Energy Probe

Colin Perkel
Globe & Mail
August 24, 2001

WALKERTON, ONT. — The provincial Tories’ fixation on the bottom line contributed directly to deaths from tainted-water in Ontario, a lawyer for the provincial Public Service Employees Union argued Thursday.

Driven by ideological zeal, the government ignored numerous warnings about the risks its budget cuts posed to public health and the environment, lawyer Don Eady said in closing submissions to an inquiry into E. coli contamination that killed seven people and made thousands ill in Walkerton last year.

The government has argued that it is not responsible for the deaths and illnesses in May of 2000, saying the reckless dishonesty of water manager Stan Koebel, who violated safety guidelines, defeated a perfectly adequate system.

But speaking for an environmental coalition, lawyer Louis Sokolov rejected the government’s position as untenable, as he did Mr. Koebel’s attempt to minimize his responsibility.

“To find the contributing causes of the tragedy, you have to look to Stan Koebel and the Walkerton [Public Utilities Commission], you have to look equally to [Premier] Mike Harris and his cabinet, and you have to look to the Ministry of the Environment,” Mr. Sokolov told Mr. Justice Dennis O’Connor. During its 10 months of hearings, the inquiry heard allegations that the rush to privatize laboratories in 1996 caused widespread confusion in reporting bad water.

The government’s distaste for regulation ignored the need for important safety measures, such as one that would have required water operators to install equipment to automatically track disinfection levels, Mr. Eady said.

Justice O’Connor appeared to have difficulty with Mr. Eady’s contention, given that previous provincial governments had not implemented such policies. “If the deficiency was already there . . . how can I say the new policy, the budget cuts, was a cause of the deficiency?”

Mr. Eady conceded that previous governments could be faulted, but he said that doesn’t excuse the Mike Harris government, the cutbacks of which were distracting to the Environment Ministry.

Mark Mattson, a lawyer for the environmental organization Energy Probe, disagreed that the privatization of water-testing laboratories contributed to the disaster. But he blamed the Ontario government for failing to ensure appropriate safeguards were in place.

He blamed the Environment Ministry for failing to take legal action against the scores of public utilities that did not meet guidelines.

Mr. Mattson said the fact that hundreds of legal orders were issued in the months immediately after the disaster suggests the government too came to realize the error of its ways. “Certainly, their actions following Walkerton and this complete 180-degree turn would support that.”

Dana Flavelle
Toronto Star
June 4, 2001

“Around here, we call it Saudi Arabia in a box,” says Andrew Stuart, patting the washing machine-sized metal box that can turn ordinary tap water and household electricity into fuel for cars.

Its technical name is the “personal fuel appliance.” It’s like having your own personal gas station in your garage, except this one pumps hydrogen for cars that run on fuel cells.

Sounds too futuristic to be real? Well, yes and no, says Stuart, president and chief executive officer of Stuart Energy Systems Inc., the Toronto-based company that’s developing them.

“It may seem slow to the casual observer, but to those of us involved it seems like it’s happening at lightning speed,” Stuart says.

Fuel cells have long been touted as the cleaner, more efficient fuel of the future, able to power everything from light bulbs to cars, not to mention their potential to reduce North America’s growing dependency on Middle East oil supplies, while producing virtually zero emissions.

Lately, the energy crisis in California, along with U.S. President George Bush’s controversial energy program, has thrown the spotlight on the emerging fuel-cell industry, in which Canada is a significant player.

The White House task force on energy emphasized increased output of conventional sources of fuel, but also recommended a tax break for buyers of vehicles that rely partly on fuel cells.

While fuel-cell cars have captured the public’s imagination, the more likely short-term applications of this technology lie elsewhere.

In fact, some fuel-cell products are already on the market, though not in the places most consumers would expect to find them.

They’re hanging on the racks in Wal-Mart and other leading consumer electronic retailers, where they’re being sold as backup power packs for cellphones.

Sold under the brand name Instant Power, they’re made by Electric Fuel Corp. Ltd., a New York-based company with operations in Israel, using a fuel-cell technology based on zinc, rather than hydrogen.

