Professor Smil and Info-Kibble

I enjoy the Saturday “papers”. I always manage to find some interesting tidbit that challenges my thinking. As I flipped through the paper this past Saturday, I came across an article by Margaret Wente. It’s about a professor from the University of Manitoba. His name is Vaclav Smil.

Smil, who is a well informed individual, says Al Gore’s notion that we can wean ourselves from fossil fuel in just a few years is unrealistic. Neither Gore nor the general public, are willing to give up the lifestyle that relatively inexpensive fossil fuel provides. He says true technological change of that magnitude will take decades.

Smil also thinks we are a society of scientific ignoramuses. He says too many people have a tendency to believe almost anything. For that reason, he has no desire to participate in media interviews. He says the sound bite culture shrinks important and complex issues into meaningless bits of what he calls “info-kibbles.”

Info-Kibbles

“Info-kibble” is a great term, and one that I am going to start using when I refer to the selective bits of information landowners are sometimes given by certain industry interests and regulators. Info-kibble is exactly what landowners were fed when the National Energy Board shifted regulatory control of the NOVA gas pipeline system from Alberta to Ottawa. At the time, industry insiders even argued that landowners didn’t need to know anything about the implications of the shift until after it had already been approved! They wanted landowners to settle for info-kibbles, rather than substantive participation.

“Info-kibble” also applies to the letter that was sent to landowners by the big pipeline lobby group, CEPA, concerning the NOVA jurisdictional change. The letter was full of info-kibbles that were intended to reassure landowners on the NOVA system that nothing would change as a result of the switch (which is simply not true—lots of things changed). See this link for starters: landownerassociation.ca/nova.html

As a result of CEPA’s info-kibble filled letter, not only did many landowners initially believe what the big lobby group was peddling, so did a good many members of the provincial legislature and Parliament. Even some bureaucrats at the National Energy Board bought into CEPA’s info-kibble, but then again, that may have had more to do with the fruit of regulatory capture than info-kibble.

Even today, after CAEPLA has clearly demonstrated that the CEPA document was misleading, there are still government people who believe the info-kibble they were fed. One government MP, to defend his intransigence on the issue, recently sent a copy of one of these info-kibble filled letters to a constituent, claiming the content of the letter was the reason he defended the actions of the National Energy Board bureaucrats.

That this MP didn’t understand the non-relationship between industry-spawned info-kibble and the overall context of a serious situation being faced by his own constituents—and is still being faced by his constituents—speaks decisively about his competence as an MP. He would do well to take a lesson from Manitoba’s Professor Smil, a gentleman who recognizes that info-kibble and the overall context of a situation do not necessarily share the same DNA.

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Roche Percee Couple Concerned About Oil Drilling Rig

Too Close for Comfort by Sylvia McBean, for the Leader Post - Read More

Kara Adams and her husband, Sheldon, were awakened early on Mother's Day by the sounds of construction equipment. "We looked out our front window and an oil drilling rig was being set up 300 metres in front of our house," said Kara Adams.

An oil well was being drilled on their neighbour's land.

Kara and Sheldon, along with their son, Tristen, live on an acreage south of the village of Roche Percee in southeastern Saskatchewan. Their 10 acres is located in the middle of a quarter section that has been subdivided. A farmer owns and farms the land surrounding them. Other oil wells have been drilled in the area.

"We found out that, legally, in this province an oil company can drill an oil well 100 metres from your house and you can't stop them," said Adams.

"We don't think they should drill an oil well so close to a home. There is the dust, the fumes and the noise. I don't want a pump jack operating in front of my home. I talked to a real estate company and they said our property value has drastically decreased.

Read More

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About Regulatory Conferences, Free Liquor, and Doing Favours

I was in Montreal last month at a conference. It was a three-day event.

The conference was sponsored by CAMPUT, which stands for Canadian Association of Members of Public Utility Tribunal. CAMPUT is made up of federal, provincial and territorial boards or commissions that regulate the energy sector. Even so, it is Ottawa’s National Energy Board that often sets the standard, and who provides CAMPUT with staff support in the form of information provision and assistance in organizing the conference. (See: http://www.neb-one.gc.ca/clf-nsi/rthnb/whwrndrgvrnnc/rhstry-eng.html)

There were two of us there from CAEPLA. We managed to get one of our registration fees waived ($1500 each), plus a $500 allowance to help cover the cost of rooms at the hotel where the event was staged. (Counting tax, the rooms were more than $200 per night.)

It was good for us to be there because in a firsthand way we were able to see the relationship that exists between energy regulators and many of the most senior people in the energy industry, when they are together in a casual setting.

The first session on the first day was about, “sustainable regulation.” I mentioned that as a landowner group CAEPLA is pro-development, and then suggested that within the context of development, when it comes to long-term sustainable regulation, landowners bring an important perspective to the table, because they have legitimate long-term interests to consider.

