Powerhouse politics: environmentalists wage a bitter battle against a B.C. megaproject

Abstract:

Alcan Aluminum Ltd has launched a $1.3 billion expansion project that would divert water from the 170-mile Nechako River in British Columbia, reducing the river to one-tenth its original size in some areas. Environmentalists and salmon fishermen are protesting the project.

Full Text:

For its time, it was a touchstone of postwar progress. Across the country, youngsters of the 1950s were taught in public school that visionary Canadian engineers had bored through mountains in British Columbia to harness wilderness rivers and produce electricity. The power would be used to make aluminum at a place called Kitimat. With the optimism characteristic of the decade, the undertaking on the B.C. coast 750 km north of Vancouver was celebrated as a triumph in the taming of the young country’s vast and undeveloped north. There was scant concern for what the wholesale rearrangement of mountain rivers would mean for wildlife, or for the Indians whose homes stood in the way.

Now, 40 years after Montreal-based Alcan Aluminum Ltd. completed its mountain dam, private powerhouse and famous Kitimat smelter, the company wants to expand those facilities. And in order to drive four new turbines in a second powerhouse, Alcan wants to divert yet more water from B.C. rivers. The diversion will reduce one river, the 170-mile-long Nechako, to one-tenth of its original level in some stretches. But times have changed dramatically. At public hearings that continue this week in Vancouver, Alcan’s $1.3-billion Kemano Completion Project (named for a river downstream from the powerhouse) has emerged as the region’s second-most-heated environmental controversy after the international furor over logging in Clayoquot Sound.

At stake, say the project’s critics, is nothing less than the survival of the West Coast salmon fishery. Alcan insists that it can satisfy its turbines’ thirst for water without devastating Pacific salmon stocks in a calamitous replay of the disappearance of Atlantic codfish. West Coast fishermen, who hauled in $449 million worth of salmon from B.C. waters last year, are among the most skeptical that Alcan can save the fish, which must return to inland rivers to reproduce. “It might work, it might not,” says Mae Burrows, environmental director of the 6,500-member United Fishermen and Allied Workers Union. “But if it doesn’t, we lose all the salmon forever.” Her answer to Alcan’s demand for additional water is blunt: “Not one more drop.”

powerhouse-politics-environmentalists-wage-a-bitter-battle-against-a-b-c-megaproject-1

But critics raise other equally sharp questions about Alcan’s project. For one, how did the giant international corporation, with operations in about 20 countries, secure a highly unusual exemption from federal environmental laws in 1990? Skepticism also surrounds the firm’s apparent desire to expand its capacity at a time when a world oversupply of aluminum has forced its price to near-record low levels. The intense scrutiny has even prompted speculation that Alcan may prefer to back away from its expansion plan. But even that could have painful consequences. Alcan has already spent $620 million on its project: if the company is forced to abandon the undertaking now, it may demand hundreds of millions of dollars in compensation from federal and B.C. taxpayers.

Alcan executives dismiss such talk as premature. Instead, they insist that the company is eager to resume an expansion that, they contend, holds few risks and many benefits. The new development would exploit water that now flows east out of the Alcan reservoir into the Nechako and Fraser rivers. Diverted by the existing Kenney Dam on the Nechako, water would instead flow west, through a new tunnel to a second powerhouse next to the company’s original one. The new generating station would add 540 megawatts to Alcan’s existing capacity of just under 900 megawatts.

The benefits, for Alcan at least, are plain. Under its original agreement with British Columbia, signed in 1950, the company pays only a minimal royalty for water used to generate electricity that, in turn, is used to produce aluminum. The charge, calculated by a formula linked to world aluminum prices, is about one-tenth what the province charges its own utility, B.C. Hydro. The concession is highly valuable to Alcan: the price of energy typically accounts for about a third of the cost of producing aluminum. Under the 1950 deal, moreover, the concessionary rate will be applied in perpetuity to all the water used in whatever generating capacity Alcan has built and put into service by the year 2000 (as long as the electricity is used to make aluminum). With that deadline in view, Alcan’s vice-president for British Columbia, Bill Rich, acknowledges: “Even though we don’t need it for aluminum now, we still want to develop the rest of this energy potential by 1999.” Until the power is needed for making aluminum, he adds, Alcan plans to sell it to B.C. Hydro–at a tidy though undisclosed profit.

More critically to the project’s future, many scientists now doubt whether there is enough water in the rugged Coastal mountain range both to turn the additional turbines that Alcan plans to install and to protect the region’s fish. Indeed, experts from the federal department of fisheries and oceans who first assessed Alcan’s proposals in the early 1980s concluded that the company’s plans would not leave enough water in the Nechako River to sustain chinook and sockeye salmon, two important species that use the river either to spawn or as a route to spawning beds in other streams.

