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Malign Neglect: What Calgary’s Water-Main Break Reveals about the Failure of City Government

Published

6 months ago

32 minute read

From the C2C Journal

By George Koch

The rupture of Calgary’s biggest water main revealed more than the problems of aging infrastructure. It showed a civic bureaucracy unable to provide basic services or fix things when they break, and a mayor eager to blame others and scold citizens for their selfishness in wanting city services in return for their tax dollars. Above all, it laid bare the increasing tendency of governments to neglect their core responsibilities in favour of social policy fetishes, and to sidestep accountability when things go wrong. Clear, competent, mission-focused public servants are a vanishing breed, writes George Koch, and governing a city is now mainly about keeping city workers, senior officials and elected politicians happy.

As the enormous task forces of the U.S. Navy steamed westward across the Pacific Ocean in the final year of the Second World War, aiming ultimately for Japan but with some of the most vicious fighting still to come on islands like Okinawa and Iwo Jima, commanding admirals issued orders that any man who fell overboard would be left behind. No ship was to slow down for search-and-rescue; nothing was to get in the way of the mission. Several weeks ago, during one of the Stanley Cup semi-final games, a player was hit hard, fell to the ice, got up with difficulty, hobbled towards the bench and disappeared down the “tunnel”. The game went on, uninterrupted. Here too, the mission – entertaining millions – took precedence.

But when two municipal workers on a crew attempting to repair a catastrophic infrastructure failure in a major North American city are injured, the work immediately halts. Although the broken item serves a function vital to civilization and life itself, the mission of restoring water supply as quickly as possible becomes secondary. This happened 10 days ago, a week after the rupture of a high-pressure water main in Calgary had sent water shooting up out of busy 16th Avenue, triggering frantic 911 calls and initiating a “one week” repair saga that as of this writing is still weeks from completion.

Mission failure: The rupture of Calgary’s high-pressure water main on June 5 flooded 16th Avenue and threatened the city’s water supply; repairs were halted for a day after two workers were injured, an excess of caution that led to anger and frustration over the city’s basic competence. (Sources of photos: (top) Acton Clarkin/CBC; (bottom) CTV News)

The two injured workers were taken to hospital (thankfully, with non-life-threatening injuries) and the repair work eventually resumed the next day. But the interruption, piled atop days of confusing, contradictory, self-serving and at times seemingly false explanations and promises from senior city officials and embattled mayor Jyoti Gondek, generated further mistrust and anger among Calgarians over their city bureaucracy’s inability to operate the basics and get things fixed when something breaks down. The safety stand-down came on the very day the city had originally promised to restore water service, a time when every hour was precious, when the sacrifices by city residents and businesses were still bearable, when a return to normality seemed imminent. So why imperil the mission with nearly 24 hours of navel-gazing?

Though soon forgotten as new problems arose, the decision is emblematic of governments’ misplaced priorities, subordination of their core mission to their social policy fetishes and confusion over whose interests they exist to serve. Governing a city appears to have become primarily about keeping city workers, senior officials and elected politicians happy. Above all, to shield them against real accountability. Residents and businesses – the people who vote and pay the bills – are basically problems to be managed.

Built in 1975, the Bearspaw South feeder main draws from the Bearspaw Water Treatment Facility on the Bow River (bottom) and supplies 60 percent of Calgary’s drinking water. (Sources of photos: (top) The City of Calgary Newsroom; (bottom) Environmental Science & Engineering)

A few key facts for readers distant from Calgary. The 2-metre-diameter Bearspaw South feeder main burst its concrete casing on the afternoon of June 5. Installed in 1975, it draws from the Bearspaw Water Treatment Facility on the Bow River in the city’s northwest, and normally supplies up to 60 percent of the city’s drinking water. The break required the city to rely on a much older but very reliable plant drawing on the Glenmore Reservoir, which dams the Elbow River in the city’s southwest. The rupture prompted Stage 4 water restrictions with various bans and recommendations (more on that below), including a call for Calgarians to collectively cut the city’s water consumption by 25 percent, to 480 million litres per day. People immediately responded and, within several days, the city was reporting a water surplus. (For those seeking more details, the Calgary Herald has logged the key daily events.)