In an absolute kneejerk response to what I said, a panel member at the front of the room representing the Canadian Association of Petroleum Producers (CAPP), literally curled his upper lip. In the presence of all, he immediately shot back for everyone to hear, that “landowners will not hold the energy industry hostage.” That this man figured it was his job at a regulatory event, rather than the job of the regulators, to determine what landowners should and shouldn’t participate in when it comes to regulatory discussions, spoke louder to me than anything he could possibly have said. That none of the regulators in the room even thought to point out to the guy that it isn’t up to him and the people he works for to tell regulators what they can and cannot do, spoke even louder.

The fellow also suggested that “all landowners are ever interested in is money (compensation).”

That the main reason the organization this man works for even exists, is to ensure its member companies make money, seems to have escaped his notice.

That when it comes to regulation, landowners have legitimate long-term interests to consider such as ongoing stewardship and liability after facilities or pipelines are abandoned, was equally elusive to this guy’s way of looking at things.

From my perspective, and I think the perspective of anyone attending the event that functions outside the very familiar and comfortable regulator-industry partnership, the conference seemed a bit peculiar, even surreal in some ways.

For example, at the evening reception on Monday the regulators in attendance were invited to belly up to the bar where they could knock back as many free whiskeys, highballs, or beers as they could possibly contain, all at the expense of the energy companies they are supposed to impartially monitor, and where necessary, adjudicate in an unbiased fashion.

That a roomful of government regulators didn’t understand how completely inappropriate it is to sit around sucking back industry-funded booze, helps explain what landowners face every time they are forced to step into a regulatory hearing or interact with these bureaucrats and boards.

Entertained by Those They Must Render Verdicts About

Interestingly, in light of the boondoggle in the Gulf of Mexico, there are a whole lot of heads that will roll at the office of the US regulator (Minerals Management Service or MMS), which is a kind of counterpart to Ottawa’s NEB. This is the same federal regulator that in the past has been characterized by scandal, as people started learning that the US regulator has been characterized by a culture of “ethical failure.” Regulatory bureaucrats were accepting free gifts, expense paid holidays, and even the exchange of sexual “favours.” (See: http://en.wikipedia.org/wiki/Minerals_Management_Service)

NEB boss Gaetan Caron was at the Montreal event too. I found it interesting that even he, the most senior regulator in Canada, didn’t understand how inappropriate and unprofessional it is for regulators who must be impartial and unbiased, to sit around getting liquored up and entertained (there was an industry funded jazz band there) by the very people they must render far reaching verdicts about in future hearings—many of these verdicts involve tens of millions or even hundreds of millions of dollars.

Surely there were some useful things achieved at the conference. Yet as I sat there thinking about who was buying the drinks and paying the musicians, I couldn’t help but think of the $300,000 CAEPLA spent in order to participate in the NOVA jurisdictional hearing. That was the hearing where the NEB later suggested that because the people who presented the pro-landowner evidence at that hearing didn’t represent very many people, it could ignore the information.

In essence, the NEB openly suggested that right and wrong don’t matter nearly as much as the fruits of regulatory capture, and the way it can spin its decisions in the press and elsewhere.

If nothing else, the conference gave landowners a clear and definitive understanding of how far reaching regulatory capture can be, as well as the attitudes of Canada’s most senior regulatory bureaucrats.

Dave Core
(with notes from Kevin Avram)

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The Dilemma of a Responsible Man

A man I will call “Big Bill,” the President of a Federal Constituency Riding Association in Alberta, called our office the other day. He and a number of his colleagues are concerned about the way their MP is behaving. They’re growing increasingly angry because their MP, a member of the Conservative Party, refuses to acknowledge the severe and negative consequences being imposed upon Alberta landowners because of Ottawa’s decision to shift regulatory control of the Nova gas pipeline system.

Just in case you hadn’t heard, the bureaucrats at Ottawa’s regulator, the National Energy Board (NEB), supported by Parliament, decided to take responsibility away from the Alberta government for regulating the 24,000 km TransCanada NOVA gas pipeline system in the province.

As a result, because federal regulations are very different than long established Alberta regulations, Alberta landowners lost big time. In many situations they no longer have the ability to recover legal costs if they end up in a dispute with the pipeline company; if farmers drive equipment across the pipeline easement without first formally obtaining permission, and something should ever happen, they now hold legal and financial liability; and under the new federal rules, the pipeline company, without having paid a dime, gets to control a much wider strip of land along each side of existing easements.

There are also new rules regarding how deep a farmer can legally cultivate or rip soil, and if a landowner should ever disobey an NEB order, he can now face up to five years in prison and a $1 million fine. Under the previous Alberta rules, the maximum penalty a farmer could face would have been a $5,000 fine.

