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Where is my “tin foil hat”?

“tin foil hat” is headgear made from aluminium foil to shield the brain from electromagnetic fields to prevent mind-control or brain-washing. Wearing a tin foil hat against these threats sterotypically brands people as having paranoia, persecutory delusions and belief in conspiracy theories.

I must admit that while I am open to many ideas and concepts, I’m not much of a conspiracy theorist and generally don’t think of myself as paranoid, even if everyone is out to get me. I realize that it is indeed a small world with strange coincidences and occurrences, some that boggle the mind and are seemingly unexplainable to the rational man. Over the years I have had bizarre meetings and circumstances that happened and rather than be concerned about the realm of impossibilities, you simply accept them as part of the usual fabric of life in a rather small world. My favourite had to be the time I was travelling from Mexico through Toronto, where I didn’t know a single soul, and ended up on the same flight as my Dad who was headed home from Ottawa via the big smoke. The shocked look in his eyes when this big tall black man, me after three weeks on the beach in Cancun, grabbed him in a big hug in the airport lobby was priceless. Neither of us knew about the other’s travel plans and there are multiple flights out of TO every day, so the odds of this chance meeting were infinitesimal. It worked out well for me though, as I didn’t have a ride arranged from the YVR airport and he ended up being my personal chauffeur.

This brings me to last week’s denial of service cyber attacks on both the White Rock Sun and Surrey Shirts websites. I woke up on Wednesday morning to find out that the website for Surrey Shirts (www.surreyshirts.com) had suddenly exceeded its bandwidth capacity within the server. While this happened several weeks ago when the website went viral after front page media stories concerning a cease and desist order from Surrey City Hall, it seemed odd that the site would crash again without a big news story helping to push it over a cliff. It took our web master the the tech support people from the server company a day and a half to sort out the problem and return it to public view. Imagine my surprise when I learned that on Thursday the White Rock Sun was also taken down in a malicious cyber attack which kept it from reporting the news for a day, much to the chagrin of Publisher Dave Chesney and embarrassment of the large internet company that powers up the supposedly hacker-proof servers it is carried on.

light
humm? … what they knew and exactly how far down the rabbit hole actually went? I figured I’d take the red pill and find out (Matrix movie reference, not drugs), asking them for the rational behind the warnings I had received. What I’ve been told is that politicos from various levels of government are actively attempting to alter internet content and place controls on websites and bloggers that are not toeing the official party doctrine. One of my columnist friends informed me that their site is constantly under attack from hostile forces and while they often use proxy servers to do their dirty work, several times IP trackers have traced the origins back to government computer servers.

Besides viral and spam attacks, I’ve also been informed that if you’ve been been a thorn under government’s saddle to expect hack attacks through friends emails that are sent to you. In a rather chilling indictment from a well-known and respected reporter friend, a member of an email group was hacked and the perpetrators then sent a virus containing email out to the targeted group that even went so far as to mimic the senders style of writing. Fortunately they were on guard for this type of trickery and the email was queried and authenticated before being inadvertently opened. It is believed that questions the group were asking regarding connections between a large commercial construction company and government contracts were to blame for the unwanted clandestine attention. In fact, I’ve been told its now considered the oldest trick in the book and next to the Chinese, one of the most favoured attack and conquer strategy’s available to all levels of political parties in B.C.

Could it be true that young member branches of seasoned political parties are attempting to attract an array of techies and computer geeks out of their parents basements, bringing with them an arsenal of dirty tricks including spam attacks, network viruses and cutting edge hacking techniques? I’ve been informed that groups of these nerds have coordinated complaints to social internet giant Facebook, getting them to remove links to news stories as spam or offensive comments. The same questionable techniques have also been used to manipulate internet search giant Google to remove entire links and cached versions of news items of a sensitive political nature. If someone tells you that once something is on the internet that it is there forever they’re wrong as you don’t have to look very far to see political stories involving the rich and powerful being cleansed or altered on a regular basis. This is especially true for media outlets that pander to the political elite and who profit from government advertising revenue, making them vulnerable to pressure and undue influence.

This all leads me to wonder about the present political turmoil in Victoria concerning a leaked Liberal document that showed Christy Clark’s government planning to woo ethnic votes utilizing provincial resources. The NDP reportedly stated this document that was sent to private Liberal email accounts had been leaked to them. I’m now wondering if it came from one of the recipients or if it was obtained from hacking into the email accounts of the people involved?
If this is the case, I would think that the method that this information was obtained would be even more of a bombshell than the governments misguided and racist intentions. If the NDP had directed such a hack attack, then it would definitely be the case of the pot calling the kettle black and quite possibly a criminal matter worth investigating. Either way, author George Bernard Shaw’s quote, “Never wrestle with pigs. You’ll both get dirty and pigs like it”, rings all too true.

My little cadre of tin foil hat wearers will be watching for future attempts to control media, squelch dissent, punish those questioning authority and manipulate political history. The fact that this kind of behaviour is apparently occurring points to how unscrupulous and immoral those clinging to or seeking to gain power can actually be. It only goes to show why many folks are so disillusioned with the political process that they don’t vote and have such great levels of distain for our elected leaders. To anyone who is backing these kinds of under-handed tactics, realize that doing so is a direct assault on the democratic process and the personal freedom of those you are supposed to serve. Scum, vermin, low-lifes, bottom-feeders and even goofs (that’s a fighting word in SRY in case you don’t know) are all labels that are too good for these kinds of people, no matter their social status, financial wealth or political ranking.bankers

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Coal and Oil exports, to developing countries are soaring.

Coal and Oil exports, to developing countries are soaring.

coal pile

Coal export through ports in British Columbia is expected to rise rapidly. The only way to prevent this is to charge our customers, mainly Japan and Korea, the proper $30 per ton of CO2 , which the British Columbians pay. Unless other countries do the same we lose all coal business and ruin our economy. Meantime the Americans take advantage of our low income tax rates, caused by the carbon tax, to buy their coal in BC via subsidiaries and ship it through our ports. This is a plea to the environmentalists to support a myriad of politicians, organisations  and industries in the US, Australia and South Africa, who understand the problem. They could get together and pressure their governments to charge the carbon tax on exported coal. Based on 2010 figures, these three countries together supply almost 40% of the coal. Indonesia is the largest other supplier, followed by Russia. That country, which supplies 12% of the coal also signed the Copenhagen agreement and will, like the US and Australia, likely find out that they need a carbon tax to achieve it. It will be more difficult to reach a global agreement on oil. The purpose of carbon tax is to drive up the price of carbon so that green energy becomes more competitive. It’s purpose is completely lost when we send cheap tax free carbon to countries who do their best to develop green energy. China is seen as the biggest problem in greenhouse gas emission. Per capita they emit only 1/5th of the GHG we do but due to increased prosperity this will rise. China develops green energy, rejects cap and trade, which would hurt them but is considering imposing a carbon tax. That development is hindered when they can count, for years to come, on cheap untaxed oil imports from Canada.

Carbon tax has become a dirty word because the cap and trade, as used in Europe and 10 US States is complex and misunderstood because the distribution of it’s proceeds is hard to explain to the public. Many people see the carbon tax as an extra tax on their income without realizing that all the extra money they pay for carbon is refunded to them via lower income tax rates and special credits. All countries who have a carbon tax or cap and trade agreements in the order of $ 30 per ton of CO2 report that it has no negative economic impact. British Columbia which has a simple revenue neutral carbon tax of $ 30 per ton of CO 2 experienced a 17% drop in consumption of petroleum products without loss of GDP. Important carbon tax proponents in the US use BC as an example on how to proceed. British economists write glorious stories about BC’s system and it’s results. The International Monetary Fund declares that a revenue neutral carbon tax is far more effective and easier to implement than cap and trade. It is up to the environmentalists to convince the Canadian government that adaption of a revenue neutral carbon tax is urgently needed.

