# 8 Support for Enbridge pipeline increases from 35% to 42% despite negative statements about carbon tax.

The Canadian public and officials in other countries are very much opposed to the Northern Gateway pipeline project which will transport oil from Alberta to the West coast for transport to Asia. The objections stem from the poor operation and maintenance records of Enbridge, the pipeline company and the dismal environmental records of the Canadian Government.

In 5 E mails to Enbridge I have shown how little the press reports on the main problems and solutions, how the internet is flooded with articles about their neglect and  4 recent spills without mentioning that due to these disasters some regulations have changed and that their pipeline proposal includes several important improvements over any line constructed in the past. I also suggested that they summarise how the past failures occurred and how things have improved since. Enbridge responded with detailed comments, referred me to some of their blogs which are hard to find and encouraged me to keep involved.

I wrote 3 E mails to the Canadian Government to show how little factual environmental information is published in newspapers and magazines., how hard it is to find, even on the internet, any proper response to all the bad news which shows up in websites and blogs. Even before president Obama announced that the US would become more serious about climate change we were rated as # 58 out of 61 countries based on 5 environmental criteria. The US was at that time rated #41. While 10 US States and one Canadian province have a successful carbon pricing system neither country has a national system. In Europe it has also been shown that carbon pricing has no economic disadvantages yet here carbon tax is opposed because little attention is given to how the proceeds are used to re-reimburse the taxpayers. This leads to very misleading figures both in the US and Canada. I have urged the government to consider these flaws and implement a revenue neutral carbon tax. This would improve our environmental reputation and make additional pipelines more acceptable.  At present the pipelines are full and we lose at least $ 15 billion per year because of transportation problems  It is recognised by many financial institutions and  at least 8 CEO’s of energy companies that a carbon tax is much easier to implement and administer than cap and trade. It is also more effective because it taxes all fossil fuels and when a global agreement can be reached in 2015 there will be no need for countervailing duties.  Until a global carbon tax has been established, demand for oil and coal will increase so we may as well supply it rather than give the business to other countries. The Executive Correspondence Officer for the Prime Minister's Office replied “You may be assured that your comments have been carefully considered. Once again, thank you for taking the time to write”

 Since those E mails the support for the Enbridge Northern Gateway pipeline has increased substantially as explained on November 21^st in http://www.vancouversun.com/news/metro/Support+Northern+Gateway+project+increasing+Poll/9194584/story.html

We are not so fortunate with the carbon tax. Mr Harper still does not accept that by opposing the tax we hurt our environmental image, creating more opposition to pipelines.  A November 13^th article http://news.yahoo.com/blogs/canada-politics/harper-government-praises-australian-government-efforts-repeal-carbon-181702013.html reports his praise for Australia’s attempt to repeal the tax. His government echo’s the same argument as used in Australia : “Subsequently, Conservative MP Ryan Leef stood in the House to make this claim.The Liberal leader has lent his support to the radical NDP centrepiece of irresponsible economic management, whose $20-billion carbon tax would raise the price on absolutely everything. However, our government rejects that idea to impose a job-killing carbon tax that would increase the price on everything, including gas, electricity, and groceries--a tax on all Canadians”.

 Not mentioned is that under a revenue neutral system the $ 20 billion is paid back to the same Canadians via reduced income tax and special grants and that nobody suffers. It is just a tax shift to make green energy more competitive around the world.  Until a global tax has been established we delay China’s development of green energy by sending them cheap tax-free oil.

For a summary of the pipeline problems and our poor environmental records see points 12 and 8 of the second article in post 1

# 7 Carbon tax becomes more popular

 Here is a frightening statement made last year:

“Greenhouse gas emissions are set for another rise in 2012. According to a Global Carbon Project, the greenhouse gas emissions will reach a record high of 35.6 billion tonnes at the end of 2012, accounting for a 2.6% increase when compared to previous year. This is yet another clear indicator that world leaders are pretty much useless when it comes to climate change - namely plenty of false promises and very little real-time action. The numbers for greenhouse gas emissions are 58% above 1990 levels, and the world looks to be heading straight ahead to an environmental disaster of massive proportions, the one that will likely make life very difficult for our future generations.”(CT63)

