Advancing the case for geothermal energy production in British Columbia

Today in the legislature, Shirley Bond, the MLA for Prince George-Valemont and I quizzed the Minister of Energy, Mines and Petroleum Resources about the delays involving approval of a permit expansion for Borealis GeoPower.

As I have discussed numerous times in the past, British Columbia is the only jurisdiction throughout the entire Pacific Rim that isn’t using its geothermal resources. As noted in a 2014 Canadian Geothermal Energy Association (CanGEA) report,

  • Geothermal unit energy cost conservatively estimated at 7.3¢/kWh compared to BC Hydro’s 2014 estimate of 8.3¢/kWh for Site C.
  • Geothermal plant construction equalling the energy output of the proposed Peace River dam is estimated at $3.3 billion compared to at least $8.8 billion for Site C.
  • Geothermal plants provide more permanent jobs that are distributed across British Columbia.
  • For the same power production, the total physical and environmental footprint of geothermal projects would be substantially smaller than Site C.

Below I reproduce both the text and video of the exchange between Shirley Bond, Michelle Mungall and me. As you will see from the discussion, I was troubled by some of the responses we received from the Minister. Nevertheless, the overall conversation was generally positive and bodes well for the future of  this particular geothermal energy project.


Text of Exchange


S. Bond: I’d like to spend a couple of minutes talking about a project that is incredibly important when we’re talking about clean energy in British Columbia.

I’m wondering if the minister can give me a sense of her understanding and the status of the project that’s being suggested by Borealis GeoPower.

Hon. M. Mungall: To the member, I know that she is very interested in this project. It’s in her region. And I’ve been fully briefed on it by staff.

We’re very supportive of this project. I think it poses some pretty interesting opportunities. So far to date, in terms of geothermal production, which is what Borealis is, there hasn’t been any exploration that has proved up to be viable, but Borealis is doing that exploration. They’re confident that they can actually prove a viable geothermal source, and so we’re very supportive of them doing that work.

S. Bond: Thank you very much to the minister for her response. I appreciate that.

Certainly, in my riding, and particularly in Valemount and other parts of the region, the opportunity to diversify the economy is absolutely essential. One of the things that’s critical to that is a secure supply of power, because it’s very hard to attract industry and others if you can’t guarantee them a stable source of power. And there has been ongoing and…. I admit, over my 16 years as the MLA for this area, secure and stable power has been a significant issue.

So looking to diversify the economy, looking to create jobs — not a big number, but in our riding, you know, even one new job matters. So this project being proposed by Borealis GeoPower is a geothermal project. I have, certainly, over the course of a number of ministers, talked about the importance of looking at the portfolio, including alternative energy sources like geothermal.

The concern I have is that there continues to be a need for a permit expansion on the Canoe Reach geothermal project. I know that the proponents have been here. I have actually met with the leader of the Green Party about this project. And apparently, the permit is sitting somewhere waiting for approval.

Can the minister perhaps explain to us if and when that permit for expansion may be approved?

Hon. M. Mungall: As I said earlier in my response, our ministry is supportive of the project. We see a lot of potential. We’re excited about the opportunity for geothermal to potentially be proved up in this province. To date, it has yet to be done. We’re glad that Borealis is looking to do the work.

The ministry is actively engaged with them and is working with them throughout that permitting process. As the minister knows, there are statutory decision-makers involved in those stages. So my understanding at this point is that their applications are under consideration, and they are actively working with the ministry, and the ministry is actively working with them.

S. Bond: I appreciate that answer. I just don’t feel overly encouraged by it.

I appreciate the support for the potential of the project.

I think it is essential, as we’re having a major discussion in our province about clean energy, particularly in a region of the province that really needs to be able to diversify their economy.

I just want to walk through some of the…. I’m the first to admit that this permit was provided to the previous government — us, basically. This is not a short-term issue. In fact, the initial feedback about this application was provided in February of 2017. That was nine months after the original request from the Ministry of Energy, Mines — where it was stated that the ministry had completed the pre-tenure referral process. However, they were waiting, at that time, for the development of regulations. That wasn’t completed. The writ period came, the election came, and the new cabinet wasn’t formed until July 18.