In Copenhagen many countries, representing over 80% of the global emission, committed themselves to drastic reductions by the year 2020. Australia committed to 5%- 25% compared to 2000. They realized this could not be achieved without a carbon tax. After a hectic struggle with the public and several coal companies they managed to establish a $ 25 per ton carbon tax in addition to a 30% tax on earnings from mining operations. Like the cap and trade system in Europe it only applies to large emitters but it is quite significant. Russia, another coal supplier, committed to 15-25% below 1990 levels and will in all likelihood need a carbon tax to reach that goal. Canada and the US committed themselves to 17% reduction compared to 2005. Since that time the US emissions have gone down while they are rising in Canada. This is the main reason why the US is lecturing us to do something about it and will possibly not approve the Keystone pipeline. In the US even bi-partisan bills for the required action are voted down due to their complex political system. Mr Obama’s carbon tax initiative had to be watered down to a fuzzy cap and trade system in order to please opponents. We don’t have any of these problems. If our government would table a bill for a revenue neutral carbon tax it would in all likelihood be accepted by all parties.

Below is an article which covers the economic impact of the carbon tax, the problems with oil transport and the economic losses due to insufficient pipeline capacity. It also highlights the many questions still to be answered before proceeding with any pipeline.  The draft report of the Joint Review Panel of the Northern Gateway Project shows clearly how consultants, contractors and experts should interact without any conflict of interest. It also defines the scope of monitoring and inspection. Despite all this there is no summary of the causes of past spills with a clear simple explanation how they would have been avoided had the present regulations and proposed technology been in place. Also hard to find is how specific technical points raised by experts have been resolved.

coal theyburnit

The economic impact of carbon tax

 

Introduction

A retired Canadian mechanical engineer, who believed that carbon tax is an effective tool to curb climate change saw the attached description and table of contents for a new book “Rediscovering Sustainability”. The subjects covered convinced him that we don’t progress fast enough to curb global warming. He lives in British Columbia, which has a carbon tax and decided to look further into the problems of carbon pricing which, among many other subjects are  covered in that book. He searched the net and found articles about the Copenhagen agreement and Australia’s efforts to establish it’s carbon tax. As a result he wrote an E mail to Mr Harper and his MP to consider following Australia’s example. Later on he found out that unless we establish a nationwide carbon tax we will likely in 2015 be faced with countervailing duties by a group of major countries who have a carbon tax. By that time he had searched the net about pipelines and found nothing but bad news. He also found out how much revenue is lost by not having additional pipelines. That resulted in a second E mail. After president Obama announced that the US would get more serious about carbon pricing he was afraid that we would fall further behind the US, retrieved information on carbon tax in various countries and found some amazing data, which led to a third E mail. The Prime Minister’s Office assured him that his points have been carefully considered. He hopes that the environmentalists will keep on pressing hard for a revenue neutral national carbon tax similar to the one in BC. That may be the only chance to get pipelines approved allowing us to safely keep exporting our present flow of oil as well as that of the near future. Following agreement with other countries we than can than start charging a proper tax for our oil exports. It will curtail our expansion plans but bring in a lot of extra revenue which should be shared with other countries who don’t have any taxable carbon but have to live with the rising energy prices and the effects of climate change. Many environmentalists feel that around $30 per ton of CO, which several countries charge internally, is only about one third of what is required to curb global warming. Let’s first all start agreeing on $ 30 per ton and than raise it gradually. The article below covers most of the subjects in those 3 E mails.(copy attached). It also addresses earthquake considerations for pipelines and a number of technical, environmental and trade data not covered in the E mails. The material found on the web is referred to by page number (EP) for environmental and pipeline references, which were attached to the second e-mail and (CT) carbon tax references, which were attached to the third e-mail. They have been expanded to cover the additional material.

Summary

Since 2008 British Columbians have lived with a carbon tax which gradually rose from $10 per ton of CO2 to $ 30 per ton. When it had reached $25 per ton it had already resulted in a 15% reduction in consumption of petroleum products and a survey found that 70% of British Columbians want to keep the tax and saw no economic losses. A recent study confirms that in July  2012 the reduction had reached !7.4% without any losses in GDP.  If BC would have taxed the coal they export there would have been a tremendous economic gain. Part of this gain could have been shared with countries which have no carbon tax income but have to live with increased energy cost and climate changes.  In the US !0 Northeastern States adapted a cap and trade system and after 3 years found that it had created 16,000 jobs added $1.6 billion to the economy and set the stage for $1.1 billion in ratepayer savings. Despite these successes neither the US nor Canada have been able to establish a national carbon pricing policy. This puts us at a great disadvantage compared to other countries. Environmentalist rate the US as #43 and Canada at #58 out of 61 counties based on 5 environmental criteria. This, combined with the fact that existing pipelines have a very bad operation and maintenance record leads to rejection of proposals for much safer pipelines to export our oil. As a result the Alberta oil companies lose at least $ 15 billion per year because the combined US and Canadian flow shipped by rail is already the equivalent of one large new pipeline.  The Alberta Government estimates that the total losses amount to $ 20-30 billon per year. Shipping by rail is dangerous and requires more energy. than transport by pipe.  Some environmentalist want to decrease our export of oil and coal claiming that it will reduce the greenhouse gas emission in other countries. As long as fossil fuel remains cheap those other countries will keep buying it from us or from others so we may as well supply it until worldwide carbon taxes have driven the carbon price high enough to make green energy cheaper than energy from fossil fuel. Quite some oil will always be needed regardless of it’s price so the oil industry will be kept in business. Also coal is an essential component in steel production so we won’t lose those exports.

A main reason that neither the US nor Canada have a national Carbon tax is that the system is poorly understood by many citizens and even some organizations.  Many people don’t realise that what they pay in carbon tax is funneled back to them in the form of reduced income tax and special rebates for those most affected like the poor, those living in Northern communities and some industries. By leaving out these tax savings the Americans are told that one of their bills will costs the average family $1500 per year, while it is only $150 per year. Canadians are told that the average BC family looses $779 in yearly income as a result of the carbon tax while it is in fact $0. Many people feel, logically, that the proceeds of carbon tax should be used to create green jobs, public transportation and many other improvements rather than returning it to the taxpayers. They don’t realise that those green jobs and improvements will come automatically as consumption of fossil fuel decreases. Part of the 17% reduction in fuel consumption in BC has obviously been replaced by green energy and even the sale of more fuel efficient cars will have helped the economy.

