If this Fortescue hydrogen project goes through as proposed, it will use everything our new $16 billion Site-C dam has to offer and won’t even power 100 permanent jobs.
That’s $266 million of taxpayer dollars for a single job.
Let’s do the math.
This Fortescue hydrogen project, hyped to make Prince George a “hydrogen hub,” will use about 1,000 megawatts of power capacity.
They chose Prince George because we supposedly have “heaps” of electricity, an obvious reference to our nearby finished Site C dam and its excess power about to come online.
But Site C will only power around 600 megawatts year round, or around 60 percent of what Fortescue needs. So it will power 60 of those 100 jobs, let’s say, for a crude analysis. Now divide $16 billion by 60 jobs.
Would we really level a world-class wildlife valley, destroy moose habitat, farmland, and even consider flooding out hibernating bears, all at great cost to the ratepayers and taxpayers of this province, for so little in return?
Would we really invest $266 million in public funds to create a single job at a billionaire’s hydrogen plant?
I wouldn’t put it past us.
We are already basically doing this with the extensive bitcoin mining operations in this province, which supposedly consumes around 273 megawatts of power, almost half a Site C, and probably only yields a few dozen full time jobs and no discernable product.
So effectively allocating a $16 billion dam to power a 100-employee factory isn’t too hard to believe.
I suppose it could make sense if Fortescue pays the true marginal cost of the new Site C power production. But it won’t.
The last official cost estimate for Site C power was 8.3 cents per kilowatt hour. But that was in 2014 when the dam was supposed to cost $7.9 billion. The cost is now at least double that.
When the dust or mud settles, Site C power could cost as much as 15 cents per KwH, depending on the discount rate and the final bill. In any case the power will surely cost us more than double the 6.14 cents we currently charge industry.
If we subsidize Site C power to this degree, we should get a lot more than 100 jobs.
But rule number one in politics is thou shall not scare off “investment,” even if it means losing billions in public assets. The billionaires and global capital always come first.
Indeed, just last week Vaughn Palmer issued a warning to Energy Minister Josie Osborne: “careful minister — news reports indicate Fortescue is considering investments elsewhere in Canada and in the U.S. and the U.K.”
Osborne, in a leaked memo, had the temerity to suggest we stand up to these massive new demands on our electricity, including requiring companies like Fortescue to build some of their own generating capacity.
Given that we risk allocating a bunch of subsidized power from the largest public investment in BC’s history to a project that won’t even give us 100 jobs, Osborne has the right idea. The problem is the absence of clear policy has created opportunities for various carpetbaggers to get our hopes up with glitzy project proposals that ultimately make zero financial sense.
James Steidle is a Prince George writer.