Canada's nuclear threat

Tom Adams
National Post
January 18, 2002


Letter to the editor:

As India and Pakistan brandish their nuclear weapons at each other, Canadians should remember the role that our federal government has played facilitating nuclear proliferation there.

Canadian General Electric supplied Pakistan with a Canadian-designed reactor in the 1960s. Canada donated a research reactor to India that was used to produce plutonium for India’s first nuclear weapon test in

1974. We also heavily subsidized the creation of India’s joint civilian/military power reactors now used to supply tritium to India’s advanced hydrogen bomb program. Even without the use of nuclear weapons, all of these reactors are potentially devastating military targets.

Nuclear scientists from both countries studied in Canadian nuclear facilities, particularly the Chalk River Nuclear Labs north of Ottawa, the Pickering station, and the Point Lepreau station in New Brunswick. Even now the nuclear establishments of both Pakistan and India are tapping into Canadian nuclear expertise through the CANDU Owners Group – aid that is probably helping their weapons efforts.

Tom Adams
Executive Director
Energy Probe

 

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Liquefied natural gas (LNG) risks by Tom Adams

Liquefied natural gas (LNG) is rapidly gaining in policy popularity and commercial interest in North America.

Energy Probe believes that the potential for catastrophic explosions and the substantial financial risks associated with LNG need to be fully considered before making any decisions to expand our dependence on LNG.

Marine LNG off-loading terminals are proposed for sites near Saint John, New Brunswick and the Strait of Canso, Nova Scotia. Ontario has a small LNG facility, owned and operated by Union Gas east of Sudbury near the town of Hagar. (Almost all natural gas storage in Ontario uses underground storage in sealed natural cavities, a technology that has proven to be extremely safe.)

LNG and other liquefied flammable agents that are gaseous at normal atmospheric pressures and temperatures, such as propane, liquefied petroleum gas (LPG), and hydrogen, are capable of what are known as Boiling Liquid Expanding Vapor Explosions (BLEVEs).

An LNG release on water is particularly dangerous. If LNG contacts water, the LNG boils rapidly, sometimes called rapid phase transition (RPT). The result is that natural gas is released. The resulting gas expansion powers the dispersion of a "cloud" of liquid and gaseous natural gas. This cloud achieves a "super-fluid" effect similar to pyroclastic flows seen in some volcanic eruptions, where the rapid motion of the cloud is powered by the expansion of bubbles within it. Flammable vapor clouds can form if a spill does not ignite immediately.

LNG explosions have been relatively infrequent in Canada and the United States. In 1944, an LNG tank in Cleveland, Ohio exploded killing 135 people. In 1979, the failure of an electrical seal on an LNG pump permitted natural gas (not LNG) to enter an enclosed building. A spark of indeterminate origin caused the building to explode. As a result of this incident, the electrical code has been revised for the design of electrical seals used with all flammable fluids under pressure.

Japan relies heavily on LNG and has so far demonstrated a good safety record.

LNG spilled on or within the hull of a ship can cause brittle fracture of some common types of steel. There have been marine accidents where hull damage due to brittle fractures was incurred after LNG was spilled. Fortunately, LNG explosions did not occur in these instances.

Many proposed LNG terminals have been turned down over the years for reasons that often involve the combined effects of high cost and high risk. Examples include an LNG terminal on the Thames River in London, three LNG terminals that were proposed for California in the 1970s but cancelled, and a land-based LNG storage facility once proposed for Eastern Ontario by the former Consumers Gas Company (now Enbridge Gas Distribution).

LNG is usually thought to be cost effective only where natural gas prices average more than US$3.50 to US$4.00 per thousand cubic feet. Measured at the producer level, North American prices have only exceeded this level for two sustained periods over the last 20 years; however both periods of high prices occurred since June 2000.
(See http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3M.htm)

For more information on LNG risks see:
www.thebulletin.org/issues/2003/ja03/ja03havens.html
www.timrileylaw.com/LNG.htm
www.lngwatch.com

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Hydrogen: Running energy policy on hype

Tom Adams
June 12, 2003

Californian Sam Leach knew that hydrogen was a winner. Near the time of the first Middle East Oil crisis in the early 1970s, Leach convinced gullible American investors to give him US$1-million on the strength of his claim that he had built a car that used ordinary water as a fuel. His "invention" used electrolysis assisted by his secret catalyst. He claimed to be able to decompose water into oxygen and hydrogen, and then use the hydrogen as a fuel to run the engine and generate more electricity than he started with. The claims turned out to be false, but by then Leach and the money had moved on.

Since Leach’s time, hydrogen technology has advanced – it provides power on the Space Shuttle – but the dream of hydrogen as an economical consumer fuel is as remote as ever.

Ballard Power Systems Inc., the Canadian West Coast darling of the hydrogen world, had teamed up with Coleman, the venerable U.S. camping products company, to produce a portable hydrogen fuel cell generator called Airgen, suited for residential and commercial consumers. Coleman lost heart and earlier this week another American firm, MGE UPS Systems, took its place.

Coleman unplugged from the space age after checking into the cost. Listed at $8,181 for a generator rated at 1 kilowatt, the Ballard Airgen costs 10 to 20 times as much as small conventional gasoline-powered portable generators. Solar power, in the form of photovoltaic systems, is substantially cheaper.

Considering only the cost of fuel per kilowatt-hour produced – that is, ignoring the cost of purchasing the Airgen device, plus its installation, insurance, maintenance, equipment to handle the pressure from industrial-grade high-pressure cylinders, and rental costs for fuel cylinders – the price is $13.26 per kilowatt-hour. Ordinary households, without industrial grade systems to safely store high-pressure cylinders, would see higher costs still for a low-pressure alternative. By comparison, conventional portable generators typically burn fuel at a rate in the order of 10¢ to 15¢ per kilowatt-hour, and grid power is available to households across Canada at rates from 6¢ to 11¢ per kilowatt-hour.