coal we mine it

1  Carbon tax principles

Carbon tax as well as cap and trade are used to drive up the price of fossil fuels. As the price of oil, coal and gas rises the green energy sources become more competitive. This means that eventually wind farms, solar fields and other green energy systems can be built and operated profitable rather than having to depend on subsidies. At the same time people will use less oil, coal and gas, which reduces the amount of greenhouse gas (GHG) emission. Most of this GHG is carbon dioxide (CO2), which causes climate change. Carbon tax is charged at the source, based on the amount of CO2 which a fossil fuel will produce when it is completely burned. At the moment the BC carbon tax is $30 per ton of CO2. Some resulting taxes are 6.67 cent per litre of gasoline, 7.67 cent per litre of diesel oil, 5.7 cent per cubic metre of natural gas $62.31 per ton of high grade coal, $74.61 per ton of coke, and $62.40 per ton of tires, since they contain a lot of carbon (CT 13) and in shredded form, taxed at $71.73 per ton, they are used as fuel. The cap and trade system is widely used in Europe. It gives allowances to all emitters with a capacity over 20 MW. Those who can reduce their emission to below the allowance can trade the difference with others who have to go beyond their allowance.(CT35,36). The advantage of the cap and trade system is that it achieves a pre-set goal while with the carbon tax the GHG reduction depends on how the public reacts to the higher fossil fuel prices. For BC it has already been shown that the carbon tax is highly successful. In 2011 when the tax was still $25 per ton of CO2, consumption of petroleum products had already dropped by 15% and 16% compared to the rest of Canada(EP15)(CT 33). In July 2012 it had dropped by !7.4 %, while the consumption in the rest of Canada increased by 1.5 % (CT48). It was re-confirmed that there was no loss in GDP. The main advantages of carbon tax over cap and trade are comprehensive coverage of emission sources, administrative simplicity and frugality (it uses existing public and private tax administration infrastructures), speed of establishment, low transaction costs, price certainty (critical for investment decisions), and transparency to consumers (critical for influencing behaviour).(CT31). Another disadvantage of cap and trade is that emission targets have to be set for each country. This would be a great disadvantage for China and India, which already have low per capita emissions.(CT 51). China is however in the planning stage for a carbon tax,CT32)  which would help their development of green energy Also the developed world will never accept an emission target as low as China’s present emissions.(CT 51)

2  Distribution of proceeds and economic results

There are several ways in which governments can distribute all that extra income. Many feel that a logical choice is to invest it in green technology, public transportation and other projects which reduce GHG emission. That would mean that the taxpayers would get no compensation for the extra money they have to spend on energy. In the US this has been recognized by one proposal to return 75% of the money collected from households to them in the form of dividends obtained from the auctioned sale of pollution allowances, which would decline as the cap and trade tightens (CT26). To the average person this is more complex than the simple rule in BC that all carbon tax collected has to be returned to individual and business taxpayers. In Europe it has been shown that the carbon pricing has given a slight boost to the economy. An in-depth European Union study of the tax shifts undertaken by Denmark, Sweden, Finland, the United Kingdom, the Netherlands and Germany found that five of the countries experienced modest economic gains as a consequence of the carbon/energy tax shift while one country, the United Kingdom, experienced a neutral economic outcome.(CT32). In the US 10 Northeastern states adapted a cap and trade system and one study found that by investing carbon funds in energy efficiency and renewable energy programs, the states achieved $3–4 savings for every dollar invested.  The program also created thousands of jobs (18,000 job years – that is, the equivalent of 18,000 full-time jobs that last one year), and individuals and businesses who took advantage of the energy efficiency programs funded by the carbon pricing system actually saw their energy bills drop. A subsequent study found that the Regional Greenhouse Gas Initiative(RGGI)s carbon cap pricing system added $1.6 billion in value to the economies of participating states, set the stage for $1.1 billion in ratepayer savings, and created 16,000 jobs in its first three years of implementation.  RGGI provides us with a real-world example of carbon pricing benefits exceeding the costs several times over(CT 18)

 

3  Confusing carbon tax figures

All this good news, along with the earlier mentioned success of the BC carbon tax, giving 17% reduction in consumption of petroleum products without any loss in GDP, should make everybody enthusiastic about implementing carbon tax. Unfortunately there are many people and even some organizations who don’t understand that by giving back most or all of the carbon tax proceeds to business and individual taxpayers via income tax reductions and special grants, nobody suffers.  In the US extra rebates were envisaged for low income families in a now defeated bill.(CT 17). In BC it is achieved through the refundable low income climate action tax credit. (CT 4). In addition to their lower income taxes, families in Northern and rural communities get a special $ 200 homeowners grant.(CT 32,33)   On the business side BC gave a special $ 7.6 million rebate to greenhouse vegetable  and flower growers because their income tax savings were not sufficient to cover the extra fuel cost.(CT 11). By overlooking these details, completely wrong figures are published. In the US it is claimed that for one of their 4 bills the average cost per household would be $1500 per year, while it is in fact only $150 per year.(CT15) For BC an average of $ 779 per household(CT29) is often quoted while it is in fact $0

4 Details of the confusing figures in the US

In the US one of their four bills (Waxman-Markey) was analysed by no less than seven separate organizations. It would by 2020 have reduced the GHG emissions to 17% below the 2005 level, which is the Copenhagen agreement (CT36,37) and 83% by 2050. (CT16) The Congressional Budget Office (CBO) concluded that the bill would reduce the federal deficit by $ 9. billion in 2019. The analysis concluded that the bill would cost the average American household between $84 and $160 per year by 2020, which corresponds to $0.67 to $1.28 per person per week.  The studies also concluded that the costs would be lower for lower income families.  For example, the CBO analysis of Waxman-Markey concluded that families in the lowest income quintile would see a net decrease in average annual costs of about $125 in 2020 due to low-income assistance provisions.(CT17)

Over the entire span of the Waxman-Markey bill (to 2050), the Environmental Protection Agency (EPA) found the average annual cost would be $80 to $110 per household in current dollars (64 to 88 cents per person per week).(CT 17) Contrary to these figures the Heritage Foundation analysis concluded that for the same Waxman Markey bill it would cost the average family $1500 per year, 10 times as much as the real cost. This is because they ignored the distribution of the collected funds.(CT 15).

5 Details of the confusing figures in Canada and international praise for BC’s tax

The Canadian Centre for Policy Alternatives(CCPA) did an extensive study to check if the BC carbon tax proceeds were indeed fairly distributed among 5 income groups. In a table,(CT30} they show that in 2008/2009 the poorest group gained .2% , the 3 intermediate groups  had gains and losses between .1% and .2% while the richest broke even. The latest figures are for 2010/11 and show that the poor loose $47 per year per household which is .2% of their income. The 3 intermediate groups  lose between .1% and .2% while the rich gain $311 per year per household, which is .2% of their income.(CT 30). The Canadian Union of Public Employees (CUPE) submitted a table, (CT29) showing how much each income group pays in carbon tax, suggesting that the proceeds should be used to help low and middle income families and in particular those in rural communities . That is exactly what the income tax reduction and special rebates do. But after having paid all money back to households  and businesses there is nothing left for their other wishes , just transition and green jobs, investment programs to help workers and communities affected by these changes adapt and develop good quality jobs, greener industries and more sustainable communities. They also like to see investments in physical and social infrastructure to help communities prepare for and adapt to the more extreme weather and climate changes caused by global warming.(CT 29). These will come automatically as the price of carbon rises. The CUPE table is referred to by the Frazer Institute claiming that a 2008 analysis of a $30.00/tonne carbon tax conducted by CUPE suggested that the poorest quintile in Canada would lose 1.7% of household income, while the top quintile would lose only 0.86%.(CT 31). The actual figures as shown above are .2% loss and .2%gain.With such misleading figures it is no wonder that the public is not that enthusiastic about carbon tax. Fortunately  70% of the people in BC who have experienced the tax since 2008, when it was $10 per ton, did not mind the $5 per year increase and still liked it when it rose to $25 per ton and probably don’t mind that it is now $30 per ton. Hopefully BC will influence the rest of Canada and the government to adapt the carbon tax

In June 2011 the Pembina institute found out that British Columbians support carbon taxes and are confident that taking action to reduce greenhouse gas pollution will help grow, or have little or no impact on, the provincial economy. The poll came on the eve of the July 1 scheduled increase in the carbon tax that will see it rise to $25 per tonne of greenhouse gas pollution. According to the poll, the majority of British Columbians (69%) are worried about climate change and most (70%) want the province to continue showing leadership on the issue without waiting for other jurisdictions to take similar steps. The poll also shows that most British Columbians feel the carbon tax has either been positive (33%) or neutral (41%) for the province.(CT 35), A subsequent study led by professor Stewart Elgie of the University of Ottawa concludes that by July 2012 BC’s per capita fuel consumption had dropped by 17.4 %, while it rose by !.5% in the rest of the country. The study also found that during the period that the carbon tax was in effect the gross domestic product kept pace with the rest of the country. (CT48).

