Wednesday, November 16, 2011

Keystone, Prosperity and government negotiators

There are many interesting aspects of the decision to delay the Keystone pipeline. The Times Colonist has a useful editorial here.

One striking thing is how quickly the company moved from its position that the oilsands crude pipeline had to traverse a sensitive Nebraska aquifer. The routing was necessary for the project, the developer had maintained all through the approval process, despite major protests from the people and politicians of the state, including the Republican governor.

But as soon as the U.S. government put the approval process on hold, the company changed its tune. The pipeline would be rerouted to avoid the aquifer.

It's a process that should be familiar to British Columbians. The provincial government approved plans for Taseko's Prosperity Mine, and accepted the company's claim it needed to use a large, fish-bearing lake as a tailings dump, destroying it. The Liberal government gave approval.

But the federal government said no, the environmental damage and impact on First Nations outweighed the economic benefits. It blocked the mine.

And Taseko quickly came back with a new proposal that didn't require the destruction of Fish Lake. It would spend about $300 million more and manage the tailings in a less damaging way. (I wrote more about the province's lax approach here.)

Both cases are a reminder that companies want to do things as cheaply as governments will allow (while avoiding obvious liabilities from future problems). They want the low-cost tailings dump, or the shorter pipeline route, because they can make more money, which is their duty to shareholders.

Governments need to be knowledgeable, tough bargainers to avoid unnecessary environmental damage or other decisions not in the public interest. (Yes, there is such a thing as necessary environmental damage. We aren't living in tents in the trees, after all.)

It's not at all clear that governments are tough or skilled bargainers. The B.C. government was prepared to let Taseko destroy a lake unnecessarily; it also handed huge benefits to forest companies when it released land from tree farm licences without getting compensation for taxpayers.


ron wilton said...

Why do the media like The Times Colonist keep reporting that KXL is a secure supply for a source of energy for US consumption when this is not true.

As the article 'exporting energy security, keystone xl exposed' demonstrates that the recipients and refiners of the dilbit in Texas are exporters and have delivery contracts in place for 'tax free' shipment of the refined product to England, Europe, Mexico and South America.

Is there a fear that if it were known that it has nothing to do with a secure and 'ethical' supply for the US, it would then kibosh the program?

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kootcoot said...

"companies want to do things as cheaply as governments will allow (while avoiding obvious liabilities from future problems)."

The companies very rarely, if ever actually accept and pay for the future clean-up or any liabilities. Who paid to clean up the Expo site, Granville Island or any of the formerly industrial areas around False Creek. Exxon is still fighting the settlement for the Valdez spill how many decades ago, and the settlement keeps getting reduced - maybe the fishermen will someday have to pay Exxon at the rate it has gone.

Of course, if I were to leave a couple bags of trash in a ditch on a forestry road (where abandoned oil cans and barrels, and rusting steel cable abound) and be caught, I would be fined much more than the cost of picking it back up......and heaven help me if I spilled the hydraulic fluid from a broken hose into a watercourse, while an IPP can totally destroy a watershed and enjoy a thirty year payout for un-necessary and over-priced so called "green" power, of course the only thing green about it is what winds up in the pockets of Plutonic and other friends of the LIEberals!