Fortunately responsible multinationals, including oil companies want a carbon tax  and state as follows:

“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 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.”( CT17)

The http://www.carbontax.org/ has this to say

Pro-carbon tax sentiment has grown so widespread that we have subdivided this page into categories:

Public Officials

Scientists and Economists

Opinion Leaders (Environmental, Business, Religious)

Editorial Positions (editorials expressing corporate rather than personal opinion)

Authors/Writers/Pundits, including Newspaper Columnists

Conservatives (CT64. 65)

I was interested in what the business people had to say, skimmed their statements and all prefer carbon tax over cap and trade. These people have some influence as can be seen from their positions:

Rex Tillerson, CEO, ExxonMobil 

Dan Reicher, director of climate change and energy initiatives, Google.org,

Donald E. Felsinger, Chairman and CEO, Sempra Energy,

Jim Gordon, CEO, Energy Management, Inc.

Bruce Williamson, CEO, Dynegy,

Robert Olsen, Chairman, ExxonMobil International Ltd.

Lewis Hay III, Chief Executive of FPL Group:

Paul Anderson, former Chairman and CEO, Duke Energy

T. Boone Pickens, oil and gas industry leader and philanthropist

Glenn Cannon, former General Manager, Waverly Light and Power, and Past Chair of the American Public Power Association  (CT 65-68)

Let’s hope that these industry leaders can convince the politicians

Many people oppose the carbon tax because the internet is flooded with articles stating how much extra the average family pays for gasoline and home heating. Little attention is given to the fact that most proposals and the existing carbon tax in British Columbia refund most or all of the money collected via reduced income taxes and special grants for businesses, public utilities and individual taxpayers. This leads to very misleading figures. The Americans are told that one of their proposals will cost the average family $1500 per year, while it is in fact only $ 150 per year. Canadians are told that, due to the carbon tax, the average British Columbian household loses $779 of their annual income while it is in fact around $ 0. The details showing how this all happened can be found under points 4 and 5 of the second article in post 1

Carbon tax is much easier to implement and administer than cap and trade. In the Australian debate 6 specific reasons were mentioned, (see point 5 in the second article of post 1). The revenue neutral carbon tax implemented in British Columbia, Canada is referred to in the US and Britain as a perfect example about how to proceed. A global agreement, which includes tax on exported oil, coal and natural gas will however also be required. Without such agreement we will keep exporting cheap untaxed oil to China and retard their efforts in developing Carbon Caption and Storage and wind energy (see point 3 in the first article of post 1). Taxing exports would also greatly benefit the coal producers in Australia who at the moment are again bitterly complaining. Under a revenue neutral system they would be refunded for the extra money they pay for their emissions. A global agreement has to include transfer of some of the tax proceeds to countries which have no taxable carbon but have to live with higher energy costs and effects of climate change. This is a stumbling block because countries all have different ideas as can be seen from one of the points in my 12 February E mail to the Canadian Government:

“I also noted that Canada would no longer advance further amounts to the Green Energy Fund until a new climate change convention is in place. That would be 2015 at the earliest. After finding out what type of fund it is (EP19), I was looking for a headline from our government showing how much we have contributed so far, how much extra was suggested and how our contributions compare to that of other countries. No such statement springs forward. I did find out that Norway proposed  to nearly double its carbon tax on offshore oil companies and fishing fleets, allowing it to plough an extra £1bn into its funds for climate change mitigation, renewable energy, food security in developing countries and conversion to low-carbon energy sources.(EP17). That sounds similar to making contributions to the Green Energy Fund”

I finish with more good news, which is not widely reported. While 10 Eastern US states have a successful and profitable carbon pricing system (see point 2 in the second article of post 1 ), the Western States are now ready to adapt the British Columbia Carbon tax see the 29 Oct article in http://business.financialpost.com/2013/10/29/b-c-reaches-carbon-pricing-deal-with-oregon-washington-states/?__lsa=d9c1-179f

Here are some of the highlights:

VICTORIA — British Columbia’s carbon tax will soon have two new American cousins, prompting Environment Minister Mary Polak to suggest B.C.’s groundbreaking tax is helping fuel an expanding green-powered West Coast economic juggernaut.

