Thursday, December 11, 2008

A split decision for B.C. coalbed methane

The politics of coalbed methane in B.C. are a lot more complicated even than getting the stuff out of the ground.
Just look at the government's latest news release on the resource, headlined "Leadership shown in unconventional gas development." Not too informative in itself.
The first paragraph - the lead, as they say - was surprising. Leadership in development in this case meant not going ahead with a coalbed methane project: "Shell Canada will take a break in exploration activity in the Klappan and have more discussions with First Nations and the community, Energy, Mines and Petroleum Resources Minister Richard Neufeld announced."
The government was "facilitating this" by barring activity for two years, Neufeld said.
Only then did the release get to the actual development part. The government announced it was awarding a coalbed methane tenure to BP Canada's Mist Mountain project in the East Kootenay.
Even there, the government treaded carefully. It excluded land in the Flathead Valley, near the Montana border.
The Flathead is a revered river in Montana. The state's politicians, and even Barack Obama, were opposed to any coalbed methane development on our side of the border.
So in southeast B.C., near Fernie but away from the U.S. border, coalbed methane is OK.
In the northwest, north of Terrace, not so much.
How come? Partly because environmental groups have targeted the Shell project. They have called the area the Sacred Headwaters, an even more market-savvy name than Great Bear Rainforest.
The opposition, along with First Nations concerns, scared Shell and the government. What oil company or government wants to be blamed internationally for despoiling the Sacred Headwaters?
There are other reasons for the split decision. The Shell project is in a relatively pristine area that includes the headwaters of the Skeena, Nass and Stikine rivers. There's little local support.
The project in the East Kootenay is in an area that's been used for mining and forestry. Many people in the region, and some local governments, supported the development.
But there is still going to be significant opposition. Neufeld says the BP project won't go ahead unless the company can meet the environmental requirements.
The B.C. government has been promoting coalbed methane development for more than a decade. So far, all the province has to show for it is a scattering of test drilling programs, including efforts in the Campbell River area and around Courtenay. The Island’s coal-mining history has attracted considerable interest.
The Mist Mountain project might bring the first real producing wells.
Coalbed methane is the equivalent of natural gas. It's found, as the name suggests, in coal seams, which B.C. has in abundance. But there are some big differences when it comes to getting it out of the ground.
Conventional natural gas is typically found in big pockets, under pressure. Companies drill a couple of holes, the gas rushes out and is sent off in a pipeline. When the deposit is gone the well is capped and that's that. It's relatively tidy and we have a lot of experience with it.
But coalbed methane is found in smaller pockets within the coal seams, so companies need to drill a lot more wells.
And the methane gas is usually trapped beneath underground water. That has to be pumped out before the gas will flow.
Sometimes, the water is of good quality. But often it's contaminated with salt or other pollutants. It has to be pumped back underground to avoid environmental damage.
It's all doable. But the industry's 20-year history has been marked by some environmentally damaging episodes. The government believes those days are behind it - about five per cent of U.S. gas production comes from coalbed methane deposits.
With some estimates putting the coalbed methane reserves at the equivalent of 100 years of current natural gas production, the government sees a lot of jobs and big royalty cheques.
It will still be a tough sell. But picking one project as a test might be the best way to establish whether the coalbed methane industry should have any place in the province.
Footnote: The exclusion of the Flathead Valley from the Kootenay lease makes sense. Why get into a fight with the U.S. as a new administration takes over. But expect B.C. gas opponents to ask why the risks are too great for a watershed that flows into Montana, but acceptable within B.C.

Wednesday, December 10, 2008

The real greatest

Gretzy was great, Rocket Richard ferocious and I've always had a great fondness for Frank Mahovlich.
But no one I've seen came close to changing games all by himself like Mr. Orr.

Tuesday, December 09, 2008

No gambling donations, says Campbell – you decide

The B.C. Liberals don't accept donations from gambling companies, Gordon Campbell said last week.
You decide if the premier is being straight.
Because it looks like some $270,000 went into Liberal coffers between 2002 and 2007 from people and companies linked to the growing gambling business in B.C.
This column rests entirely on the fine work of Sean Holman of the 24 Hours free newspaper and his own website,
Holman was curious about gambling companies and political donations. They didn't show up in the financial reports the parties filed with Elections B.C.
But he decided to dig deeper and checked out the people behind the numbered companies and businesses or individuals with unfamiliar names that contributed to the Liberals.
He found some $265,000 in contributions had come from people connected with the industry - current or former gambling facilities owners or operators. But the donations had not come through the gambling businesses, but indirectly as individual donations or through other companies controlled by the same people.
For example, there was $23,000 in contributions from B-11 Holdings Ltd. and 7779 Ventures Inc. The companies' presidents were Patricia and Gary Hart; Patricia Hart is also president of the service provider to Chances Kamloops, one of the mini-casinos being rolled out in smaller communities.
There was $6,500 from Kings North Development Corp. Its president Mark Ekraut, is also president of the service provider for Bingo Bingo Esquimalt.
The list went on.
Holman called the donors to ask why the contributions were made in that way.
No reason, most said. They just happened to have a chequebook handy from the other company when they contributed, or there was more money in its account or they just couldn't remember.
But then Holman talked to John Becher, who owns the Lucky Dollar Bingo Palace in Terrace.
He said members of the Registered Gaming Management Companies of B.C. - which represents a majority of B.C.'s bingo halls and community gaming centres - were told not to make their donations through their gaming service provider company.
Otherwise, the public might have concerns, he added. "People will say, 'Gee, what's going on here. We can see why the government wants all these slots put in because they're being supported by the gaming association,'" Becher said.
Becher said the request for donations, and the suggested method of donation, came from Tom Nellis, president of the association.
No way, says Nellis. He never suggested members donate to the Liberals in any fashion.
Holman found another interesting fact in the Elections B.C. documents.
Almost one-quarter of the donations came into the Liberal party on the same day, three months before the last provincial election.
Seven different donations on the same day, from people and businesses linked to gambling.
And not one through a company readily identifiable as a gambling interest.
Now that is a coincidence. The odds against all those people in one industry independently deciding to write a cheque to the Liberals on the same day have to be up there with winning a lottery.
Yet Campbell says the party won't accept money from "gaming" companies. (In opposition, the Liberals called it gambling.)
That suggests he believes taking the money would be improper. So if it's happening. . .
The other thing Holman revealed was the emptiness of Campbell's defence of unrestricted political donations. In B.C., unions, businesses, individuals and interest groups can give any amount. Federally, only individual donations are allowed and they're limited to $1,100.
As long as donations are disclosed, Campbell argues, the public can tell if big contributors are getting special treatment from government.
But how are most people to go through hundreds of pages of forms, note a donation from 7779 Ventures Inc., check the officers and directors and cross-reference them against gambling companies or people who get government contracts?
B.C. is an anything goes province. Rich special interests can give what they want. And the public has to wonder how badly political parties come to depend on that support.
Footnote: The backdrop for all this is the Liberals' abandonment of their campaign promise to halt the expansion of gambling because of the damage it does to individuals, families and communities. Campbell has never explained why the principled pledge was forgotten in a massive expansion of slots and casinos and the introduction of online betting.