The Timmy and Tommy show

In January of 2007 the Ontario Government announced a proposed ban on burning of used oil in space heaters in Southern Ontario.

Recently opinion articles questioning the science and motives behind the ban have been appearing in small-town newspapers such as the Peterborough Examiner and Owen Sound Sun Times.

These articles are written by Dr. Timothy Ball whose byline describes him as, “chairman of the Natural Resources Stewardship Project (NRSP.com)…” and, “…a Victoria-based environmental consultant and former climatology professor at the University of Winnipeg…”, while Tom Harris is described as, “…an Ottawa-based mechanical engineer and NRSP executive director.”

Tim and Tom present themselves as highly qualified and seemingly disinterested individuals who, judging by the name of their organization – the Natural Resources Stewardship Project – might even be taken as ardent environmental advocates lobbying out of an altruistic concern for the public interest.

Moreover on face value their query to the Minister of the Environment seems reasonable. The say, “…we asked Broten to explain how she came to her decision…” adding, “…One would expect that, if her decision was based on a proper environmental analysis, she would readily disclose the information we requested.”

But all is not as it seems.

It is one thing to question the scientific basis for a policy decision but it is quite another to advocate for the alternative proposed to be banned. In this light let’s look at what Tim and Tom said about used oil space heaters in the Owen Sound Sun Times article, “Used oil heaters have been successfully operating in the province for at least 15 years. Hundreds of small businesses in Ontario, at least 20 in Owen Sound alone - car dealerships, bus fleets, farm equipment dealers, etc. - have invested in these systems to carefully dispose of waste oil while reducing space heating costs. Strict emission regulations apply and we know of no evidence that these regulations are not being followed.”

By what evidence have Tim and Tom come to the unequivocal conclusion that used oil furnaces have been operating, “successfully” (whatever that means) and “carefully” - did they undertake an evaluation of the 800 or so facilities operating across Ontario? Did the Ministry of Environment give them this information? If not then what supports this assertion? And where did Tim and Tom get the notion that, “strict emissions regulations” apply to used oil furnaces?

Well gents, if questions are good for the Minister of Environment then surely you’ll be happy to field some questions of your own no?

And Messrs. Tim and Tom, just as an inconvenient FYI, used oil furnaces are not regulated by the emissions they discharge – there are no “strict emissions regulations” on used oil furnaces per se - but by the concentrations of heavy metals and toxics in the used oil. By current Ontario standards its okay to burn used oil without pollution controls that, “contains not more than 5 milligrams per kilogram arsenic, not more than 2 milligrams per kilogram cadmium, not more than 10 milligrams per kilogram chromium, not more than 50 milligrams per kilogram lead, not more than 2 milligrams per kilogram PCBs…and not more than 1,500 milligrams per kilogram total halogens.”

It doesn’t take a “climatology professor” from the University of Winnipeg to know that without any pollution controls whatsoever what goes into a used oil furnace has to come out into the air – put lead into a used oil furnace and out of the stack comes most of the lead you put in (with the rest ending up as residue in the furnace). If one burns thousands of liters of used oil every winter one ends up putting hundreds of grams of heavy metals (and other carcinogens and toxins) into the local air-shed (largely in urban areas where most of these units operate). That is why both the medical officers of health for the City of Toronto and Peel Region support the ban on burning used oil for space heating.

But we are not operating in the realm of fact and rationality here but in the realm of propaganda – and these articles are brilliant propaganda. That is that, “Instead of impartially providing information, propaganda can present facts but do so selectively, produce deliberately misleading information, or load messages, whether essentially truthful or not, with emotional meaning in order to produce an emotional rather than rational response to the message that is being presented.”

What better way to undermine the Government and its policy agenda than by questioning its science, casting doubt and fomenting fear through economic alarmism? Does this sound familiar? Hasn’t this been the same tactic used to delay action on climate change?

Well of course it has and Tim and Tom are no neophytes in this regard.

Until late October 2006 Tom was listed as a Director of Operations of the Ottawa office of the High Park Group (HPG), a Canadian public relations and lobbying firm.