This company, which is working very hard to…. It is one of the projects where I’ve seen significant support in my region, where people have stepped up and said: “This is something that we would like to see happen.” The delay has continued. The last information that certainly the company received was that the permit request was “with cabinet operations and the minister.”

It sounds to me like the permit is ready to be signed. I’m wondering if the minister can at least agree today that the ministry will look at where the permit request is and when it will be signed.

Hon. M. Mungall: I appreciate that Borealis and the member for the region would like to see this moving forward in a timely manner. I heard her comment about the length of time it already took under her government, that there was a nine-month time frame. If she’s wondering if, in the last four months, we’re moving at a more speedy pace, I can say yes.

A. Weaver: I’d like to follow up on the questioning from the member for Prince George–Valemount on this issue of Borealis. I, too, have met — with the member for Prince George–Valemount — several times with the proponents of this project. My understanding is identical to the former minister’s understanding, in that the permit is actually in the OIC process, waiting for signature.

My question would basically repeat, initially, the question made by the member: will the minister commit to actually looking, in terms of what’s in the queue in the OIC approval process, to determine whether or not she can expedite the signing of this permit? It is — I believe, as the member does — in her jurisdiction, not in the jurisdiction of a statutory decision-maker.

Hon. M. Mungall: I should let the member know that, due to the oath that I signed, I’m not at liberty to discuss cabinet agendas.

A. Weaver: I accept that as an answer. I do bring it to notice, though, as the member opposite did, that the answer that we did receive was one that, I would argue, is not the relevant answer, because permitting is not before a statutory decision-maker. It is before cabinet as we speak, in my understanding.

I’m coming to a question, then. This particular project, this Borealis project, is the at the end  of a transmission line in a community, Valemount, that’s subject to brownouts already, at the same time as there’s an approval process for the development of a major ski resort, Glacier Destinations.

This is a community where the Simpcw Nation wants this to happen. Valemount wants this to happen. The company wants to develop. The holdup is primarily, almost exclusively, in the minister’s office. Will the minister commit to actually looking at this project so that we don’t lose yet another investment — not of taxpayer money but investor money — in a community that’s dying to get this forward?

Hon. M. Mungall: I’m glad that we have members from both of the opposition parties — the official opposition and the Green Party as well — who are supportive of this project. As I mentioned to the member for Prince George–Valemount, government is very supportive of this project. We have to do our due diligence. That’s government job, as a regulatory body. I believe members of the Green Party were just asking questions in question period to that effect — that government has a job to do in terms of a regulatory function. We are doing that.

The Borealis project — as I’m very happy to see that members from all sides of the House agree — is a positive project and a good opportunity for British Columbia, if they are able to prove up any exploration that they’re able to do of the geothermal resource. As I mentioned, there has been past exploration of geothermal resources in B.C. that have not been able to prove up a sufficient resource to generate electricity. We’re hoping that that may change with Borealis.

That being said, as I’ve said to members already, I cannot discuss cabinet agendas, but the due diligence around this project has been done. Our ministry, our government, is very supportive of it, and we look forward to continue working with them into the future.

A. Weaver: I’m surprised that the minister would suggest that exploration has been done in geothermal that has not proven up a resource when B.C. Hydro has done precisely no exploration on geothermal and companies associated with the Canadian Geothermal Energy Association have done exploration to say that we have an enormous potential. In fact, we are only the jurisdiction in the Pacific Rim that does not have a geothermal capacity — not because we don’t have it but because there has been no will to develop it.

I come back to this issue of Valemount. Valemount is at the end of a transmission line, a transmission line that leaves Valemount to brownouts all the time in the winter. B.C. Hydro has to upgrade that transmission line, and there’s a massive capital cost involved in doing that. B.C. Hydro produces power, is the sole purchaser of power and also is responsible for the development of transmission of power.