Fuel cells are new technologies where rapidly developing know-how can be expected to drive down equipment costs over the next decade or so. Hydrogen, on the other hand, has been produced industrially for over 100 years. Today, it is primarily made from natural gas or by using electricity, mostly through on-site processors designed for just-in-time delivery to avoid the need for expensive storage. Big breakthroughs in bottled hydrogen costs, a very, very mature product, are not likely.

Although it is an essential industrial feedstock, hydrogen, even if it would be produced cheaply, makes a poor fuel. Hydrogen is corrosive to metals. The amount of energy in a cubic meter of hydrogen is lower than that in other gaseous fuels. To store usable amounts of hydrogen, enormous pressures and specialized containers are required. On top of that, hydrogen is explosive.

Hydrogen, like electricity, is not an energy source but a fuel form. Both can carry energy from some ultimate source to some other usage. Converting energy from one form to another necessarily results in efficiency losses, which imposes a particularly heavy burden when hydrogen is produced from electricity, which is in turn produced from another ultimate source.

In theory, cheap, clean electricity could be used to make hydrogen if we didn’t have anything better to do with the electricity. In practice, the best thing to do with cheap, clean power is to displace the expensive, dirty power North Americans now rely on.

Notwithstanding the costs and other practical barriers that have limited hydrogen’s development for 100 years, hydrogen hype hit the political big leagues when President George W. Bush announced C$1.6-billion in his Freedom Fuel initiative in his State of the Union address last January. Earlier this week, the U.S. Senate pledged another C$1.5-billion, this time for a dedicated hydrogen-producing nuclear reactor in Idaho. Given the track record of U.S. government nuclear power production projects, many of which failed to produce much usable energy at all, the cost of hydrogen from this latest initiative may hit new highs.

Canada’s Federal Environment Minister David Anderson, appearing before a parliamentary committee on Tuesday, said that the government will announce details of its Kyoto implementation plan in the next weeks. He’s expected to earmark at least $80-million for hydrogen-powered fuel cell industry.

As Sam Leach used to tell us, hydrogen is the most common element in the universe. Now we hear the same line from Ballard and our politicians. Someone should tell them that electrons are even more common than hydrogen atoms, yet nobody expects the availability of electrons to lead to limitless quantities of inexpensive power.

Tom Adams is executive director of Energy Probe, a Toronto-based think tank. E-mail: TomAdams@nextcity.com.

BACKGROUND SOURCES

 

Readers respond

Published in the National Post, Thursday, June 19, 2003

At last! An informed and coherent commentary dispelling the myths of hydrogen as an alternate energy source and/or the pollution-free fuel of the future (Hydrogen: Running Energy Policy on Hype, Tom Adams, June 12). Will such facts dissuade the federal government from throwing "at least $80 million" at the hydrogen fuel cell industry as part of its Chrétien-legacy implementation plan? Probably not. – David Cottle, Niagara Falls, Ont.

 


Mr. Adams makes several technically true but misleading claims. He correctly points out that hydrogen is not an "energy source but a fuel form." Electricity is required to separate water into hydrogen and oxygen. Hydrogen can then be used to store energy until a later time. And he’s correct there is energy loss as electricity is converted to hydrogen and back.

What I take issue with is his implication that individual homes would need industrial grade systems to store hydrogen. This isn’t true anymore than saying we each need to process our own crude oil for gas. Honda and Toyota are doing research into fuel-cell vehicles. These new cars would be dramatically different to your mechanic, but most of us would still drive down the street to the Quik-E-Mart to fill up at a pump.

Mr. Adams also claims "the amount of energy in a cubic metre of hydrogen is lower than that in other gaseous fuels." If you’re planning on burning hydrogen in the same way you might burn natural gas, then you’re going to waste a lot of hydrogen. That’s why we use fuel cells. They recombine the hydrogen and oxygen to make water reclaiming much of the electricity in the process.

Hydrogen is an energy storage medium only. It is preferable to run the electricity, however it’s generated, directly to you. However, cars need mobile and refillable fuel sources. Eventually oil and gas will run low and change will be forced on us. Better to make the change on our terms. – Douglas Wise, Washington, D.C.

Tom Adams responds:
How would you like gasoline at $30 per litre? That is what the industrial price of bottled hydrogen in Toronto – what Mr. Wise is proposing – works out to for the same amount of energy in a liter of gasoline, taking into account the efficiency advantage of the Ballard Airgen fuel cell device relative to a normal car engine.

This article reprinted in May/June 03 issue of Maricopa Green Party Newsletter.

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LEDs signal energy revolution

Lawrence Solomon

November 26, 2003

While governments have diddled for decades in the energy marketplace, subsidizing a 500-megawatt nuclear plant here, a 5,000-kilometre Arctic pipeline there, the big energy gains have come via pint-sized innovations in conservation and energy-efficiency. This decade, the biggest little gainers on the planet are LEDs, or light-emitting diodes, those gizmos that first entered the public consciousness in the 1970s through calculators and digital watches.

 

LEDs are fabulously efficient devices that often can save upwards of 90% of the energy required by conventional lighting methods. Their latest accomplishment: They have just about taken over the market for exit signs in commercial buildings, where they now have an 80% market share. Not impressed? The electricity savings from this one tiny segment of the North American marketplace amounted to about 7.5 terrawatt hours in 2002, and once LEDs have fully penetrated the exit sign market, the North American power grid will no longer need the output of closer to 10 terrawatt hours. That’s equivalent to the power produced by almost three Pickering-sized nuclear reactors.

 

LEDs will soon dominate the North American traffic light market, too, in the process eliminating about five terrawatt hours a year, or one-and-a half nuclear reactors. It has just started in on billboards and other commercial signs (another two reactors), and Christmas lights (just one-half reactor, because the holiday season is so short).

