Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

The Pacific Carbon Trust audit

with 7 comments

We are supposed to have a carbon neutral government in BC. The BC Liberals introduced legislation to ensure that all the various organizations reporting to it – including schools and hospitals and so on – both took steps to reduce their emissions and where that was not feasible to purchase carbon offsets.

The BC Auditor General has been trying to ensure that his report on this program reached the public before he leaves for Australia and before we head to the polls. Not only was his report issued but he also got a presentation made and put it up on youtube. You can both read the report in full or spend a quarter of an hour listening to a nice lady read a summary. The video is just basic powerpoint type presentation. The main points appear as text on the screen as the voice reads the summary. Auditors are not noted for their exciting presentation skills – but this stuff is indeed dynamite.

The government has been boasting about how well it has done. How safe we are in its hands since the Liberals are so much better at running a businesslike government. Not rash tax and spenders like the NDP – or pie in the sky flakes like the Green Party. This report shows clearly the gap between government spin and reality.

I too have been caught out by false promises of carbon off setters. I wrote about that here. I expected much better of the Climate Change Secretariat, though I am hardly surprised by the results of the audit.

One of the projects was run by a company called Encana. They were flaring gas but now managed to capture it. But it turns out that they would have been doing that anyway, without the PCT financial contribution. And it also just so happens that Encana made $647,670.00 in contributions since 2005 to the BC Liberals. Thanks to Laila Yuile for that info

UPDATE 1 But there is another side to this story as Charlie Smith explores in the Straight. I do not know if the date has any significance.

UPDATE 2 However my conclusion is very much the same as that reached by Bob Simpson MLA – his open letter to the Minister of Finance is well worth reading

Written by Stephen Rees

March 27, 2013 at 3:00 pm

7 Responses

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  1. Clearly there’s more nuance to this than “PCT defrauds taxpayers, fails to meet mandate.” The PCT followed transparent well understood methods, verified by the likes of Det Norske Veritas. If the AG is claiming those international standards are faulty, then that’s a different case, and one that probably needs more detail than he has provided.

    Nevertheless, I’m sure all your readers will agree that more joined-up government policies on carbon are crucial.

    In terms of ‘basically free’ ways to cut carbon, zoning reform and new street design guidelines are probably right up there. I recently mocked a Nanaimo engineer for following an outdated guidebook and questioned the zoning and street design choices at this Vancouver intersection

    In order to ensure the built environment and publicly-owned space makes non-motorised and shared electric modes the most obvious, some funds for lane repainting, planter purchase and deployment etc. may be required. However the “tactical urbanism” movement has show us just how low cost those corrections can be: a line of paint and a line of parked cars can work wonders for female cycling. Major funds may be needed for Surrey and Vancouver’s transit projects and, as previously suggested elsewhere, carbon tax funds seem like as good a source for those as any.

    At the very least this report, the introduction to which emphasised the vital need to make real carbon cuts quickly, should put the Massey tunnel issue to bed. I hope to hear that point made very vocally by the likes of Hub and Get On Board.


    March 28, 2013 at 10:40 am

  2. PCT also decided to go and hire a PR firm to blacken the AG’s report before it was released. The concept of additionally does not require a degree in accountancy to understand. The simple fact was that the gas capture was going to happen anyway. It is not that the standards were faulty, they were not followed.

    Stephen Rees

    March 28, 2013 at 11:02 am

  3. If I understand you correctly, you (and the Auditor General) believe that standard Canadian natural gas industry procedure is underbalanced drilling, and not simply flaring?

    Can you substantiate that claim? My understanding was that this is the first application of this in Canada and the first commercial-scale program of its type in the world.

    If you are correct, this is a surprise to me and, frankly, good news.

    As I mentioned above, I believe that at a higher level this policy is a foolish and costly way to reduce carbon, and that other anti-urban policies plainly undermine such stated provincial goals. I also believe that every fossil-derived atom of GHGs inside BC should come with a $100+ pricetag. Flaring (and fracking) should, by the design of other policies, be too expensive.

    But, given the policy design and mandate given to the PCT, I believe the evidence shows they acted properly.


    March 28, 2013 at 11:42 am

  4. From the Auditor-General’s comments (page 3 of the report)

    “neither project was able to demonstrate that the potential sales of offsets were needed for the project to be implemented. Encana’s project was projected to be more financially beneficial to the company
    than its previous practices, regardless of offset revenue”

    Stephen Rees

    March 28, 2013 at 1:49 pm

  5. Thanks for that. I see the AG’s statement is pretty clear. Does the report include evidence for that statement?

    I also see Encana is putting out a statement that simply says the AG is wrong. “Based on project economics, the project was not economic without carbon offsets,” according to Encana. “…a loss that would have been unsustainable for the company (without) revenue from carbon offsets…” According to the company, there were many technical challenges that required “additional infrastructure and equipment as well as the combined use of several technologies to make the drilling system safe and reliable – particularly challenging when dealing with formation gas that can contain potentially lethal levels of hydrogen sulfide.” To underscore how tricky the new technology is, Encana pointed out that it lost a multi-million dollar drilling rig to fire during the pilot project.

    How shall we decide whether this technology is commonplace? It seems to me that it would be worth checking with other natural gas companies in Canada: with Encana’s competitors, for example. If Encana’s competitors can show that they employ this technology without a carbon price, then Encana doesn’t have a leg to stand on.

    I really don’t want to be defending Encana: they are polluters, and their activities should be far more stringently circumscribed by regulation (at the very least a large price on emissions). My point is about policy design, policy goals and procedure.


    March 28, 2013 at 2:01 pm

  6. Isn’t it odd that you can quote Encana extensively, yet you seem unaware of the content of the AG’s report. I have provided a link to it – even though it is easy enough to find. No-one is claiming that the technology is commonplace.

    Stephen Rees

    March 28, 2013 at 2:05 pm

  7. Fair criticism: I’m lazy. For that Encana quote I just googled your previous AG quote, I don’t have them at my fingertips.

    Looking at the AG report now, this is the money quote:

    “Based on the preliminary information provided to the PCT on the project costs and gas recovery levels, the project was projected to be more economical than the historical practice of flaring the gas.”

    This seems like an easy thing to source and confirm / refute. If so, I’m surprised PCT is kicking up such a fuss.

    “The company providing the technology reported that the gas conserved over the course of the project had a market value of more than $7 million. This is substantially greater than the projected incremental cost of the technology.”

    I’d love to have those sourced too. Do you know who the technology company is?

    It still feels a bit too ‘he said, she said’ to me. As I say, I don’t want to defend Encana’s emissions or any regulatory capture. I want good policy, good regulation and everyone playing by clear rules. I think the ‘offsets’ part of the carbon-neutral government should be far smaller and the actual local emission cuts far greater.


    March 28, 2013 at 2:21 pm

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