My question to the minister is: how does she ensure that the transmission component of B.C. Hydro actually talks with the part of B.C. Hydro that purchases power so that they recognize that the cost benefit of developing up transmission line power is there to avoid the unnecessary expense of capital to upgrade transmission lines? If you upgrade the power at the end point, you don’t need to bring up the transmission line to give more power to the end point. Will she commit to ensure that B.C. Hydro starts to talk between the different branches so that the actual full capital cost of moving forward is recognized when this is done?

Hon. M. Mungall: I just want to address something that the member said before I get to the actual answer of the question. The member said that B.C. Hydro had never done any exploration of geothermal. That is actually not the case. Let me take this opportunity to make sure he is aware of what happened in the 1980s.

B.C. Hydro actually explored a site at Mount Meager, as part of the federal geothermal program that existed in the 1970s and 1980s. They drilled dozens of holes to understand the temperature at that location. They drilled three production wells to attempt to find commercial resource. Unfortunately, they had no commercial success.

They spent about $25 million doing this activity, and the result was that there was just not enough steam or water to move into full electrical production. So I just wanted to make sure the member was aware that, actually, that work has been done by B.C. Hydro. I should also mention that further work has been attempted since then in that site, but yet with the same result.

In terms of the transmission that the member asked about, everyone is in agreement. Whether it’s B.C. Hydro or whether it’s the ministry, we all agree that there are definite benefits and reliability to the transmission site should Borealis be successful and be able to prove up this resource.

Again, I feel like there’s a little bit of a characterization from members opposite that somehow this government isn’t supportive of the Borealis project when in fact we actually are. I’m very pleased to see that that support is shared by all parties in the House.

A. Weaver: I’m sorry, my last question. I just to want to comment on the statement about Mount Meager.

Mount Meager was done in the 1980s — one location. There has been an entire report published by the Canadian Geothermal Energy Association in 2014 outlining the myriad places in British Columbia where geothermal capacity exists. To suggest that one study by B.C. Hydro in the 1980s represents a feasibility analysis in British Columbia is misleading. B.C. Hydro has not taken the proactive steps to explore geothermal capacity in British Columbia.

I reiterate. We are the only jurisdiction in the Pacific Rim that has no geothermal capacity — none — and it’s because B.C. Hydro builds dams. That’s what they do. In fact, they’re not actually tasked in their mandate to build geothermal, so why would we expect them to explore it?

I would suggest…. I do appreciate that the minister is supportive of this, but I think it’s important that the minister not dismiss the fact that B.C. Hydro has not explored British Columbia for geothermal capacity. It’s not me saying that. It’s the National Energy Board review of the Site C project that’s said that. It’s the Canadian Geothermal Energy Association report in 2014 that’s said that. It’s submissions to the BCUC process now that said it. So I would suggest the minister recognize that B.C. Hydro has not done exploration of geothermal in B.C. Experts across British Columbia and across North America have said exactly that as well.

S. Bond: Apparently, the minister didn’t feel there was a question there, so I’ll provide another one.

It’s like we have a raging agreement going on in this Legislature. It’s not about divulging cabinet secrets about the agenda, it’s about asking for reasonable explanation to these proponents about when they can expect the permit for expansion to be signed.

It’s a simple question. Can the minister or her staff provide us with some sense…? You know, this proponent and this community…. I appreciate the comments made by the leader of the Green Party. This matters a lot. This has taken enormous consultation. It is a community that is in agreement with this. The minister has said she supports the project. When can we expect to see the signed permit?

Hon. M. Mungall: As I’ve said before, we appreciate the value of this project to the region. We appreciate the opportunity it has to provide for British Columbia, for Prince George–Valemount in particular. That being said….

I appreciate that the member opposite would like a conclusive answer today. She knows the process of estimates. If I was able to provide that, I would have.

I’m not able to provide that for her today, but I will commit that we are working on it in a timely fashion. It’s unfortunate that her government was not able to approve it in such a way. We, however, will be doing that.

S. Bond: I just want to quote from a note that said “we have heard back from a staff member in the ministry on October 13, who said the permit request was with cabinet operations and the minister.” I hardly think that that is timely. We’re well into November now. It’s just a matter of actually sorting out who is going to advocate for that permit to be signed to get the matter completed.