Despite all this good news there are, even in BC, some people who don’t believe that the carbon tax is revenue neutral because the reduced income tax does not show as such on our tax forms. This perpetuates the myth that carbon tax is harmful to individuals and businesses. Fortunately other countries see the benefits. Due to the revenue neutral regulation we now have some the lowest individual and business income taxes in the western hemisphere. (CT38). In the US our revenue neutral carbon tax is pointed out as a prime example on how the US should proceed as seen in the following statement: ” Handley argued that taxing CO2 pollution instead of productive activity such as work and investment is a climate policy offering enormous climate benefits at little or no cost. Successful carbon taxes in British Columbia and Sweden are proof that voters can be persuaded to embrace carbon taxes that reduce taxes on individual and business income, retail sales and payrolls. These taxes, along withAustralia’s new carbon tax, demonstrate that well-designed carbon taxes can effectively reduce emissions quickly, at minimal cost, without stunting economic growth.

Handley further noted that the effectiveness of BTI’s proposal hinges on the ability (and willingness) of Congress and federal agencies to identify and fund nascent low-carbon energy technologies capable of breaking fossil fuels’ economic dominance. Yet a steadily-rising economy-wide carbon price can perform this task far more broadly and effectively, Handley argued, by encouraging every energy supplier and every energy user to look for ways to reduce emissions, spurring innovation across the entire spectrum of energy supply and use. He noted that diverting carbon tax revenues to R&D would preclude using carbon tax revenue to reduce other taxes, thus undercutting political support.”(CT45). Closer at home we are praised in Seattle by the following: “British Columbia’s carbon tax offers a “tremendously useful role model” for U.S. states developing their own climate policies, said the policy director of a Seattle-based think tank.

The most specific argument to use carbon tax rather than cap and trade comes from the Australian debate as follows: “Here are the six reasons the Carbon Tax Center believes carbon taxes are superior to cap-and-trade systems:

Carbon taxes will lend predictability to energy prices, whereas cap-and-trade systems will aggravate the price volatility that historically has discouraged investments in less carbon-intensive electricity generation, carbon-reducing energy efficiency and carbon-replacing renewable energy.

Carbon taxes can be implemented much sooner than complex cap-and-trade systems. Because of the urgency of the climate crisis, we do not have the luxury of waiting while the myriad details of a cap-and-trade system are resolved through lengthy negotiations.

Carbon taxes are transparent and easily understandable, making them more likely to elicit the necessary public support than an opaque and difficult to understand cap-and-trade system.

Carbon taxes can be implemented with far less opportunity for manipulation by special interests, while a cap-and-trade system’s complexity opens it to exploitation by special interests and perverse incentives that can undermine public confidence and undercut its effectiveness.

Carbon taxes address emissions of carbon from every sector, whereas cap-and-trade systems discussed to date have only targeted the electricity industry, which accounts for less than 40%[in the US] of emissions.

Carbon tax revenues can be returned to the public through progressive tax-shifting, while the costs of cap-and-trade systems are likely to become a hidden tax as dollars flow to market participants, lawyers and consultants.

(Copied directly from the Carbon Tax Center.)” (CT 50,51)

A recent (4 August 2013 ) article in the Economists gives more details about Professor Elgie’s findings about the 17% drop in fuel consumption and also states “CANADA could do more to limit carbon emissions, which have risen in recent years even as they have fallen south of the border. As if to rub it in, Barack Obama recently warned that unless it does, he will not approve the Keystone XL pipeline to bring oil from Alberta’s tar sands to Texas. Yet America itself can learn a thing or two about climate policy from British Columbia (BC).”(CT 54, 55) Note that in Copenhagen both counties agreed to reduce emissions in 2020 to 17% below 2005 levels (CT 36, 37).

6 Industries’ reaction to carbon tax

Until many countries agree to charge the same carbon tax there will be strong opposition  from many industries. Obviously they don’t want to see a cost disadvantage compared to competitors’ in other countries. This can best be seen in the struggles Australia had to establish the tax and which South Africa has in trying to impose it. On the other hand there are 100 multinational  companies who complain bitterly that the negotiations to obtain a global tax are proceeding far too slowly and hamper their forward planning.

In Australia the government first yielded to pressure from the coal companies and did not impose a tax.(EP 53) When it became clear that Australia could not meet it’s GHG reduction target without taxing big emitters (CT43 ) there was enough public support to impose a $23 per ton of CO along with a mining tax of 30% of earnings(CT 40 ). There was quite some uproar and the impression was created that it was an export tax following this statement from BHP Billiton: “This, if you boil it down to its barest essentials, is a tax on coal exports from Australia.”.Their Climate Change Minister had  this to say: “Claims of massive job losses are completely absurd. The coal industry has at least $70 billion worth of investment coming into it that’s committed, 19 new mines opening up that are committed.

You know, the average carbon price cost per ton of coal mined once the carbon price legislation comes into place is only $1.90 per ton of coal in the first year – $1.90, as against a coke and coal export price currently in excess of $300 a ton.

It’s a modest impost on the industry and it will create an incentive to reduce their methane emissions – and that’s a positive thing.

– Greg Combet, Climate Change Minister(CT 49)

 

South Africa was at the same time (2011) trying to establish a carbon tax and got this reaction from Anglo American: “Ms Carroll said yesterday the process the South African government was adopting in formulating a carbon tax policy was far preferable to that in Australia, where Anglo is carefully weighing up the financial merits of a pipeline of projects worth $10bn-$15bn after the government passed a carbon tax policy that will affect the mining sector heavily.
She warned about the implications of the current proposals for South Africa’s economy. Anglo wanted a clear and stable policy environment on climate change as it had long-life assets around which it had to plan, said Godfrey Gomwe, executive director of Anglo American SA. In Australia, a tax of $25 per ton of carbon emitted was adopted to become effective from July next year, provoking a furious response from not only the mining sector, but other industries such as airlines and steel makers.”(CT40)

The companies who feel that the carbon pricing does not proceed fast enough made their stand clear: “And, in a clear signal that global business is becoming frustrated by the lack of political action in the UN climate talks, support for a global carbon price came on Monday from 100 multinationals including Shell, Unilever, Cathay Pacific, EDF Energy, Braskem, Statoil, Swiss Re, Ricoh and Skanska.