From the beginning, the city’s attempts to explain things did not quite add up. The water main had been inspected and tested regularly, officials said, or at least once for sure, and had received “maintenance” as recently as April. Most people probably assumed this involved physically examining it from the inside, then subjecting it to excessive pressure to see if it would hold, and patching up any weak areas. But all that would require first draining a pipe that, after all, 1.6 million people depend on every minute of every day. Later it came out that the line had last been drained and inspected in 2007.

For a few days it seemed as if water service would be restored within the promised one week. But on June 15 it was announced that line inspections (which apparently had occurred in the physical world and not merely in city officials’ media narrative) had found five more ‘hot spots’ – i.e., potentially calamitous weaknesses.

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So then it was explained that sophisticated external sensors had not detected any leaks in the most recent inspection. But then someone pointed out that catastrophic failures of an entire multi-layered structure of inner concrete core, steel piping, wire tension coils and outer concrete don’t usually begin with small leaks. And then someone else let slip that the line’s robustness had been confirmed by modelling, i.e., relying on theory.

“This pipe is only at the halfway point in its life cycle,” lamented Sue Henry, Chief of the Calgary Emergency Management Agency. “By all accounts, this should not have happened, but it did.” But others pointed out that the 100-year-lifespan claim was itself bogus. Lines of this type, said Tricia Stadnyk, Canada Research Chair in hydrologic modelling with the University of Calgary’s Schulich School of Engineering, are rated to last 50 years. And the Bearspaw South line was built…49 years ago. (The lifespan issue gets even worse – more on that below.)

A story full of holes: City officials said the water main had been inspected and tested regularly, and that no leaks had been found; experts pointed out a catastrophic breakage of the line’s multi-layered structure would not likely begin with small leaks – and it emerged the line had not actually been drained and inspected since 2007. (Sources: (left photo) The City of Calgary Newsroom; (right image) The City of Calgary Newsroom)

Gondek, for her part, extended her track record of blaming anyone but herself by claiming the disaster could have been averted if only Alberta’s UCP government had “paid enough attention” and not denied Calgary the money it desperately needed for preventative maintenance and repair. The implications of her claim didn’t quite gibe with city officials’ assurances that the line was considered just fine. And Alberta Premier Danielle Smith shot back that Gondek “has never asked us for funding to repair their water supply infrastructure,” and that the province is providing the city with $224 million to allocate as it pleases. Others noted it was never a question of money at all, because Calgary has generated successive annual budget surpluses but either spends those funds on more congenial pursuits or carries them over into future years.

Still, for a few days it seemed as if water service would be restored within, or very soon after, the promised one week. But on June 15 it was announced that line inspections (which apparently had occurred in the physical world and not merely in city officials’ media narrative) had found five more “hot spots” – i.e., potentially calamitous weaknesses. The repair timeframe was abruptly extended to three to five weeks, well into July. And with that, the City of Calgary declared a State of Local Emergency.

Pointing fingers: Calgary mayor Jyoti Gondek blamed Alberta’s UCP government for denying Calgary the money for maintenance and repairs; however, Calgary had never asked for such funding, and in any case received $224 million this year to allocate as it pleased. (Source of screenshot: The City of Calgary Newsroom)

There is an emergency in Calgary – and virtually every city across North America and the Western world. At least two types of emergency, actually. The first type is the open, at times almost gleeful refusal to focus on the basic responsibilities of municipal government. Such as paving roads – Calgary’s are notoriously cracked and potholed – instead of removing lanes from busy thoroughfares and lowering speed limits in order to create still more unused bike lanes. Or ensuring that public transit facilities are clean and safe for law-abiding users, as opposed to all-but abandoning buses and C-Trains to drug addicts, while still pushing for funding of the next multi-billion-dollar transit line.