My final question relates to B.C. Hydro. I understand that in a conversation with the BCUC, they are suggesting that B.C. Hydro partner with industry to develop geothermal projects. I’m not sure if the minister is aware of that. If she is, can she also tell me whether or not she has had a conversation with the minister who is responsible for Columbia Power Corp and the Columbia Basin Trust to talk about whether or not the Columbia Power Corp could be included in a discussion about a partnership of that nature?

Hon. M. Mungall: So first off, I just want to state for the record that B.C. Hydro is interested in geothermal and proved-up sources and working with companies like Borealis, should they be successful.

The member’s question was whether I’ve spoken with the Minister of Children and Families, who is also responsible for the Columbia Power Corporation. My understanding is probably coming from a letter she would have received from Borealis. Borealis was looking for funding, is my understanding, from Columbia Basin Trust and perhaps maybe a partnership, is my guess perhaps, with the Columbia Power Corporation in terms of moving forward and seeking some financial support. That is not within my ministry.

To her question of if I’ve had an opportunity to meet with the minister responsible for CBT and CPC, I have not yet to date.

S. Bond: Thank you very much for the opportunity to ask these questions.

As we’ve heard in this House today, Valemount has either the most power outages in the entire B.C. Hydro grid system or is at least one of the communities that has the most.

There is an opportunity with a geothermal project in the Robson Valley to actually do some very significant things, which actually has important trickle-down effects. Growing the economy — hard to do if you can’t say there is a secure and stable power source.

Certainly, as we’ve reviewed this file and met with Borealis, in the community and numerous times here in Victoria, what’s standing between getting to drill on the land and move toward operations is an outstanding geothermal permit.

I would simply urge the minister to advocate on behalf of this — getting the permit signed and getting on with what is an essential opportunity to look at alternative sources of energy in a part of the province that needs them significantly.


Video of Exchange


BCUC report puts final nail in Site C’s coffin

The long awaited British Columbia Utilities Commission Inquiry Respecting Site C was released today. I am absolutely thrilled with the thorough and comprehensive analysis that was undertaken. The report reaffirms the position that the BC Greens and I have taken on this project for the last five years.

As noted in the report’s Executive Summary:

  1. “The BCUC is not persuaded that the Site C project will remain on schedule for a November 2024 in-service date. The Panel also finds that the project is not within the proposed budget of $8.335 billion. Currently, completion costs may be in excess of $10 billion.”
  2. “The Panel finds the least attractive of the three scenarios is to suspend and restart the project in 2024. The suspension and restart scenario adds at least an estimated $3.6 billion to final costs and is by far the most expensive of the three scenarios. In addition, the Panel considers it the most risky scenario because, among other things, environmental permits will expire and that will require new applications and approvals.”
  3. “The Panel finds the Site C termination and remediation costs to be approximately $1.8 billion, in addition to the costs of finding alternative energy sources to meet demand.”
  4. “The Panel finds BC Hydro’s mid load forecast to be excessively optimistic and considers it more appropriate to use the low load forecast in making our applicable findings as required by the OIC. In addition, the Panel is of the view that there are risks that could result in demand being less than the low case.”
  5. “The Panel believes increasingly viable alternative energy sources such as wind, geothermal and industrial curtailment could provide similar benefits to ratepayers as the Site C project with an equal or lower Unit Energy Cost.”

It is now up to the BC NDP cabinet to decide upon the fate of Site C. Armed with the BCUC report, it would be fiscally reckless to proceed with construction. The BC Greens will remain vigilant on this file to ensure that the BC NDP make the evidence-based decision to cancel the project.

Cancelling Site C will now take real leadership. I hope that the BC NDP will seize the incredible opportunity that has presented itself to develop a 21st Century vision for the future of energy in this province.

Below I reproduce the media statement that I issued on the report.


Media Statement


Weaver statement on BCUC Site C Report
For immediate release
November 1, 2017

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, issued the following statement in response to BCUC’s release of the Site C report.

