fame | A PACIFIC TRIBUNE EXPOSE The great By SID ZLOTNIK ONCLUSION of the deal to build a natural gas -pipeline in British Columbia has been hailed by the daily press as both a personal victory for B.C.-born Frank McMahon, president of Westcoast Transmission Company, and a successful completion of the fight to establish a line to serve B.C. industrial and con- sumer needs. Westcoast Transmission is the so-called Canadian which has just signed an agree- ment with its erstwhile competi- tors, El Paso Natural Gas Com- pany of Tulsa, and Pacific North- west Pipeline Corporation of New York to construct a $100,000,000 line from the Peace River to the U.S. border. At Sumas the pro- jected B.C. line will hook up with a USS. line to California. The full terms of this agree- ment are being withheld by the Social Credit government, al- though it has already bestowed its unqualified blessings upon them, Nevertheless, one shocking central feature has already been disclosed. Westcoast is commit- ted to deliver 300,000,000 cubic feet daily to the U.S. as against a total of 15,000,000 cu. ft. daily in the B.C. lower mainland in the initial stage. While the figure for total B.C. consumption is not yet available, it is clear from these figures and previous statements of the com- panies concerned that it will be not more than twenty and may be as low as ten percent. * ‘ The fact that the bulk of our ' gas going through the line will be used to satisfy U.S. needs for industrial expansion, and that B.C. will get only the very inadequate .surplus, is not so surprising on investigation. Westcoast Transmission is reg-° istered as-a Canadian company, put it is U.S.-controlled. Behind the Canadian front provided by . Frank McMahon, are powerful U.S. interests... Four of the nine directors of Westcoast are Americans, and a fifth, company vice-president C. R. Hetherington, although his home is Calgary, is a senior en- gineer for Ford, Bacon and Davis ..Company of New York, one of the two companies reportedly bid- ding on the contract to construct the line. C. C. Whittelsey of New York City is conveniently both a di- rector in Westcoast and a vice- president of Ford, Bacon and Davis. : Probably the most influential director on the board is L. S. Gil-. mour of New York, a senior part- ner in the New York firm of East- man, Dillon and Company, and director in half a dozen other great corporations linked to this steal of our natural gas. Control of the $10,000,000 com- mon stock of Westcoast is vested in its sponsors, Pacific Petroleum and a group of affiliated compan-° ies. Five of Westcoast’s direc- company — This map shows the route of the proposed pipeline. tors are also directors of Pacific Petroleum. Among Pacific’s sub- sidiaries are Peace River Natural Gas Company, Canadian Atlantic Oil Company, Oil Ventures Ltd., Bear Oil Company Ltd., and Transmountain Oil Pipeline Ltd. Pacific Petroleum is an oil pro- ducing and developing company with an interest in 73 oil wells in Alberta and in natural gas rights in the Prairie provinces, B.C. and North Dakota. It holds interests in 6,500,000 acres and has proven wet gas reserves of 1% trillion cubic feet. Most revealing is the new agree- ‘ment entered into by Pacific Pet- roleum’s subsidiary, Canadian At- lantic Oil Company and Southern Production Company of Fort Worth, Texas, reported in the Vancouver Sun of December 20, ‘1954. ; The Texas firm agrees to spend $10,000,000 (of which it has al- ready spent $3,000,000) on oil and gas exploration in B.C. and Al- berta in return for a quarter in- terest in all holdings of Canadian Atlantic and its associates; this interest will increase to half on any project on which it brings in a commercial well. Southern Production is closely connected ’ through interlocking directorates with the $200,000,000 Southern National Gas Company with oper- ates 3,000 miles of pipeline in such southern states as Georgia. This latest agreement brings Westcoast even more tightly un- der the thumb of U.S. control. x Great concern was expressed in the House of Commons in April 1949 when the Pipe Lines Act was being debated. Spokesmen of all political shades expressed fear that our resources would be fun- nelled off to the U.S. Howard Green, Conservative MP for Vancouver-Quadra, was particularly emphatic. “The point I am making, Mr. Speaker, is that this oil and gas should be used to the greatest possible extent within our own country. I cite as an example that these two,companies piping natural gas to the Pacific Coast may be piping it primarily to the western U.S. rather than for BiG as ‘T believe that this opens the dodr, or places some obligation upon the dominion government to help the provinces conserve these resources. “The third consideration, and this is a very important one, is that this development of oil and natural gas must bring down the cost to the Canadian consumer. . .. There is not much use in Canada’s developing vast quanti- ties of oil and natural gas if our people are not going to get any benefit by way of reduced prices for those commodities.” And again, in October 1949, : Green put the question pointedly. “Somebody in Canada must de- cide as a matter of policy, wheth- ‘er this oil or gas should be piped to the U.S. rather than be used in Canada to build up industries here and give employment. I should like to know whether there is anybody, from the prime min- ister down, who is at the moment exercising any control over that question