Many Calgarians have grown exasperated at such neglect and indifference, and quite a few are paying close attention. One letter-writer to the Calgary Herald pointed out that aging water infrastructure is a well-known problem in civic government circles, noting that the Alberta Urban Municipalities Association in 2014 set the goal of getting “unaccounted for” water down to 10 percent of total treatment plant outflow. While that figure seems unsettling enough, five years later a third-party engineering report estimated that Calgary was losing 17-28 percent of all its treated water. While some of that was for fighting fires and some was theft, the majority was believed to be leakage. That makes it sound like very few of those “100-year-rated” lines had ever been inspected, tested and confirmed sound.

Core failures: As in many Western cities, Calgary’s leadership refuses to focus on the basic responsibilities of municipal government, like fixing potholes, clearing snow or ensuring public transit is safe and effective; it prefers building bike lanes people don’t use and planning the next multi-billion-dollar transit line. (Sources of photos (clockwise starting top left): Dave Gilson/CBC; Rachel Maclean/CBC; Postmedia; Matt Scace/Postmedia Network; Nick Blakeney/CityNews; Rebecca Kelly/CBC)

The staggering water volume implied by that percentage range – and worse, the toleration of the problem for at least a decade – evokes a deeply disturbing decrepitude analogous to the massive leakage from oil pipelines in the dying years of the Soviet Union or the chronic tapping of oil pipelines by thieves in Nigeria. Neither is a place Calgary should emulate. The 17-28 percent range is also, coincidentally, similar to the amount of water Calgarians are now expected to conserve. If Calgary’s pipes didn’t leak, we’d hardly have to conserve water at all even with the city’s biggest water main down. “It’s time,” declared attentive letter-writer Guy Buchanan, “to rethink projects such as the Green Line LRT project and concentrate the $4-billion of reserves that council is hoarding to fortify life-sustaining infrastructure.”

This fiasco is, unfortunately, just one example of an operating mentality averse to focusing on dreary real-world problems. The City of Calgary also hates clearing roads in winter and, every year, whenever it snows hard, the warming Chinook winds fail to arrive on schedule and streets remain snowbound, chaos erupts and the excuse – every single time – is that the city lacks the money and equipment needed to plough its roads and, in any case, does not have a “bare pavement policy.” These words come out of the city spokesperson’s mouth right about the time that private-sector operators wrap up clearing streets and sidewalks at private condo developments and old folks’ homes, have restored Walmart and Safeway parking lots to pristine expanses of black pavement, and can all head to Timmy’s for a well-deserved round of late-morning dark roasts and crullers.

But the inversion of priorities that sees the city authorize spending on ugly cactus-like plants for roundabout verges or cartoon-like bas-reliefs of leaping trout in dank freeway underpasses, and the extirpation of men with a mindset like Buker are not the kinds of emergency Gondek or other public officials have in mind when they declare one.

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The second type of emergency is what has been termed the “crisis of competence” that is afflicting not only governments but utilities and complex systems in general. Put simply, two generations of experienced technical specialists, managers and tradesmen have been gradually retiring, quitting in disgust or getting purged from organizations that now prioritize adherence to internal process and conformity to progressive ideology over the nuts and bolts of keeping systems running, heeding numbers that don’t lie and respecting unforgiving physical reality. The incoming cohorts, meanwhile, often don’t know what they’re doing and don’t want to learn, hiding their ignorance behind a veil of virtue-signalling arrogance.

Crisis of competence: Experienced technical specialists, managers and tradesman have been leaving or getting purged from organizations that prioritize conformity to progressive causes like ESG and wokism over the nuts and bolts of keeping systems running. At bottom, engineer James Buker, a retired city waterworks employee. (Source of bottom photo: Darren Makowichuk/Postmedia)

The National Post’s Jamie Sarkonak had a good column on this over the past week. “Today’s students can’t read as well as their predecessors; workers are increasingly hired on non-meritocratic bases; medical errors and aviation ‘safety issues’ are on the rise,” Sarkonak wrote. “Meanwhile, decision-makers are often so risk-averse they struggle to decide anything. At small scales, everything still works. But at large scales, the effects can be disastrous.” His piece also references a more detailed description of the phenomenon in the Palladium online journal.

