracker unit capacity is expected to increase from 4,359 mbd in 2018 to 5,532 mbd in 2023. Over the five year period, the hydrocracking unit capacity of the country is set to increase to 2,922 mbd from 1,846 mbd.

This is why Asian refineries are buying up all the heavy they can get, often at a premium over lighter crudes. Consider that on June 13th (when I started this blog post)

  • Maya (the chemical twin to land-locked Alberta WCS) for export to Far East was selling at $51.16/bbl.
  • WCS (the Canadian heavy oil used to represent Alberta heavy) was $39.19/bbl and
  • West Texas Intermediate $48.96/bbl.

Look at those numbers. The high sulfur, heavy oil was selling at a premium over the lighter crude and Alberta was losing almost $12/bbl of value because its oil was land-locked. It doesn’t take a PhD in Economics to know that if the market is paying a premium for a product then clearly someone wants that product.

As for that $12/bbl less per barrel. That means less royalty money for the Alberta government, less income for Alberta and less money going towards paying for Canadian social programs.

The world market

This brings me to a topic I’ve been told I shouldn’t touch….our competitors. The reality is that you can’t have a legitimate discussion about the topic of oil without considering the ethics underlying our oil supply.

Some commentators say we should get out of the oil business and cede the field to the despots, the tyrants and the murderers. I disagree. I see a need to supply the Canadian market with Canadian oil, produced by Canadian workers who pay into the Canadian tax system and thus underwrite the costs of Canadian civil services, the Canadian way of life and the Canadian move away from fossil fuels. Do you know who else is making this same argument? Green party Leader Elizabeth May.

Our primary competitors in the heavy oil market (besides Mexico) are Venezuela, Russia and Iran. These are not liberal democracies where individuals are free to marry the people they want; protest their governments without fear of persecution; or are safe from arbitrary arrest and punishment. These are dictatorships propped up by oil money. Their oil is extracted with little or no concern for environmental protection and the profits are used to fund oppression. This is a painful truth that has to be faced by any activist who says we shouldn’t be producing oil in Canada.

Tankers in the Salish Sea

As described in a previous post, if the TMX doesn’t get completed, the refineries in the Puget Sound will still need over 645,000 bbl/d of crude oil. Currently Cherry Point refinery alone sees 500+ tankers a year and Toresco (a committed shipper on the TMX) has said they want to add 120 tankers a year to their Andeavor facility to make up for an absence of supply. Meanwhile Westridge will still be sending out a few tankers a month. So in the end we will still see 700+ tankers a year coming in and out of the Salish Sea with 620+ of them running the narrower and much more dangerous Rosario Strait.

Spill risks

I have written in detail about the relative risks associated with the project to the Salish Sea. Any cold-eyed analysis of the relative risks shows that the TMX reduces our regional risks of oil spills. Blocking the TMX will increase the likelihood of a disastrous rail spill that could spell the end of a major fishery or result in the deaths of dozens of innocents. It will put more tankers going through narrower waters with less support from escort tugs. That is a formula for increased risk.

Spill response

The BC west coast has been chronically under-served for spill response. One of the big gets for BC in the TMX project was a toll on the new fuel transportation to pay for improved spill response. However, if there is no expansion that toll will not be paid and that money disappears. The result is a loss of spill response capability.  Right now we are looking at losing $150 million and several spill response bases. Since the funds for the spill response was coming from the private sector there is no obvious way to replace those funds. When a spill occurs the equipment will not be there to address it. So damage will be greater.

The threat to the Southern Resident Killer Whales

I wrote about this in a previous post. If you look at the entire Salish Sea, and not simply the Canadian side of the border, then you realize that the TMX will likely decrease the risks to the southern resident killer whales (SRKWs) not increase those risks. If the TMX fails, foreign-flagged ships with lower safety standards will be coming in to the same waters, running through narrower straits while not following the slower speeds recommended by DFO to reduce ship noise. It will be more dangerous and louder for the SRKWs. Meanwhile, more oil-by-rail along the Columbia Gorge puts the whales’ winter feeding grounds at risk. All it takes is one spill in the Columbia River to destroy the SRKWs’ winter feeding grounds.

Oil-by-rail volumes

As reported by Global News: the Paris-based IEA forecasts that Canadian crude-by-rail exports will grow from 150,000 b/d a day in late 2017 to 390,000 bbl/day in 2019. In October 2018, rail exports hit a record high at 327,229 bbl/day — a 138.5% volume increase over 2017.

On the American side of the border just three (Tacoma, Anacortes, or Ferndale) of the region’s six refineries moved over 156,800 bbl/d by rail in 2017 and every indicator is that the volume will be increasing absent TMX. These trains are carrying explosive Bakken crude through some of the most densely populated parts of the Pacific Northwest and along the sides of some of the West Coast’s most important salmon rivers.

Rail spill risk

We all know that risk of incident is 4.5 times higher for transportation via rail over pipeline and more of the rail route is along the river sides than is the pipeline. Many activists complain about the sourcing of the 4.5 times stat so let’s go to Citylab and the Sightline Institute, both of  which warn about the increase in risk of oil spills associated with this increase in oil volumes by rail. There will be more oil-by-rail spills and because our rail lines run along river sides we will have far more risk to salmon habitat and the SRKWs.

Conclusion

I am a pragmatic environmentalist. My area of professional expertise is the investigation and remediation of former industrial and commercial sites with a specialty in the assessment of petroleum hydrocarbon contamination and its effects on human and ecological health. Working in this field I have come to understand that all industrial activities have environmental consequences.

We live in a society that, like it or not, remains dependent on oil (petroleum hydrocarbons) and petroleum hydrocarbon-based products. Our food is produced on farms that need heavy equipment to operate. That food is shipped around the world by air, water and rail, all of which rely on petroleum hydrocarbons to operate. Contrary to claims from activists, this reality is not going to change anytime soon. While many alternative means of transportation are in developmental pipelines, none are in a position to significantly change our industrial or commercial dependence on liquid fuels, even as we move to electric vehicles for personal use.

In 2015 world leaders passed the Paris Agreement. As part of the process Canada agreed to drop our greenhouse gas emissions to 30 per cent below 2005 levels by 2030. Irrespective of what many activists may claim, Canada did not commit to an economic suicide pact, nor did we agree to abandon all fossil fuels.

Canada certainly did not commit to achieving a fossil fuel-free status in less than two decades. I have read many recent articles written by activists about a Canadian Green New Deal who repeat ridiculous claims like the idea that we can cut our emissions by 50% by 2030. As I have demonstrated at this blog, the claim that we could achieve this goal in the next 11 years does not even rise to the level of laughable. It is simply magical thinking. If we undertake herculean efforts and dedicate a historically unprecedented per cent of our national gross domestic product to the task we have a reasonable chance of weaning ourselves off fossil fuels in 30 years. What this means is that Canada has, and will have, an ongoing need for fossil fuels for the foreseeable future.

To fund that transition needs a healthy Canadian economy. I want the funds generated by Canadian oil to help fund our Canadian transition away from fossil fuels. The first step in that process is getting that oil to market in the safest, least environmentally harmful manner and that means via pipeline. Most importantly, blocking the pipeline is not going to reduce our dependence on fossil fuels, rather it will simply redirect the crude to less safe means of transport while simultaneously reducing our economic ability to fight climate change. One might say we will end up with the worst of both worlds, a greater risk to the environment and less financial ability to finance the fight against climate change.