 

LED products like these eliminate the need for electric power plants. Other LED products reduce the need for oil wells and tar sand plants. The biggest potential here lies in lights for cars, trucks and buses, into which LEDs have just begun to make inroads. More than 1.5 billion gallons of gasoline a year, and 1.2 billion gallons of diesel fuel, would be saved once LEDs take over. That’s enough fuel to drive all the continent’s cars for four days a year, and all its buses and trucks for 12 days a year.

 

Large-scale energy supply projects such as nuclear plants and Arctic pipelines leave behind large footprints that create a host of problems for society: They produce pollutants that need to be managed, they consume land that needs to be expropriated, and they require subsidies that need to be raised through taxes. Efficient devices like LEDs, in contrast, tend to solve societal problems instead of creating them by contracting the footprint.

 

Because LEDs convert more fuel into light than heat, they save on air conditioning costs. Because they produce little heat, they require less heat shielding and cause fewer fires. Because they need less energy to do the job, they produce less pollution. Because they last 10 times longer and are far more durable, they often pay for themselves in maintenance costs alone.

 

In automobile taillights, for example, these and other design features produce lights that will outlive the vehicle. No replacement costs. No warnings from policemen who otherwise pull you over to tell you you’re driving with a faulty light. No traffic accidents, and liability, caused by lights that fail to function. LEDs, in fact, are safer than conventional lights that function perfectly. LED headlights direct more of their light to the road surface, where it’s needed, less into the eyes of oncoming drivers. LED brake lights take 200 milliseconds less time to turn on: For a car travelling on the highway at about 100 kilometres per hour, that comes to about six metres — more than the length of most cars. To boot, because LEDs are compact, and don’t need access panels for their replacement, they give car designers more options and drivers more trunk space.

 

LED technology is still in its early days. Although it is present in hundreds of different consumer markets, all involve niche applications, generally where coloured light is required. It has yet to make a breakthrough in most white-light settings, such as street and residential lighting, but those days are fast approaching.

 

LED’s accomplishments have come chiefly through the efforts of companies like General Electric Co., an early innovator, and without subsidy. Governments have a role to play, though, if they want to speed the pace of LED development, and that of other energy-conserving products. They can stop subsidizing the nuclear plants, Arctic pipelines and other large-footprint projects that compete with the countless little innovations that ultimately make all the difference in the world.

 

Lawrence Solomon is executive director of Urban Renaissance Institute and Consumer Policy Institute, divisions of Energy Probe Research Foundation. E-mail: LawrenceSolomon@nextcity.com

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Explosive resource

Lawrence Solomon

National Post May 29/2004

Trinidad and Tobago, a tiny island nation with vast natural gas reserves that it can’t easily export, earlier this week inked a deal with aluminum giant Alcoa that points to progress for both parties, and for us.

Under the deal, Alcoa will build a US$1-billion aluminum smelter in Trinidad, to use cheap electricity generated by exploiting the potential in Trinidad’s natural gas fields. This is only the second smelter Alcoa, the world’s largest aluminum producer, has built in the last 20 years, the other being a nearly completed plant in Iceland, also an island nation with hard-to-export energy. Alcoa’s new power-guzzling aluminum smelters replace mothballed Alcoa smelters in the United States, which, unlike Trinidad, has higher value uses for its energy. Following U.S. electricity deregulation, power producers can now profitably transmit power to U.S. locales that can use it more intelligently than in low-grade uses, such as converting tons of bauxite into half as many tons of aluminum. The Pacific Northwest alone has seen eight of its 10 smelters shut down, the better to satisfy higher-paying power users such as the west coast’s high-tech and media industries.

This transition in the U.S. away from a commodity resource industry is good for a highly developed economy such as America’s. Even dynamic developing economies such as Russia’s and China’s, to conserve their electricity for higher grade uses, are relocating their electricity-intensive aluminum production to countries that can’t find more productive uses for their power. The list of countries slated for new aluminum production includes the likes of Brunei, Bahrain, Guinea . . . and Canada, whose politicized and over-regulated system directs electricity to crude uses, instead of freeing it up for the highest bidders, anywhere on the continent. To encourage Alcoa to expand in Quebec, for example, the provincial government last week offered it a US$100-million interest-free loan and subsidized electricity for the next 50 years.

Simply put, resource industries, among others that are electricity intensive, routinely lobby for, and obtain, large amounts of subsidized power from our provincially owned electricity monopolies. When Canada stops subsidizing its electricity guzzlers, as China has begun doing, the smelters will move to more sensible locations, simultaneously modernizing the economies of all concerned. Such a worldwide transformation is also underway in fertilizers, plastics, steel, and other energy-intensive industries. Instead of importing energy from developing countries, developed countries are increasingly importing energy-intensive products, to the benefit of all. In Trinidad’s case, the transformation is all the more sensible because natural gas, unlike oil, cannot be easily exported without first converting it into liquid form, an expensive and fuel-consuming process.

With the Alcoa plant, Trinidad will obtain a large workforce – its smelter will employ 1,000 workers during its construction and 575 permanent workers. More importantly, Trinidad’s economy will have an opportunity to diversify away from oil, gas and petrochemicals, which account for more than one-quarter of its GDP: The aluminum smelter, its first, will also support downstream aluminum manufacturing.

Perhaps most important, the island would be tempering its dependence on Liquified Natural Gas exports – a rapidly expanding sector that already supplies North America with two-thirds of its LNG imports. At the same time, because it would be supplying us with the products we would have used the LNG imports to produce, Trinidad would be helping us temper our own growing dependence. Keeping an even keel in LNG is all the more important because, for rich and poor countries alike, the mushrooming LNG industry could blow up at any time.