The companies have called on governments to introduce a the price to “drive the investment” needed to deliver substantial reductions in greenhouse gas emissions. “A price on CO2 can open the door to increased ambition. Putting a clear, transparent and unambiguous price on carbon must be a core policy objective,” said the companies who signed up to a declaration by the Carbon Price Communiqué, an initiative co-ordinated by the Prince of Wales’s corporate leaders group on climate change.”(EP17)

 

7  Economic impact of not having a carbon tax

Environmentalists from around the world want to stop our pipeline projects based on our poor environmental records and past disasters with pipelines and oil tankers A carbon tax would help to show them that we care about the environment. A far more open discussions about the past pipeline and tanker problems and how they can be prevented could gain more public support for all 3 projects . The sad fact is that the delay of the Keystone XL pipeline already causes  at least $15 billion  per year in lost revenue for the Alberta oil companies.(EP 1) According to the Alberta Government it is $ 20- 30 billion per year.(EP1) The Governments and the environmentalists should release a more detailed analysis of these losses and how they affect our standard of living, our social services and financial support for specific municipal projects. A main reason for the lost revenue, $37 per barrel of oil in January 2013(EP 1), is that, due to lack of pipeline capacity the oil has to be shipped by rail, which is costly, dangerous and consumes a lot of fossil fuel. In 2012 rail shipments in the US were 340 000 barrels per day. With added Canadian shipments it is expected to reach over 400 000 barrels per day, which is equal to the amount shipped in a new large pipeline.(EP 13)

8  Our environmental records

Our records are indeed poor. We have always stated that we would continue to align our measures with the US but even well before president Obama announced his policy change we were according to the environmentalist already well behind. They rated us as # 58 out of 61 countries while the US was rated #43.(EP2) This makes it more difficult to negotiate with the US. Our Kyoto aim was to reduce GHG emissions in 2012 to 6% below 1990 levels. Instead in 2008 we had already increased it by 24% instead of lowering it (CT 36). In Copenhagen we agreed to reduce our emissions in 2020 to 17% below 2005 levels (CT 36, 37). Environmentalists and US government officials( CT 1) believe this is impossible to achieve considering that extraction of oil in Alberta requires a lot of energy while further extraction is encouraged by special fiscal privileges, which are seen as subsidies.(EP 1) Furthermore when we tore up our Kyoto agreement there was no agreed way to punish us. This led to the virtual collapse of the pricing system for tradable permits, which deprives many countries of a valuable tool (CT 37}. .Alberta apparently tried to influence the decision on the Keystone XL pipeline by offering to try to negotiate an increase in the Alberta carbon tax from $ 15 to $40 per ton. That sounds a lot but far less than what BC charges, $ 30 per ton on any fossil fuel. The Alberta tax only applies to large emitters (more than 100 000 tons per year),(CT 3). It only applies  to the amount they emit over target.(CT 3) . As a result they only collected $312 million (CT 3). This is very little compared to the $ 15 billion a year, which oil companies loose in revenue partly because other countries don’t like our carbon policies (EP 1). All these matters lead to aggressive demonstrations against our government and our pipeline proposals. In London Mr Harper was met by 30 protests organisations from both sides of the Atlantic while 6 MPs tabled a motion to keep our oil out of Europe.(CT 37) By now 20% of the greenhouse gas emissions and 30% of the World’s GDP are covered by a carbon price. Korea, South Africa and China are still in the planning stage. (CT 32)(CT 46). When so much progress is made we might as well join the crowd rather than facing countervailing duties. These are likely to arise in 2015 when a group of countries become upset with the slow global process, form a block and charge us based on our implied emissions(EP 1). To an average Canadian it appears that this important carbon tax issue has for far too long been used as a political football between parties and that it is high time to get together and pass a bill for a carbon tax similar to the one in BC. That may be the only way to keep exporting our oil as planned.

9  Development of green energy

While wind power appears to be the most economical green energy it has a big drawback that energy storage is expensive. This means that it requires a lot of regular power to cover all those periods when there is no wind. The Vehicle to grid system(V2G), which is being developed sounds promising.(EP4 and EP19) It would allow utility companies to use the batteries of parked electric vehicles to store surplus electricity and retrieve it when needed.

Since there are so many coal fired power plants around the world it is unlikely that they could be rapidly replaced even when green power becomes more economical. This would explain the great emphasis on coal fired plants with carbon capture and storage(CCS). It reduces the Global Warming Potential(GWP) from 4.44 to 1.8. but requires roughly 20% more coal per KWH. The GWP can be further reduced if the power required to drive the carbon underground is derived from other sources than coal(CT24)

The table on EP 18 shows that by 2017 the US can for new facilities produce wind power far cheaper than advanced coal with carbon capture and storage($96.8 vs $140.7 per MWh). A later table (CT62) shows that by 2018 it will be $86.6 vs $135.5 per MWh. These figures don’t include targeted tax credits and it is assumed that a plant without CCS would have to pay  an emission fee of $15 per ton of CO2(CT61). It is likely that after 2015 coal will be more expensive due to a $25- $30 per ton of CO2 carbon tax. That would make the alternative energy even more attractive. As shown on the  2018 table(CT62). the next cheap green energy apart from hydro is geothermal. It can also be seen that without a carbon tax the green energy can’t compete with natural gas. The US figures may not apply world wide. In 1975 the US pioneered windpower (CT33) and had in 2012, after China’s 75,324 MW, the largest windpower capacity in the world at 60,007 MW(CT34). They have many windy deserts which may explain their success.

Since China depends on coal for 70% of it’s primary energy and emits more GHG than any other country, the carbon capture and storage(CCS) receives a lot of attention in China(CT58), while other countries help them to achieve lower emissions. In 2005 the per capita emission in China was 1/5th of our emissions(CT56) but due to China’s increasing prosperity that figure will increase unless they become a lot greener. Canada, which has many coal fired plants, spends a good part of it’s research money ($3 billion) on CCS, which could lead to 5 or six large demonstration plants.(CT22). The European CCS team also helps China with evaluation of potential storage sites. Also the Australian coal companies commit money for CCS research(CT63). China now has the largest number of CCS pilot projects in the world. Six of them are large scale fully integrated projects(LSIP), driven by state owned power companies with help from major international partners(CT59,60)

Another source of CCS which appears to be overlooked is the carbon content of rubber tires. It is futile to burn those as fuel when the carbon can be stored underground. Shredded tires, known as Tire Derived Aggregate (TDA), have many civil engineering applications. TDA can be used as a backfill for retaining walls, fill for landfill gas trench collection wells, backfill for roadway landslide repair projects as well as a vibration damping material for railway lines. There are many more applications which store the carbon (CT57). While it costs a lot of money to store the captured carbon from power plants, road builders in BC do it for free after having paid a carbon tax of $ 71.73 for each ton of shredded tires they bury (CT13). The use of tires in the steel industry(CT57) does make sense because the carbon is an essential reduction agent to convert iron ore to pig iron in the blast furnace or to obtain sponge iron(CT58) and pre-reduced pellets via different processes.