It’s all part of the vast and complex world of the fuel-cell industry, where the number of players is expanding rapidly, each armed with slightly different technologies with different applications, and different game plans.

Fuel cell is a generic term for a non-mechanical device that operates like a fuelled battery, as opposed to conventional batteries that operate on stored energy.

Most Canadians, when they hear the term fuel cell, think of Ballard Power Systems Inc. The Burnaby, B.C.-based outfit is a world leader in this emerging technology.

The company has deals to supply fuel cells to major auto makers, including DaimlerChrysler AG, Honda Motor Co. and Nissan Motor Co.

But at least half a dozen other Canadian companies are exploring the market. They include:

Fuel Cell Technologies Corp., of Kingston, which is developing a fuel cell that would power the home. The company expects to have a device on the market by 2003. Its Solid Oxide Fuel Cell is powered by natural gas or propane, but gives off lower emissions than conventional power sources.

Its initial target market is remote locations, sites that require uninterrupted power, or have severe weather.

Global Thermoelectric Inc. of Calgary, is also developing fuel cells for the home. The company expects to deliver the first unit for testing later this year.

It has a strategic alliance with Enbridge Inc., the natural gas distributor to 1. 5 million homes in Canada. Enbridge invested $25 million in the company last year.

Hydrogenics Corp., of Mississauga, makes fuel cells for all applications. It also makes fuel cell test beds and components for auto makers, fuel-cell developers and government agencies.

The company was co-founded by University of Toronto research engineer Pierre Rivard in 1995.

Methanex Corp., of Vancouver, produces methanol, one of the potential sources of hydrogen for fuel cells.

Several of these companies have raised millions in the past year by going public.

However, big questions remain about how long it will take to achieve the economies of scale that make fuel cells financially competitive with conventional sources of power and whether this new industry will realize its environmental potential.

“There’s a lot of hype around fuel cells,” says Tom Adams, spokesperson for Energy Probe. “Like all good hype, there are some threads of truth mixed in there.

“There are workable technologies and, in the long term, the prospect for non-mechanical, purely chemical engines for converting gaseous fuels to electricity has potentially great benefits.

“I’m a fan in principle.”

Like other environmental activists, Adams has reservations about how the technology will be applied.

Another critical issue is where the hydrogen comes from in the first place, says Peter Tabuns, executive director of Greenpeace Canada.

Hydrogen can be extracted from a variety of sources. Most people think of water, where hydrogen is the H2 in H20, as the cleanest, most ubiquitous source.

But you can also get hydrogen from gasoline and natural gas.

Also, one of the ways to separate hydrogen from oxygen is by electrolysis. In effect, using electricity that may have been produced by coal-fired plants.

“You’d actually have more pollution than you have today,” said Tabuns.

So, how will this new fuel lessen our dependence on the old ones?

One of the applications both Tabuns and Adams say makes the most sense is in the home.

A fuel-cell device hooked up to the existing natural gas supply in the basement could deliver enough electricity to light your home. The by-product, waste heat, would replace the need for a furnace.

In the auto industry, on the other hand, environmentalists fear manufacturers will fall back on gasoline as the main source of hydrogen.

“We see that as really bad news,” Tabuns said. Hydrogen from gasoline won’t produce the desired environmental or energy benefits, he said.

“The issue is not as straightforward as it looks.”

Over at Stuart Energy, the enthusiasm remains high despite the challenges ahead.

Andrew Stuart, who presides over the company his father and grandfather co-founded 50 years earlier, agrees there are still issues to be resolved.

And he’s the first to agree that mass commercialization of the fuel-cell car is still a long way off. However, he’s quite sure it’s coming.

“We’re very optimistic we’re going to see a period starting in the next few years, when we see a transition away from gasoline toward a hydrogen-based economy,” Stuart said.

“The potential of this is enormous,” he added.

“Even if hydrogen covered only 1 per cent of the market it would be a very large business opportunity.”