LNG’s boosters quite rightly boast that LNG, one of the most dangerous products on earth, has had an excellent safety record for 60 years. Sixty years ago, in 1944, an LNG accident incinerated one square mile of downtown Cleveland and miraculously killed only 128 people. After that accident, public horror shut down the industry for 20 years, much as the explosion of the Hindenburg shut down air travel by hydrogen balloon. A lesser LNG explosion earlier this month at a Halliburton Company facility in Algeria, thought to be caused by LNG escaping from a pipe break, led to 27 deaths and US$1-billion in damage.

These are as nothing compared to the potential for catastrophe that comes of cooling some 20 billion gallons of natural gas to minus 260 degrees Fahrenheit, then compressing it 600-fold to allow 33 million U.S. gallons to be squeezed into a single tanker. One nightmare scenario involves LNG coming into contact with water, causing it to boil rapidly and release of a cloud of liquid and gaseous natural gas. If the cloud ignites before it has a chance to spread, the worst-case damage would be limited to an immense explosion, releasing the energy of 50 Hiroshima bombs. If the ignition occurs after the cloud has had a chance to spread downwind, to populated areas within 16 kilometres of an LNG tanker, the human toll from the blanket of fire that could befall a city could run to the tens of thousands. For this reason, in the hours after the Sept. 11 attacks, Richard Clarke, then America’s top counterterrorism official, told the U.S. Coast Guard to close Boston Harbor, fearing Al Qaeda might attack an LNG tanker as it glided past downtown buildings. "Had one of the giant tankers blown up . . . it would have wiped out downtown Boston," Clarke said in his book Against All Enemies.

Should a serious LNG explosion occur by accident or by design, the LNG industry might well be shut down, devastating the economy of LNG-dependent exporters such as Trinidad. The devastation that developed nations such as Canada and the U.S. face should be no less sobering. In Canada, LNG tankers are slated to sail down the St. Lawrence to Levis, opposite Quebec City, if energy companies such as Enbridge have their way; LNG facilities are also proposed for Saint John, New Brunswick, and Cape Breton in Nova Scotia. Along with the risk we are asked to bear comes interferences in the marketplace: To make the LNG industry profitable, companies like Enbridge seek new regulatory protections from competition as well as depending on regulators to continue to channel Canadian energy supplies for the benefit of the few in the resource economy, and for the disbenefit of the many in the greater economy.

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Wind at our backs

Lawrence Solomon
National Post
October 8, 2004

In a pinch, Canada could meet 100% of its electricity needs with wind power, numerous studies indicate. A report released last week by the authoritative General Accounting Office in the United States shows just how attainable a 100% wind power society would be.

The United States, with a smaller land mass than Canada, already meets the needs of two million households through wind power and is adding to that total by putting the equivalent of about 500,000 additional homes on wind power each year. If those windmills were in Canada instead, we would be meeting the needs of about 2.5 million Canadian households through wind by the end of the year. That 2.5 million represents about one-fifth of Canada’s households.

Germany, with an area one-thirtieth that of Canada, blows even stronger, having built more than twice as much wind capacity as the United States. If Germany’s windmills were in Canada, we could now be meeting the needs of about five million households with wind power – more than 40% of all Canadian households. The land mass of just two and a half Germanies, in other words, would be enough to meet all of Canada’s household needs, using existing wind technologies.

Wind technologies haven’t been standing pat, however. Year after year for more than two decades now, this fabled but long-ignored technology has been getting more and more efficient, relentlessly driving down costs. In the 1980s, power from wind often cost US30 cents a kilowatt-hour. Today, says the U.S. Department of Energy, the cost is between US3 cents and US6 cents, allowing it to out-compete many conventional technologies on both sides of the border. In Alberta, for example, the cost of wind power being built by TransAlta is about 5 cents to 6 cents a kilowatt-hour, well below the 9 cents-plus the governments of Manitoba and Ontario may spend to bring power to market from Conawapa, a proposed new mega-dam on Manitoba’s Nelson River. Wind has long been cheaper than nuclear power and at today’s fossil fuel prices, wind power competes well against both oil and gas.

Even before the recent run-up in oil and gas prices, wind power was sweeping the world, with a five-fold increase in capacity since 1997. In the United States, wind power has been increasing at a 28%-per-year clip, far exceeding U.S. government expectations, and there’s no let-up in sight. As it is, 90% of U.S. wind power is generated in just 10 states, more than 50% in just three states. According to a U.S. Department of Energy study, three states alone – North Dakota, Texas and Kansas – could meet the entire energy needs of the United States.

Wind power, of course, currently meets an insignificant part of the power needs of most Western countries. The reason? For almost a century, wind power has suffered a great curse called Public Power. In the early decades of the 20th century, before governments landed hard on the electricity business, windmills were ubiquitous in many farming regions of Canada and the United States, generally to pump water. Because electricity could not be economically brought to rural areas from city power plants, entrepreneurs successfully adapted windmills to small-scale farm use. By the mid-1920s, such companies as Parris-Dunn and Jacobs Wind-electric were electrifying farms throughout the rural areas of the Midwestern prairies, first by providing lighting and charging batteries for crystal radio sets, then, as the technologies advanced, by powering refrigerators, freezers, washing machines, power tools and other appliances. The future seemed bright for windmills; they were the most economical source of power for much of rural North America.

Public Power then blew on to the scene, in the form of rural electrification programs that offered farmers power at deep discounts if they switched from windmill-generated electricity to power from a centralized grid, brought to rural areas at great expense. The windmill entrepreneurs, unable to compete against the government-mandated subsidies, were snuffed out, ending their innovations and replacing their renewable-energy technology with power from remote power utilities that typically relied on burning coal. Wind technology remained extinguished for decades, until the environmental movement resurrected it in the late 1970s. Now wind technology is roaring back, logging the fastest growth of any energy technology in the world.