As luck would have it, Calgary’s water main debacle produced an archetype of that vanishing breed. James Buker was an engineer in what used to be called the Waterworks division from 1975 to 2016, serving as head of water transmission and distribution for much of the period. Following the Bearspaw rupture, Buker told journalists that such an event became foreseeable after a similarly catastrophic though less damaging water main rupture in 2004. Excavation revealed that pipe had deteriorated to “talcum powder”, as Buker described it, in barely 20 years. This in turn led to the conclusion that the precast concrete used in an entire generation of city water infrastructure installed between 1950 and 1990 was insufficiently resistant to corrosion from soil. Buker was present for the installation of the Bearspaw South line in 1975. The problem, in other words, was well-understood. By some, at least.

But the inversion of priorities that sees the city authorize spending on ugly cactus-like plants for roundabout verges or cartoon-like bas-reliefs of leaping trout in dank freeway underpasses, and the extirpation of men with a mindset like Buker (or another retired city engineer who revealed that 2007 inspection date mentioned above), are not the kinds of emergency Gondek or other public officials have in mind when they declare one. Their kind of emergency mostly involves increasing their powers to boss the rest of us around. In their minds, the critical task is getting the citizenry good and compliant, in this case focusing us entirely on water conservation, so that we don’t ask too many questions about how the work is going and we blame ourselves when “we” fall short.

Hectoring and lecturing: When the state of emergency was declared, local media focussed increasingly citizens’ compliance with water restrictions; the mayor lectured Calgarians on the need to “dig in and do a little bit more”. Shown at bottom, people filling their water jugs at the city’s emergency supply trailer. (Sources of photos: (top) Helen Pike/CBC; (bottom) The Canadian Press/Jeff Mcintosh)

This is more than a rhetorical flourish. Following the state of emergency declaration, local media coverage shifted emphasis from the situation’s technical aspects to water conservation and more water conservation. Multiple articles were devoted, for example, to showcasing how residents in bedroom communities like Airdrie, which draw their drinking water from the city, were “rallying” to cut their water use.

Gondek has been lecturing Calgarians as if we are schoolchildren or simpletons, noting “how well you’re doing” and “when you need to dig in and do a little bit more.” She urged businesses to ask employees to work from home because this, after all, “would save them the time of having a shower in the morning and no one has to worry what they look or smell like, for that matter.” The mayor, though, always turned up looking good, and there were no reports she didn’t smell good.

Going by the city’s rhetoric, the crisis was largely about our failures. As if a construction company owner worrying he’ll have to shut down the jobsite and lay off his workers because the “Stage 4” water restrictions have forbidden welding, applying hot tar or even using glue due to the purported fire hazard is being narrow-minded. As if the costly disruption to thousands of businesses employing tens of thousands of people can just be shrugged off. As if a retired business owner who laboured for 40 years to afford a decent house in a good neighbourhood and now wants to enjoy gardening – and who, after all, pays many thousands in property taxes and water fees every year – is being selfish in worrying that her plants will die. As if receiving water from the City of Calgary is a gift, a privilege the city has every right to withdraw.

Water, water everywhere: The clampdown was based on a fear the city would not have enough water to fight a single major fire, this in a city posting daily water surpluses of 100 million litres, with two rivers (including the Bow River shown at top), two large reservoirs (including the Glenmore Reservoir shown at bottom) and multiple small water bodies to draw from.

Governments today appear to have only two basic states: immovable indolence and unchecked panic. When the first state trips over to the second, a machinery of absurd over-reaction kicks in, including costly campaigns to eradicate phantom risks. The clamp-down on industrial fire hazards was so severe that a reported 800 Calgary construction jobs were at risk of shutdown. The city feared it would not have enough water to fight even one major fire. This despite posting daily water surpluses as high as 100 million litres and having available two rivers, two large reservoirs and dozens of smaller water bodies to draw upon with pumps. The blanket ban on outdoor fires wasn’t lifted even when it rained four days in a row.