Author’s note: conflict of interest declaration

Contrary to claims by my detractors, I have no connection, financial or otherwise, to the Trans Mountain pipeline project. My employers holds no contracts (nor anticipates any contracts) with the project nor do I have any financial stake in the project. I am interested in this project because I am an environmentalist who has spent over 30 years becoming an expert in this field and worry that the narrative on this topic is being driven by activists who appear to not really understand the topic and so keep making impossible claims/demands.

Posted in Canadian Politics, Pipelines, Trans Mountain | 1 Comment

On the Energy Innumeracy of the supporters of Canada’s Green New Deal

In the last week a group of Canadian activists have decided to mimic their American cousins by trying to advance a Canadian pact for a Green New Deal (GND Can hereafter). This is not the American Green New Deal you might have heard about, it is entirely Canadian project, and like the Leap Manifesto (its political cousin) the GND Can represents a sort of aspirational thinking best relegated to fairy tales and not worthy of consideration in serious climate change discussions.

I’m sure a lot of people reading this post will think that I am being a bit unkind by describing the GND Can as a grand delusion, but as I intend to show in this blog post, it is clear that the people who created this project are innumerate when it comes to energy policy. The demands being forwarded are so ridiculous that it is unclear how any informed individual/organization could sign on to this deal.

Once again I have presented some pretty strong words, so let’s start with the obvious question: what are the core demands for the GND Can? From their Q&A we get this:

The Pact for a Green New Deal rests on two fundamental principles:

a. It must meet the demands of Indigenous knowledge and science and cut Canada’s emissions in half in 11 years while protecting cultural and biological diversity.

b. It must leave no one behind and create a better present and future for all of us. That means ensuring that solutions are universal and far reaching.

Now I can hear you all asking: isn’t eleven years to cut Canadian emissions in half a bit ambitious? Well the GND Can web site answers that question as well. Here is their response:

We must remember we are living a climate crisis. If we would have started acting decades ago we wouldn’t need such a wide-spread and rapid transition. But because of government delays and fossil fuel funded disinformation campaigns our window has become very short and our timelines are no longer negotiable. We have a 303 MT gap* to make up and we need to get started. We are talking about survival now. We either choose to act and avoid catastrophe or we don’t. We’d prefer the former.

**The IPCC 1.5 degree report uses a 2010 baseline. Canadian GHG emissions were 694 MT in 2010, so to meet the science Canada’s emissions would need to fall to 347 MT. The most recent data is on 2017 emissions (716 MT), so that’s a ~369 MT reduction from 2017 levels. Canada’s current climate plan gets us to 616 MT (excluding LULUCF), so there is still a 303 MT gap to get to 369 MT: http://publications.gc.ca/collections/collection_2018/eccc/En1-78-2018-eng.pdf

As a numerate individual interested in energy policy I find this argument somewhat less than compelling. Crisis or not, demanding the impossible will get you nowhere. I say this not because I don’t want to see it happen, I say it because I want us to fight climate change and when we spend time arguing for the impossible we are not arguing about accomplishing the possible.

To understand the extent of the problem we have to remember that evidence-based environmental decision-making relies on using real data in the process. So let’s look at Canadian greenhouse gas (GHG) emissions to see what I mean (here is the Env Can summary doc and the document the GND Can web site cites in their footnote).

Let’s start with the big picture (all figures from Env Can). According to the government of Canada, in 2017 Canada emitted 715 Megatonnes (MT) of carbon dioxide equivalents. Sectorally this can be broken down to:

  • Oil and gas – 195 MT
  • Transportation – 174 MT
  • Buildings – 85 MT
  • Electricity – 74 MT
  • Heavy industry – 73 MT
  • Agriculture -72 MT
  • Waste and others (light industry etc) – 42 MT

To achieve the GND Can demand of a 50% decrease would bring us from 715 MT/year to 357.5 MT/yr. This means we have to find 357.5 MT to reduce from our yearly emissions. Moreover, if the demands of the GND Can are to be met we need to achieve this goal in 11 years. So let’s start chopping to see what it will take.

Let’s first look at the oil and gas sector since it represents the low-hanging fruit.

From the supporting documentation we get these yearly numbers:

  • Natural gas – 49.5 MT
  • Conventional oil – 31.3 MT
  • Oil Sands Mining and extraction – 16.4 MT
  • Oil sands in situ – 41.7 MT
  • Oil sands upgrading -22.4 MT
  • Other 33.2 MT

Let’s assume we will need conventional oil if we want to keep our planes, trains and buses operating. That leaves us about 160 MT which gets us almost half-way (44%) there.

Cutting the oil and gas sector brings about some pretty serious problems from a public policy perspective. We are talking about a significant percentage of Canada’s economy, hundreds of thousands of jobs and most importantly the tax dollars that will be needed to pay for this massive program. By killing the industry we are starting from behind the eight ball with a massive Canadian recession and an even bigger hole in the national budget.

The killing of the oil and gas industry doesn’t just destroy our economy it also leaves an even bigger hole in Canada’s energy picture. Natural gas is used in almost every sector of our economy but is particularly important for housing. Natural gas is used over much of the country to heat our homes and businesses. According to the Canadian Association of Petroleum Producers

Over six million Canadians use natural gas to light, heat and cool their houses, heat their water, and cook their food. Natural gas is increasingly used in energy-efficient furnaces and appliances such as dryers. 

Natural gas currently provides 13 per cent of Canada’s electricity generation, and because it can be delivered quickly and affordably it is an excellent partner for intermittent renewable power sources such as wind and solar.

According to the NEB, in British Columbia 58% of households rely on natural gas for heating, in Ontario it is 67% and in Alberta it is 79%.

To go without natural gas means we will need to upgrade EVERY SINGLE home or business that uses natural gas for heating or hot water. All in 11 years. Think about that number 58% of British Columbian households, 67% of Ontarian households and 79% of Albertan households would need to be upgraded in 11 years. That is millions and millions of households.

Having addressed the biggest source, the next biggest source is transportation.

Transportation emitted 174 MT in 2017 broken into

  • Passenger Cars – 34.6 MT
  • Passenger light trucks – 50.5 MT
  • Passenger aviation, bus, rail and motorcycle – 8.6 MT
  • Freight trucks – 59.9 MT
  • Freight aviation, rail and marine- 11.9 MT
  • Others (recreational, commercial and residential) 8.9MT

Now looking at these numbers the first thing to understand is that technologically there are no currently available alternatives for the two freight options. You can’t expect us to go without food or water so those we are stuck with using liquid fuels for passenger aviation, bus, rail and freight trucks. The only problem is they only represent 41% of the pie. To achieve a 50% cut we need to eliminate 85% of emissions from the other four categories. If we assume that mass transit should be protected (bus, rail and domestic airlines represent about 7 MT) that leaves a stately 8.2 MT for all remaining passenger vehicles (or over 90% reductions). Reducing your personal vehicle use by 90% shouldn’t be a problem in 11 years should it?

A lot of people would likely be able to switch to EVs but then we have an increase in electricity, challenges with our power grid and the problem of simply getting all those EVs built and sold.

A minor consideration not previously mentioned. Most municipal electrical systems are not easily upgradeable and all those EVs, electrical heaters and electrical hot water heaters will overload the local grids.

