Future Energy

Ancient History: the Northeast B.C. Access Management Initiative

Source: Muskwa-Kechika Management Area

Once upon a time, I worked for a Canadian bank.  Shortly after I joined that august institution, the Chief Credit Officer, a man with a long history in the bank and in lending circulated a memo that roughly said .... when he began his career, it used to take 25 years for the bank to forget the lessons of the past and make the same mistakes all over again.  In contrast, he suggested that at the time of the memo, it was only taking the bank 10 years to recycle all of the mistakes it had formerly made.  He attributed the change to the price of progress. 

I have often thought about those remarks in connection with the work I do today.  poking around oil and gas companies in Calgary and energy regulators in western Canada, I would have to say that institutional memories have continued to shrink.  So much so that I would suggest many organizations are working on a forget-fullness cycle of five years or even less as people change jobs, reorganize, restructure, etc. more or less continuously. 

Bearing this in mind, over the past couple of months, triggered by some recent work on access management, I decided to track down and scan some of the reports, etc. that were developed as part of the Northeast B.C. Access Management Initiative.  The Northeast B.C. Access Management Initiative was a multi-party process that was initiated in 1994 in an effort to understand the issues and find some solutions.  It was also the first time I became involved in trying to develop land-use management processes to address access concerns.

Back in 1993 I was helping a Canadian gas pipeline company (Westcoast Energy Inc., now Spectra Energy) develop a series of projects in northeast B.C.  Then, as now, the cumulative effects of access development and its subsequent uses were among the most significant concerns associated with oil and gas development among public land-use managers (primarily the B.C. Ministry of Environment) in the area.  In the words of one environmental consultant I worked with at the time, "the creation of motorized access has the greatest impact of any activity on the type, pattern and amount of use of public lands and resources". 

Like any issue associated with cumulative effects, the best solutions were not likely to come out of any single infrastructure project then being developed.  So, with the help of several people in the oil and gas industry and the financial support of my employer, I set out to bring everyone that could possibly have an interest in the issue to the table.  Eventually, with the support of the Canadian Association of Petroleum Producers and the B.C. Government, we were able to have individuals working in oil and gas and forestry sat down with government staff, guide/outfitters, local landowners and others to try to understand the issues, some of the possible solutions and agree on a path forward.  After less than two years, and having written a series of documents, the initiative was ultimately subsumed into the land use planning processes (Land and Resource Management Planning), then raging across the process.

Despite this early initiative, the pace of industrial development on western Canada's  public lands and the explosion in the number of people looking to these same lands for recreation have ensured that concerns for access creation and management remain much as they were 16 years ago.  And, needless to say, few remember either the initiative or the work that was developed during its short life. 

So as my public service for the day, I have posted on my company website (Eos Consulting) the documents that I've tracked down and scanned thus far, including:

1. A Compendium of Physical Access Control Measures for Roads and Other Rights-of-Way, prepared by Axys Environmental Consulting Ltd.(now part of Stantec), March 1995.
2. A Review of the Coordinated Access Management Planning (CAMP) Process in British Columbia: Applications and Lessons Learned, prepared by Carmanah Research Ltd., February 1995.
3. Agenda for the 1994 Initiative Workshop: Access Management as a Component of Planned Petroleum and Natural Gas Development, June 1994, prepared by Erlandson and Associates.
4. 1995 Workshop Summary Report for the Access Management Initiative, June 1995, prepared by Ehrlandson and Associates.

[There are two further documents - very bulky - that I will post as soon as I can arrange to have them scanned.]

I doubt these materials are going to provide anyone with the solution to cumulative effects associated with access  and access management, but they can offer a starting point for some of the initiatives that are following.

Searching for Energy Nirvana?

Source: Rock Merch Universe

Last week, writing in the Cleantech Blog, Richard Steubi asked if "In the wake of the BP oil spill in the Gulf, is this time different? Will the U.S. finally be able to change its stance on petroleum? Will the petroleum industry itself be irrevocably altered?" (See The Petroleum Industry: Past the Tipping Point?, July 5^th)

He proceeded to answer the question with a resounding no, laying the blame on "ineffective posturing and inane bickering in Washington", which he concludes is driven by the vast amounts of cash that the petroleum industry is willing to spend to defend the status quo.

[Any discussion of U.S. energy policy has to include current efforts to craft some kind of climate bill - any kind of climate bill.  Pew Center's Eileen Claussen for one seems to have accepted that the best that can now be achieved is a bill that caps only utility emissions.] 