“Big Bill” is not the kind of man to complain, preferring instead to find solutions, but like a lot of Alberta landowners he isn’t happy about the way farmers and ranchers are being treated. He told me he had been thinking about how to fix what the NEB has done, as well as how to fix the NEB. That the federal regulator is broken, in need of repair, is pretty obvious.

In response, I suggested that the federal government, because it is the federal government, has the power to undo hasty and inappropriate decisions pushed through by arrogant federal bureaucrats at the NEB.

Interestingly, when asked to rule on a policy decision with very similar implications, the Ontario Energy Board (OEB) said that transferring regulatory control over an already existing easement agreement from the province to Ottawa shouldn’t be allowed. The Ontario project the regulator ruled on was different in size and scope from what happened in Alberta, but the policy principle, and its effect upon landowners, was exactly the same.

Ontario pointed out that landowners would suffer severe harm if the transfer of regulatory control from the province to Ottawa was allowed, and then explained why this was true. (For details on the OEB judgment, click here and here.)

Unlike the Ontario regulatory tribunal which paid careful attention to the implications of such a decision upon the people most affected (landowners), and then acted with integrity, the Stelmach government in Alberta wimped out, not speaking even a single word in favour of landowners, even as the NEB bureaucrats were imposing ever more severe controls upon the province’s landowners.

*For a detailed explanation of regulatory capture, what it is, how it works, and the manner in which regulatory capture influences Ottawa’s NEB, click here.

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The Goon Commission

I think most of us know what a hockey goon does. You know the big brute that drops his gloves in an instant to protect the star player. Unfortunately, the British Columbia Oil and Gas Commission (OGC) is quite like one of these thugs.

When he played for the Edmonton Oilers, Dave Semenko protected Wayne Gretzky and Mark Messier for years, allowing them to fire shot after shot on goal. As a regulator, the OGC is more lethal than Semenko ever dreamed of being. It does the same task for industry that Semenko performed for Gretzky, but in addition, it is also the referee.

The bureaucrats at the BC Oil and Gas Commission are so arrogant they don’t even try to hide their bullying ways and inappropriate relationship with the industry. Consider the fact that landowners along the proposed Spectra Energy (Bissette) Pipeline, south of Dawson Creek, recently decided to work together to ensure that construction, operational, and all related issues, are directly addressed during negotiations with the pipeline company.

To facilitate the process, each landowner signed legal documents authorizing the South Dawson Landowner Committee (SDLC) and CAEPLA to represent their interests in all discussions, negotiations, and correspondence with respect to the project. CAEPLA, on behalf of SDLC, notified the company of the formal legal structure and the intention of the affected individuals.

In response, the pipeline company stated: “... the Oil and Gas Commission (“OGC”) will be dealing with each of the landowners on an individual basis in an effort to resolve any issues. Accordingly, to the extent there are specific concerns, Spectra proposes to address those with the landowners and the OGC.”

In response, I contacted the BC regulator to inquire if it intended to ignore the legal implications, and the will of the affected landowners, in order to visit individual landowners one by one on behalf of the energy company.

The gentleman that answered my phone call laughed when I told him who I was. He said my call was a coincidence because he had just started to read some CAEPLA correspondence, as well as the regulations. He said the people working at the OGC thought they should study the regulations to see if the legislation allowed the employees to visit each landowner in the fashion the pipeline company had advised.

I mentioned it appeared this was normal practice for the OGC, and asked if OGC employees had visited landowners in this fashion before on behalf of energy companies. The man replied that yes they had, quite often, but because CAEPLA was involved this time they thought they had better check the regulations to see if they had the authority to do that.

In response, I asked for clarity: “Are you telling me that OCG employees have visited landowners on other projects on behalf of energy companies without knowing if the regulations allowed such a thing?” He replied with a muffled, “Yes”.

That the bureaucrats at the OGC have decided they can reject the expressed will of affected landowners and run interference for the industry yet one more time is rather obvious. Just recently, I received an email from one of the SDLC landowners affected by the proposed project. It seems the BC regulator called, wanting to talk directly to her — in essence, on behalf of the pipeline company.

It seems the goons are out and the gloves are off.

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Goodbye MMS: Oil Regulating Agency Gets Makeover

Associated Press writer Frederic Frommer recently wrote about the makeover at the MMS, which is the US regulator responsible for overseeing the process that led to the BP disaster in the Gulf.

WASHINGTON – The Minerals Management Service — well, the name anyway — now sits on the scrap heap of discarded monikers alongside ValuJet, Blackwater and Enron Field. Not that a new name makes it any easier for the Obama administration to convince a skeptical Congress that the agency will be any better at policing offshore drilling.