Having completely upending our transportation system still only earns us 87 MT (roughly 24%). We are far from where we need to be.

Now for the electricity sector.

Since the aim is to get off coal and natural gas, this seems like an easy one. We can simply eliminate all 74 MT. This helps a lot (20%) but leaves us in a pickle because every step to date has assumed we will have more electricity. Since building new electricity infrastructure is both expensive and time-consuming we will just have to go without for the time-being. After all hospitals don’t really need ventilators.

We also need to massively upgrade our transmission system to move all that new power to where it is needed. As I’ve written previously, even the most optimistic view has a new grid costing $25 billion and taking a couple decades to build. A more realistic appraisal puts the cost of a national backbone of 735 kV transmission lines at around $104 billion and taking 20 years to complete. I’m not sure how we will do that in 11 years but at this point it is becoming clear how awesome this task really is.

We are now reasonably close. We have cut 321 MT and need only 36.5 MT to reach our goals. Considering that a lot of the buildings (85 MT) involve burning natural gas for heat and hot water that should easily get us below the magic number to below 357.5 MT. So let’s consider what this entire project will cost us:

By 2030 we need to

  • Essentially eliminate the personal vehicle
  • Eliminate our oil sands and natural gas industries
  • Retrofit every household in Canada that uses natural gas for heat and/or hot water
  • Eliminate all our fossil fuel electricity capacity
  • Build the electrical capacity to provide the power for all those EVs, hot water heaters and heaters and
  • Build an entire electricity transmission system to move all that power around.

Moreover we need to do this in 11 years while

  • Dealing with the massive recession that comes from destroying our oil & gas industry
  • Paying for a massive upgrade to our public transportation infrastructure to deal with the fact we virtually eliminated personal automobiles
  • Paying for massive retrofits for virtually every household in the country that uses natural gas or fuel oil for heating and hot water
  • Paying for a massive increase in renewable electricity capacity to deal with the sudden jump in demands and the loss of fossil fuel electricity infrastructure
  • Paying for the massively upgraded transmission capacity to move all that new renewable electricity from where it was generated to where it is needed.

Admittedly the GNDers have one thing right. They will create a massive number of new jobs, the only hitch will be how to pay for them all.

Now the funny part of this whole blog post is going to be the replies. I’ve already been asked “so what would you do instead?” and “so you think we should stand back and do nothing?”.

My response is simply to point out that the first step in evidence-based environmental decision-making is to assemble the data to help make an informed decision. Having done so it becomes clear that whatever we choose to do, the Canadian GND shouldn’t be part of the discussion. Looking at what it would take to achieve their goals it is clear that even with an infinite amount of money at their disposal they could not get there. 2030 is only 11 years away and there are too many tasks on their plate with too many rate-limiting steps and that doesn’t even consider that they want to run each step through the lens of indigenous knowledge and equity.

Until the authors of this Green New Deal actually put pen to paper and show how they will achieve their goals I think they should simply be ignored. They are peddling a fantasy. Trying to argue that we should attempt the impossible is a ridiculous approach that is guaranteed to end in failure and failure is something we can’t afford. If you want to see what we should do let’s look at the City of Vancouver’s Climate Emergency Response document. It is a great start but even it sets more realistic timelines.

Put simply the Canadian Green New Deal is another fantasy project that will distract from the real work that needs to be done. It is time activists stopped demanding the impossible and started working towards the possible.

Posted in Climate Change, Climate Change Politics, Leap Manifesto, Uncategorized | 12 Comments

How the CCPA completely misses the target on the root cause of our elevated gasoline prices in the Lower Mainland

This morning while getting ready for work, I heard Marc Lee from the Canadian Centre for Policy Alternatives on the radio with Stephen Quinn talking about the price of gas in the BC Lower Mainland. I understand he also spoke on Jon McComb’s program as well. The basis of this discussion was a new Policy note prepared by the CCPA titled: Turn off the taps? Alberta already has Vancouver over a barrel. This analysis purportedly explains why BC gas prices are too high (hint he blames price gouging) and proposes a solution (hint he proposes more regulation). Coincidentally, this weekend I wrote a post about this very topic so here it is:

I have listened to Mark Lee and read his analyses and remain amazed that someone with his Economics background can continually make arguments that seem so flawed to me. As I have listened, I have wondered to myself how what is he missing? and I think I have the answer: it has to be an incomplete Root Cause Analysis. In this blog post I will attempt to explain where I believe he is getting it wrong.

To start let me explain about Root Cause Analysis. Root Cause Analysis is a tool used in incident investigation to drill down to the root cause of an incident. One of the tools of Root Cause Analysis is the “multiple why” approach. In the “multiple why” approach you have to keep asking “why?” until you determine the root cause of the accident.

As an example consider a trip and fall incident. A worker tripped and fell. Asking “why?” you discover that the worker stepped on uneven ground when a safe path existed nearby. Asking “why?” you discover that the route was faster than the alternative. So the answer is laziness? Maybe, but maybe not, let’s keep drilling down. Ask another “why?” Why did the worker chose the faster route when a safer route existed? Because the worker felt pressured to get work done faster. Wait that is a totally different answer from the worker being lazy. Time for another “why?” Why did the worker feel the need to choose speed over safety? Maybe it is a corporate policy that emphasize output over safety?

As this simple example shows if you stop a multiple why analysis too early the investigator can come to the wrong conclusion. It wasn’t a lazy worker that caused the problem but a corporate policy that valued output over safety that was the root cause. Any solution to address this incident will only succeed if it addresses the root cause “valuing production over safety” in the final conclusion. A true root cause analysis can also come to a variety of independent root causes that all need to be fixed to avoid a repetition of the incident.

Going back to the Marc’s conclusion: that price gouging is to blame for our gasoline price woes. We can see that Marc stopped asking “why?” several questions too early and because he stops his analysis too early his solutions appear equally flawed. So let’s dig deeper.

The obvious question is “why are the refineries gouging (assuming they are)?” Well the clear answer is: because they can? So comes the question “why can they?” and that question brings us to the crux of the problem…the one any reasonable Economist should consider in their analysis but never seems to be considered by Marc in his analyses: supply and demand.

The simple truth of the matter is that the west coast is under-supplied in refined fuels. As I have written previously BC uses about 190,000 barrels per day (bpd) of refined fuels but we only get about 160,000 bpd from domestic supplies. The remainder we have to buy, at a premium, from the US.

According to the US Energy Information Administration (US EIA), the US sent British Columbia about 45,000 bpd of refined fuel in January (last month of available stats) with most of that being jet fuel (~15,000 bpd), diesel and fuel oil (~16,000 bpd) and gasoline (~9,000 bpd).

Now that 9,000 bpd of gasoline is the problem. To understand this problem I recommend you read a short but excellent blog by well-respected Economist Marv Schaffer. In it he explains the:

Puget Sound only supplies a small proportion of the gasoline and other refined petroleum product requirements in the province, but it is what economists call the ‘marginal source of supply’ – the source BC has to turn to when Alberta supply plus the limited local production is not sufficient to meet provincial requirements.  Because Puget Sound refiners are the marginal source of supply, they effectively set the market price. Shippers from Alberta can charge the delivered Puget Sound price, even if it is well above their own cost, because they are still competitive with the only available alternative. And Puget Sound is the only available alternative because of limited pipeline capacity for additional deliveries from Alberta.