“I am pleased that BCUC’s comprehensive review and insightful report have been completed on time,” said Weaver.

“It is unconscionable that the B.C. Liberals demonstrated such reckless disregard for British Columbians and for sound fiscal management by pushing through such a substantial mega-project without proper due diligence and oversight.

“I am very encouraged that the report indicates that alternative energy sources could provide similar benefits to ratepayers as Site C at an equal or lower cost. I have long argued that the plummeting cost of alternative renewables makes Site C the unequivocal wrong direction for B.C.’s energy future.

“Supporting the development of smaller renewable projects presents a significant economic opportunity for all corners of British Columbia. In recent months our caucus has met with numerous communities across the province who are proposing exciting projects like wind and geothermal that would generate jobs and innovation in their communities using private sector investment rather than billions in taxpayer funds.

“Cancelling Site C will take real leadership. I hope that the B.C. NDP will seize the incredible opportunity before us to develop a 21st Century vision for the future of energy in this province.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Statement on government’s announcement of Site C review

Today the BC Government fulfilled a promise made in our Supply and Confidence Agreement to send the Site C project to the BC Utilities Commission for review. The Terms of Reference for the review indicate that a preliminary report summarizing preliminary findings will be released on September 20 with the final report due November 1, 2017. Below I reproduce the statement I released in response to this announcement. Further coverage is available in the Victoria Times Colonist, Vancouver Sun and Globe and Mail.


Media Statement


Weaver statement on government’s announcement of Site C review
August 02, 2017

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green caucus, responded to the news that the NDP minority government has referred the Site C dam for review by the B.C. Utilities Commission.

“I’m glad that the BC NDP have laid out a process that will ensure that Site C finally receives an independent review,” said Weaver. “The BC Liberals should have sent this project for review from the get-go to determine whether it was in the interests of British Columbians. It is simply reckless to spend $9 billion of public money without proper due diligence. According to estimates the cost could be as high as $12 billion.

“As an opposition caucus, our role is to hold the government to account as this process goes ahead. As per our Confidence and Supply Agreement, we were consulted early on the terms of reference but the final draft is the responsibility of Cabinet.

“Our goal all along has been to ensure that a decision such as this, where the impacts are felt by so many, is made with the best information available. This is a step in that direction.”

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Media contact
Jillian Oliver, Press Secretary
250-882-6187 | jillian.oliver@leg.bc.ca

Response to Premier Clark’s Site C Letter

Today I received a letter from Premier Clark in which she requested I respond to questions regarding the construction of the Site C Dam.

Premier Clark’s letter follows one sent last week by John Horgan, leader of the B.C. NDP, to Jessica McDonald, President and CEO of B.C. Hydro, requesting the delay of the destruction of two homes pending future review of the Site C Dam by the B.C. Utilities Commission.

Last week, I signed a Confidence and Supply Agreement, indicating that the B.C. Green Caucus would support confidence and supply measures introduced by a potential B.C. NDP minority government. As part of the agreement, both parties agreed that the Site C Dam construction project should be referred to the BC Utilities Commission on the question of economic viability and consequences to British Columbians in the context of the current supply and demand conditions prevailing in the B.C. market. The B.C. Liberal government chose not to put the dam to independent evaluation by the BCUC before moving forward with the project.

Below is a copy of the letter that I sent back to Premier Clark.


June 6, 2017

The Honourable Christy Clark
Premier of British Columbia
West Annex
Parliament Buildings
Victoria, BC  V8V 1X4

 

Dear Premier Clark,

Thank you for your letter in response to Mr. Horgan’s request to delay the relocation of two homes pending future review of the Site C Dam by the BC Utilities Commission.

While I was neither privy to, nor involved in, writing Mr. Horgan’s letter to Ms. McDonald, you will know that for four years I have raised significant and substantive concerns regarding the economics of the Site C project.

Your government has chosen to proceed with the costliest public works project in BC history without adequately analysing its economic viability. Even the chair of the Federal-Provincial Joint Review Panel that reviewed the Site C Dam, Dr. Harry Swain, has criticised the process for not sufficiently evaluating the project’s economic case. In the face of these significant concerns, and despite numerous calls for an independent review by the BC Utilities Commissions, you are about to apparently move the project to the “point of no return”.

