Globe and Mail editorial, January 3, 2020
The report must have landed on British Columbia Premier John Horgan’s desk with a thud. It was not a welcome Christmas present.
The report in question is an independent assessment of the troubled Site C hydroelectric dam under construction on the Peace River in the province’s northeast. It was scheduled to hit the Premier’s desk in the days before Christmas, and could be made public as soon as this week.
It will be grim. How grim is the question.
Last summer, BC Hydro revealed Site C was in big trouble. A shaky foundation on the river’s right bank threatened the stability of the dam, and costs were spiralling. The $10.7-billion project was already over budget, with about half the money spent. Mr. Horgan ordered an independent review and said halting Site C for good was possible.
“If the science tells us and the economics tells us that it’s the wrong way to proceed, we will take appropriate action,” the Premier said.
If this sort of story sounds familiar – big dam, big promises and big problems – that’s because the saga of Site C has many prequels in the world of hydroelectric megaprojects. Backers exaggerate the benefits and minimize the challenges; then construction starts and predictable surprises pop up like weeds. What started life as a reasonable idea is suddenly twice as expensive – and no longer so reasonable.
In Newfoundland and Labrador, the Muskrat Falls dam is, at $13.1-billion, more than double its original budget. It has pushed the province to the financial brink. Ottawa, which had guaranteed $7.9-billion of project debt, stepped in again in mid-December and deferred $844-million in payments. Power is finally supposed to flow late next year.
The feds are also aiming to make Muskrat Falls viable – or are they throwing good money after bad? – by backing the so-called Atlantic Loop, a network to carry the electric power to Atlantic Canada.
For B.C., there is still time to turn back at Site C, as difficult and financially gutting a choice as that may be. Killing the project now means $6-billion-plus spent for zero power. But it may make sense, if pushing forward means a final bill at upwards of $15-billion.
There is bipartisan blame for this mess, which is decades in the making. There are two large dams on the Peace River, one completed in 1968 and the second in 1980. They have supplied plentiful and affordable power to the province. The plan had always been for a third dam. In 1967, a spot near the Alberta border, Site E, was seen as the best location. The terrain was firm, but it was rejected because of cost.
Instead, a decade later, the seemingly cheaper but geologically troublesome Site C was chosen.
In the 2000s, building Site C became a priority of the BC Liberals. It was exempted from an independent review and construction started – with a budget of $8.8-billion – in 2015. Former premier Christy Clark promised to get the work beyond the point of no return. In 2017, the NDP formed government. They had opposed Site C but Mr. Horgan decided to push forward. Mike Harcourt, a former NDP premier, in 2017 called Site C a “clear, unmitigated disaster.” And that was when only $2-billion had been spent.
More warnings came behind closed doors, before finally spilling out last summer.
Mr. Horgan’s first big decision as Premier in 2017 was whether to continue construction at Site C. The first big decision of his second term will once again be Site C.
Is the project already so far along that stopping it makes no sense?
In October, the C.D. Howe Institute released an analysis from two hydro experts, which concluded that the case for Site C is “getting weaker.” At $10.7-billion, it is only “marginally economic.” Cancellation, the report said, should be on the table if costs jump. At $15-billion, it makes more sense to shutter Site C, absorb the costs, and invest in wind power and battery storage, the report said. Wind power plus battery storage would also allow for smaller projects, rather than one huge one.
Site C was always a problematic place to build a large dam. Numerous decision makers over the years pushed ahead anyway.
Now, Mr. Horgan has to eyeball the sums and consider the conclusions in that report on his desk – and decide whether prudence means pressing forward, or turning back.
Have a look at the clean energy plan the BC NDP promoted while in opposition before 2017: “PowerBC.” It stands in stark contrast to the NDP’s current “CleanBC” plan, which unlike PowerBC, involves both fracking/LNG and the Site C dam, with the latter functioning to greenwash the former. PowerBC has somehow nearly been scrubbed from the internet, so we are uploading some materials from it here for the historical record.
In the 2017 election, it was assumed that PowerBC was the energy plan that the NDP was running on. It’s mentioned in the NDP’s long 2017 election platform, but only a meager six times. However, and chillingly, the phrase “Site C” is not mentioned ONCE in that election platform. Have a look and try it yourself.
Nevertheless, the BC electorate was under the impression that the BC NDP was running on the PowerBC plan, which excluded the Site C dam.
PowerBC explicitly excludes the Site C dam as an energy source, even using images of an undamaged Peace River Valley in some of its key graphics. It doesn’t pretend that fracking and LNG are “clean energy” but speaks instead of solar and other renewables, retrofitting buildings, increasing capacity on existing dams (Revelstoke Dam still has an empty bay for a major turbine that was never added!), and much more.