So once again it is not price gouging that is the cause of our high gasoline prices but the market features of supply and demand. We have too much demand and too little supply. This problem can only be addressed by either reducing our demand or increasing our supply. I have argued repeatedly that the way to address this problem is to build the Trans Mountain Expansion Project and reduce the bottle-neck in our refined fuel supply chain.

Marc has different ideas. Let’s take a moment to take a look at how Marc Lee argues we should deal with the supply shortage. This from his policy note:

There is no supply shortage of gasoline in Metro Vancouver. No vehicles have been turned away from a station because they ran out of gas. The demand for gasoline in Vancouver is very stable and predictable, and storage tanks exist to manage inventories of fuel.

It shouldn’t be too difficult for these companies to supply fuel at comparable prices to other parts of Canada, as they have historically. And if they won’t, the BC government should step in to regulate the market.

It is hard to believe how bad this “solution” really is but I will try.

Remember that the CCPA is a think tank that deals “issues of social, economic and environmental justice. with poverty“, so let’s consider this from a poverty perspective.

Imagine a different think tank like the Fraser Institute argued that: “the problem with the working poor is that they simply don’t save enough money in the bank. If the working poor only had bank accounts where they stored large supplies of extra money for a rainy day then they could deal with their daily needs and have extra money to deal with emergencies“.

Do you think the CCPA would agree with this analysis? Yet this is an exact analogy for the CCPAs argument about gasoline. Marc is arguing that in a market with a chronic shortage of gasoline the solution is for the wholesalers to maintain an excess supply of gasoline in storage facilities.

Can you see how ridiculous this argument really is? If there was enough excess gasoline in the market for the wholesalers to have tanks of the stuff lying around then we wouldn’t be in this problem in the first place. If the working poor had enough extra money at the end of the month that they could fill a bank account with scads of cash, then they wouldn’t be the working poor.

Going back to our Root Cause Analysis we can see that Marc’s analysis stopped a couple “whys” early and as such his “solutions” are equally useless.

In order to fill these tanks with spare gasoline the wholesalers would have to buy expensive gasoline off the world market. But we already know that doing so will cost them more than it costs to buy from the Puget Sound (or they would be doing it already) so that solution makes no sense. It will have no effect on the marginal source of supply and gasoline prices will remain sky-high.

As for the suggestion we regulate the price of gasoline. That only works in jurisdictions where there is an excess of supply. If the government regulated the price of gasoline on the West Coast it would have to do so at a price equivalent to the marginal source of supply. Were they to choose a lower price the suppliers would simply sell to other markets (in this case to Oregon and California). This would leave us with an approximately 9,000 – 10,000 bpd shortage of gasoline in our market. I don’t need to tell you what happens when you use more than you bring in every day? You end up with a shortfall and eventually run out altogether.

Thus the regulation of gasoline would only lock in the price at a price equivalent to the marginal source of supply or it would have to be accompanied with strict rationing to keep our demand equivalent to the supply that is coming in. This is Economics 101.

Arguing that the poor should simply save more money doesn’t work in a poverty discussion and a parallel argument doesn’t work in discussing gasoline prices in the lower mainland. The supply/demand equation has two sides. If you want to decrease price you either increase supply or decrease demand. Any approach that ignores this bedrock principle of Economics is guaranteed to fail. Unless we can address the marginal source of supply we will have over-priced gasoline in BC. This is not rocket science, it is Economics 101.

Posted in Canadian Politics, Pipelines, Trans Mountain | 19 Comments

An Ecomodernist-based approach to fighting climate change while protecting our shared global ecosystem

I am a pragmatic environmentalist and an Ecomodernist and in celebration of the fourth anniversary of An Ecomodernist Manifesto I have prepared this post to present an Ecomodernist-based approach to fighting climate change while simultaneously protecting our shared global ecosystem.

Let’s start with the obvious, but apparently necessary, declaration: I believe that climate change is both real and a significant threat to the long-term ecological health of our planet. That being said, I think we need to take a long and careful look about how we have approached the fight against climate change and how we should be carrying out the fight in the future. My concern is that we have made some poor choices, to date, in the fight and if we are not careful we risk being led down a path that could have consequences almost as bad as if we simply listened to those who deny climate change is real.

I write this blog post as someone who has spent almost three decades evaluating policy options to fight climate change from both an ecological and humanist perspective. As a humanist I see the need to reduce human suffering by pulling as many humans as possible out of poverty and giving them the resources to live good and fulfilling lives. This means making more energy available for more people since quality of life is strongly correlated with easy access to energy. From an Ecological perspective, I see a planet where the mass of humanity has inexorably squeezed out nature. I see a need to turn back that tide. As humans we need to reduce our global ecological impact. We need to restore nature not just for human use but because nature has a legitimate right to thrive absent human intervention. We need to make more space for nature and give it a chance to exist outside direct human influence.

Returning to the issue of climate change; we currently live in a world where climate policies appear to be more-and-more dictated by high-school students, political operatives and unaccountable international NGOs rather than the scientists and policy experts who have spent decades studying these problems. In that context, I can state that I have never been more afraid. I’m afraid because it is becoming increasingly clear that the idea that we should proceed using defensible and rational policy has effectively become passé. We have let ourselves be convinced that any action is better than our current path and in doing so are embarking on policies that could pose a significant threat to the long-term ecological health of our planet.

Now I know this last paragraph sounds harsh, but the truth of the matter is that the climate change debate is becoming one of harsh language, overblown rhetoric and a lot of really bad science. Political activists and unaccountable NGOs are pushing their political agendas under the guise of “fighting climate change” and the result has the potential to derail the real fight against climate change. Consider the “Green New Deal” (GRD). It represents a tremendous aspirational document and yet somehow its supporters simultaneously argue that the GRD requires that the all work be done by unions. The reality is that renewable energy projects do not produce fewer megawatts per hour if they are constructed by non-unionized labour. Placing these kinds of irrelevant restrictions in the way represents the sort of thing that takes away from achieving our goals.

In addition to activists adding unnecessary requirements to projects, others are demanding unrealistic and overly expensive approaches or approaches like expanding our use of biofuels even as we have come to recognize that biofuels often make climate change worse. When policy decisions are driven by students, political operatives and activist NGOs (often staffed by individuals with no real understanding of the underlying science that forms the basis of our current society) the results can be changes that can have massive negative consequences.

To understand what I mean by well-meaning activists look at the proposals of the 100% wind, water and sunlight team at the Solutions Project. Their idea of a solution to our climate challenges is to industrialize our fragile marine foreshores with low-efficiency wave and tidal facilities while massively increasing the amount of space dedicated to harvesting low-density energy sources (i.e. wind farms and solar facilities). Marine foreshores represent significant and highly-restricted ecological niches and filling them with disruptive human technologies represents an unnecessary burden on those niches.

It is hard to talk about bad approaches to energy policy without discussing the German experience with Energiewende. It has shown that you can spend almost $500 Billion and still see almost no decrease in carbon emissions if you make the wrong choices.

We need to stop listening to dreamers who don’t understand physics or ecology. The people who demand we depend solely on low-density, diffuse power sources or revert to low-tech, high-input agricultural practices are wrong. Instead let’s look at how an Ecomodernist approaches the problem.