Wind has many selling points, apart from its availability. It doesn’t pollute, it doesn’t run out. And unlike most of its competitors, its cost keeps falling. Yet despite these attractions, a crash program to switch us to wind would be a mistake. Other energy forms also have their attractions, and they, too, are plentiful. Canada’s tar sands have enough petroleum to run our power plants indefinitely. Our natural gas is also endless for all practical purposes, as are our uranium, our coal and our solar-energy resources. The availability of energy is not at issue, only the cost, cleanliness and safety of our energy choices.

In all these areas, governments have spoiled the electricity marketplace by subsidizing all energy forms – oil and gas, wind and solar, coal and nuclear. The subsidies have enabled dirty fuels, such as coal, to compete and dangerous ones, such as nuclear, to exempt themselves from legal liability. The subsidies have turned reality inside out, making the implausible seem normal and the normal seem impossible.

Without subsidies, windmills would be a commonplace that dotted our countryside and perhaps our cities, too, while nuclear power would be a rarity, mostly limited to the university and government research labs that could afford them. Without subsidies, we would consume less natural gas and oil, and be much more efficient in our use of power, using perhaps half as much as we do today to enjoy the same standard of living.

Without subsidies, we would have assured energy supplies. Instead, we subsidize energy and suffer periodic shortages. All because our politicians have no principles to guide them, and go whichever way the wind blows.

Lawrence Solomon is executive director of Urban Renaissance Institute and Consumer Policy Institute, divisions of Toronto-based Energy Probe Research Foundation. www.Urban-Renaissance.org

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Energy non-savers

Tom Adams
Globe and Mail
December 2, 2005


Letter to the Editor
Globe and Mail
December 2, 2005

Re: Biofuel Revolution ‘beginning to happen now’ (December 1)

While ordinary Canadian have some excellent biofuel options for home heating using pelletized forestry and agricultural fuels, ethanol from starch crops like corn and biodiesel from oil crops like canola are not environmentally attractive. Leading ecology researchers, such as Cornell University’s David Pimentel, have demonstrated that road fuels derived from starch-based ethanol and biodiesel consume more fossil energy during their production than they yield. The more ethanol and biodiesel we use, the worse our energy and environmental problems get.

Tom Adams, Executive Director, Energy Probe


Biofuel revolution ‘beginning to happen now’

by Michael Vaughan, Globe and Mail, December 1, 2005

Biofuels produced from plant and animal feedstocks are growing by an estimated 10 per cent a year. Last week, for example, New York Governor George Pataki announced an initiative to increase the production of biofuels in New York State, part of a plan to help reduce the state’s dependence on foreign energy sources.

Under the executive order, state agencies will be required to purchase biofuels for use in heating and cooling plants and in their motor vehicle fleets. The order mandates that by 2012, at least 5 per cent of the heating fuel used in state buildings will be bio-diesel. By 2007, at least 2 per cent of fuels used in the state fleet must be biodiesel, with this percentage rising to 10 per cent in 2012.

The state government believes there’s about 800,000 hectares of underutilized farmland in New York State that could be put into productive use growing energy crops.

However, if biofuels are ever to supply more than a small percentage of transportation fuels, new technology and more efficient production methods will be needed, some of which are being developed in Canada.

Gord Surgeoner was born and raised in Southern Ontario and received his agricultural education at the University of Guelph and Michigan State University.

He was a professor in the Department of Environmental Biology, and then the Department of Plant Agriculture at the University of Guelph until his retirement in January, 2004. Since 1999, he has been the president of Ontario Agri-Food Technologies, a non-profit organization consisting of members from farm associations, universities, industry and governments. He recently received the Order of Ontario.

Vaughan: I’d prefer to buy my automotive fuel from an Ontario farmer than a multinational oil company. Is there any chance that that’s going to be possible?

Surgeoner: It’s beginning to happen now.

We have 10-per-cent ethanol blends but they’re still sold by the major oil companies. You’re not going to create a whole separate retail channel out there. You’re going to have the Essos, the Shells and the Sunocos and so on. But if you drive in today to a Sunoco station you may be filling up your tank on a 10-per-cent ethanol blend, and the ethanol would have probably come out of Chatham, Ont., or from Commercial Alcohols Inc. and a large percentage of the corn that created the ethanol came from Ontario farmers.

Right now, the United States of America is by far the world’s largest supplier of corn. The No. 1 use for corn is animal feed, but ethanol has become the No. 2 use.

The day is coming rapidly when we will have what we call E-85 blends, in which 85 per cent of the fuel will be ethanol. Ford has announced that 250,000 of its vehicles will be flex-fuel. In other words, you can have 85-per-cent ethanol blends providing the fuel for that car. As we replace fossil fuels there will be an increased demand for what we produce in agriculture.

Vaughan: So is that it – is that as far as we can take the trend toward agri-fuels?

Surgeoner: Well, there’s biodiesel as well. In the province of Ontario, we have a 5-per-cent ethanol standard in gasoline, and I think we will see a similar standard for biodiesel in diesel fuel.

What I love about biodiesel is that we have some great Canadian technology that came out of the University of Toronto. Biox Corp. is building a 90-million-litre-a-year biodiesel plant in Hamilton right now. Rothsay, a division of Maple Leaf Foods Inc., is about to bring a 30-million litre plant on stream in Montreal.

The feedstock for these plants is an agricultural product but it’s a waste product; it’s grease that’s been used to cook French fries and chicken and so forth. It’s restaurant grease, and it’s also rendered animal material.

However, if we have a bad year for soybeans and the quality of the crop isn’t good for human feed or even animal feed, we can make biodiesel from soybeans, too.

Canola is the same. If you look at Europe today, the number one use of crops is biodiesel. All the rape seed in Europe, including all those yellow fields you see in England, those are diesel crops.

In Europe most of the biodiesel – and it’s a very large volume – is being created from crops, but it’s on what I call European economics, which is heavily subsidized.

Vaughan: So is it just subsidies that prevent Ontario farmers from getting into more of the fuel-producing crops?