as to whether or not this Canadian oil and gas is to be piped to the U.S. rather than used in Canada?” - Transport Minister Lionel Chey- rier replied: “I am afraid I cannot satisfy my honorable friend. All I can tell him is what the board of transport commissioners does and what this department does in con- nection with an application (to build a pipe line) such as that.” And Green’s retort was: “The government must decide whether or not, as a matter of policy, this Canadian product is to go into the U.S. rather than be used in Canada.” Today, when the very type of agreement Green objected to is being carried through on the * B.C. gas pipe line, neither he nor any of the other members who spoke up then, have said one word in,public to oppose the sell- out of our gas. * The Pipe Lines Act gave the green light to the great U.S. mon- opolies and their Canadian junior partners. No safeguards are pro- vided to ensure the conservation of Canada’s oil and gas resources. Canadian industrial development and consumer hopes for cheap fuel are left to the indelicate mercies of U.S. corporations. The gas pipe lines are specifi- cally exempted from being com- mon carriers. The pipeline com- panies therefore can lay down _the law as to which suppliers may use the lines (by far the cheapest way of transporting gas). This gives the big pipeline companies and their associate pro- ducers, in this case Westcoast Transmission and the Pacific Pet- roleum group, the power of life and death over the smaller inde- pendent producers. The federal government has the authority to refuse to export power across the boundary. But -once it issues a permit to a com- pany to construct a pipe line to the U.S. border, it is not going to refuse permission for the com- pany to pipe gas to the U.S. And the U.S. companies will strive to see that no government which threatens their monopoly comes to power. ‘ The provincial governments cannot deny their responsibility also in this matter. Alberta re- served the right to issue export licences on its gas. The B.C. government, which has given its blessings to the Westcoast deal, has the authority to call a halt to this plundering of a vital pro- vincial resource. * \ What about the problem of dis- tribution? The B.C. Electric has boasted it will reduce the price of natural gas 25 percent below the current price of manufactur- de gas. However, Vancouver has had bitter experiences in respect to B.C. Electric generosity, and many people are asking if we are going to enjoy the benefits of cheap natural gas in our homes if Valley, gas steal the B.C. Electric maintains con- trol over distribution, as\is now planned. In 1952 Westcoast testified it could bring gas to Vancouver at a cost of 29.2 cents. A fair esti- mate of the maximum cost of delivery from the Peace River to ‘Vancouver today would be 35 cents. Yet the B.C. Electric has al- ready stated through company vice-president Mainwaring that -the price of natural gas will be 25 percent less than the price of manufactured gas. That means over $1 per 1000 cubic feet. In other words, the B.C. Elec- tric will charge twice as much to deliver it from the main line at Vancouver to our homes as it costs to bring it all the way from » the Peace River to Vancouver! One of the positive provisions of the Pipe Lines Act gives the Board of Transport Commission- ers “the power to order a com- pany operating a gas pipeline to extend or improve its transporta- tion facilities and to sell gas to any person or municipality en- gaged in the local distribution of gas to the public, and for such purpose to construct branch lines to communities immediately ad- jacent to its pipelines if the board finds no undue burden will ne placed on the company there- NAeg To prevent the municip&lities from taking advantage of this, the Propane Gas affiliates of Westcoast are moving in to take over the franchise of the Fraser Okanagan and Island centres, so as to be able to con- trol the distribution of natural gas when the line is finally built. ‘The question of public owner- ship, then, is an important. mat- ter for Vancouver and the other municipalities. ; : The decisive issue, of course, — is control of the main line and related to that, use of the main supplies coming through the line. If the present ratio of supply between U.S. and Canada is main- tained, then there is going to be very little volume on our side of ' the border to worry about dis- -_tributing. Of the 300,000,000 cubic feet going to the U.S., California will take 250,000,000 cubic feet per day. But the California demand is now well over a billion cubic feet per day, and rapidly grow- ing. So the pressure is going to be on us to increase the supply to the U.S. as greater capacity is developed on the line. The great volume going initi- ally across the line will enable the U.S. to develop new secon- dary industry, while our inade- quate supplies will prevent us from doing likewise. Establish- ment of U.S. industries ‘will make it even more difficult for us to establish competitive industries in the future, even if sufficient gas supplies were made available to us at that time. There is no doubt the present policy will stunt the future indus- trial development of B.C. and deprive thousands of Canadians of jobs. The people, defending the national interest’ which the government is selling to the U.S., . must. compel the policy to be changed before it is too late. PACIFIC TRIBUNE — DECEMBER 24, 1954 — PAGE 9