10  Carbon tax on exported coal and oil

 

Many countries will never improve their emissions if they can count on importing  cheap untaxed coal, oil and gas. Negotiations  to obtain a world wide agreement for a uniform system keep breaking down because the developing countries don’t want to be tied to a cap and trade agreement and the developed world cannot accept a reduction to anywhere near the per capita emissions in the developing countries.(CT51). They would not even accept a 40% reduction( CT52 ). A global carbon tax treaty is the way forward. Each country has a wide scope about how their tax is set and spent, no adverse global economic impact as long as overall tax levels remain the same(CT51). It is hoped that this will be achieved in 2015. If not, a partial treaty by many countries is likely, these would than impose import duties on non participating countries(EP1). Based on 2010 figures(CT42)about 40% of the coal export comes from Australia, which has a carbon tax and from the US and South Africa who have pending bills to obtain it. Since that time the US has increased it’s export from 83.2 to 126 million tons(CT63) while Australia projects increases in the order of 10% per year(CT63) so by now likely well over half the coal export is covered by countries who have or acquire a carbon tax and could reach an agreement to charge the tax on exported coal.  If the environmentalists keep on pressing for such a uniform tax in coal , the oil may follow.  As long as all counties charge about the same tax there would be no unfair competition between companies, This is exactly what those 100 multinationals expressed: “And, in a clear signal that global business is becoming frustrated by the lack of political action in the UN climate talks……”(see 6 above), The environmentalists could discuss the problems with these companies and propose a joint solution. A main problem to solve is how much of the tax proceeds have to be passed to less fortunate countries, who will determine and administer that distribution.

11  The coal situation in BC

 

In 2010 Canada supplied 2.9% of the world’s coal, Australia 26.5% and Indonesia24%.(CT42). If we would curtail our export, those two countries could easily add a little more to their production so the amount of GHG produced in the world would remain the same. Only a universal carbon tax will eventually reduce the demand for coal. The rapid expansion of US coal export from 83.2 million short tons  in 2010 to 126 million short tons in 2012(CT63) can in part be explained by 2 price advantages they have. The first one is that of the coal targeted for export, most of it will come from leases on publicly owned lands in the Powder River Basin. A lease is obtained by a “competitive” bid. Rarely is there more than one bidder. Awarded the lease by the Bureau of Land Management at “fair market value”, a high value might equal US$1.10 a tonne(CT38). Once mined from the leased land, the coal is sold. The sale takes place at the mine. In the State of Wyoming, where most of the export coal will be mined, the only tax liability is on the value of the coal at the mine, which works out at US$9 or US$10 a tonne(CT39).

The second advantage is that, due to the carbon tax, BC has one of the lowest income tax rates in the western hemisphere. The US companies make use of it:  “As to income tax, when the coal mined from taxpayer property is profitably sold for US$80-120 a tonne on the international market, there is no obligation to pay those taxes in the United States. A prudent international business will use an international subsidiary to buy the coal at the mine mouth. It could be a subsidiary based in British Columbia, or any country where income tax rates are lower than in the United States.”(CT39)

BC environmentalists can do something to stop that US flow. They can seek out all politicians and industry groups in the US who are against the very low mining leases and let them know that it not only hurts US taxpayers but also has nasty effects in BC. The main problem is still that there is no international agreement on carbon tax, let alone on taxing coal exports. That can be achieved by environmentalists actively searching through all those hyperlinks in the CT documents and get together with the 100 multinationals mentioned under 6) above and with Australians who understand the problems. If they can agree on a plan of action to be presented at the next climate conference we may see better progress. Furthermore the environmentalists should check if there are any carbon tax centres in South Africa and Russio in order to get support from those coal exporting countries.  Here is an Australian comment proving that we are not alone in trying to tax coal exports:

“Export Coal Tax

Australia supplies almost 40% of the world’s coal and so can have a huge impact on the price of this damaging product. Our coal exports account for more than half of Australia’s total emissions. (See “Out with the coal” by John Perkins.) Through a combination of coal taxes and export quotas we could drive up the price of coal until other energy sources become more attractive.”(CT51)

12  Oil transport records

The pipelines have a history of regulatory violations, poor maintenance, inadequate instrumentation, numerous large spills, including a rather recent catastrophic one. Little publicity is given to the fact that these problems have led to stricter regulations, safer designs and improved operating procedures for the proposed pipelines.  A recent Bloomberg article reveals that the customary leak detection systems, which rely on internal sensors, can’t detect leaks smaller than 1 ½ % of the flow, which for the proposed Keystone XL pipeline amounts to undetected leakage of 500 000 gallons per day.(EP11} Furthermore in complex networks the signals these internal  sensors provide,  are hard to interpret leading to so many false alarms that the real ones may be misinterpreted. For the disastrous Enbridge Kalamazoo spill this caused a delay of 18 hours before the flow was stopped. The same article also notes that external sensors which can detect leaks as small as 10 gallons per day are available but seldom used because they are too costly.(EP 12)  Enbridge will use external sensors for their Kitimat pipeline but this is hardly mentioned. It was discussed in Kitimat but not reported(EP27) They will also provide thicker than normal wall thickness for their pipes, install 50% more isolation valves.(EP 8, 9), use extra personnel in the control room and around the clock manning of their pump stations.(EP 43). It also appears that the public is not aware that Enbridge pays a lot of attention to the seismic activity along the route and will design the pipeline to accommodate the maximum ground acceleration.(EP51). Note that an Alaska pipeline was designed with a flexibility which withstood a magnitude 7.9 earthquake. (EP 37). Also there are acoustic leak detection systems available which detect vandalism, tremors and landslides, which could shut the line down in time. (EP20-23,28)   Enbridge has so far not yet committed to any particular leak detection system.(EP45) It would appear that their design and improved manning will result in one of the safest pipelines on the continent. It will however require a lot more open discussion to convince the public that all previous problems will be resolved. The draft report of the joint review panel for the Northern Gateway pipeline shows a number of conditions how consultations have to be conducted, how to achieve independent reviews and what monitoring involves. It does not immediately refer to resolution of specific published problems or several concerns which have been raised during the enquiry (EP40). It appears that it was more like a court hearing. Enbridge was faced with a cross-examination by legal council (EP27) and had to be careful what to say. Also all efforts were made not discuss the US National Transportation Safety Board’s report about the Kalamazoo spill. (EP38) Obviously the public wants to have simple answers to a number of questions listed under point 14) below. It would be nice if the governments and the environmentalists publish their views on those matters. It all refers to Enbridge but Trans Canada also has some poor records. A  CBC discussion on 6 August suggests that a careful review of that company is also in order.

A lot can be accomplished by having more personnel available to oversee the design, construction and operation of our oil transport systems. In the past too many cuts have been made with disastrous results. Surely more inspections and oversight will increase the price for our oil but if all companies are forced to follow the rules, there will be a level playing field and the price increase for the oil will be insignificant compared to the $37 per barrel which we lose at the moment due to limited transport capacity.

For the pipelines some examples of cost cuts are that Enbridge incurred over 500 regulatory violations in one year during the 2008 pipeline  installation  in Wisconsin (EP6) and paid $ 1.1 million to settle a lawsuit for 100 violations on that project.(EP59) Enbridge was also well behind with required  repair of 15,000 cracks in their disastrous Kalamazoo line.(EP3) Trans Canada continued construction of their Bison pipeline while they were made aware of shoddy welding and poorly trained inspectors who were not identifying all the welding problems(EP54). Railroad  transport also has to become much safer. The Quebec disaster revealed that in order to cut costs, a struggling railroad company was allowed to operate a 72 car, 4 locomotive fully loaded oil train with only one engineer. In addition he was allowed to leave it parked unattended on a hill for several hours.  For the tanker transport, reservations were expressed about the proposed number of tugs and pilots(EP7). The public will want to know how that has been resolved.