By 1987, in fact, relations between the company and the department were so strained that they were on the verge of taking their dispute to court. At that time, then-fisheries minister Thomas Siddon ordered his scientists to be more “reasonable” towards the company. The result of Siddon’s intervention was an unusual four-day private meeting in August, 1987, attended by fishery experts from both the federal and B.C. governments, as well as the company. The group emerged with an unexpected agreement: Alcan would be allowed all the water from the Nechako that it had originally asked for, and Ottawa would abandon its opposition to the company’s proposals. In return, Alcan ceded its claim under the 1950 agreement to water from another major stream in the area, the Nanika, and undertook to protect sockeye and chinook salmon in the Nechako.

It was a critical agreement. With its conclusion, says Alcan’s Rich, “both the federal and provincial governments said, `You have met every requirement.’ We relied on that, and began the project.” Ottawa reconfirmed its approval in 1990, when the cabinet of then-prime minister Brian Mulroney exempted the company from submitting its plans to a federal environmental assessment review.

Within a year of securing that exemption, however, Alcan’s momentum began to falter. New doubts began to surface about the impact of the project, as well as about Alcan’s cozy relationship with the Tory government in Ottawa. In 1990, a federal review found that the impact on Nechako salmon from Alcan’s project would be as much as seven times more severe than the company had estimated. Documents leaked from the federal fisheries department, meanwhile, showed that senior officials had put pressure on research scientists to tone down their criticisms of Alcan’s proposals. And in 1991, legal challenges forced Alcan to suspend construction.

Some of the most telling criticism came from former employees of the fisheries department. Retired research biologist Gordon Hartman, for one, charged that the 1987 settlement was “a political decision, not a scientific one,” adding that Alcan was relying on unproven measures to protect Nechako salmon. A former colleague at the federal agency, biologist Harold Mundie, concurred. Mundie’s verdict: “Kemano completion would reduce the sockeye and chinook salmon runs to mere remnants. . . . The fisheries’ verdict, therefore, is that the project should not be undertaken.” The Tory cabinet’s haste to protect Alcan from a federal environmental review also provoked debate in Ottawa. In June, 1993, a joint committee of the Senate and House of Commons determined that the exemption was “both illegal and subversive of constitutional government.”

At the same time, people living downstream from Alcan’s dam on the Nechako River found other reasons for alarm. Cheslatta Indians, forced from their ancestral lands in 1952 by rising water along an Alcan reservoir spillway, accused the company of ignoring the peril that its new plans posed to freshwater fish such as trout and sturgeon, on which the relocated band relies. Declared Chief Marvin Charlie, leader of the 150-strong Cheslatta: “A big part of the province is being written off forever to fatten the bank account of Alcan Aluminum Ltd.” Non-native residents expressed concern that the company’s demands would leave the river too low to provide water for irrigation and local industry–or even to float a canoe. “There was water put aside for Alcan and for the salmon,” said Pamela Sholty of Fort Fraser, 120 km west of Prince George. “But there was no water put aside for the people.”

powerhouse-politics-environmentalists-wage-a-bitter-battle-against-a-b-c-megaproject-2

With doubts about the project growing, the B.C. government early last year instructed the province’s utilities commission (which normally regulates energy prices) to review the impact of Alcan’s proposals. Public hearings by the panel began a year ago and continue this week in Vancouver, when federal fisheries scientists will present the commission with their latest assessment of Alcan’s proposals for protecting salmon. After initially condemning Alcan’s plans and then, in 1987, endorsing them, federal officials have become more circumspect in their judgments. Contacted by Maclean’s last week, Donald Noakes, director of the fishery department’s Pacific research establishment at Nanaimo, on Vancouver Island, refused to say whether his agency remains satisfied with Alcan’s performance. He also declined to explain why the department’s official position changed during the private meetings with Alcan in 1987. Indeed, Noakes predicted that individual scientists might disagree during the hearings. “It is going to be an open process,” he said. “Scientists can tell their version of events.”

The provincial panel is expected to report its findings by September, but that is unlikely to end the controversy. For one thing, the B.C. government’s instructions to the utility commission expressly forbid it from considering impacts beyond the immediate watershed of the Nechako and Kemano rivers–or from recommending that the project be stopped. That constrained mandate leaves open the possibility that the still-new Liberal government in Ottawa may insist upon a more wide-ranging environmental review. Federal Fisheries Minister Brian Tobin, in fact, hinted at such a possibility in February. “I will not allow the habitat, and I will not allow the resources, to be squandered,” Tobin told The Vancouver Sun. David Anderson, the federal minister responsible for British Columbia, has also made it clear that the cabinet is prepared, if necessary, to kill the project.

As challenges to Alcan’s rosy view of its expansion accumulate, a few observers suggest that the company might be willing to see its troubled project shelved indefinitely. They note that Alcan has not earned a profit since 1990, and lost $140 million in 1993. Meanwhile, the company has accumulated interest charges of $70 million to date on the money that it has already borrowed for the undertaking. Rich, however, insists that his company “doesn’t have a walk-away strategy.” Adds the 55-year-old engineer: “I believe very firmly that I will go back to the upper Nechako in 15 or 20 years and there will be lots of fish.” Whether there will also be a second Alcan powerhouse is plainly something else again.

>>> View more: Billion-dollar buy