Additionally, SourceWatch.org reports that the Natural Resource Stewardship Project (NRSP), “…is led by Executive Director, Tom Harris, who, in November 2002, while in the employ of the PR firm APCO Worldwide, organized a press conference titled ‘International Climate Experts Speak Out Against Climate Change Myths’. The press conference was sponsored by Talisman Energy Inc. and Imperial Oil (ExxonMobil's Canadian subsidiary). Many of the same scientists and advisors now linked to the NRSP were present, including Tim Ball.”

For more information on the Natural Resources Stewardship Project read, “NRSP Controlled by Energy Lobbyists” at desmogblog.com or if you have time watch The Fifth Estate's THE DENIAL MACHINE

Oh and by the way, I am a policy analyst to Safety-Kleen Canada Inc. - the oil re-refiner that according to Tim and Tom, “…stands to significantly increase their business as a result of her decision.” If Safety-Kleen was 100% successful in competing to recover all this newly available used oil its Ontario collections might increase by about 10% and if not then the used oil no longer burned in used oil furnaces in Ontario will end up being collected by its competitors and shipped out of province to be burned as waste derived fuel (half of the used oil generated in the province annually is shipped primarily to the U.S. to be burned).

Now you know who I am and why I have an interest in the issue. As for Tim and Tom you’ll have to ask them about what is motivating them to take the time to write their stories.

I have reproduced Tim and Tom’s stories as they appeared in the Owen Sound Sun Times and Peterborough Examiner on May 17th and June 9th 2007 below.

Continue reading "The Timmy and Tommy show" »

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Today I finally had a chance to rise above the details of changes to Ontario Regulation 347 (Waste) as proposed in the Ontario Ministry of Environment’s new Regulatory Amendments to Facilitate Waste Recycling, Use of Alternative Fuels and New and Emerging Waste Management Technologies. As I turned my attention away from the draft regulation and read the associated EBR posting I came across a real gem – there in all its elegant simplicity was the Extended Producer Responsibility Systems (EPRS) proposal.

Without reproducing the environment ministry's description in its entirety, the EPRS model involves the “producer” (manufacturer, brand-owner or first importer) or a voluntarily convened collective of producers establishing a self- or third-party operated management system for spent products. All costs of the system are to be borne by the producers (though there would be a natural tendency to try to diffuse costs through the product chain) and all arrangements between producers (i.e., cost allocation) and service providers (i.e., charges for service) would be negotiated and set via commercial agreements and contracts. Ministry approval of an EPRS would require details of the system’s operation and regular reporting of the final disposition of wastes to the ministry (very important to be sure).

Back in my March 13th blog post Wither EPR?, I described such a property-rights-based model for end-of-life product management. To save you looking for it, here is what I wrote in context of a notional EPR program for waste TVs:

“What about the formation and operation of a Producer Responsibility Organization (PRO) for waste TVs? What about the 'funding mechanism' (i.e., fee scheme) for collecting and processing TVs to the 'environmental standard'? What about all the regulatory and bureaucratic clap-trap that normally accompanies 'stewardship' programs?

In a property-rights-based regulatory approach, all of these things are immaterial to the regulator. The producers -- the waste TV title holders -- sort themselves out to meet the environmental standard in managing their wastes. Producers could band together in a collective (e.g., Electronic Product Stewardship Canada -- EPSC comes to mind) to manage their wastes (much as electronic producers do to create technical standards for CDs, DVDs etc.). Like any other aspect of business, contractual obligations and charges for covering the costs of administration, collection and recycling services are the subject of commercial negotiations between producers (or the producer collective) and service providers -- what prices are actually established are also irrelevant to the regulator.”

Well as I read it this is exactly what the ministry is proposing with its EPRS model – right here in Ontario: home of the infamous Waste Diversion Ontario!

Whoa there! WDO! What about the WDO? Well my guess is if enacted EPRS is going to cure what is ailing reuse and recycling in Ontario – the WDO.

How so? Consider that under the Waste Diversion Act “stewards” can set up Industry Stewardship Plans (ISPs) outside of an approved Industry Funding Organization (IFO) program – imagine a fast food chain setting up a packaging management system independent of the approved Blue Box program via an ISP (but only after having suffered through being part of the collective blue box program). Well, the EPRS proposal goes one step further by effectively saying producers can set up a program entirely outside of the WDO.

