Cost-benefit study for oil pipeline in Ontario but not for wind farms
Energy East pipeline merits examination; the Green Energy Act? Not so much…
“This report marks the conclusion of an extensive consultation and engagement with the people of Ontario, including First Nation and Métis communities, that sought their views on the energy east pipeline (energy east or the project).”1.
So begins the Executive Summary in the $2.4-million report on the Energy East pipeline, released August 13, 2015 by the Ontario Energy Board (OEB). The 95-page report, took 15 months of consultations and examined the conversion (gas to oil) and reversal of the existing pipeline in Ontario.
The OEB was directed by Minister of Energy, Bob Chiarelli, to conduct the review on the impacts associated with: “natural gas consumers, in particular those in eastern and northern Ontario, in terms of rates, reliability and access to supply; the impacts on the natural environment and pipeline safety in Ontario; the impacts on local and Aboriginal communities in Ontario; and the short- and long-term economic impacts of the Project in Ontario.”
The OEB expanded the impacts by adding one other: “the potential impact of Energy East on climate change.” Let’s examine the concerns expressed by the OEB and compare them to the GEA doctrine. I think the reader will agree the irony in comparison between the observations of this report and the imposition of the Green Energy and Green Economy Act (GEA) without any appreciable or similar study is evident.
The contracted “economic adviser” the OEB hired was the left-wing Mowat Centre; the Centre was aptly described by Philip Cross, former Chief Economic Analyst at Statistics Canada, this way: “MOWAT evidently stands for Moulding Ontario to Wynne-Approved Talking points”. The Mowat Centre obtains almost 50% of its annual funding from the Province of Ontario and is paid for research (such as this) by taxpayer- and ratepayer-funded entities including the OEB, IESO, Toronto Hydro, Ontario Ministry of Citizenship and Immigration’s Partnership Grants Program, etc., as noted in their annual report for 2015.
Officially opened by Dalton McGuinty in early 2010, after receiving $5 million in seed money, the Mowat Centre continues to receive regular grants much as the MaRS Centre does. The financial information included in their annual report is (in this former banker’s opinion) laughable!
Discussions from the report:
»IMPACTS ON ONTARIO NATURAL GAS CONSUMERS
“Ontario needs to be assured that the pipeline capacity and the supply of natural gas in eastern Ontario will meet Ontario’s medium- and long-term needs and that Ontario natural gas consumers will not subsidize the costs of Energy East.” This particular statement from the report is in reference to the Iroquois-Waddington hub. Iroquois-Waddington is a small market hub at the eastern end of the Eastern Ontario Triangle that is used to export gas into the U.S. Northeast. The estimate of price increases are related to the winter only with annual prices increases expected of 3.5%.
Compare to: Green Energy ACT—FIT and MicroFIT programs:
Subsidize foreign companies by paying $135 per megawatt hour (MWh) to generate electricity over a 20-year contract period from industrial wind turbines, and pay IKEA, Loblaws, Canadian Tire and others $700 per MWh for solar power. Put the difference between the market value, the HOEP (hourly Ontario energy price) into a pot called Global Adjustment, and get all Ontario ratepayers to pay the difference subsidizing those companies— including one managed by the former President of the Ontario Liberal Party, Mike Crawley. Increases have averaged in excess of 10% per annum and an additional increase of 42% is forecast for the next 4 years. Contract intermittent wind and solar generation creating the need to export up to 20% of Ontario’s demand and back their intermittency up with gas plants that are guaranteed a market return and levy the cost to ratepayers providing an additional subsidy to ensure demand is met during periods of no or low wind and winter periods when solar is absent.
Additionally the Ontario Minister of Energy in his letter of February 17, 2015 to the OEB directed them “to pursue options to expand natural gas infrastructure to service more communities in rural and northern Ontario” advising that his predecessor, Brad Duguid, Minister of Economic Development, Employment and Infrastructure, was in the process of establishing a “Natural Gas Access Loan and a Natural Gas Economic Development Grant”. The potential impact on gas prices was not noted as a consideration of Minister Chiarelli’s directive to the OEB. Now this was something that the province may have had some control over versus the Energy East Pipeline but it appears Minister Chiarelli didn’t even give it a second thought. Isn’t that ironic?