Surgeoner: In Canada we have not historically spent a lot of time breeding our crops for new end-use purposes.

If we look at our soybeans, for example, we breed for high levels of protein. That makes great tofu and all kinds of foods, but to do so you sacrifice some of the oil in the crop.

But what happens if we bred soybeans not for food but for diesel? We would be at the start of what I call the innovation curve. We would make great gains early, I would think. We know some of the genetics that would make higher oil, and we have studies that say if we can get the oil content up in soybeans to this level, then it makes a lot of sense in biodiesel plants.

Vaughan: And will we pay a lot extra for these biofuels because we feel good about it?

Surgeoner: Actually, it depends what the price of oil is. At the current prices of oil, no you won’t pay extra. If a barrel of oil went back down to $10 a barrel, yes you would.

But what the consumer pays for biofuels at the end of the day is based on its functionality against the competition, which is fossil fuel. But we would eventually get into the classic supply and demand balance.

I guess that the point that I would make is that the more that we can replace fossil fuel – and we are never going to totally replace it in my lifetime – the more demand we put on agricultural products to make up the difference. But indirectly, in many ways, you will pay less for it.

I’m not sure of the exact number, but we have 30 or 40 smog alert days a year in Toronto. What we’re really doing is we are buying cleaner air.

If I sit in a hot August afternoon on Toronto’s Don Valley Parkway, then clean air suddenly becomes very important to me. On smog alert days we can see the increase in emergency room treatments.

So it’s about removing some of the demand for fossil fuel. It’s about cleaner air; it’s about better health; and it’s about rural development.

Vaughan: Okay, so let’s talk about rural development. Has the movement toward bio-fuels raised farm incomes and improved the viability of agriculture?

Surgeoner: In Ontario at this point I would unfortunately have to say, not yet.

The main reason is international trade issues. U.S. farmers are heavily subsidized. In my opinion, our farmers can compete with most people in the world on a level playing field, farmer to farmer. But if I have to compete against the U.S. Treasury or the European Union Treasury, that’s a pretty tough deal.

But our farmers’ advantage is, if you are near the ethanol plants, then you have lower transportation costs. And you don’t have border-crossing issues, which probably saves 10 to 15 cents a bushel. But that’s the max right now.

Still, if we didn’t have those markets today for ethanol, we would be so awash in corn that the price would be even lower. So the short answer about improving the viability of agriculture, again, is not yet.

Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8:30 p.m. on Report on Business Television and Saturdays at 2 p.m. on CTV.

 


More on the subject . . .

What about CO2?

Re: Clean Coal: What About C02?, Letter, National Post, Jane Forbes, Nov. 19.

Ms. Forbes, of OISE/U of T, should know more about combined-cycle clean coal technology before she criticizes it.

In a nutshell, the process entails the combustion of coal in a self-contained oxygen-deficient environment, and in stages results first in CO plus other gasses and then CO2, N2, NOx and H2. All gasses are captured, so that the CO2 can be sequestered and the H2 separated. In addition to heat, the H2 byproduct has energy value.

We had an excellent presentation by the Clean Coal Power Coalition at our CIM branch in Winnipeg about two years ago, and the industry estimate then was that electricity prices in the order of 8 cents per kWh were required. The current marginal cost of producing additional power from natural gas- driven co-generation likely exceeds that price at current natural gas prices, so here we are in the future.

Credit is due to a committed environmentalist like Tom Adams for being prepared to discuss appropriate use of coal within the discipline of a scientific framework.

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Lessons of the August 14th blackout in the U.S. and Canada

Tom Adams

December 8, 2003

Energy Probe’s presentation to the US-Canada Power System Outage Task Force 2003

Thank you, on behalf of Energy Probe, for the opportunity to present our ideas on how to reduce the risk of widespread power disruptions in future.

Energy Probe is a 24 year old citizen-based environmental and consumer research and advocacy organization dedicated to promoting environmentally responsible and economically efficient solutions to Canada’s energy problems.

Recognizing that the scope of the interim blackout report focused on its proximate causes, Energy Probe considers the report to be thorough. In the second stage of its deliberations, we urge the Outage Task Force to analyze the design philosophy that allowed avoidable vulnerability to be built into our power system.

The proximate causes of the August 2003 blackout were a series of routine failures. The blackout demonstrates the vulnerability of our power system – a vulnerability due primarily to its design. A more decentralized power system, more modular in its design and less reliant on large power flows across great distances, could provide substantial reliability advantages as well as significant environmental and economic advantages.

We need a power grid that develops toward the more web-like structure of the Internet, rather than the existing structure, which resembles the oldest mainframe computer/terminal systems.

On August 14th, proximate operational deficiencies and flawed designs permitted a widespread collapse without external initiating events. Consider the damage our power system could suffer if the architects of the September 11th attacks, or their students, aim their ingenious malice at the power system.

A more decentralized model is urgently needed so that our power system can develop greater resilience in the event of mechanical failures or malicious attacks. Reactive power, which is essential to maintain power system reliability, is far more effective when generated close to consumers rather than being transported long distances over the high voltage transmission system. Numerous small power plants provide diversity, reducing the reliability impacts of individual generator outages relative to reliance on fewer but larger stations. High efficiency cogeneration stations reduce not only fuel costs and emissions but also customer impacts in the event of impaired fuel supplies. Locally generated power reduces reliance on inherently vulnerable transmission networks. We draw attention to the fact that many of Ontario’s large nuclear generators were power sinks, not sources, following the blackout, resulting in Ontario’s post blackout emergency.

While ruling out terrorism as a cause of the blackout, the report notes that the power system "has been, and continues to be, the target of malicious individuals and groups intent on disrupting the electric power system."