Polak, who was in San Francisco, said the carbon-pricing agreement follows a meeting of the Pacific Coast Collaborative, which includes California, Alaska, Oregon, Washington and B.C. The four states and one province have a combined population of 53 million people, with a gross domestic product of $2.8-trillion.

Polak said B.C.’s 2008 carbon tax played an instrumental role in convincing the U.S. states to embrace carbon pricing similar to B.C.’s carbon tax.

Earlier this year, California introduced a carbon pricing mechanism as part of its carbon cap-and-trade system.

“California isn’t waiting for the rest of the world before it takes action on climate change,” California Gov. Jerry Brown said in a statement. “Today, California, Oregon, Washington and British Columbia are all joining together to reduce greenhouse gases,” Brown said.

# 6 Coal export protest is fine but carbon tax works better

Today I did a Google search on coal export protests  and skimmed through the following, all in 2013

http://metronews.ca/news/vancouver/836851/metro-vancouver-protest-against-coal-exports-not-a-fringe-issue/

http://www.vancouverobserver.com/blogs/earthmatters/hundreds-protest-against-port-metro-vancouver-%E2%80%9Cclosed-door-decision-making%E2%80%9D

http://ecowatch.com/2013/04/24/greenpeace-protest-australias-coal-export-boom/

http://ecowatch.com/2013/03/15/oregon-protest-coal-export/

http://mastmedia.plu.edu/2013/10/31/fr-coal-export-hearing/

http://www.texasvox.org/community-and-activists-protest-permit-for-plaquemines-coal-export-terminal-in-louisiana/

http://mastmedia.plu.edu/2013/10/31/fr-coal-export-hearing/

http://ecowatch.com/2013/04/24/greenpeace-protest-australias-coal-export-boom/

http://ecowatch.com/2013/03/15/oregon-protest-coal-export/

You will note that they cover British Columbia, Washington, Oregon, Louisiana  and Australia. There are many complaints about dust, train traffic and contribution to Greenhouse Gas emission. Metallurgical coal is an essential reduction agent in the steel industry and will always be needed but thermal coal export should be reduced dramatically. This can only be achieved by negotiating a world wide carbon tax on all fossil fuel, which also applies to exports. 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). It will take a while before a global arrangement can be reached. Until that happens no country dares to tax their exports so the coal stays cheap and demand keeps rising. To emphasize

the situation in the Pacific North West I repeat point 11 from the second article in my first post:

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)  That refers to https://www.chinadialogue.net/article/show/single/en/5405-US-tax-loopholes-driving-up-coal-exports-to-Asia and the US advantages are shown as follows:

 US coal is already being exported through Canada’s most western province, British Columbia. Just south of the bustling west coast port city of Vancouver, the Westshore Coal Terminal ships 22 million tonnes of coal a year, of which 59% goes to China. Westshore is profitable, but its exports only scratch the surface of the envisioned market. With increased Asian demand for coal, and a favourable tax environment, the terminal has plans to grow

Not intended as a means to grow a bigger government, the carbon tax is revenue neutral. Dollars received from the tax are used to offset other provincial tax burdens. Consequently, British Columbia has some of the lowest personal and business income tax rates in the western hemisphere. For coal exporters, the business tax rates are attractive. Even as they export coal that will emit an amount of carbon dioxide equal to the emissions of the entire province, they are charged no carbon tax. Export coal is not burned in British Columbia.

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 Russia 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)

# 5 Enbridge pipeline, unanswered questions

Enbridge pipeline, unanswered questions.

On November 6^th the Enbridge pipeline was in the news again and it was stressed that acceptance by the public and in particular by the First Nations is of prime importance. In my 3 emails to the government and Enbridge I have stressed that far more details on the development of this project should be readily available to the public. A lot of positive information on pipelines and carbon tax is hidden on websites and blogs, leaving the general public in the dark on what is happening. On September 1^st I sent Enbridge a copy of my article “the economic impact of carbon tax”, which is now in the firsts part of my blog. On September 10^th Enbridge replied “thank you Neil, we appreciate your support” You will note that under point 13 many rules and regulations are discussed along with some explanation about what went wrong in the past. I hereby repeat the unanswered questions as I saw them:

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?(EP26,27). 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 the spills 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 on

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?