Terence Corcoran
Financial Post
June 30, 2001

Ontario Premier Mike Harris survived his appearance yesterday before the Walkerton inquiry. More than survived: He triumphed. Facing an orchestrated ambush by smirking union lawyers, hired activists and placard-carrying demonstrators, Mr. Harris rose so far above the low politically motivated smears of his prosecutors that many citizens of Ontario must now be wondering about the validity of the Harris caricature they have been fed for most of the past year.

No doubt somewhere in the hours of testimony some news clips can be found to highlight an apparent contradiction or make Mr. Harris look bad. But throughout the session, as his questioners dug their cynical holes, Mr. Harris conveyed a sense of integrity and honesty they lacked. The issue, in some ways, is how Mr. Harris mustered the generosity last year to appoint an open inquiry that handed his political enemies a platform for his own prosecution.

For anyone who watched yesterday, moreover, it must have been eye-opening to realize that the lawyers questioning Mr. Harris were less interested in getting at relevant truths than in scoring ideological points. At times, the sessions slipped below the level of Question Period in the legislature.

The inquiry’s chief council, Paul Cavalluzzo, is a former NDP policy advisor who occasionally could barely resist mugging for the camera when he thought he’d scored a point. Paul Muldoon, whose clients are supposedly a group called Concerned Walkerton Citizens, is in fact also a front for organized labour. A media favourite, Mr. Muldoon’s grilling of the Premier revealed the bias he displayed in a recent paper funded by public service unions. “There is no criteria for which the private sector has an advantage over the public sector in providing water services.”

Their main point, of course, is that Walkerton was the product of spending cutbacks, privatization and a right-wing government hell-bent on a corporate-style business plan aimed at trashing the environment. If only that were true. If there’s any underlying lesson to come out of the Walkerton inquiry it is that the Harris government did not bring in a corporate-style business. They did not privatize, they did not bring in the structural reforms that their critics are now attacking.

The Harris government is under attack for a policy it failed to implement. In August, 1996, the Harris cabinet agreed to a program that would bring private investment to Ontario’s water and sewage system. The plan was to phase out the system of provincial grants and subsidies, which had proved distortive and ineffective, and replace it with local responsibility, local ownership, and, where appropriate, privatized services. Excerpts from the cabinet document appear below.

Privatized water systems, accompanied by full cost pricing, would bring numerous benefits over the current system. This was no crackpot cost-cutting conspiracy. The benefits were outlined by David Crombie, who headed a government advisory panel, in a memo later that year. The old subsidies system, he said, created overbuilding in some areas. Consumers don’t pay full cost for water, and therefore have no incentive to conserve and local governments have no incentive to invest wisely, if at all. The subsidy system also “dampens innovation and the pursuit of creative management practices.”

A former red-Tory mayor of Toronto, Mr. Crombie is no right-wing ideologue. But he said, “Clearly the current situation is financially and environmentally unsustainable.” He and his colleagues called for a major overhaul of water and sewer services, along the lines approved by the Ontario cabinet. But the program, as we now know, was never carried out.

Why not? Who knows. Former Environment Minister Norm Sterling, during testimony last Wednesday, conceded the government did the opposite. Under questioning from a lawyer representing the Energy Probe Foundation, Mr. Sterling was asked whether the cabinet plan remained in effect. “Well,” he said, “nothing happened.” In fact, he said, the government introduced legislation “which almost discouraged it.” Instead of ending grants, it provided new ones that acted as a disincentive to privatization.

The Walkerton tragedy is beyond any doubt the product of public ownership, buck-passing local bureaucrats, beer-drinking incompetents and decades of destructive public funding. All this long pre-dates the Harris government.

If anyone should be on trial at this inquiry, it’s the clients, policies and ideologies that the Cavalluzzos and Muldoons have long represented. The real campaign here is not to get to the bottom of Walkerton and its causes. The objective is to stave off programs and policies that would finally end the union and public stranglehold over government services.

Correction: Paul Cavalluzzo, chief counsel to the Walkerton Inquiry, is not now and never has been a policy advisor to the NDP or any other political party.