Decentralization is not the only lesson we should learn from the 2003 blackout. Utility regulators must pay attention to reliability. The Ohio Public Utilities Commission regulates First Energy, the U.S. utility at the centre of the blackout investigation. Notwithstanding the long catalogue of First Energy’s deficiencies, the Ohio Public Utilities Commission is not mentioned in the interim report. In the U.K., regulators use corporate self-interest to promote reliability. Electricity provider pay fines directly to affected customers in the event of outages. Not surprisingly, since this system was introduced, customers have received more reliable service.

The report also identified a major deficiency in the competence of the Canadian Nuclear Safety Commission (CNSC): CNSC staff were unable to immediately activate the CNSC’s Emergency Operation Centre because of loss of power to the CNSC’s head office building. Instead, CNSC staff established communications with licensees and the U.S. NRC from other locations. Happily, the CNSC did not have to cope with any nuclear emergencies during the blackout. The CNSC must establish and maintain a working emergency management plan.

 


Post script:

After making its formal presentation, Energy Probe asked for an opportunity to respond to comments from other presenters in order to clarify Energy Probe’s initial remarks. What follows is a summary of that statement.

Energy Probe was asked during the morning break to clarify its views on the appropriate role of transmission interconnections between Ontario and surrounding jurisdictions in light of our advocacy of decentralization.

Some groups presenting their views to the Task Force, such as CUPE National, are of the view that Ontario should not have electrical interconnections with the United States, that interconnection and commercial trade between utilities in Ontario and some utilities in neighbouring states is "dragging us into a swamp." Energy Probe takes the opposite view.

Decentalization and interconnection are compatible, not incompatible. The essence of decentralization is maximizing customer choices in sources of supply. Interconnection in Ontario is not just an additional option for consumers, it is an essential element of our power system’s reliability.

Ontario is the Canadian province most operationally reliant on large two-way flows of power across international boundaries. Without the access to electricity across international boundaries Ontario would have suffered rolling blackouts during the winter of 2002-2003, during August and September 2002, in May 1999, and throughout extended periods in 1990.

Some have pointed to Quebec’s favourable experience with reliability during the August 14th blackout, suggesting that Ontario should adopt Quebec’s practice of operating its power system as a power island, isolated from the rest of the Eastern North American Grid. That advice is ill-considered. Before the ice storm of 1998 and the August 2003 events, Quebec’s power reliability statistics were much poorer than Ontario’s.

For practical reasons – indeed necessity – Ontario’s primary interconnections are with Michigan and New York. Happily, regions of the U.S. with the capability to help meet Ontario needs, like New York and PJM, are, driven by competition, rapidly modernizing, expanding, and decentralizing their generation capabilities.

If the internationalization of interconnections is to flourish as it should, policy makers must be mindful of the constitutional arrangements that apply to electricity in Canada. Unlike in the U.S., the Canadian federal government has little constitutional authority in electricity matters. As a consequence, the Canadian federal government is relatively uninformed about electricity matters. Happily, the Canadian National Energy Board has recently started to address this gap by undertaking some inquires, albeit limited, into the reliability implications of interconnections.

Successful continued international cooperation in electricity – a trading relationship that has historically yielded rich public interest benefits on both sides of the border – will require an opportunity for Ontario’s active participatio

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Energy Probe is the only organization with a plan to save Ontario's energy system

Tom Adams

December 9, 2003

The Tories under Ernie Eves had no plan, only a hodge-podge of contradictory policies – price freezes, billions in new spending on the nuclear industry, subsidies to conservation, pretenses at deregulation. That way lay ruin.

The NDP had a plan but it was just as ruinous as the Tories non-plan. The NDP wanted to give big rate breaks to major polluters in unionized industries while keeping the power system as a monopoly. This was the same policy that the old Tories and old Hydro employed for decades – until it almost bankrupted the province.

Now the Liberals are in power and, to their credit, they have agreed to freeze electricity prices at a higher, more realistic level. Unfortunately, in all other respects, they’re continuing with the failed Tory approach – more nuclear boondoggles and high-profile but phoney conservation programs, a new freeze, and a continuation of the old Hydro monopoly system.

These policies threaten us with another Hydro bankruptcy and more blackouts. We must make the government come to its senses, and realize we shouldn’t be putting all our eggs in one big vulnerable monopoly that brings us expensive power. Instead, we need dozens of small generating plants that will compete with each other and guard against disruptions. As the Great Blackout last summer showed, small systems are resilient as well as economic, and when they do go down, they come back quickly. The blackout lasted longest for those reliant on large coal and, especially, large nuclear plants.

The best energy policy by far that Ontario has ever had came from the Bob Rae government in the early 1990s. Rae brought in Maurice Strong, perhaps the world’s best known environmentalist, as Hydro’s chairman and he soon made the tough but necessary economic and environmental reforms. Strong, who met with members of our staff and board on several occasions, agreed with our plan to break up the Hydro monopoly. He ended nuclear expansion and shut down existing nuclear reactors. He ended Hydro’s phoney conservation programs, which amounted to an empty billion-dollar PR gesture. And he convinced Bob Rae and many in the NDP that privatizing Ontario Hydro and breaking up the power monopoly was the best course for Ontario consumers, the Ontario economy, and the Ontario environment.

Rae almost convinced his cabinet to do the right thing — he came within one vote in cabinet of privatizing the power system. Had Bob Rae succeeded, Ontarians would now be as fortunate as people in the U.K.: After the UK broke up its power monopoly, its nuclear expansion plan was canceled, existing coal and nuclear plants were shut down, and rates plummeted for households and businesses alike.

The Rae government lost the next election – Ontarians elected a Tory government that promised to break up the Hydro monopoly, and complete the job that the Rae government started. Unfortunately, the Harris government also let down the people of Ontario.