An Ecomodernist Take

The core of the Ecomodernist approach is to decouple human development from environmental impacts. How do they suggest humanity do that? By increasing urbanization; intensifying agriculture; expanding the use of renewable power within the context of our urban environments; and supplementing low energy-density renewables with higher energy-density renewables like geothermal and nuclear power.

Serious environmental scholars understand that the best way to preserve nature is to enhance urbanization. Urbanization means putting more people into cities where they require fewer ecological inputs, per capita, to enjoy a healthy and fulfilling existence. In urban communities we can reduce per-capita energy costs through mass transit, shorter travel distances for supplies and shared heating/cooling in energy-efficient, high-density housing. The more spread out your community, the less likely that centralized services like sewer, water and gas are possible and the more expensive the cost to maintain the services. More people in cities means fewer people in suburbs and more space for nature and non-human species.

Similarly, our aim shouldn’t be to “go back to nature” to grow our food, rather we should intensify our agriculture while limiting our farming footprint. There is simply not enough land for humans to return to subsistence agriculture. While the 100 Mile Diet sounds intuitively like it should be better for the environment, that is far from the truth. We need to grow our food where it grows most efficiently and in doing so we can use less space leaving more space for ecosystems to thrive outside of direct human influence.

Marine aquaculture is a critical consideration on this topic. Our heavy reliance on the natural bounty of the oceans is quickly depleting their ecological diversity. We need to eliminate open-ocean and drift-net fishing. If we must fish then we should rely on terminal fisheries rather than indiscriminate fisheries and we need to use everything that we take. The ecologically criminal practice of discarding bycatch simply has to stop. Moreover, we need to create more marine nature reserves where marine species can re-build marine biodiversity. This means setting aside large expanses of oceans where we simply don’t fish or otherwise exploit the oceans while identifying smaller areas where we can take advantage of the bounty of the sea through aquaculture.

Part of the de-coupling involves changing the way we generate energy. We need to wean ourselves off fossil fuels and move toward electricity-based transportation and home-heating technologies. We also need to re-think how we look at renewable energy technologies.

Our current approach to wind technology has to be re-considered. Wind turbines can be differentiated by comparing the axis of orientation into two types: Horizontal Axis Wind Turbines (HAWT) and Vertical Axis Wind Turbines (VAWT). To date almost all our wind energy has been generated using HAWTs but we need to consider the advantages of VAWTs. While VAWTs tend to be smaller and individually less efficient than HAWTs, as described at Phys.org

While a single VAWT is not as energy-producing as an individual HAWT, the wind flow synergies created in a closely-spaced array of VAWTs can potentially generate up to 10 times more power per unit of land area than an array of widely-spaced HAWTs.

Moreover, because they are smaller in size VAWTs can be placed in locations where HAWTs cannot, like the medians of highways. Anyone who has walked near a roadway knows how much wind is generated by a large truck driving by. Now imagine hundreds of small VAWTs harvesting that otherwise wasted energy and pumping it back into the grid. Tests are being done around the world, and the results have been very promising. Our urban environments create massive wind corridors and VAWTs can take advantage of those conditions to generate energy.

As for solar energy, we need to re-think how we generate that as well. Our current approach of stripping huge swathes of nature to install solar panels has to be re-thought. We need to make more policy decision like the California rooftop solar mandate and ensure that new buildings don’t just use energy but generate energy. This doesn’t just mean solar panels on the roofs but fully integrating photovoltaics into our building designs. If we do decide to develop stand-alone solar power facilities, we should do so in combination with agricultural uses.

We shouldn’t stop with making our buildings energy producers; we also need to incorporate ideas like the the Vancouver Green Building plan that reduces the amount of energy need to keep a building warm in winter and cool in summer.

Now the topic where Ecomodernists always get attacked is the recognition that de-coupling human development from environmental impacts means incorporating our most effective low-carbon energy technology: nuclear power. Opponents of nuclear claim it is too expensive, will encourage nuclear weapons development and has waste issues. We all know that the reason nuclear has been so expensive is that traditionally nuclear plants were designed and built as one-off projects. Well, the Koreans and Chinese have demonstrated that by simplifying and standardizing nuclear design we can avoid most of the cost challenges in building nuclear reactors. As for nuclear proliferation, if Canada wanted the bomb we would already have it. As for China, the US, India, the UK, France and Russia? they already have the bomb. Ultimately, I’m pretty sure a new nuclear plant in Alberta won’t be the deciding factor as to whether Canada decides to become a nuclear weapons state. Finally, the waste argument is simply a red herring. Nuclear energy produces much less waste than solar or wind facilities (per MWh produced) and as for the spent uranium, the Generation IV reactors will be turning that “waste” into the next generation’s electricity.

To conclude let me take a couple lines directly from the Manifesto:

Urbanization, agricultural intensification, nuclear power, aquaculture, and desalination are all processes with a demonstrated potential to reduce human demands on the environment, allowing more room for non-human species. Suburbanization, low-yield farming, and many forms of renewable energy production, in contrast, generally require more land and resources and leave less room for nature…..A good Anthropocene demands that humans use their growing social, economic, and technological powers to make life better for people, stabilize the climate, and protect the natural world.

Posted in Climate Change, Environmentalism and Ecomodernism, Uncategorized | 5 Comments

A primer on the BC refined fuel market, lower mainland gasoline prices and how they can be affected by a change in mix in the Trans Mountain Pipeline

In the last couple weeks I have read a lot about gas prices and the threat by Jason Kenney to shut down the Trans Mountain pipeline. Since a lot of what I have read is incomplete and/or incorrect, I figure it is time to prepare a quick primer to help understands the refined fuel market in BC and what Jason Kenney may, legally, be able to do to mess that market up.

Understanding the BC Refined Fuel Market

Let’s start with what we know about the BC refined fuel market. Let’s start with this from an article in Business in Vancouver:

Provincially, B.C. lacks refining capacity. B.C.’s two refineries produce only 67,000 barrels per day (bpd) of gasoline and diesel, whereas B.C. consumed 192,000 bpd in 2015, according to the CFA [Canadian Fuels Association]. The Parkland Fuel Corp. refinery in Burnaby produces 55,000 bpd and supplies about 25% to 30% of Vancouver International Airport’s jet fuel supply. Alberta’s refineries supply about 100,000 bpd to B.C., and about 30,000 bpd is imported from Washington state refineries, according to the CFA.

To our south, the United States has broken their petroleum market up into five Petroleum Administration of Defense Districts (PADDs). The West Coast of the US, including California, Oregon and Washington, make up PADD 5. Geography defines PADD 5. It is mostly bordered on the east by mountains. The only (non-rail) major east-west connection on the west coast is the Trans Mountain pipeline. As the US Energy Information Administration (EIA) puts it:

Because PADD 5 is isolated, in-region refineries are the primary source of transportation fuels for PADD 5. In 2013, PADD 5 refinery production was sufficient to cover about 91% of in-region motor gasoline demand, 96% of jet demand, and 113% of distillate demand. Heavy reliance on in-region production further complicates the supply chain when disruptions occur. When disruptions occur, all of these factors noted above combine to limit short-term supply options, lengthen the duration of supply disruptions, and cause prices to increase and remain higher for a longer period than would be typical in markets outside PADD 5.