From the report:
»IMPACTS ON THE NATURAL ENVIRONMENT
“TransCanada needs to assess whether it is appropriate to take a route originally chosen for a natural gas pipeline and use it for the transportation of crude oil. Where the existing pipeline route is too close to environmentally sensitive areas, TransCanada should reroute the pipeline or justify why rerouting is not necessary.”
Compare to: The GEA and the Ministry of Natural Resources:
The Ontario Ministry of Natural Resources has issued dozens of Renewable Energy Approvals (REA) for industrial wind developments in many of Ontario’s IBA (important bird areas), completely ignoring endangered bird and bat species as well as fragile alvar environments, and objections by nature and conservationist groups. They have also issued REAs for wind developments on Crown Land which they are responsible for managing and issued solar contracts over identified aquifers.
From the report:
»IMPACTS ON CLIMATE CHANGE
“The issue of climate change is bigger than any one pipeline project, and the discussion paper we commissioned is a valuable contribution that should be used as part of a broader discussion of the issue.” What was found by the commissioned study: “The main findings from Navius are that emissions at the Ontario level are very modest” and “less than 0.5% of Ontario emissions” but included this blockbuster: “Navius projected that Energy East will likely increase annual greenhouse gas emissions outside of Canada between 3.6 and 7.8 Mt. by 2035, an increase of 0.01% in global emissions.” No doubt the same basic statement could be said of all of extracted mineral exports from Canada be they minerals for offshore refining or those wood pellets we export to the U.K. for the DRAX biomass plant, classified as a green energy source.
Compare to: Industrial wind turbines and their effect on Climate Change:
The intermittency of industrial wind turbine generation means operating gas plants to provide back-up, which means Ontario burns more gas, and emits more CO2, per MWh, than we would if we ran the gas plant(s) as a peaking source. Additionally, the 400 tonnes of concrete required to support an individual turbine and all the materials required in the manufacturing, transportation, decommissioning, etc. also add considerable emissions— but the OEB never undertook a Ministry driven review as it wasn’t deemed necessary by the ruling Ontario Liberal Party.
From the report:
»IMPACTS ON PIPELINE SAFETY:
A comment from the report: “The most important threat to the integrity of Energy East is the four sections of the pipeline in northern Ontario that are coated with polyethylene tape.” and “As well, TransCanada must demonstrate its financial ability (and associated guarantees) to cover the response, clean up and remediation costs of a spill, knowing that these costs could easily surpass $1 billion.”
Compare to: Impacts on industrial wind turbine safety:
Safety was not a consideration of the GEA as the regulations allow ice throw, the potential for forest fires in remote locations, shadow flicker, infrasound (harmful to humans and farm animals), the killing of birds and bats, construction deaths, etc., and endangers vulnerable species such as Blandings turtles and Monarch butterflies. Developers are free to flip their ownership of the wind development and many have done so, meaning the original applicant may have cashed in and left the province/country with his cash without leaving behind enough to even decommission the project.
From the report:
»IMPACTS ON LOCAL COMMUNITIES:
“TransCanada needs to ensure community engagement in the definition of “significant water crossings” and any possible rerouting around environmentally sensitive areas; and TransCanada should continue its community engagement effort in the ongoing monitoring of the Project.”
Compare to: Community engagement resulting from the GEA:
One presentation is required from the contract recipient to simply inform the community what they can expect to see, based on the contract they received from the OPA/IESO, even though now, 91 communities in the province have declared themselves “Not a Willing Host.”
Isn’t it ironic?
In words direct from the Minister of Energy, Bob Chiarelli to the media: “I can assure you that Ontario plans to be an active intervenor in the National Energy Board approval process and our participation will reflect the concerns of the Ontario public to the federal regulator.”
The minister also said that new federal legislation has “drastically reduced” the scope of the hearings that can be undertaken by the NEB on Energy East. “This has directly resulted in a reduced voice for First Nations communities, minimal consideration of the implications for our natural environment, and inadequate participation from local communities.”
Perhaps our Minister of Energy should now deal with the GEA to find out how most Ontarians feel about their lost voices, and their inability to be an “active intervenor” in the placement of industrial wind turbines that now tower as high as a 60-storey building and do produce noise and vibration only 550 metres from an Ontario residence or school!
©Parker Gallant, August 15, 2015
1. Authors Note: Unlike the imposition of the Green Energy Act