Now ask yourself why any producer or group of producers would want to be forced to work in an Industry Funding Organization not of their choosing? Who wants to run the WDO Board gauntlet to try to get their stewardship program approved when they could deal directly with policymakers and endure a relatively clear and simple approval process? Can someone remind me why it makes sense to have the soft drink industry, beer industry, consumer packaging users, retailers, the LCBO and newspaper industry vote on whether to approve a program on scrap tires or household hazardous/special wastes when we have folks in the Ontario Public Service well qualified to do just that?

While it might make sense for the Stewardship Ontario to remain under the Waste Diversion Act so it can continue to enjoy a 50 per cent discount on blue box services, where is the impetus for any other steward to hang around the WDO? Who really wants to cover the WDO’s administrative costs and help pay back the packaging brand-owners their $600K+ loan to the WDO? If you had to be regulated would you not pick the least troublesome and least costly regulatory option?

So all that has to happen is that the environment ministry designates a waste under the EPA or WDA and producers can pick how they go. My bet is that they go the EPRS route.

In the last few months a prototype EPRS type program for fluorescent tubes has been convened by the Recycling Council of Ontario which involves the Toronto District School Board (the waste generator), two fluorescent tube manufacturers and Fluorescent Lamp Recyclers Inc. The approvals for operating the waste management system were graciously expedited by the ministry and took only a few months to complete. The program will be up and running in September.

All those in favor of EPRS write in to the Minister early and write to her often – The EBR comment period ends on September 18th.

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On Thursday, June 22, I participated in a panel discussion on funding the blue box at the annual conference of the Municipal Waste Integration Network (MWIN). The panel was moderated by Guy Crittenden, editor of Solid Waste & Recycling magazine, who had a tiger by the tail with this panel, since the debate became very animated.

One of the most heated exchanges occurred between myself and Lyle Clark -- a representative of the Liquor Control Board of Ontario (LCBO) -- who was supported in his statements by a couple of audience members who work directly or indirectly for Tetra Pak. Certain statements I made were questioned and dismissed as “pure fantasy” by the LCBO and Tetra Pak people. They’re entitled to their opinion, of course, but I said at the conference that I’d post some documents in this space in support of my assertions, which I didn’t have handy at the conference.

The gist of my statement was that the LCBO’s real agenda in selling more wines in Tetra-Paks (as opposed to glass bottles) is a commercial one not an environmental one.

Specifically, I asserted that the LCBO’s commercial agenda was to bring in cheap wine in bulk (directly itself or via “partners” such as French Rabbit -- a brand that did not exist until it was first listed in the LCBO), package that wine in Tetra-Paks and sell it as “premium” wine in order to reap enormous profits. (It’s worth noting that LCBO executives are given bonuses based on the LCBO’s financial performance.)

The denial of the LCBO representative was vehement.

In support of my claim, I offer some documents. (For your convenience, these are posted as downloadable pdf files under Posted Documents on the left side of the home page at www.solidwastemag.com):

1. 2005 Deloitte-Touche Operational Review of the LCBO

The first attachment is an excerpt from a copy of the 2005 Deloitte-Touche Operational Review of the LCBO. In my opinion, it’s quite “puffy” in tone, touts the LCBO and puts forth an LCBO policy “wish-list” (which is not surprising given that the consultants worked closely with LCBO management in preparing it). For our purposes here, what are notable are the recommendations on Page 12, two of which are significant:

-- The first relates to pricing: that the LCBO be granted the power to apply differential or variable mark-ups on products at its discretion (a trade illegal practice that was suspended by the Ontario government as a result of a GATT challenge from Europe in the early 1990s which challenged LCBO listing policies, winery retail store licenses, etc.).

-- The second relates to the development of LCBO “private-label products” or house brands which would mean that it would not only be wholesaler and retailer but further extend its quasi-monopoly into becoming a manufacturer/brand-owner.