In a nutshell, BC is short 30,000 bpd in refined fuel supply domestically and relies on Washington State refineries which sell into a PADD 5 market that is also significantly short on supply.

Even more problematically, most of the big refineries are owned by oil companies that have long-term contracts for most of their production. We can only buy our 30,000 bpd out of the left-overs and we are competing with Oregon and California (that are also under-supplied) for whatever the Washington refineries have to sell. What is worse is that at this time of year the refineries have to temporarily lower capacity to allow the transition from winter gasoline to summer gasoline. The reason for this is that gasoline is affected by temperature and the winter blends have more volatile components needed to help cars run in the cold.

As for the suggestion that the Parkland refinery can somehow fill in the gap. The truth is that, as a very small refinery, Parkland has needed to specialize to survive in the international market. Parkland has specialized by tuning their refinery to make jet fuel and the more expensive high-octane, premium fuels. It actually exports some of this premium gas in the US market. To make regular gasoline, in any reasonable quantities, would require the refinery to shut down and would take time and money.

The only other significant facility in the Lower Mainland is the Suncor Burrard Products terminal. As I will point out below, the Trans Mountain is a batched pipeline. It carries refined fuels, light crude and heavy crude. One issue with batching is the refined fuels can pick up impurities left over from the heavy oil on the way. Before gasoline can be sold on the market it has to go to the Suncor facility for clean-up.

To conclude, the take-away from this section is that BC has an ongoing shortage of about 30,000 bpd in refined fuel supply, with no large marine import facilities. We are buyers in a seller’s market (PADD 5) and have no ability to change that equation. Should we choose not to buy the fuel from the Washington refineries, they have lots of other options. So we are price takers not price makers.

Local Gas Prices

The next topic to discuss is our local gasoline prices. Our local gas price has a lot of factors built into it. Let’s start with taxes. Provincially, in the lower mainland we pay 34.39 cents/L (c/L) of provincial taxes for every liter of gas. This can be broken down to:

  • 17 c/L in TransLink Tax,
  • 6.75 c/L in British Columbia Transportation Financing Authority  Tax
  • 1.75 c/L in Provincial Motor Fuel Tax, and
  • 8.89 c/L in Carbon tax

The federal government also gets its pound of flesh. Federally we pay:

  • 10 c/L federal excise tax and
  • 5% GST on our total purchase price (or 7.5 c/L on $1.55 gas)

Adding up all the taxes together we get 51.89 c/L for taxes on $1.55 gas. Now the problem with the gas business is that it is very opaque. The internal prices are kept private but one thing we are privy to is the rack price. The rack price is defined as:

the cost of the gas itself, as well as transportation, overhead, and profit costs. The price can vary from terminal to terminal and depends on the cost of crude oil and related refining costs. The rack price also depends upon the distance between the fuel retailer and wholesale terminal. A gas station located far from a terminal is going to pay a higher fuel rack price than one located just down the street.

That would be all the costs, exclusive of the dealer’s mark-up which pays for the retail facility and all its staff. Most oil companies publish their rack price somewhere. Here is a link to the Petro-Canada daily rack price for Canadian cities. In Edmonton, on April 14, 2019 it was 83.30 c/L while in Vancouver it was 105.2 c/L. There is a 21.9 c/L difference in the rack rate. This difference is the scarcity premium we pay because it is expensive to send gas to the west coast, then clean up the gas at the Suncor facility and then sell it to the big distributors. The only way to decrease that scarcity premium is by eliminating scarcity.

Assuming the rack price is pretty comparable between retailers (to simplify this discussion) then all we need to add is the dealer’s mark-up. This is normally around 12 c/L. So our gas ends up with:

  • $1.052 rack price
  • $0.3339 provincial taxes
  • $0.10 federal excise tax
  • $0.075 GST
  • $0.12 dealer’s mark-up

This becomes a gas price of $1.68/L.

Green fuel requirements

One thing we seldom hear discussed represents another big challenge with importing gasoline to BC: our fuel regulations. The Greenhouse Gas Reduction (Renewable & Low Carbon Fuel Requirements) Act and the Renewable & Low Carbon Fuel Requirements Regulation define what our gasoline looks like. Part 2 of the Act establishes the renewable fuel content requirements for gasoline and diesel sold in British Columbia:

  • Fuel suppliers must ensure that they have a minimum renewable fuel content of five percent (5%) for gasoline and four percent (4%) for diesel, on a provincial annual average basis.
  • Fuel suppliers have the flexibility to vary their blend percentages and can choose where in the province they supply renewable fuel blends, as long as they meet the provincial annual average requirement for renewable fuel content.

What does this mean for consumers? Well it means we can’t simply buy gas from Asia or California and sell it off the boat to retailers. Instead gasoline from other suppliers would need to be imported and mixed with enough ethanol to meet the BC regulations before it can be sold. This is another way we have, through our desire to fight climate change, made it harder (and more expensive) to get gas in BC.

Trans Mountain Capacity and allocations

Going back to the Trans Mountain Pipeline, we are all told that the Trans Mountain has a nominal capacity of 300,000 bpd. But that is not the entire story. You see the Trans Mountain is a batched pipeline. It carries refined fuels, light crude and heavy crude and the relative amount of each defines the actual capacity of the pipeline. Here is how those volumes have looked over the last few years.

The thing to understand about the pipeline is that the 300,000 bpd assumes we are moving 20% heavy crude. As the table below shows, the actual capacity of the pipeline would change dramatically if we changed the mix running down the line. The Trans Mountain can carry 395,000 bpd of light/refined, or 300,000 bpd if 20% is heavy or 269,000 bpd if 40% is heavy.

This means that if we can get all of the heavy fuel out of the pipeline (say moving by rail via CanaPux) then that would be almost like getting a brand new pipeline. Running only light crude and refined fuels, the pipeline could supply the Puget Sound with 260,000 bpd while still leaving lots of room for Parkland and the West Coast market. The flip side of this equation is that if Alberta were to require that the pipeline carry 30% – 40% heavy it would push the capacity of the pipeline down to 269,000 bpd which could squeeze the amount of refined fuel running down the pipe.

One additional fact that is not well known is that in 2010 the NEB provided the Westridge marine facility with two allocations. A firm allocation of 54,000 bpd and and uncommitted allocation of 24,000 bpd. As you can see from the graph above, over the last few years the marine terminal has been getting the short end of the stick but that doesn’t have to be the case. Essentially, the NEB said that the suppliers can demand up to 79,000 bpd be sent to the marine terminal. 79,000 bpd represents almost 30% of the pipeline capacity if that 79,000 bpd were heavy crude.

Now this is where it becomes interesting. Given the NEB’s decision, it is possible that Alberta could require that the entire marine allocation be put in the pipe as heavy fuel (say by nominating a whole lot of the in-kind bitumen they get in lieu of royalties). If that were the case it would, as discussed above, put the squeeze on the pipeline and reduce the amount of refined fuel running to BC. This would represent an entirely legal way that an Alberta government could constrain BC fuel supplies and there would be nothing a court could do about it. Simply enforcing existing allocations using heavy could shrink the amount of anything else running down the line.

Conclusion

To conclude we, in the Lower Mainland, are buyers in a sellers market. We have no ability to dictate to the market and if the provincial government decided to regulate gasoline it would have to start high because Canadian governments can’t force American refiners to sell them gasoline.