 

13  Rules and regulations for pipelines

Thanks to the internet it is easy to find some of the criteria and technical aspects which give some idea how many rules and regulations there are and how insufficient checking and supervision can lead to major problems. Here are some facts which are important to evaluate proposals:

a)     Wall thickness.  It is very simple to calculate the required wall thickness when the pressure is known but the pressure varies all along the line as summarized by the Canadian Energy Pipeline Association(CP 31). The complexity of the calculations  is discussed in a paper submitted at the 2007 Pipeline Technology Conference in Munchen, Germany. There are four equations which describe (1) the continuity of mass, the conservation of (2) momentum and (3) energy, and finally (4) the equation of state. All four equations have to be solved simultaneously to include all the hydraulic and thermodynamic phenomena being relevant for flow through pipelines. (EP 46-47).  Obviously such calculations have to be checked, double checked and preserved for future reference. Also during operation the pressures in all sections of the line have to be recorded to ensure that at no time the operating pressure exceeds the design pressure. It should be noted that Enbridge increased the wall for the diluted bitumen (dilbit) line by 19% over the requirement and by 14% for the condensate line. At major river crossings the thickness was further increased by 10-20%(EP 43)

b)     Steel quality. There are 4 different grades of steel plate from which pipes can be made.(EP57). The quality of each individual piece of pipe has to be backed up by a Mill Test Report(MTR) from the steel mill who supplied the plate. This ensures that the particular batch of steel has been tested at the mill for strength and chemical composition of the steel grade on which the design is based. It proves to all governing bodies and inspection agencies that the project meets government safety requirements. (EP45,46)

c)      Pipe manufacturing. The Pipe Fabrication Institute (PFI) creates standards and technical bulletins for the production of piping, which is made out of steel plate.(EP45). Inspection and cleaning of the longitudinal weld is an important part of the fabrication. The welding is to be done following specific standards for submerged arc welding. (EP57). Manufacturing is not perfect. Between 1979 and 1985 Enbridge did, following 5 failures due to manufacturers defects, replace all Canadian Phoenix pipe in a 1200 km line with IPSCO pipe (EP 34)

d)     Field welding and inspection. The work involved, and required qualifications of personnel  are described by 2 companies who do this work for pipeline companies.(EP49) Obviously their work has to be overseen by the client and by the authorities, who all need trained personnel to look after this all important aspect of the construction. If the client does the work himself there still must be an independent inspection agency to review the work. The inspection records have to be carefully prepared and preserved for future reference. In the case of Trans Canada’s welding and inspection problems mentioned under 12) above, these were identified in internal correspondence and ultimately reported to the National Energy Board (NEB) by a metallurgical engineer. He was later on fired for undisclosed reasons. His whistle blowing did result in a NEB investigation which eventually “warned TransCanada it would not tolerate further infractions of regulations related to welding inspections, the training of pipeline inspectors and internal engineering standards. It also announced a further audit of the company’s inspection and engineering procedures”.(EP54)

 

e)     Hydrostatic testing. This is a very important test to prove that the newly constructed line is safe (EP 55). The pipe is filled with water and the pressure is raised to a specified pressure, well above the operating design pressure and it is carefully checked if the pressure holds when no further water is admitted. If it does not hold , it can be determined where the pipe leaks. Obviously such tests have to be witnessed by knowledgeable independent observers and recorded for future reference Until the pipelines are equipped with external sensors which can detect small leaks it is the most reliable test for the safety of existing pipe lines. This does however require expensive shutdowns of the operation. If it can’t be done with oil it requires lots of water. Obtaining and disposal of all that water must meet local codes and practices such as those which are shown for Alberta.(EP54)

 

f)      Corrosion protection and backfilling. The pipeline is cleaned, primed and coated with a hot, tar-like material to prevent corrosion and wrapped in an outer layer of heavy paper, mineral wool or plastic. If the pipe is to be buried, the bottom of the trench is prepared with a sand or gravel bed. The pipe may be weighed down by short, concrete sleeves to prevent its lifting out of the trench from groundwater pressure. After the underground pipeline is placed in the trench, the trench is backfilled and the surface of the ground returned to normal appearance. (EP 55)The material for the bedding and backfilling will have to be specified for quality and size graduation. Corrosion is further prevented by Cathodic Protection (CP),which is a technique used to control the corrosion of a metal surface by making it the cathode of an electrochemical cell. A simple method of protection connects protected metal to a more easily corroded “sacrificial metal” to act as the anode. The sacrificial metal then corrodes instead of the protected metal. For structures such as long pipelines, where passive galvanic cathodic protection is not adequate, an external DC electrical power source is used to provide sufficient current.(EP56)

 

g)     Oil properties including corrosion aspects.  Some confusion has occurred by statements that the Alberta oil is more corrosive and has to be transported hotter than regular oil. This is true for gathering piping in the oil fields but not for the transmission pipes(EP 55,56). The diluted bitumen behaves the same as other oils and before it reaches the transmission pipe it must for Canada meet the National Energy Board regulations and for the US the Federal Energy Regulatory Commission’s standards. Samples of each batch are analysed before they enter the pipeline

 

h)     Limitations of internal leak detection instruments.   Pipeline operators use a variety of methods to look for leaks, but the remote leak detection system—a combination of sensors, gauges, computer software and control room technicians called controllers—is the only one that offers real-time, continuous monitoring along the length of the line. The system is not very sensitive and signals can be misinterpreted because there are many false alarms. 10 years of federal data shows that leak detection systems do not provide as much protection as the public has been led to believe. US figures show that between 2002 and July 2012, remote sensors detected only 5 percent of the nation’s pipeline spills, according to data from the Pipeline and Hazardous Materials Safety Administration(PHMSA). The general public reported 22 percent of the spills during that period. Pipeline company employees at the scenes of accidents reported 62 percent. (EP9) These internal instruments are not very accurate, one to two percent is “the most anyone’s going to guarantee, because there are some hydraulic behaviors that thwart perfect leak detection. For Keystone XL a spill involving 1.5 percent of the initial capacity would be 10,500 barrels, or 441,000 gallons a day. When calculated for the expanded capacity, that 1.5 percent comes out to 12,450 barrels, or 522,900 gallons a day. (EP11) Another option is to install external sensors that can detect leaks smaller than 10 gallons per day. But these sensors are expensive and are rarely used.(EP12)

i)       External sensors for leak detection   Wikipedia confirms that local dedicated sensors (LDS) are very expensive (EP 27). It describes 5 other systems including the acoustic system(EP28). That system is used by Westminster. Apart from leaks, it detects vandalism, landslides and earthquakes. It is described as follows: “The Westminster Acoustic Fibre Optic Pipeline Security System (AFOPSS) is designed to protect gas, oil and other utility pipeline distribution networks and their remote facilities by providing an early warning of leaks, illegal taps, excavations and intruders which could pose a potential threat. AFOPSS will monitor vibration and acoustics at every metre of a pipeline with a single standard communication optical fibre sensor linked to one or more interrogator units. AFOPSS unique sensing solution will provide security and monitoring, detecting third party interference (TPI) tampering and illegal tapping attempts to within 1 metre along the pipeline. AFOPSS un-rivalled sensitivity means the sensor can detect analyse and locate leaks or potential threats instantly, regardless of distance”(EP20-22). No data are given on the minimum leakage flow it can detect. Enbridge does a lot of research on leakage systems (EP 29) but there are so many vendors that they have not yet committed to a particular system(EP45).

j)       Isolation valves. These valves, also referred to as stop valves are used to isolate a portion of the line when a leak is detected. “An economical and technically feasible method is available for determining effective pipeline block valve automation for remote operations. Most pipeline codes do not stipulate requirements for block valve spacing or remote pipeline valve operations along transmission pipelines carrying low-vapor-pressure petroleum products. This requirement is generally industry driven to control hazards and reduce environmental effects of pipeline ruptures or failures causing hydrocarbon spills. This article summarizes pipeline codes for valve spacing and spill limitations in high consequence areas (HCAs). It also provides a criterion for an acceptable oil spill volume caused by pipeline leak or full rupture”..EP56)