The new name, the Bureau of Ocean Energy Management, Regulation and Enforcement — or BOE for short — is designed to emphasize regulatory and enforcement responsibilities of the troubled agency, which is part of the Interior Department. The change comes in the wake of the disastrous BP oil spill in the Gulf of Mexico.

MMS had been panned for its lax oversight of offshore drilling. A recent report by the department's inspector general said that its drilling regulators have been so close to the industry that they've accepted gifts from oil and gas companies and even negotiated to go work for the companies.

To read more:
http://news.yahoo.com/s/ap/20100629/ap_on_bi_ge/us_oil_regulators_rebranding

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The MMS and the Mess in the Gulf

In a way like never before, the mess caused by the BP gusher in the Gulf of Mexico is forcing people to consider the implications of regulatory capture on federal regulators. At NOLA.com, (NOLA is short for “New Orleans Louisiana”) the Times-Picayune, which is a New Orleans daily newspaper, reports on the US Mineral Management Service (MMS), the US federal regulator responsible for the BP Project.

Alleged Ethical Lapses in Lake Charles MMS Office Targeted

Gulf Region MMS Employees Accepted Gifts, Food, Tickets at Oil and Gas Company Expense

BP Says MMS Never Enforced Blowout Preventer Law

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Stelmach Government Seeks to Extinguish Property Rights

Alberta is the one place in Canada, where at one time, many had a sense that the adults were in charge. There was something attractive and comforting about it, even for those of us who lived outside Alberta. Ottawa and the other provinces could be as irresponsible as they may, yet the reassuring presence of Alberta’s professional, adult-like political administrations, gave every Canadian a sense of stability.

Unfortunately, that’s all changed. The adults have moved on.

Now, in the same way that we used to instinctively sense Alberta as a place with a mature, business-like political administration, we now understand that the men and women who have taken over are the political equivalent of teenage boys who have been given car keys and whiskey.

In terms of respect for the principles of due process, individuals rights, and traditional Alberta values—what many would call conservative values—the Progressive Conservative Party of Edward Michael Stelmach is a shadow of the provincial party’s former prominence.

What the Stelmach government has done to its own traditional support base is hard to be believed.

Why the Stelmach crowd would be so stupid as to systematically and deliberately embark upon a legislative agenda that undermines the very people that put them in office, is irrational. Yet they are doing it, and not reluctantly. Their passion for centralizing power in the hands of cabinet, as they trample property rights and collude with federal regulators to strip Alberta landowners of longstanding provincially-regulated property rights, is giving new meaning to the word enthusiasm.

The Stelmach government spied on people solely because those people questioned some of its energy policies related to the development of hydro corridors, and the enormous costs that would subsequently be imposed upon all Albertans. Then, after getting caught spying on its own citizens, rather than admit the process it was trying to follow was wrong-headed, having the effect of isolating people, Stelmach and the knuckleheads surrounding him decided to pass a series of laws that would put the power of a court in the hands of cabinet. And what’s more, is that the power these guys want goes beyond the power of a court, because under the Stelmach government’s legislative agenda its decisions could not be appealed (even to a real court), after the politicians make a backroom decision about what you can or cannot do on your own property.

Alberta’s Bill 36 establishes an unimpeded easy access highway for politicians in cabinet to impose regional plans upon anyone in the province. Through these “plans,” the politicians could specify what your land could be used for, or not used for, depending on what they think. The Act is written in such a way that the decisions of cabinet about your property will trump every other piece of existing provincial legislation, and the courts. These are cabinet decisions that would apply to crown corporations, municipalities, boards, commissions, and private Alberta citizens.

The Bill gives a handful of politicians in a backroom the ability to amend or extinguish existing rights someone might hold as a result of any existing agreement, license, or contract, including land titles, mortgages, water licences, leases, well licenses, permits, etc. At the same time, it also restricts a landowner’s right to appropriate compensation for any damages that result.

Most importantly, under Bill 36, there is no way for anyone to appeal a decision made by cabinet. The Bill blocks a citizen’s right to seek judicial review or undertake legal action. Essentially, the Bill stops the courts from having anything to do with what the politicians might want to do to Alberta citizens, and to their property.

The Bill also enables a cabinet minister, at his or her sole discretion, to file a judgment against a landowner without there ever having been a trial or court hearing—and the cabinet minister’s judgment would be as binding on the citizen as if it were issued by a real judge in a real court.

What citizen in his or her right mind, living in a democracy, would want to identify with people who think this kind of policy reflects good government, let alone vote for them? These people are arrogant scoundrels and pompous asses who think they know better than ordinary people, exactly how those people should live, and what should or shouldn’t be done on their own private property.

- by Dave Core and CAEPLA Staff

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