The postmodern world’s inability to rationally assess risks and balance possible risk-reduction measures against foreseeable costs and benefits includes a blindness to the principle that too much caution itself creates danger. Every additional precious hour lost during the water main repair process – such as through that nearly day-long safety stand-down – placed additional weight on the 92-year-old Glenmore facility. It was considered an engineering marvel of its era and its feeder main has proved better-built than anything installed in the last 50 years. But if it failed too, Calgary would be without safe drinking water. People might actually die.

It’s worth noting that the same progressives who now worry about two injured workers more than 1.6 million city residents were happy to destroy anything and anyone who got in their way during Covid-19. Those questioning the narrative were cast aside like used Kleenex or crushed like cockroaches.

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Of course it is great – stirring, in fact – how Calgarians rallied almost as one and did what needed to be done under inconvenient circumstances. Limiting water consumption has been a topic in every conversation; people really do care. The same civic-mindedness was shown during a brutal cold snap last winter, when southern Alberta’s electrical grid became overloaded and the system operator was on the verge of ordering rolling blackouts. People responded within minutes to an urgent request to shut off unneeded lights and electrical devices, and the problem passed. But if a whole city’s population can instantly do the right thing on more than one occasion, why can’t that city’s government also do the right things, like paving roads and inspecting aging water mains?

They don’t make ‘em like they used to: The water main break forced the city to rely on the 92-year-old Glenmore Water Treatment Plant (right), built on the north side of the Glenmore Reservoir (left), an engineering marvel of its era.

In the same spirit, I’m certain there still must be dozens, hundreds, even thousands of earnest and well-meaning city managers, tradespeople and technical specialists who know what they’re doing and would love to focus on just getting the job done, if the internal culture would only let them. The repairs are getting done – even if it’s with the help of a small army of private-sector “partners” – so the entire city payroll can’t be incompetent.

But if the Bearspaw South rupture had been felt and not merely declared to be an emergency, then the repair work wouldn’t stop for two injured workers. As Star Trek’s Mr. Spock liked to intone, “Logic clearly dictates that the needs of the many outweigh the needs of the few.” All good progressives used to nod in rhythm to that line; but either the present-day City of Calgary is from a different other planet, or the “many” whose needs must be met aren’t actually the city’s residents.

It’s worth noting that the same progressives who now worry about two injured workers more than 1.6 million city residents were happy to destroy anything and anyone who got in their way during Covid-19. Those questioning the narrative were cast aside like used Kleenex or crushed like cockroaches. The (futile) mission of “stopping the spread” took precedence over everything: the economy, the individual, religion, social relations, common sense, basic rationality.

“Logic clearly dictates that the needs of the many outweigh the needs of the few,” said Star Trek’s Mr. Spock (left); the same progressives who used to nod in agreement to that line seemed more worried about two injured workers than the mission to repair infrastructure critical to 1.6 million Calgarians. Shown at right, a Japanese kamikaze pilot in a damaged single-engine bomber over the U.S. Aircraft Carrier USS Essex, off the Philippine Islands, November 1944. (Source of right photo: Rare Historical Photos)

But when it comes to civic infrastructure, the mission doesn’t top the priorities list. Unless the real mission is something other than what is stated. If the mission is to avoid accountability, to go back to the way things have been for the past 30 or so years, and to save the faltering political career of a deeply unpopular mayor, then it all makes a kind of sense. Bringing in specialists from the private sector (from the oil and natural gas industry, no less) to help get them out of the mess, as they quietly announced about 10 days into their week-long repair job – “our best and brightest”, as Gondek put it without any apparent self-awareness – should be seen as confirmation of their desperation, not as a hopeful sign they’re about to change their ways.

George Koch is Editor-in-Chief of C2C Journal.

Source of main image: @cityofcalgary/X.