 

k)     Cracks, causes, monitoring and regulations   For most people it will be a surprise to learn that cracks often occur in pipelines and that there are regulations which allow operation at reduced pressure until the cracks are fixed. Pipelines are subject to cyclic pressure fluctuations and cracks can be formed by corrosion fatigue as occurred in a longitudinal weld on Enbridge’s line 3 line (EP34} In this case neither the  material nor the manufacturing was at fault (EP33). Cracks are measured by intelligent pigs which are cylindrical vehicles which are inserted in the pipe and travel with the flow. A German paper describes how between 1991 and 1994 an ultrasonic detection tool was developed, which measures inside and outside cracks.(EP 49) Quite likely there are different tools available. One of the conclusions of the Kalamazoo spill was that “the tools used to measure cracks were inadequate for the type of cracks in pipeline 6B.”(EP20). That 2010 disaster was caused by 15000 cracks which had been reported in 2005. Enbridge tried to manage these defects by prioritizing them by immediacy. These small corrosion fatigue cracks grew in size and linked together creating a rupture when the pressure was increased. (EP20). Since that time stricter regulations have been issued for US pipelines. They deal with various types of cracks, crack growth, when a pipe with suspected cracks has to be excavated, time limits for various activities and safety factors based on accuracy of crack sizing.(EP32)

 

14  Pipeline and Tanker transport details yet to be clarified

 

The general public opposes the Northern Gateway project because few details of the project can be found in newspapers magazines and official bulletins. Below are a number of points which have to be answered before the public can gain more confidence that this project will be much safer than any previous undertakings:

a)     Leak detection using internal sensors

Ten days before the Kalamazoo spill Enbridge had told the federal regulators that they could shut down the line in 8 minutes but yet it took 17 hours.(EP10). Has Enbridge since that time done regular tests by creating artificial spills as discussed at the Kitimat hearing?(EP26). Has it been confirmed that the instruments can’t detect a leak smaller than 1.5% of the flow? What is the average response time for more severe leaks? For the Kitimat line how often and at how many locations will such tests been done?

b)      Leak detection using external instruments

Enbridge improved the leak detection system of their Michigan line by installing external sensors.(EP26). What type of sensors are these and how small are the leaks they can detect? Enbridge does a lot of research work in leak detection (EP29), yet they don’t release any information of how sensitive some of the options, like the Westminster acoustic system (EP 20,21) (EP28) are. They mention that there are many vendors from which they will make a selection.(EP45).Surely those venders have some test data for their products and an overview could be given about the capabilities  This lack of details has frustrated the BC Environment Minister (EP 27) and is certainly something which makes the public wonder if there will be hidden surprises.

c)       Previous leaks and new pipeline regulations

It seems logical to have a summary explanation of all recent major spills. These are 2012 Wisconsin (190,000 litres) 2012 Red Deer (230,000 litres), 2011 Stingray (gas),2010 Kalamazoo( 3 megalitres) (EP6). Were the design criteria for these lines different than those of the Canadian Energy Pipeline  Association (EP 31). How old were those lines, how often were they inspected and most importantly how would they have been prevented had the present regulations and proposed technology been in place. Are the Canadian regulations as strict as the new US regulations. A summary of the present regulations in particular the maintenance requirements seems useful to satisfy the public that things have changed as a result of all those spills.

d)     Explanation of regulatory violations

In 2008 Enbridge incurred over 500 regulatory violations in one year during pipeline installation in Wisconsin.(EP6). What type of violations were those? Was Enbridge not aware of these regulations or was there insufficient oversight, How are regulations for a new project researched, recorded and included in bid documents for contractors who do work on the project? It is noted that on the same project Enbridge had to pay $1.1 million to settle a lawsuit related to over 100 environmental violations. They violated numerous permits resulting in impacts on wetlands and navigable waterways. (EP59) Is Enbridge aware of all the BC regulations and will they be listed to allow all workers to know about them. Are they included in their design and proposed construction methods?

e)     Cracks detection tools

 

The NTSB report about the Kalamazoo spill shows that the tools used to measure cracks were inadequate for the type of cracks in pipeline 6B.(EP20) Why were these tools inadequate, what are the presently available tools, how accurate are they? SGS uses a pig to measure all types of weld defects (EP49-50), NDT uses pigs and crawlers(EP 49). What equipment will Enbridge use for the Kitimat project. Are those tools used by many other companies and what is their experience? How often will the lines be checked for cracks?

f)      Isolation valves

 

With reference to 13 j) above the public will want to know what is the maximum spill which could occur in each section of the line. Many people may not realize that when a section between two isolation valves has several up and down segments only one segment will be emptied when the leak is at the lowest point of that segment. The worst spill can occur when the leak is at the bottom of a hill just ahead of the isolation valve or anywhere in a perfectly horizontal segment.

g)      Earthquake considerations

 

Like buildings, pipelines can be designed to withstand earthquakes. An Alaska line was designed to withstand up to 20 feet lateral and up to 10 feet vertical movements at known fault lines. In 2002 it withstood a magnitude 7.9 earthquake.(EP37). Also note that the Westminster leak detection system monitors vibrations and acoustic at every metre of the pipeline(EP20) and can detect landslides and earthquakes(EP23). Enbridge describes their earthquake and tsunami strategies in a 29 October 2012 blog (EP50-51) and a summary should be published to ensure that the public  is aware that Enbridge has already done quite some pre- engineering work this important aspect.

h)     Tanker selection and sea conditions

 

At the hearings Captain Walsh gave several reasons why 20 year old tankers, which are double hulled vessels at the end of their service life, should not be used (EP6). Transport Canada approved the use of 20 year old vessels (EP8). Will Enbridge avoid using such old ships considering that tanker design has changed since that time (CT27,28) Captain Walsh also felt that more pilots and tugs were required and that details were missing about the treatment of ballast.(EP7). How has that been resolved?

Mr Sweeny, a retired naval commander reported sea conditions which rolled his ship 60 degrees to port and another 20,000 ton ship nearly stood on her nose.(EP3). This must have been very unusual conditions which can with present weather forecasting be avoided. Even without good forecasting Alcan’s bulk carriers must have made thousands of trips through these waters. For well over 50 years they shipped alumina powder, the raw material for their smelter, from the West Indies to Kitimat. Their logbooks could give an insight of the sea conditions. There are documentaries of huge tankers being towed and nudged  through Alaska waters by powerful tugs. How comparable is that operation to the present proposal?  Have there been any spills? A US Coast Guard report shows that between 1991 and 2004 roughly36% of spills came from ships and barges, 28% from facilities, 9% from pipelines, 20% from non tank vessels, 7% from mystery spills and only 5% from oil tankers.(CT 28). Are there any later figures available?

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What's happening on our planet---and why

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A. C. P. Federal Class Actions ----- U. S. A. | Canada

Where citizens come together in order to combine their lawsuits because the facts and the defendants are so similar. In this way, a single litigant's case is heard by the court as representative of all (together, called a "class"). This is designed to save Court time and to allow one judge to hear a representative case once and to make one decision on the representative case which is binding on all the plaintiffs grouped in the class. See if you qualify below, and join us fight for justice for ourselves. There is strength in numbers and we are growing.

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