Alberta’s power industry has a bright future, but needs to rely less on a fixed commodity like natural gas in favour of developing and researching more economical, environmentally friendly coal technology, energy experts say.

And following the Sept. 11 terror attacks in the U.S., security and reliability of long-term energy sources are gaining more importance in the minds of consumers and suppliers, a Calgary energy conference was told.

“I think the events that have transpired . . . have underscored that it’s extremely important to have security of supply,” Don Lowry, president and CEO of EPCOR, told a Canadian Energy Research Institute Conference last week.

In terms of reliability, Lowry said, “if all your power was through one hydro source or one gas pipeline and you had a major catastrophe through explosion or sabotage, you do not have security.”

Creating diversity in fuel sources by developing coal reserves also helps spur innovation, investment, and helps price stability, Lowry added.

Coal, which provides more than 80 per cent of Alberta’s power generation capacity, “is the most economic alternative fossil fuel that we have to natural gas.”

Don Lowry of EPCOR says coal plants will improve their emission records.

But critics fear the increased use of coal will boost greenhouse gas emissions and air pollutants such as mercury because burning coal produces 75 per cent more greenhouse gas emissions than natural gas. Emissions from Canada’s electricity generation sector increased 17 per cent between 1990 and 1997, according to figures provided by utilities in a national voluntary reporting program.

New coal plants coming on line in Alberta include TransAlta’s $1.8-billion expansion of its Keephills facility west of Edmonton to generate another 900 megawatts. EPCOR is also in the permit process for a $500-million, 400-megawatt expansion of its Genesee plant, located about 50 kilometres west of Edmonton.

Fording Coal and ENMAX are planning a new 400-megawatt coal-fired generation plant southeast of Calgary.

University of Alberta business professor Allan Warrack agreed that the estimated 800-plus years of coal reserves in Alberta make it a more attractive and price-stable power source than gas. Canada has more than eight billion tonnes of coal reserves, containing more energy than its oil, natural gas and oilsands deposits combined. It’s estimated that North America has 40 years of natural gas reserves.

“Even if the price of natural gas was going to stay lower . . . we’re using the wrong fuel,” Warrack said.

“We need to recognize that the workhorse to provide electricity in this province for a long time to come is coal.”

The big drawback for coal is its black reputation as a polluter, he added. “If people think coal is dirty, then for public policy purposes in the short term at least, it’s dirty. It isn’t, but people need to have the opportunity to understand how good coal is and can be.”

Murray Nelson, TransAlta’s executive vice-president, generation, reminded conference participants that gaining permits and licences for coal plants can take a long time.

“There’s also the prospect of uncertainty of further environmental regulations over the life of the plant,” he said.

If coal were to come back on the front burner and start attracting more research and development dollars, he suggested, technology breakthroughs to follow could improve both the bottom line and emission levels.

Lowry acknowledged a greater emphasis on coal-based power production carries costs and benefits, but said his company’s planned coal-fired plant west of Edmonton is committed to achieving the equivalent carbon-dioxide emissions of a natural gas combined cycle plant.

“It’s our conviction as a producer of power that every time you move forward with a coal plant, its technology should be better than those that preceded it, and the levels of emissions should be less so you progressively improve and contribute to the environment.”

Speakers at the two-day CERI conference addressed other aspects of Alberta’s energy industry, including deregulation, the export of Alberta power, and how the terrorist attacks may affect U.S. energy policy and the development of a continental energy strategy.

“In the longer term, I think there may well be some aftermath in terms of further heightened interest in continental energy as a more secure form of energy compared to other sources,” said Sue Kirby, assistant deputy minister with Natural Resources Canada.

Mark Sills, an international and domestic trade law expert with Macleod Dixon, said it is still unclear how the events of Sept. 11 will play a role in initiatives by the U.S. to work with Middle East countries.

“The question here is, will U.S. concerns translate into any move on the part of the U.S. to lessen its overwhelming dependence on oil from the Middle East?” he said.

Kirby observed that as the North American electrical sector begins to converge into larger, more integrated regional electricity markets that cross provincial, state and national boundaries, there will be a need for jurisdictions to ensure compatible market rules.

“The good news is that the U.S. appears to be focused on increased electricity imports, rather than imposing restrictions,” she said, adding there is a need to remain vigilant in monitoring any legal or regulatory initiatives that may affect Canada.

(Next week, Business Edge writer Mark Lowey will look at discussions on alternative energy at the CERI conference.)