The Lower Mainland also lacks marine facilities to significantly increase the amount of fuel that comes here by ship and BC gasoline regulations would require that any imported gasoline be adapted to meet our local requirements. Both would raise the price of gasoline even more.

If Alberta wants to squeeze BC it can shut down the pipe. But if it did the courts would deal with that in hours/days. But the truth of the matter is that Alberta is full of smart people and they know that the Trans Mountain can be gamed to reduce the amount of refined gasoline coming down the pipe. This will have price consequences.

I’m going to end with the environmentally interesting part of this story. If you were an environmentalist wanting to reduce BC’s carbon emissions and our dependence on fossil fuels you should be cheering Jason Kenney on. Thanks to the Law of Unintended Consequences any effect he has on prices will force people to find alternatives. The reason we have carbon taxes is to increase the price of carbon-intensive fuels to discourage their use and encourage users to seek alternatives be they EVs, transit, walking or avoided trips. The reality of the case is that if they are looking to fight climate change, Jason Kenney and high gas prices are something they should be aiming for, not fighting.

Posted in Pipelines, Trans Mountain, Uncategorized | 32 Comments

More bad epidemiology about BC LNG from the MDs at CAPE

I have written a lot about the BC liquid natural gas (LNG) export industry. I have done so because my examination of the climate math says BC LNG will help reduce global greenhouse gas emissions and will help in the fight against climate change. Many activists disagree with me, with one of the most vocal anti-LNG groups being the good MDs at the Canadian Association of Physicians for the Environment BC (CAPE). CAPE has a history of fighting the natural gas industry. Their most recent effort involves a travelling roadshow called: “Voices from the Sacrifice Zone: Fracking in BC’s North“. Their presentation is summarized in a Narwhal article written by CAPE BC Board Member Melissa Lem. As I have written in the past, the good MDs at CAPE often struggle when trying to translate their professional experience in private practice through the lenses of toxicology and epidemiology. As I will discuss in this blog post, this is again the case with their travelling anti-LNG roadshow. Ultimately, what I intend to show in this blog post is that the anecdotal experiences of the people in the roadshow are trumped by the epidemiological work done to date in BC’s northeast and that any decision on the future of BC LNG should be based on science and not anecdotes.

To explain what I mean by anecdotal experience let me give you an example using one of my favorite hobbies: birding. I love birds and have a backyard feeding station for birds. Before we got our puppy I had black oil sunflower seeds in our station. As a result, I would see dozens of finches daily. Unfortunately, our puppy took to eating the discarded sunflower seed shells so we had to stop including the seeds in our station…and the finches disappeared from my backyard. As a birder I know that all the finches in the neighbourhood didn’t just die off. I am quite sure they simply moved to a feeding station down the street. If we did a regional survey and sent those results to a statistician that statistician would likely find that the number of finches in the region hadn’t changed. In the field of human health risk assessment that statistician is called an epidemiologist.

Going back to the CAPE roadshow. It consists of a small number of practitioners presenting their anecdotal observations to the public. The problem is the anecdotal information they present is not backed up with a look at the bigger picture. This is unfortunate because, as presented in the Narwhal article, a detailed epidemiological study has already been carried out for the BC Northeast and the results were very reassuring. The assessment called: Cancer Incidence in the Peace River South Local Health Area looked at the rate of cancer incidence in the region where LNG is generated and found that cancer incidence was normal or as they put it:

the number of total cancers diagnosed in this region are consistent with Northern Health regional rates; the number expected based on regional rates is almost identical (1193 vs 1201)….overall cancer incidence over the past 10 years in this region is consistent with average cancer rates in Northern BC.

So what are the CAPE doctors using to refute this epidemiology? Why anecdotes of course. In the Narwhal article they note that there were ten incidences of glioblastoma in the area when the average for that population should have been five. The article also notes that this is an “unofficial” count and the numbers presented are not reflected in the cancer incidence study. Not a surprise since the doctor had observed less than 2 incidents a year. Also interesting is the link provided in the piece did not indicate that VOCs were a particular risk factor for this cancer but rather:

The vast majority of glioblastomas occur randomly, without inherited genetic factors. The only confirmed risk factor [my emphasis] is ionizing radiation to the head and neck region. Studies of environmental and genetic factors contributing to glioblastomas have so far been inconclusive or negative. 

Looking at the literature it is understood that radon is a significant risk factor for this cancer while VOCs are not. So when the author points to this cancer she fails to note that the more likely reason for this potentially increased incidence is that Dawson Creek is a hot spot for radon.

They also present the experience of “an internist who diagnosed ten cases of idiopathic pulmonary fibrosis (IPS) in the two short years he’d worked in Dawson Creek“. What they omit is that genetics represents a major risk factor for IPS so in a close-knit community (especially one with First Nations communities that have strong genetic ties) this consideration becomes important and must be considered in the math. This demonstrates why it is so important to use the tools of epidemiology in trying to come to an evidence-based conclusion.

The most telling part of the presentation is CAPE’s go-to study in their fight against LNG; this is the study that CAPE has used in virtually every one of its presentations: Gestational exposure to volatile organic compounds (VOCs) in Northeastern British Columbia, Canada: A pilot study. This study is used because it involves pregnant women and benzene and so pulls at virtually every observer’s heart-strings. The problem is the study is explicitly described as a pilot study meaning it has an exceedingly small sample size and is not able to effectively address critical confounding variables. As such it is absolutely useless for telling us whether LNG is having an effect on the population. Because of its importance to CAPE, I will spend a bit of time explaining where it goes wrong from a decision-making perspective.

This pilot study involved testing for benzene and benzene metabolites in the blood of 29 pregnant women in northeastern BC. Now for the first problem: sample size. Twenty-nine participants is a tiny population to search for trends in any study but this one is particularly notable because of the 29 women, 2 were regular smokers and 4 more were regularly exposed to second-hand smoke. Smoking is a serious confounding variable in a study of this kind because smokers are expected to have higher benzene and benzene metabolite concentrations in their blood as a by-product of exposure to smoking.

In this study, the elevated benzene and benzene metabolite concentrations were only observed in a very small number of participants. Unfortunately, the authors did not confirm whether the elevated participants were among the number that were regularly exposed to cigarette smoke, they only indicate that the highest results were not smokers. Step 1 in any more detailed epidemiological assessment would typically have been to exclude smokers from the study.

The study also does no discuss another major confounding factor: whether the women lived in houses with attached garages. Attached garages you ask? Yes, since the presence of an attached garage is one of the strongest indicators (after smoking) of potential human exposure to volatile organic compounds (VOCs) like benzene. To explain, see this article:Automobile proximity and indoor residential concentrations of BTEX and MTBE where they point out:

Residing in a home with an attached garage could lead to benzene exposures that are an order of magnitude higher than exposures from commuting in a car in heavy traffic, with a risk of 17 excess cancers in a population of a million

Another article (Migration of volatile organic compounds from attached garages to residences: A major exposure source) points out:

A total of 39 VOC species were detected indoors, 36 in the garage, and 20 in ambient air. Garages showed high levels of gasoline-related VOCs, e.g., benzene averaged 37±39 μg m−3. Garage/indoor ratios and multizone IAQ [indoor air quality] models show that nearly all of the benzene and most of the fuel-related aromatics in the houses resulted from garage sources, confirming earlier reports that suggested the importance of attached garages. Moreover, doses of VOCs such as benzene experienced by non-smoking individuals living in houses with attached garages are dominated by emissions in garages, a result of exposures occurring in both garage and house microenvironments.

