The B.C. government is expected to announce this week if it will build a third hydroelectric dam – Site C – on the Peace River, completing a project that has been stalled at the drafting stage since the 1970s. It may stand as the biggest legacy of Christy Clark's government. It also comes with a price tag that will make it the single largest financial decision the Premier is likely to make.
If her cabinet signs off on the construction, it is effectively signing a cheque for $8.5-billion – or more – while forever changing the landscape of the Peace River valley, and almost guaranteeing a protracted legal battle with First Nations and others in the region.
Here are five key matters that the cabinet will consider:
Does B.C. need the additional power, and are there alternatives?
In its forecasts, BC Hydro says rising demand for electricity means the province will need new energy resources by the year 2022, and it will take eight years to build Site C.
However, last May, a joint environmental review panel said it could not determine if Site C is the most cost-effective source of new power. And the panel found the province's electricity supply won't be maxed out until the year 2028. It urged the Crown corporation to look at unconventional energy sources such as geothermal power, and more conservation options.
What will it cost, and what would that mean for B.C.'s debt?
BC Hydro maintains the project can be built for $7.9-billion, but last week the Premier suggested that is a low-ball figure. She pegged Site C at $8.5-billion. Her energy minister then warned even that estimate is probably low. This is not the kind of sticker surprise that the bond-rating agencies like to hear, and it just happens that Finance Minister Mike de Jong is on his way to New York later this week to meet with the agencies that set the government's credit rating. A credit downgrade would mean higher borrowing costs for the province – something the B.C. Liberal government has worked hard to avoid.
What will be the impact on First Nations and the environment?
The panel found that construction of Site C would result in significant adverse effects for First Nations – fishing, hunting and trapping lost, sacred native sites that date back thousands of years flooded. As well, replacing a portion of the Peace River with an 83-kilometre reservoir would cause significant adverse effects on fish, birds, bats, rare plants and sensitive ecosystems. Roland Willson, chief of the West Moberly First Nations, says the province needs to look at the cumulative environmental impact of all the development in the region, already disrupted by dams, coal mines, pipelines and natural-gas drilling. "The importance of the last chunk of free-flowing river is immense. You can't put a dollar figure on it," he said in an interview. "I don't think they have taken into account we are going to start pushing back on other development if this goes ahead."
Do electricity and liquefied natural gas mix?
In an interview last week with the Bloomberg news agency in New York, Ms. Clark said she is prepared to abandon Site C if it runs up against her ambitions to land investment in liquefied natural gas. Why the conflict? LNG proponents are concerned that B.C. won't have enough skilled labour to build their projects. At least six of the top jobs overlap, including heavy equipment operators, iron workers and carpenters. Jobs Minister Shirley Bond said it should not be a problem – she expects peak construction activity for Site C will wrap conveniently around that of the five LNG plants the province hopes to see built. That assumes everything goes according to schedule. Which brings us to one other key question:
Never mind the budget, can Site C be built on time?
As of last Friday, there are six applications for judicial review seeking to overturn the environment certificates that have been granted for the project. The first case is expected to be heard in April, but BC Hydro wants to start site preparation in January. Rob Botterell, lawyer for the Peace Valley Landowner Association, said it would be foolish to start building before the legal doubts are settled. "B.C. taxpayers and hydro ratepayers could be saddled with the bill for hundreds of millions of dollars of work that the court ultimately finds was not authorized."
A green light from the B.C. cabinet this week, if it comes, won't be the last hurdle for this megaproject.