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Your towing rights! AMA unveils measures to help fight predatory towing

Alberta

Your towing rights! AMA unveils measures to help fight predatory towing

Published on December 21, 2024

By

From the Alberta Motor Association

Know Before the Tow: Towing Rights in Alberta

Predatory towing is a growing concern in major cities across the province. The Alberta Motor
Association (AMA), in partnership with the Calgary Police Service and Calgary Fire Department,
wants to ensure Albertans are not only aware of this emerging issue but also know how to stop
it.

Today, AMA launches Know Before the Tow—a new, provincewide awareness campaign that
empowers Albertans with the knowledge needed to stay confident and in control when faced with
a tow scam. The campaign features a list of five key towing rights that every Alberta driver should
know:

1. You have the right to refuse unsolicited towing services.
2. You have the right to choose who tows your vehicle, and where, unless
otherwise directed by police.
3. You have the right to access your vehicle to retrieve personal items during a
storage facility’s business hours.
4. You have the right to ask if the towing company receives a kickback for taking
your vehicle to a particular storage facility or repair shop.
5. You have the right to a quote prior to service, and an itemized invoice prior to
making payment.

“Being in a collision or broken down at the roadside is stressful enough; the last thing any Albertan
needs is high pressure from an unscrupulous tower,” says Jeff Kasbrick, Vice-President,
Advocacy and Operations, AMA. “These towing rights are clear and remind every Albertan that
they’re in the driver’s seat when it comes to who they choose to tow their vehicle.”

Edmonton and Calgary in particular are seeing increasing reports of predatory towing. Unethical
operators will arrive at a collision or breakdown scene uninvited, create a false sense of urgency
to remove the vehicle, and ultimately leave drivers facing huge fees.

Starting today, Albertans can visit ama.ab.ca/KnowBeforeTheTow to download a digital copy of
their towing rights, helping them feel confident if faced with a tow scam. And soon, all AMA centres
will offer free print versions, which are small enough to tuck in a glovebox.

“Alberta’s towing industry is still highly reputable, with the vast majority of operators committed
to fair and professional service. In fact, AMA and our roadside assistance network is proud to
represent 80% of all private-passenger tows in the province, so our members can be confident
that we’ll always protect them—just as we have for nearly 100 years,” says Kasbrick.

“By knowing your rights and choosing trusted providers like AMA, you can avoid unnecessary
stress, costs, and uncertainty. Because the road to recovery after a collision shouldn’t have to
include fighting for your vehicle.”

Sergeant Brad Norman, Calgary Police Service Traffic Section, says law enforcement continues
to work diligently with first responders and community partners like AMA to put the brakes on
predatory towers, who “are showing up at collision sites and pressuring overwhelmed and
frightened victims into paying high towing rates.”

“Our priority is to ensure the safety of collision victims, the public, and first responders at
collision sites. Part of this effort is educating motorists about their rights so that they Know
Before the Tow that they can say no to unsolicited towing services and choose a reputable
tower of their choice instead,” says Norman. “No one deserves to be taken advantage of after
being involved in a collision.”

To learn more, and to view an expanded version of Alberta towing rights, visit
ama.ab.ca/KnowBeforeTheTow

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Alberta

Proposed $70 billion AI data centre in MD of Greenview could launch an incredible new chapter for western Canadian energy

Published on December 21, 2024

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 By Terry Etam

 

In case you missed it the other day, the Municipal District of Greenview, in west-central Alberta, announced some rather huge plans: to develop the “world’s largest AI Data Centre industrial Park”. The potential total value of the project could exceed a staggering $70 billion. This might, just might, be the tip of a big iceberg, because it shows the first indications that word is spreading about what some people have known for a while: there is no better place for these power-hungry data behemoths than the cold, relatively unpopulated, natural-gas-rich region of western Canada.

The announcement has garnered significant attention, which was awesome to see. The terms “AI data centre” and “$70 billion” will do that, and for good reason. AI is sweeping the world and no business or institution wants to be left behind. Furthermore, everyone wants them yesterday, and the challenge is where to put them all. It’s not easy finding the right place to plop something onto the grid within a few months that consumes the electricity of a small city, that doesn’t cause very problematic disruptions. We are in a power-short world, and this new entrant doesn’t really care. Which spells nothing but opportunity for power-rich regions.