Put simply, the benzene metabolite study has challenges associated with sample size and confounding variables. These are the sorts of thing a more detailed epidemiological examination would be able to establish. Absent these considerations we have a study that tells us that more study is needed but should not be relied upon for decision-making purposes.

To continue my critique of the Narwhal article; I would also note that in Northeastern BC, where winters are extremely cold, indoor air issues are exacerbated because ventilation is minimized to prevent heat loss. In the Narwhal article the author questions why a study comparing the results to southern BC has not been carried out? The issue is that in southwestern BC we don’t see the same cold as they do in the northeast so people here are more likely to open their windows in winter and thus have fewer indoor air issues. This is why no epidemiologist would blindly compare northern and southern communities in a manner the author of the Narwhal author suggests should be done. It would be bad science.

Ultimately, the “Voices from the Sacrifice Zone” series consists of a collection of anecdotes with the common feature that all the anecdotes involve people who live or work in Northeastern BC. There are no controls, there is no evaluation of the big picture. It is a handful of activists telling their personal stories. As such it makes for a compelling presentation from a human-interest standpoint, and is useless from an environmental decision-making perspective.

The thing we have to keep reminding ourselves is that a presentation that includes a lot of compelling stories is of little use in determining if the LNG industry is safe. For that you need epidemiological research and the epidemiological work to date identifies no cancer hot-sports in need of more detailed assessment. There are no increases in VOC-related cancers in the data. Rather the research shows the exact opposite. The cancer rates are consistent with what is expected in this community. There are simply not enough cancer cases to raise any concerns. The authors of the report note that Acute Myeloid Leukemia (AML, the cancer CAPE associates with benzene) is so rare that the Peace River south Region sees an average of “less than 1 case per year” of AML. In the case of AML, in some years, there is literally no data to crunch.

To end this piece I want to reiterate a simple truth. Decisions about energy policy shouldn’t be made based on anecdotes and first-person narratives, no matter how compelling they may sound. First person narratives can inform further research but decision-makers need to consider real evidence assembled by people experienced in ensuring that the data is not the result of unexamined confounding variables. Epidemiologists have compiled those results and the current output from those experts indicates that the northeast is not a “sacrifice zone” but rather has absolutely typical diseases incidence rates. As such the anti-LNG roadshow really doesn’t inform evidence-based decision-making, rather it muddies the waters by implying a negative trend exists when the data says no such trends exist.

Author’s Note

An earlier version of this blog post had an error with respect to the incidence of glioblastomas. This was the result of my mis-reading the Narwhal article. The error had no significant effect on the piece but has been corrected in the current version.

The text has also been cleaned up with respect to the maternal benzene metabolites study as the original critique could be viewed as too imprecise. I hope the new language addresses those concerns.

Posted in Renewable Energy, Uncategorized | 1 Comment

On spherical cows, an idealized China and the futility of arguing with activists on BC LNG

It seems like every week we get another announcement from the BC government about the BC LNG industry. While there are clearly issues with how our government is handling the financial end of the BC LNG industry (including taxation policy and subsidies) the one area where the case is solid is on the emissions side of the ledger. As I describe in my blog post on the topic the peer reviewed academic literature shows quite categorically that BC LNG will lower global emissions for electricity production. BC LNG is not “dirtier than coal” as some activists falsely claim, rather it is much cleaner than coal. So how can the activists fight this science? Well the answer is simple: they use the “consider a spherical cow” defense, by imagining an idealized China. As I will show in this post, ultimately it is futile to argue against the professional activists if they insist on ignoring the real world and “assume we have a can opener“.

To start let’s explain what I mean by “consider a spherical cow”. This expression derives from a book: “Consider a Spherical Cow: A Course in Environmental Problem Solving“. The term is shorthand for relying on a too-simple model for a complex problem. Here is a good description by Timothy Lee:

There’s a famous joke about a dairy farmer who, hoping to increase milk production, seeks the help of a theoretical physicist at the local university. After carefully studying the problem, the physicist tells the farmer, “I have a solution, but it only works if we assume a spherical cow.”

There is a similar joke called “assume we have a can opener” which Wikipedia describes as:

there is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, “Assume we have a can opener”!

You are probably asking what I mean by this? Well here is an example from today:

I presented data that showed that:

in the current market, BC LNG would not be replacing coal when exported to China. Instead BC LNG would mostly be replacing Chinese SNG and the climate math is even more categorical on that topic. BC LNG is much, much cleaner than Chinese SNG. Replacing Chinese SNG with BC LNG will help the planet and even if exporting BC LNG causes Canada to miss our Paris Agreement targets then the sacrifice is worth it. We have to keep reminding ourselves GHGs are global and it is more important to address global emissions than local ones. If a minor increase in Canada emissions can result in a major decrease globally then that is well worth our missing our Paris Agreement commitments.

The Wilderness Committee response was a link to a model that completely ignores the real world. The link provided by the folks at the Wilderness Committee concentrates on how there is no room for new natural gas. In the context of our discussion this can only mean that we are supposed to simply ignore what the Chinese are doing because there is “no room” for their emissions. In essence they are insisting we imagine some idealized China completely unrelated to the existing China. They argue that if we are to meet the goal of 1.5 degrees Celsius then China can’t be allowed to use the fossil fuels that they have declared they will use so the activists will simply pretend those emissions won’t happen.

Now here is a secret I need to share: China doesn’t care what a climate think tank or a bunch of North American activists say they should do. We do not have some idealized China, we have a very proud nation state that currently occupies a large hunk of the planet on a continent called Asia. The Chinese government has declared their intentions and backed those declarations with huge financial investments.

When activists argue that we shouldn’t lock in the emissions associated with BC LNG they ignore that the Chinese are investing billions building synthetic natural gas (SNG) projects:

As of June 2018, five pilot synthetic natural gas projects are operating in China, with a total capacity of just under 6 billion cubic meters per year (bcm/year). Roughly 80 SNG projects with a cumulative capacity of more than 300 bcm are in different stages of the development pipeline. (This is 10 more than were in the pipeline in June 2017.)….China currently emits 25.5 MT (or one third of the entire oil sands in 2017) just to create the SNG they will later burn. To put this into perspective the LNGCanada project in total is estimated to emit 10 MT/yr while Woodfibre would generate about 1 MT/yr .

These projects lock in emissions that produce around 1.4 – 2 times the emissions for the same energy output as compared to BC LNG. Our real-world China is expanding its coal industry not reducing it. They are locking in emissions that BC LNG can help reduce.

As a pragmatic environmentalist I keep insisting the climate change energy debate has to rely on real-world numbers. We need to look at what real countries are planning to do and figure out how we can reduce those emissions. We need to recognize that there are no spherical cows out there. We can’t simply “assume we have a can opener” and we can’t plan based on an “idealized China”. We live in a world where spherical cows don’t exist, where can openers don’t simply materialize and where the Chinese government exists and its current energy use trajectories cannot be dismissed. In that real world, BC LNG will lower global emissions for electricity production and are something reasonable observers should support, not fight.

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