Taxpayers Will Subsidize Oil Pipelines

B. McPherson

The following letter was passed on to me via email. If the figures are even remotely accurate, the BC taxpayers will be on the hook to subsidize the largely foreign owned oil companies in their efforts to export oil to Asia.

So how does this work? Give the oil transport corporations like Enbridge and KinderMorgan a low rate for the electricity needed to keep the oil and bitumen warm enough to flow. In the meantime, charge increasing rates to homeowners for their needs. Then tell the public we're short of electricity and dam yet another river valley and increase taxes to pay for it.

Joe and Jane Shmuck get to have a scar carved through the Great Bear Rainforest, risk extinction of the endangered woodland caribou, gamble with the jobs and health of the environment of the coastline and still get to pay for the privilege of having foreign corporations reap massive profits. Sounds like big business to me.

Pipeline Will Suck Up Hydro Power

August 27, 2012

Back in '03, a fellow teacher and I had registered as intervenors at B.C. Hydro's first hearing on rate increases. This hearing was to reveal Gordon Campbell's disastrous “energy plan.”

Buried in the hundreds of pages of information, handed to us, were some revealing numbers. The energy plan would be buying privately generated electricity at over $0.12 per kilowatt-hour, well above the half-cent per kilowatt-hour that it was costing Hydro to generate power, from its own “heritage resources.”

Nine years later, we have two tar sands bitumen pipelines proposed for this province. These will add giant loads to Hydro's grid and they will be enjoying a huge subsidy, courtesy of B.C. Hydro and its ratepayers.
You see, Hydro's industrial rate, even for new accounts, is only about 4.4 cents per kilowatt-hour but, Hydro's latest call for private power is offering 12.4 cents a kilowatt-hour. Hence, the pipelines are on track to get a subsidy of $0.08 per kilowatt-hour.

Electrical demand figures obtained for Enbridge's highly disputed Northern Gateway Project are staggering; 77 megawatts for condensate pumping and 116 MW for the bitumen pumping. This adds to 193 MW which far outstrips B.C. Hydro's largest customer, Highland Valley Copper with its power demand of 120 MW. Gateway will consume power at the same rate as about 200,000 homes.

B.C.'s second bitumen pipeline, Kinder Morgan's Trans Mountain expansion, is skillfully flying under the radar in terms of scrutiny. However, a proportional comparison with the Northern Gateway, based on length and pumping capacity, yields an estimated power demand of 230 MW.

Together, these two pipeline projects will consume 10 million kilowatt-hours a day and they will add over 420 Megawatts of base power demand, to the grid. They will obtain a daily operating subsidy of $800,000 and an annual subsidy of $292 million, courtesy of B.C. Hydro.

Eric Andersen, a retired federal government economist from Galiano Island, has analyzed Hydro's cash flow situation and he concludes that it is headed for bankruptcy. This is hardly surprising when marginal energy sales don't cover the cost of marginal power purchases.

There will be beneficiaries to this situation; the pipeline companies, the private power producers and the corporate interests that will eventually pick up B.C. Hydro for pennies on the dollar.


If you build it, it will leak

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