Despite the positivity of the news release, it is important to keep our feet on the ground. Not meaning to be a buzzkill, here, but we shouldn’t fool ourselves that this will be easy. At any rate, here’s a quick run through the challenges, before getting to the more optimistic view. And in the spirit of Kevin O’Leary, I’ll let ‘er rip.

Mr. O’Leary is of course the driving force behind the Greenview AI project, which means that out of the chute it is going to be a colourful ride. He has dubbed himself “Mr. Wonderful” in an odd burst of mirth; the title is I guess supposed to be ironic because he, in his own words, courts controversy. He does seem to go out of his way to be provocative, with a certain Howard Stern-type shock-jock vibe that is not always helpful.

At least a few very bright people I’ve spoken to raise their eyebrows when they hear that Mr. O’Leary is leading this charge (he has even dubbed the location “Wonder Valley”, presumably a play on his chosen nickname, which comes across a bit like a tinpot dictator putting up a huge statue of himself). His business chatter is often mostly a lot of shouting, a lot of feathers but not much chicken; he is an astute businessman but seems to take delight in boisterous battles or boasts that cause people to think otherwise. In a recent BNN interview this past summer, he mused that he would buy TikTok (“I will be the buyer, I think”), which is a bit of an astonishing claim, considering that later in the conversation he went on to talk about his investment in a cupcake-in-a-jar business, which sounds fun, but does not enhance his Renaissance-man-style, nor when talking about executing 70 billion dollar projects. His focus is, to put it mildly, rather wild-eyed.

He is not a stranger to data centers, but even then his low polar moment of inertia leads to some serious longitudinal instability (oops, too much F1 lately). At the 2022 “Montana on the Rise Economic Summit”, he spoke extensively of data centers, concluding that data centers would be built “right here in Montana” because of the clean power attributes, and abundance of space and water. He went on to say that he would only place data centers (he does invest in them) where he requires “policy that he can see at least 7 years ahead.” When he invests in data centers, per his speech, what matters are two parameters: “the source of energy and the stability of the policy and the tax regime.” Regarding energy sources, he talked about Montana’s zero-carbon power sources as being key to this Montana vision of his. His statement was clear: clean power was the key to Montana data center development, from hydro, wind, nuclear. He introduced four speakers that each spoke of the clean power that was pretty much a prerequisite.

But now here he is leading the charge into Canada, which is a great omen possibly, more on that in a second, but it does fly in the face of what he said two years ago. In fact, not just two years ago but even earlier this year he was lamenting that Canada was un-investable. Here is another batch of sound bites from Mr. O’Leary from March 2024, where he vigorously follows up on his requirement for 7 clear years of policy vision:  Canada is “run by complete idiots…Canada should have at least five of them [data centers]. There are none of them going on right now because you can’t get energy permits…you wouldn’t waste your time trying to go through the regulatory process of getting a permit issued…No one is going to risk capital there. You cannot get anything done in Canada, not in mining, not in data centers, not in anything to do with the federal government…”

Furthermore, as he ascertains, the challenges will be considerable. He was not wrong in his assessment of Canada’s challenging investment climate, and anyone involved in building anything in Canada can spill yarns until the cows come home about the endless challenges.

You wouldn’t know this by looking at the Wonder Valley website. It is somewhat different than the norm for this type of thing, in Canada – some entities that I am in touch with are attempting to build such projects, but are doing it the hard way – doing as much legwork as possible before making a big public statement, because of the considerable uncertainty. Mr. O’Leary has chosen a different tack, including creating a minute-long AI video of a dreamy forest landscape with prancing deer and pristine buildings, to go with his wonderful name, and anyone with any project development experience up here is well aware of the challenges that are being visually swept under the rug. It makes one wonder just where the project is at in the planning timeline, because the peacock feathers need to be affixed to something substantial, or they’re all just for show. And that’s where this project has an aura of haziness, because anyone that builds anything knows the flash is the easy part.

