Canada's coal-mining sector is trying to polish the mineral's dirty image as a growing number of nations look to develop alternative energy sources.

The Coal Association of Canada, which represents 76 coal-related companies across the country, is embarking on public-speaking engagements, educational programs and media interviews in a bid to show the importance of coal as an energy source.

Meanwhile, producers of thermal coal - the kind used in coal-fired power plants - are quietly waiting and hoping that commercially viable carbon-capturing technology will be developed in the near future.

"It's not the villain," says Allen Wright, executive director and CEO of the Calgary-based association. "It provides an inexpensive form of electricity."

Allen Wright

Canada produces 67 million tonnes of coal per year and exports 27 million tonnes of mostly metallurgical coal - the kind used to make steel - to 22 other countries, mainly Japan and Korea. Most of the coal produced, about 55 to 60 per cent, is used to fire power plants.

But coal is often blamed for increasing greenhouse gas emissions as it is burned to generate power at electrical and oilsands facilities.

The Ontario government has announced plans to phase out coal-fired facilities and the B.C. government has introduced a policy that will only permit coal plants to be constructed if they have no greenhouse gas emissions.

"One of the things to keep in mind is that there is not an energy source that doesn't have problems," says Wright. "Wind has problems, and they all do, but should we eliminate them out of hand? I don't think so."

The B.C. government policy, introduced in this year's energy plan, has resulted in one proposed coal-fired plant - the AES Wapiti in northeastern B.C. - being scrapped and another - Compliance Energy Corp.'s project in southern B.C. - being indefinitely postponed. Both project operators have received energy-purchase contracts from provincially owned BC Hydro.

Wright and other mining and oil and gas leaders say carbon capture-and-storage technology, commonly known as carbon sequestration, is expected to permit the development of new coal-fired plants.

But the technology is not yet commercially viable.

"One of the challenges with carbon capture and storage is, unless you can find a way to use it for enhanced oil recovery as an example, (it) is purely a cost," he says.

But there is hope on the horizon or, to be more precise, the Prairies.

Sask Power, the province's electrical utility, is contemplating building a $1-billion clean-coal power plant employing carbon sequestration at its existing Shand facility near Estevan.

"The one in Saskatchewan could be unique, so it's a matter of timing in many of these situations," says Wright, adding the economics have to be sorted out.

B.C. will permit coal-fired power plants in coming years, says the province's minister of state for mining. In an interview after a recent speech to the Coal Association of Canada in Vancouver, Kevin Krueger says Premier Gordon Campbell's government will endorse coal-fired facilities in hopes of ending its days as a net importer of electricity.

"We have a tremendous coal resource," says Krueger. "We would like to see coal-fired electricity."

B.C.'s electricity supply falls 15 per cent short of demand. To avoid blackouts during peak usage periods, it imports extra power from Alberta and Washington state.

"We actually haven't had any coal-fired electricity projects in British Columbia up until now," says Krueger.

"We don't think it's a satisfactory situation when we are a net importer of electricity from outside of B.C. We have been for years now, and a lot of it is coal-fired electricity."

But for the time being at least, Krueger's support for coal usage conflicts with his government's policy of only allowing coal-fired plants that can fully sequester emissions.

"We will only write the permits for (a coal-fired plant) when there are not greenhouse gas emissions as a consequence," he says.

David Slater, president and CEO of Vancouver-based Hillsborough Resources, says it's "hideously ironic" that the province pushes for more coal production, but won't permit coal-fired plants - and imports power from coal-fired facilities in neighbouring jurisdictions.

Under the scuttled deal, AES was to operate a power plant called AESWapiti between Tumbler Ridge and Dawson Creek, while Hillsborough provided the coal from its Wapiti mine.

"There's a little bit of hypocrisy that goes on with this whole situation with regard to what goes on with power in B.C.," says Slater.

Michael McPhie, president and CEO of the Mining Association of British Columbia (MABC), says the province should do more to encourage the research, development and commercialization of clean-coal technology.

"Why would we want to sterilize such a massive potential energy source?" says McPhie, whose group represents large mineral producers.

Clean-coal technology could be developed in B.C. and exported around the world, he says. "It seems to me to be just a little bit inward looking if we just ban it outright in British Columbia and we don't do anything about it."

Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia now have coal-fired power plants.

Peter McBride, a spokesman for the Ontario Mining Association, says coal is a "non-issue" in his province, because the mineral is not present within the Canadian Shield.

But he adds the opening of new coal mines and revival of old ones in Western Canada indicate the industry is faring well.

"I don't think coal is a dirty word," says McBride.

Even though Canadian coal may not be burned in many locales in this country, a leading analyst says demand for it is high.

Jeff Watkins, president of U.S.-based international coal-consulting firm Hill & Associates Inc., told the recent Coal Association of Canada luncheon in Vancouver that coal-fired facilities account for one-third of future American power projects.

"The message here is the global energy industry now recognizes the importance of coal," said Watkins.

But, he warned, less than 10 per cent of new U.S. coal generation is carbon-neutral, and proposed American plants could be derailed by future greenhouse gas legislation, escalating labour and materials costs, increased opposition of environmental groups and plant lead-time constraints.

"We think, despite the fact that there are all these coal plants in the pipeline (in the U.S.), very few will actually get built," said Watkins.

(Monte Stewart can be reached at monte@businessedge.ca)