Bruce Bartlett
The New Brunswick Telegraph Journal
January 14, 2002

A battle over the air we breathe and the future cost of electricity begins today in a hotel conference room in Saint John.

The Public Utilities Board of New Brunswick (PUB) is holding two weeks of hearings on an application by NB Power to convert its Coleson Cove generating station from crude oil to Orimulsion.

Natural gas, the cleanest burning fossil fuel, was not included in NB Power’s plans, but several interveners at the hearings are expected to raise questions about it.

The $700-million project, which NB Power has been planning for more than a year, will allow it to reduce sulphur dioxide emissions – the major culprit in acid rain – by 77 per cent and nitrogen oxides by 70 per cent, but will do little to reduce carbon dioxide, the major greenhouse gas, said Jim Brogan, vice-president of generation for NB Power.

The Coleson Cove plant, located west of the city on the Bay of Fundy, often produces a long brown plume of smoke that hangs on the horizon. The proposal will reduce particulate emissions, which contributes to the brown smoke, by 55 per cent, he said.

The power plant can generate 1,000 megawatts of electricity, about one-third of New Brunswick’s peak need on the coldest day of the year.

“The output from that plant is clearly needed to meet the in-province load requirements,” Mr. Brogan said. “That recognition came out of Public Utility Board hearings early last year.”

NB Power knows it needs to have a plan in place by 2005 to reduce sulphur dioxide emissions and decided it could do that by converting to the low-cost Orimulsion fuel from Venezuela, he said.

But the Natural Resources and Energy Minister Jeannot Volpé has let it be known that he is not sold on Orimulsion. Don Barnett, his assistant deputy minister, said the government still has questions.

“Has due diligence been applied in looking at natural gas?” he asked.

NB Power has not been interested in natural gas because it concluded it was more costly, said Mr. Brogan. But a couple of factors have revived interest on the part of Premier Bernard Lord’s government – the need to reduce greenhouse gases and the possibility of a liquefied natural gas terminal coming to Saint John.

In August 2001, the New England governors and Eastern Canadian premiers agreed to reduce greenhouse gases in the region to 1990 levels by 2010.

“If you compare gas to Orimulsion, gas is a much lower emitter of carbon dioxide,” said Mr. Barnett.

NB Power does not see the Coleson Cove conversion as a solution to the carbon dioxide problem, said Mr. Brogan.

“But we can totally fund all the environmental upgrades from the fuel savings by using Orimulsion,” he said.

Interest on the part of the government and others in natural gas also revived last summer when Irving Oil Ltd. announced a proposal to build a $500-million liquefied natural gas terminal next to Canaport at Mispec.

It would see natural gas cooled to a liquid and transported by ship to the terminal where it would be turned back into gas and shipped by pipeline into the city.

Mr. Brogan said NB Power has not taken a close look at liquefied natural gas because there is no real certainty it will be available.

Orimulsion is a heavy fossil fuel named for the Orinoco Belt of Venezuela where it is found. It is slurry made of water and bitumen, similar to crude oil, produced only in Venezuela.

NB Power already uses the fuel at its Dalhousie power plant. The company says it can’t reveal the price it pays for Orimulsion because the contract is confidential. It has reached a tentative agreement with the producers to supply Orimulsion for 20 years at a set price that is low enough to make converting Coleson Cove economically feasible.

If all goes according to plan, NB Power expects to have the $700-million Coleson Cove conversion paid off within six years of completion – around 2010 or 2011.

The PUB hearings will focus on the financial side of the project and a recommendation is expected by the middle of February on whether to proceed or not with the project, said Mr. Brogan.

A full environmental impact assessment was also ordered by the Department of Environment and Local Government in December. There will be hearings on the environmental issues later in the year.