OK, that was the bad news. And it’s no surprise, we all know he is flamboyantly combative and blustery. But that’s not the end of the story.

Now let’s look at the good. And it could be very good indeed.

Regardless of the antics chronicled above, the fact remains that Mr. O’Leary is a very successful businessman, wh0 does not run from a challenge. There are also numerous reasons why he might just make this all happen despite his historical comments on the topic.

First off, Mr. O’Leary, like everyone else, no doubt has a different view of data centers than from 2022. The whole world has exploded in AI demand in just the past 12 months. So we can easily forgive him for that change of heart, including his adaptation to welcome natural gas. Given the current demand for AI services over the next few years, there is no other way.

Then Mr. O’Leary spoke of Canada being un-investable because of Ottawa. He’s not crazy there, I would agree completely. But the good news is that perhaps the winds of change are blowing so hard that investors might be willing to start placing bets that the era of insane governance in Canada is nearing the end. That would be a very good sign, because this country will continue to sink as long as the current regime keeps flexing in ways that terrify any investor that isn’t building a battery plant or other albatross with the fed’s $.

The last part of the good news equation is that Mr. O’Leary is publicizing something that is exactly right. From the Greenview/O’Leary news release: “Given existing permits, proximity to stranded sources of natural gas, pipeline infrastructure, water and a fiber optic network within just a few kilometers of the Greenview Industrial Gateway, we will be in the ground and up and running sooner than any scale project of its kind… The GIG’s ideal cold-weather climate, a highly skilled labor force, Alberta’s pro-business policies and attractive tax regime make the GIG the perfect site for this project.” Mr. O’Leary has not forgotten the carbon-free angle, noting that geothermal energy is under development in the region as well. And finally, the project, according to the news release, promises a positive relationship with First Nations, a cornerstone of any future large-scale industrial construction in any part of Canada that is not a major city.

Behind the regulatory woes, the tools required to make this project a success are mostly there. The energy sector has a formidable ability to get things done, with a strong, motivated workforce, world-class talent, and legendary enthusiasm. The dynamism of the sector has drawn young people from across the country for decades.

Thanks to the enthusiasm of producers, we are also blessed with many decades of reasonably priced natural gas; we are capable of producing far more than can find a home via pipe. If ever there was a poster child for “in-basin demand”, this is it. The infrastructure is there, the gas is there, the construction talent is there, the fiber optic linkages are there…it’s quite a list of assets.

Those of us watching the energy industry from the inside have known since the topic went viral that inland western Canada possesses everything necessary to successfully host massive AI data center developments. The challenge has been the vast, thick wet blanket of regulatory strangulation and business animosity that has grown like a weed across the country.

If it takes a bombastic guy like Kevin O’Leary to punch through that mess and start the first wave of what could be a very large infusion of capital into Canada, then so be it and I welcome his project and even him with open arms. Furthermore, I’m sure nothing drives him forward like being told he will not accomplish something.

And to be very clear on the point: Mr. O’Leary is an entrepreneurial guy who gets things done. That is exactly what we need more of in Canada. Or rather, we have lots of those types, but they’ve been demoralized for a decade by the current political and regulatory environment that actively dislikes the hydrocarbon sector. Maybe exactly what we need is someone larger than life to kickstart things. We do know that the demand for AI data centers seems insatiable, and once the trail is blazed for new, co-located projects, perhaps many more will rapidly follow.

Mr. O’Leary, wishing you all the best and I will gladly print and eat this column at your convenience (I get to choose font) should you bring Wonder Valley to life. If you do, it could be the cornerstone for a whole new industry up here, and the benefits to Canada will be glorious.

It’s all happening as expected, more or less – an energy transition isn’t quite so simple.  Find out what readers knew years ago in The End of Fossil Fuel Insanity – the energy story for those that don’t live it, and want to find out. And laugh. Available at Amazon.ca, Indigo.ca, or Amazon.com. 

Read more insightful analysis from Terry Etam here, or email Terry here.

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