B.C.’s battle over the proposed $400-million Sumas Energy 2 (SE2) natural gas-fired power plant project isn’t over yet, despite a decision being cheered by residents in Abbotsford and Premier Gordon Campbell.
The National Energy Board (NEB) denied an application by U.S.-based SE2 Inc., which has spent six years trying to get the 660-megawatt power plant built, to construct the Canadian portion of an 8.5-kilometre international power line for the project.
The line would have enabled SE2 to transport electricity from the proposed power plant near Sumas in Washington state across the border into the Fraser Valley to a B.C. Hydro substation in Abbotsford, for distribution into the Pacific Northwest regional power grid. Without the line, the project looks uneconomic.
The NEB decided after holding a public hearing that, on balance, the negative effects of the SE2 project outweighed the benefits to Canada, especially for local and regional communities.
The power plant would emit 2.5 tonnes of pollutants a day into the Fraser Valley – already one of the most polluted airsheds in Canada.
SE2, which says it is “flabbergasted” by the NEB’s decision, already has approval from Washington state energy regulators for the power plant, which would generate enough electricity for a city of 400,000.
The U.S. firm now has the option of asking the NEB to reconsider its decision or launching an appeal in Canada’s Federal Court.
Federal Environment Minister David Anderson says he expects that a court appeal will be forthcoming.
But this column’s prediction is that if SE2 goes ahead, the company will instead try to plug the plant into the U.S. power grid about 30 kilometres away along Washington state’s Interstate 5 freeway. It’s a much more costly route, but it won’t be nearly as expensive as an international court battle.
OIL REFINERY UPGRADED
Husky Energy is investing $73 million to grow its ethanol-blended gasoline and diesel fuel business in B.C.
And the people of Prince George couldn’t be happier.
Husky will spend the money to upgrade and expand production at its Prince George oil refinery, to produce low-sulphur gasoline and diesel fuels that meet new federal fuel regulations.
John Lau, the company’s president and CEO, says the investment “complements our position as a responsible manufacturer and marketer of environmentally friendly fuel.”
Upgrading the 10,800- barrel-a-day (b/d) facility to 12,000 b/d also makes good business sense. Husky’s wholesale, commercial and retail marketing network consists of more than 580 Husky and Mohawk outlets stretching from B.C. to Ontario. It includes one of the most successful car/truck-stop networks in Canada.
The Prince George refinery, which has 80 full-time employees, supplies 20 per cent of the fuel sold by those outlets.
The upgrade expansion, expected to be complete by the second quarter of 2005, means Husky won’t need to buy an alternative fuel supply.
For Prince George residents, the project also means new construction jobs and investment for their city.
BIOMASS POWER DEAL INKED
Compliance Energy Corp. of Vancouver has signed a tentative deal with Northland Power Inc. to help develop a 49-megawatt biomass and coal-fuelled power project on Vancouver Island.
Compliance Energy will assist in securing the fuel supply for the electricity-generation plant, in return for the right to acquire up to a 15-per-cent equity interest in the project.
The biomass fuel for the generator would be wood waste from Northland Power’s new Beaver Cover Chipping waste-wood fibre recovery facility on Vancouver Island. Northland, headquartered in Toronto, is an independent power company that specializes in developing and operating private power projects.
BC Hydro has put the biomass and coal-fired generator on its bid list of proposed projects to supply much-needed new power to Vancouver Island. But whether the facility proceeds depends on BC Hydro selecting the project as one of the successful bidders.
Compliance Energy, which is positioning itself as one of B.C.’s “new energy” companies, is also planning to build a 50-megawatt wood-waste and coal-fired power plant close to its new coal mine near Princeton in B.C.’s Okanagan Valley. That project is a joint venture with Nissho Iwai Coal Development Ltd., the Canadian arm of a Japanese conglomerate.
OILPATCH PRAISES PETROCAN SALE They’re calling him ‘Prudent Paul,’ but it could just as well be Mr. Political Smoothie.
Oilpatch analysts are applauding the federal budget announcement to sell Ottawa’s remaining 18.7-per-cent stake in Petro-Canada, while investment bankers counting on a piece of the action are merrily singing “Anticipation.” In a shrewd bit of strategy, Prime Minister Paul Martin also pre-empted any energy sector criticism about how the government will use the proceeds from selling its 49 million-plus Petrocan shares – worth about $2.8 billion as of last week.
He did it by allocating at least $200 million of the proceeds to develop new environmental technologies to improve air quality, reduce greenhouse gas emissions, and clean up water supplies and contaminated soil.
Predictably, some National Post columnists, afflicted by feverish rhetoric whenever they hear the word ‘green,’ lambasted such spending. One even complained that the money would be wasted on a technology “for which there is no demand.”
That will come as news to the oil and gas industry, which every year invests millions of dollars – sometimes hundreds of millions – in new technology to reduce airborne pollutants such as sulphur dioxide, as well as greenhouse gases.
Another Post prognosticator opined that funding environmental initiatives won’t be popular in the West, especially within the energy sector.
But most Westerners don’t share such a myopic view. In fact, the energy sector has consistently told the federal government that the best way to reduce greenhouse gas emissions, without damaging the economy, is through more research and development of new technologies.
That’s why Pierre Alvarez, president of the Canadian Association of Petroleum Producers, actually welcomed Ottawa’s investment in new technologies as “an important step in the climate-change debate.”
By the way, half of the proceeds from the sale of the government’s stake in Petrocan will go toward paying off the national debt – a cause near and dear to the conservative heart.
Knee-jerk criticism of spending on environmental technologies – ideology disguised as insight, really – overlooks surveys by the Canada West Foundation and other organizations that show Westerners place a high priority on protecting the region’s natural assets, including those above ground.
Paul Martin is a seasoned politician. He knows it’s not sufficient to simply dismantle a predecessor’s unwanted program – you have to lay the foundation for a better idea. In selling the remaining shares of Petrocan, a former Crown corporation, he erases the last remaining symbol of the much-loathed National Energy Policy of the Trudeau era. Just as important, Martin is also investing money to put the Liberals’ new brand on future technologies that will benefit the oilpatch.
WIND INCENTIVE STALLS
The federal government’s plan to invest $200 million in environmental technologies didn’t impress one green energy group.
The Clean Air Renewable Energy Coalition had been hoping that Ottawa would enhance an existing federal incentive to encourage more wind-power production.
The government also didn’t heed the coalition’s recommendation that Ottawa develop a national renewable energy strategy, in co-operation with the provinces, territories and other stakeholders.
The coalition includes oilpatch firms (BP Energy Company, Enbridge, Shell Canada Ltd., Suncor Energy Inc.), utilities (BC Hydro, ENMAX), renewable energy firms (Canadian Hydro Developers), environmental groups (the Pembina Institute) and the Federation of Canadian Municipalities.
Robert Hornung, president of the Canadian Wind Energy Association, says Ottawa’s failure to enhance the federal wind energy incentive “sends a negative signal” at a time when wind turbine manufacturers are looking for investment opportunities in North America.
But the federal government, with its current incentive, has at least taken the first step to encouraging more renewable energy.
