Coal is cool again. Just ask Ralp

(Feb. 9, 2006) It looks that way. The Alberta Department of Energy yesterday confirmed that coal, the lowly, grubby black stuff otherwise known as yesterday’s fuel, will make a star appearance in Premier Ralph Klein’s Throne Speech on Feb. 22. Details are scant, but it looks like Mr. Klein will extol the virtues of coal as an enthusiastic wannabe member of the new “integrated” energy policy, side by side with oil and natural gas and a few green bits.

No one can remember the last time coal was mentioned in an Alberta Throne Speech. Maybe Mr. Klein is about to prove yet again that he’s the smartest dumb guy you’ve ever met.

The Premier and his capable Energy Minister, Greg Melchin, probably have reached a few grim conclusions about the state of the province’s energy supply.

The first is that conventional oil reserves, which can be pumped out of the ground, and the easy-access gas reserves are disappearing with shock-and-awe speed. If they weren’t, you wouldn’t see the oil companies sinking tens of billions of dollars into the oil sands and gas pipelines to the Arctic.

The second, and probably foremost, must be the realization that it is a sin to burn a clean fuel, gas, to make a dirty fuel, oil. This has been likened to turning champagne into rubbing alcohol. Vast quantities of gas are burned to create the steam to cook the bitumen trapped in the sands so that oil can be drawn to the surface.

The third must be that the fuel capable of propelling the Alberta economy for decades, maybe centuries, is not oil or gas but coal. That’s because there’s so much of it. At the current rate of production, Alberta’s coal reserves will last 800 to 1,000 years, the Energy Department says. Measured by energy value, the coal reserves are twice as big as all the conventional and unconventional oil and gas reserves together. Seventy per cent of Canada’s coal is in Alberta.

Mr. Klein wants to exploit this merry accident of geology. Building coal plants to generate steam for the oil sands is one option that probably will be pursued with vigour (nuclear plants have also been proposed, an idea that seems to be losing favour). Using coal to generate more of the country’s electricity is another.

Which brings us to Ontario. If Alberta can get excited about coal, why can’t Ontario?

Under Premier Dalton McGuinty, Ontario seems determined to test society’s tolerance for blackouts. The province almost faded to black in last summer’s heat wave; only hideously expensive electricity imports kept the lights on. Ontario nonetheless has handed death sentences to its coal-burning generating plants for the crimes of generating smog, acid rain, cough-inducing particulates and Kyoto-unfriendly carbon dioxide. Toronto’s big Lakeview plant was closed last year. The Lambton plant is to go next year. Nanticoke, one of the biggest coal-burners on the continent, is to shut by 2009.

At least that’s the plan. Given the severe energy shortages, the new line from the government is that the plants will not disappear until there is enough new generation built to replace with missing megawatts. Good luck. Even if a new nuclear plant is approved this year – public consultations on that option are being held this month – a decade or more would pass before it would produce electricity.

As a stop-gap measure, Ontario wants to build two new gas-fired plants, one in Brampton and one in Toronto. The Brampton one is already well on its way, with full operation scheduled by mid-2008. Guess what? Gas has become so expensive that neither the Brampton plant nor the proposed Toronto plant have negotiated long-term gas supply contracts. Gas is available, but not at the price they want to pay. Gas prices are so high that many partly constructed gas plants in the United States are being abandoned, their turbines sold for pennies on the dollar.

So why not bring back coal? It’s a lot cheaper than gas and it’s available in vast quantities. Coal is even cleaning up its act. While true “clean” coal does not exist yet, “cleaner” coal, with substantially reduced levels of pollutants, such as sulphur and mercury, is already on the market. The technology is improving rapidly. In the not-too-distant future, clean coal should be competitive with gas on the emissions front (burning coal still produces carbon dioxide).

Still, Ontario isn’t biting. Energy Probe estimates that converting the dirty coal plants to clean coal would cost less than half as much as supplying the equivalent electricity by burning gas.

Perhaps Mr. McGuinty should talk to Mr. Klein about the virtues of coal. The alternatives are either too expensive, too late or a potentially light-dimming combination of both.

Eric Reguly, The Globe and Mail, Feb. 9, 2006
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