But it’s not too late to inject reason into our electricity system. In the U.S., the people of California have suffered even more than we have in Ontario from an unprincipled hodge-podge of policies. Californians learned their lesson. They recently replaced the politician who ruined their power system and put in a new governor –Arnold Schwarzenagger – who campaigned on a promise to end costly state control over power production in favour of competition and reliable electricity supplies.

The evidence is in from hundreds of power systems around the world – monopolies produce expensive power, have highly unreliable systems, and dare to build dangerous nuclear plants; only competitive power systems produce clean, cheap and reliable power.

With your help, we successfully brought this message to Ontarians in the 1990s – that’s why the Rae government came so close to acting. With your renewed help, we can successfully bring this message to Ontarians again. As you may know, Energy Probe is one of the most quoted organizations in Ontario. By funding our research and educational efforts now, before the new government irrevocably commits to more errors, we can redouble our efforts and avoid future economic and environmental disasters.

Sincerely,

Tom Adams
Executive Director

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Privatization's power

Tom Adams
Financial Post
March 25, 2004

Governments that privatize electricity generators provide their citizens with cheaper, dependable power. Why is Ontario heading into darkness?

With bankruptcies and blackouts on Ontario’s electricity horizon, the Ontario government is poised to shelve plans to create a competitive market. Instead, it will remain with the monopoly system that has brought Ontarians some of the highest costs on the continent. To boot, it is likely to soon become one of the continent’s most unreliable power systems.

The government is doing so driven by fear of repeating a California-style fiasco. It doesn’t realize that California’s trouble occurred because that state failed to implement a market-based system, and that, almost without exception, consumers have benefitted whenever power systems were privatized and deregulated.

The U.K. privatized its power system in 1990 in what was then, and remains today, the largest power privatization in history. The typical domestic electricity customer in the U.K. now pays £115 per year less for power – from £365 in 1990 to £250 in 2002 – a decline of 32%, and that’s after accounting for inflation. The U.K. story is even better for consumers who decided to shop around to obtain the best price for power – different power companies suit different customers, depending on how much power the consumers use, and when they use it. Since competition came to the domestic market, the typical electricity shopper saves about £32 on their annual bill, on top of the £115 per year that they save without bothering to shop.

In the United States, most of the country is awash in cheap electricity, after deregulations unleashed a building boom in power plants. The single most successful U.S. power market is known in electricity business circles as PJM, short for the interconnected Pennsylvania, New Jersey and Maryland system. Here, competition especially delivers cheap power during peak periods. From 2001 to 2002, peak prices dropped by more than 50%, from $307 for the highest priced 100 summer hours to $138 during 2002. The price then dropped another 40%, to $97, during the last summer. The reason? Plentiful private investment in new generation – something Ontarians lack – kept peak prices low. Prices should continue to drop because last October a nuclear utility serving Pennsylvania consumers finally eliminated the last of its stranded costs – most of them related to ill-advised investments in nuclear reactors and contracts for independent power – that were entered into during the system’s previous monopoly period.

In Australia, power markets proved a great winner, too. After the state of Victoria privatized, power rates dropped and investments soared. Privatization fever then struck other Australian states in the populated south and east coast. The investment boom in South Australia led to a 30% increase in generating capacity between 2000 and 2002 alone.

But privatization is fragile, not because of the nature of electricity markets but because of the nature of politicians. After labour unions struck the power system in the State of Victoria during the hot summer months in 2000, the government panicked and froze power rates. The system soon developed serious shortages. Rotating power cuts became common. Its interference wrecked the market. With rates frozen and the government unreliable, investors lost confidence and fled to neighbouring states. Neighbouring South Australia, although it was also affected by the strike, and although it also experienced a hot summer, fared better. Its government didn’t lose its nerve, and it resisted the temptation to intervene. Although prices temporarily peaked, investment flowed in and South Australians are now reaping the benefits of low prices.

Even where rates rise, as happened in Alberta following price hikes in natural gas, the benefits of markets are clear. Alberta’s government started introducing competition in the mid 1990s because the former regulated system was not modernizing and meeting the needs of a rapidly expanding economy. From 1998 to 2003, the electricity efficiency of the economy, based on the amount of power sold through the electricity market, increased by almost 9%. In 2002, demand was 16% higher and natural gas prices were 40% higher than in 1999. Yet power prices increased by an average of only 2.8% in 2002 compared to 1999. Between 2001 and 2003, the energy efficiency of power generation in Alberta improved by over 40%. Competition worked as expected, creating downward pressure on prices due to rising investment in new, more efficient supply.

Consumers aren’t the only beneficiaries of privatization. Taxpayers win big, too, even when prices plunge for consumers as in the U.K. The proceeds from the U.K. privatization amounted to £21-billion. In addition to that one-time benefit, taxpayers are now rewarded annually, with the now-private companies having become among the country’s largest corporate taxpayers. Following privatization, the government has received £8-billion from the corporate taxes paid by the electricity companies. As with other competitive jurisdictions, the U.K. is awash in power.

In Ontario, in contrast, the average bill has risen dramatically since 1990. Power supplies have become insecure, the more so given the province’s increasing reliance on nuclear power, and Ontarians face rotating blackouts whenever the summer gets too hot or the winter too cold. Public power gives its advocates a warm, fuzzy feeling. For everyone else, it raises the spectre of freezing in the dark.

References:

UK household electricity prices

PJM peaking prices:
www.pennfuture.org, "E3", Vol. 5, No. 25 – 2003: The Year in Review

Alberta’s efficiency increases:
For 9%, the calculation is based on AEUB and StatsCan data; for the 1999-2002 wholesale price comparison see www.ippsa.com/Restruct_Paper.pdf; the 40% 2001-2002 fuel efficiency gain is based on comments of Martin Merritt, Market Surveillance Administrator, presentation to IPPSA 2004 annual conference

UK taxpayer gain due to liberalization

Australian power investment patterns:
International Energy Agency book, Power generation investment in electricity markets by Peter Fraser, (Paris: 2003)

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