BC putting all its eggs in one energy resource basket

by Geoff Olson

The other day I was going through my notes from a November 2013 presentation held at SFU Harbourside on liquefied natural gas development in B.C. when Milo Minderbinder came to mind.

Minderbinder is a mess officer in Joseph Heller’s 1961 antiwar novel Catch-22. His “syndicate,” M & M Operations, uses complex trade deals to expand his mess operations across the wartime Mediterranean.

He buys eggs in Sicily for one cent, sells them in Malta for four and a half cents, then buys them back for seven cents. He then sells them to the mess halls for five cents. The book’s central character, Yossarian, expresses puzzlement. How can Milo make a profit? The mess officer tries to explain, but Yossarian — like the reader — remains in a fog.

So what’s this got to do with liquefied natural gas? Glad you asked.

According to environmental researcher Ben Parfitt, even without those much-ballyhooed, yet-to-be-signed LNG plants, our province has had the most intensive gas extraction project going anywhere in North America. At the presentation hosted by the Vancouver Council of Canadians, Parfitt displayed photographs of immense tanker trucks in Northeast B.C., travelling the equivalent of an eight-lane highway in width. The road space was cleared for not just for transport, but for gas feeder lines interconnecting to bigger gas lines for massive hydraulic fracturing operations, with the forest “permanently removed from the land base, taken right down through the organic soil layer.”

Parfitt says northeast B.C. set a world  record for fracking in 2010. If we go ahead with LNG plants, he  foresees a gold rush on our water resources “unlike anything that’s been seen, certainly in the northeast of the province.”

Now there’s a glut of gas on the market, natural gas production in B.C. is nowhere close to what it was just three years ago. That gives some idea of the market’s mood swings when it comes to this vaporous commodity. Yet if four LNG plants are built on the B.C. coast — Christy Clark’s  stated objective for  2020 — the province will have to quadruple or quintuple its record-setting gas production. To get that much gas to four LNG facilities will require massive increases in the amount of gas drilling, fracking, and water consumption. This will involve trillions of litres of water over the projected 20 years of development, and massive amounts of energy to liquefy the gas for export. The combined power demands of the four LNG plants would swallow at least one-quarter of B.C.’s projected hydroelectric supply in 2016, says Parfitt.

Premier Clark’s rosy projections for LNG profits are based on current market estimates, yet there is now a global boom of shale gas extraction underway.

Bloomberg News — no hotbed of radical environmentalists — has projected the “difference between U.S. and Asian gas is poised to drop by more than 60 per cent by 2020, leaving exporters facing a loss of as much as $6 million per tanker.” Australia, which is already in financial difficulties due to its LNG commitments, by itself may be capable of oversupplying China’s natural gas market. Where then will be B.C.’s much-ballyhooed “prosperity fund” from LNG revenue?

From this perspective, Clark’s idea of eliminating B.C.’s debt through LNG development sounds about as convincing as Milo Minderbinder’s magic act with eggs from Malta. But on a global basis, this may be less about long-term energy security than mid-term profit. Those in the chain of resource extraction, infrastructure creation and peripheral services all get their fee, even if the LNG resource economy turns out to be as much time bomb as boomtown.

A 2012 article in Rolling Stone argues that the U.S. business model for fracking is based more on land speculation than future energy revenues. This would be consistent with late-era capitalism’s pattern: the manufacture and gaming of  bubbles, with the accompanying destruction of natural capital.

In Catch 22, Minderbinder’s syndicate becomes part of a large company, and then an international syndicate. Minderbinder himself becomes mayor of Palermo and Cairo, assistant governor-general of Malta, caliph of Baghdad, vice-shah of Oran, and the god of corn, rain, and rice in numerous African countries. Similarly, in petitioning for a LNG gold rush, our noble representatives in government may find cushy corporate directorships, ambassadorships, and all sorts of ships ready to sail them away from so-called public service.

The Vancouver Courier, Feb. 21

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