2. Ontario Tetra Pak Facilities press release and LCBO/WCO alternative packaging letter

In its Ontario Tetra Pak Facilities press release, the LCBO announces that it is “sponsoring” two Tetra-Pak co-packing facilities to, “…to package wine from Ontario and around the world.”

In combination with the other documents, the agenda behind the LCBO's Tetra Pak initiative is clear. This isn't about improved environmental performance, and it isn’t even about avoiding a deposit-refund system, or avoiding blue box fees (although those might be side benefits). This is about the LCBO creating a new wine category that is highly profitable for it. The LCBO is shifting from being a distributor and vendor of wines into being producer of sorts -- stage managing the bulk import of wine and coordinating the packaging of it in Tetra Paks, and then selling the wine in Ontario with enormous margins.

This shift raises important policy issues for the government and for wine producers. Do we want this monopoly wholesale and retail entity now engaging in this kind of activity? What of the impact of the LCBO’s “abuse of dominance” to Ontario wine producers? As an aside, it’s worth thinking about the fact that the LCBO says that French Rabbit in Tetra Paks was the most successful launch in its history – not surprising given the LCBO’s heavy subsidization of the launch. Why did the Ontario government’s sanctioned wine and spirit vendor invest in the launch of a foreign wine and not an Ontario product and why is the LCBO now allowed to engage in heavy employee and consumer inducements to keep pushing French Rabbit now that its sales volumes have tanked? The implications are chilling for Ontario producers.)

Whether or not policymakers approve of the LCBO’s new commercial plan, it seems to me that it’s ridiculous for the LCBO to deny that this is going on.

Consider that these proposed Tetra Pak facilities will package imported bulk wines (in addition to local products). Under the federal Importation of Intoxicating Liquors Act the LCBO must be the import agent, which means that it is the de facto brand-owner of the imported bulk wine. The LCBO is more than a little conflicted here.

It’s my contention that the Tetra Pak program is not about protecting the environment, but rather that environmental protection (as is often the case in our society) is being used as a “fig leaf” for the LCBO’s commercial agenda, which is sponsorship of the production of products that will become its “house brands.” This is analogous to those “private label” soft drinks and other items you see in grocery stores, such as Loblaws’ “Presidents Choice” line of products. These afford the grocery chain higher profit margins at the expense of national brands. This is good and well in the world of supermarkets, but we really must pause and reflect upon the implications of a government-sanctioned monopoly for liquor engaging in this.

Again, this relates to the “private-label” recommendation in the documents. If the LCBO also has complete discretion in how these bulk imported wines are marked-up for sale (the “pricing” recommendation) they will be enormously profitable -- bought at low bulk prices and shipped over in container ships, likely in large “bladders” the size of a tractor-trailer container, poured into Tetra Paks and marked-up as "premium" wines. Note the LCBO’s ongoing communications positioning Tetra Paks as a “premium package” and the conditions (in the 3rd attachment’s last paragraph) being placed on listing new wine products by Ontario vintners. Essentially the LCBO is telling local producers that if they want their new products put on shelves, put them in Tetra Paks. Otherwise, you can only add a new product by taking an old one off the shelf.

For Ontario wine producers this should be highly alarming. The LCBO will have an economic incentive to give preferential treatment (more and better shelf space in its stores) to its imported bulk products. Even if Ontario producers choose Tetra Paks, they will have to be price competitive with bulk wine imported cheaply and sold as premium wine. Ontario wine producers already face competition from low cost and highly subsidized producers such as those in South America. There is in fact a global glut of wine production. Now they’ll potentially face direct competition from their own local liquor monopoly!

This agenda to drive subsidized imported wines will have some very serious implications to Ontario wine producers. Of note is Deloitte Touch’s disclaimer on page 3: “..the potentially largest opportunities are related to pricing, product costs and vendor funding which have significant policy implications which are beyond the scope of this review.”

Who looked at the economic and environment “policy implications” prior to the LCBO embarking on this initiative, and is anybody going to?

Whatever happens, I leave it to readers (and delegates from the MWIN conference) to read the documents and decide for themselves whether my description of the LCBO’s commercial agenda is plausible or “pure fantasy” on my part, as was alleged at the conference.

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