Steubi's skepticism leads him to look for change as a result of energy prices and from their he begins to riff off of Jeff Rubin's arguments, that in a world of Peak Oil its only a matter of time before oil prices are back in the triple digits.  With the return of $150 plus oil, Rubin sees the need for a re-engineering of the global economy, driven not by policy makers in Washington (where they can't) or Ottawa (where they won't) or elsewhere, but by the micro-economic decisions that businesses and consumers will have to make to allow them to adjust to the market for declining supply.

Both Steubi and Rubin see a silver lining in the coming of Peak Oil -and the high energy prices that would accompany Peak Oil.  A silver lining based on their view of a more sustainable global economy, including:

• Reversal of the globalization of manufacturing, bringing manufacturing jobs back to North America and Europe;
• Emergence of local economies, including more farmers markets (???); and
• Greater investment in national infrastructure, particularly public transportation infrastructure.

Jeff Rubin develops this theme in his book, Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization.  And since I have not yet read it, I have to temper my comments.  However, a couple of thoughts do jump out at me. 

First, while I can see how a partial retrenching of globalization away from the current energy-intensive model may make for a more robust world (i.e. more resilient to spiking oil prices, reduced trade imbalances, particularly between the U.S. and China), any judgment of greater sustainability may only be from the point of view of the western economies.  A significant loss of manufacturing might not look like a sustainable path to China.

Second, how much manufacturing would really come back in the face of increased energy prices.  With dramatically lower labor costs available in China and other Asian economies such as India, Bangladesh, Burma, etc.  it might take a very large energy price differential to lead to repatriation of manufacturing jobs. 

Finally, while their arguments sound kind of plausible if you say it all fast, the transition costs to a less globalized economy could be devastating - trillions of dollars have been spent over the past few decades in China alone to build up the manufacturing capability they currently enjoy.  That would not be easily reversed.

So cycling back to Steubi's original question(s) about the effect of the BP Deepwater Horizon disaster on the petroleum industry, I would have to suggest that yes, the industry will undoubtedly be affected.  I would expect to see significant changes in operating practices and in the risks drillers are willing and/or able to take on.  However, in the face of reduced potential supply and higher costs, the real question should be whether our society, in which the petroleum industry exists, can change.

Will we be capable of developing the alternative energy infrastructure, be it efficiency, renewables, nuclear, etc. that would allow us to meet the challenge of significantly higher oil prices when they come.  If we are unable to anticipate change, then I think we will pay a high price.  Unprepared, we would enter a very painful transition period on the way to Rubin's sustainability nirvana.

I don't disagree that we could find nirvana - but I don't think we can sit back and wait for higher oil prices to take us there.  As a result, I think I am a lot less sanguine about the current inability of Washington, Ottawa, etc. to lead the energy policy changes that will be required. 

Controlling Risk with Malcolm Sparrow

Last week while trying to get some information on a recent book by Malcolm Sparrow, I came across an interview with the man himself.  I was trying to make up my mind about ordering his book, The Character of Harms, and had hoped to find enough information to make a decision.  However, the interview was interesting in its own right and seemed worthy of a quick post.

I first came across Sparrow, a researcher at Harvard and ex-British cop, in an earlier book entitled The Regulatory Craft.  As a consultant that focuses on regulatory management, I am always looking for good writing on the subject and Sparrow's book was one of the best I've come across in recent years.  (Very quickly, his thesis in The Regulatory Craft was that regulators should "pick important problems and solve them" as part of a focus of focusing on the delivery of obligations.  It strikes a counterpoint to the many prescriptions for regulatory reform that focus, in his view wrongly, on customer service, process improvement, etc.)

In his interview, (and I suspect in his most recent book) Sparrow again focuses on the careful identification and solving of regulatory and other risk related problems, extending the direction advocated in The Regulatory Craft.  In discussing this approach, he hits on three key themes, including:

• Catastrophic risks, much in the news these days, lack the frequent, low-level events that would normally provide a basis for training, practice and prevention.  Put another way, there are too few events to support a a feedback loop.  To successfully manage catastrophic risks then, regulators and others must shift their focus to near-misses and precursor events.

• Regulators should focus on spotting emerging problems and suppressing them quickly before they can do much harm - "that doesn't mean waiting for three years for new legislation, but using available tools and enlisting relevant partners and getting into it quickly, devising a solution ..."

• This approach is not just for regulators, it applies equally well to corporate risk management and in fact any forum in which managers are struggling to manage risks relating to potential harms.

I am a strong advocate of designing and building proactive management systems to address the risks that affect companies and regulators.  However, I do believe that the practical, evidence-based approach advocated by Sparrow makes sense for addressing those problems that inevitably squeeze through even the best management systems.  So I recommend reading the interview for yourself - its short and won't take you long.  I recommend Sparrow's books even more.

Incidentally, I did buy The Character of Harms and with 30 minutes invested in reading thus far, it looks like it will be good.