Please let me express my disappointment in how your government is choosing to proceed with this project. Your government is turning a significant capital project that potentially poses massive economic risks to British Columbians, into a political debate rather than one informed by evidence and supported by independent analysis.

Your letter asserts that delaying the relocation of two homes will cost BC Hydro ratepayers an estimated $600 million due to the project delay. You further request an indication of my position on the matter.

Before I can comment on these assertions, I require access to the supporting evidence, including but not limited to the signed contracts, the project schedule and the potential alternative project timelines that could allow an independent review to be conducted at minimal cost to the ratepayer.

 In addition, I would need briefing notes on the status of existing delays including those associated with the stability of the north bank as well as the acquisition of and compliance with any environmental permits.

I would be pleased to answer your questions on the assumption that the information requested will be forthcoming in a timely manner.

Best wishes,
Dr. Andrew Weaver, OBC, FRSC
Leader, BC Green Party

Not too late to change course on Site C dam

Since becoming an MLA I have visited the proposed location of the Site C dam on the Peace River twice. Most recently, on Aug. 23, I travelled a section of the river with a group of concerned community members. It’s hard to fathom the scale of planned development unless you see it in person, just as it’s hard to grasp the human and cultural cost of this project until you listen to the people caught in the middle of it.

Dam construction would flood more than 5,000 hectares of land – drowning homes, traditional lands, scores of culturally important sites, and 15,985 acres of agricultural land.

Local and indigenous people in the area are being systematically stripped of their livelihood and culture by one arm of government, while receiving apologies for past injustices and promises of reconciliation from another.

Compounding the environmental, historical, cultural and agricultural damages is a reckless disregard of energy economics.

Since 2005, domestic demand for electricity in B.C. has been essentially flat, but over the next 20 years BC Hydro forecasts our energy needs will increase by about 40 per cent as a consequence of both population and economic growth. They are selling Site C as the solution to this growing electricity demand, but their argument doesn’t hold water.

Upon completion, the dam would produce 1,100 MW (megawatts, i.e. millions of Watts) of power capacity and up to 5,100 GWh (gigawatt hours, i.e. billions of watt hours) of electricity each year.

Currently only about 1.5 per cent of B.C.’s electricity production is supplied by wind energy (compared to roughly 20 per cent in P.E.I.). With our mountainous terrain and coastal boundary, the potential for both onshore and offshore wind power production is enormous. The Canadian Wind Energy Association and the BC Hydro Integrated Resource Plan 2013 indicate that 5,100 GWh of wind-generated electricity could be produced in B.C. for about the same price as the electricity to be produced by the Site C dam.

A report by the Canadian Geothermal Energy Association noted B.C. also has substantial untapped potential for firm, on demand, geothermal power which could be developed where power is needed.

While costs associated with Site C will be borne by provincial taxpayers (a price tag that will eventually be much more than BC Hydro’s estimate of roughly $9 billion), solar, wind and geothermal project risks are covered by industry.  Alternative sources coupled with existing dams could provide enough energy to meet the needs of British Columbians, with the potential to scale up as needed. They would also provide better economic opportunities to local communities and First Nations across the province, with lower impacts on traditional territories.

Instead of a diversified approach to renewable energy, the B.C. government is pushing Site C because they want to offer LNG proponents access to firm power. As I have been explaining for years, however, there will be no B.C. LNG industry in the foreseeable future because of a global glut in natural gas and plummeting prices for imported LNG in Asia. As the government desperately doubles down on LNG, renewable projects are moving elsewhere. Just this year they let a $750 million US investment to build wind capacity on Vancouver Island slip away, despite buy-in from five First Nations, TimberWest, EDP Renewables and the Canadian Wind Energy Association.

I wanted to see how much has been done when I visited Site C this summer. Nothing has passed a point of no return. Proceeding with Site C is actively driving clean energy investment out of the province, but it is not too late to correct our province’s power trajectory.