You may enjoy this page from PowerBC’s promotional materials, where an academic who then became a lobbyist for Site C, SFU’s Marv Shaffer, is on record saying that BC doesn’t need Site C. How priorities change at the drop of a hat, or election, or lobbying contract…
The section below is interesting, because for BC Hydro to pursue adding renewables like solar and wind and geothermal, Horgan and the NDP would have to have reversed some legislative changes made by Gordon Campbell and the BC Liberals which:
• restricted BC Hydro to only hydroelectricity
• forced BC Hydro to build Site C instead of cheaper renewables
• sidelined BC’s energy watchdog the BC Utilities Commission from oversight of energy and Site C
But the NDP noticeably didn’t make those absolutely key legislative reforms, when it would have had Green support to do so. Instead, it didn’t restore our watchdog so we have no oversight, and we can’t pursue far cleaner and cheaper renewables or save a key agricultural and ecologically important valley.
Then there’s this excellent idea: instead of building Site C, increase power generation at our existing dams, which we have not yet even begun to do.
People tend to get politically activated only during elections then fade away. But only organizing and activism between elections wins real change. To all those who campaigned for and/or voted NDP: now help us challenge their disastrous “CleanBC” plan. Please pressure your NDP MLA to cancel Site C, abandon the environmentally disastrous and uneconomic fracking/LNG plan, and return to the sanity of the NDP’s PowerBC plan. It was a good, modern plan. CleanBC, with its fracking and outdated, overexpensive and unnecessary mega-dam, is not.
And sign the new petition if you haven’t already, please. But it’s more important to sink your teeth into the legs of your local NDP MLA (figuratively speaking only) and don’t let go until Site C and fracking are abandoned.
Of the many issues awaiting the next government of British Columbia, none is more vexing and politically fraught than the Site C dam project.
On its present course, it has the potential to be the greatest financial disaster in the province’s history. And all indications are it will be John Horgan and the New Democratic Party who will have to make some enormous, financially consequential decisions related to the problem-plagued undertaking.
Before calling the current election, which concludes Saturday, Mr. Horgan ordered an investigation into the current trajectory of the project and the consequences that its myriad challenges are expected to have on final costs and timeline.
That report is expected in the next few weeks. It will almost certainly contain bad news. The question is whether it will be bad enough to cause the government to consider cancelling it, despite the billions that have already been invested – and the billions more yet that it would cost to halt it in its tracks.
Mr. Horgan had, until recently, steadfastly rejected any notion of killing the project and taking the losses. However, pressed on the campaign trail by Green Party Leader Sonia Furstenau, he opened the door to that possibility.
In referencing the report that is coming, Mr. Horgan said, “We’ll take a good hard look at the evidence, and if the science tells us and the economics tells us it’s the wrong way to proceed, we’ll take appropriate action.”
While that statement may have buoyed the hearts of thousands opposed to the dam, cancelling it at this juncture seems unimaginable. On the other hand, the thought of a cataclysmic failure of the dam’s wall down the road – not to mention the small army of engineers from BC Hydro that is already working, right now, to triage the dam – must keep Mr. Horgan up at night.
The problem is the soft sedimentary shale that underlies the construction site. Harvey Elwin, one of the country’s most experienced dam engineers, has observed that he’s never seen such appalling foundation conditions for a project of this scale. Documents recently obtained by Ben Parfitt of Canadian Centre for Policy Alternatives (CCPA) have revealed that a decision to pour massive amounts of concrete to build a buttress before a critical water-drainage tunnel was completed “could cause the notoriously unstable shale rock to move even further.” Several prominent British Columbians and the former chief executive officer of BC Hydro, Marc Eliesen, have called for the project to be stopped until an independent team of professionals can assess the situation.
BC Hydro has been less than upfront (to put it mildly) about the problems the project is experiencing. The whole thing has the feel of an issue that is growing in ugly complexity every day, the ramifications of which are enormous for the provincial treasury.
Site C started out as a concept that would cost $3.5-billion. When plans became more serious, the price tag was changed to $6.9-billion. By the time the BC Liberals approved it in 2014, the estimate rose to $8.8-billion. When the NDP took over in 2017, it ordered a project review by the B.C. Utilities Commission, but by that point, almost $2-billion had already been spent. It was determined that if the project was cancelled at that point, it would cost another $2-billion – a $4-billion writeoff.
So the NDP decided to push on with the dam, at a revised estimate of $10.7-billion.
No one believes that will be the final tally – not by a long shot. Comparisons to Newfoundland and Labrador’s infamous Muskrat Falls dam fiasco suddenly seem not so far-fetched.
As is always the case in these matters, it will be future generations that will bear the brunt of the pain. In the case of Site C, hydro rates are going to have to rise precipitously in order to pay the bill.
And then there is the indelicate question of demand. By the time the dam is scheduled to be completed in 2025, there is expected to be little need for the power it produces. Demand will be there down the road, but it can be reasonably asked if that power could have been supplied far more cheaply, with less damage to the environment, via independent producers and alternative forms of energy such as solar or wind.
There is no question that the BC Liberals deserve enormous blame for this debacle, pushing the project to the point where most believe there was no turning back. But it’s the NDP’s problem now – and they are likely to wear this, no matter what happens.
Thanks for reading! PLEASE sign the petition to halt Site C!