July 19, 2004
Natural gas crisis looms, study warns
Western Canadian reserves not enough to ease North American supply crunch
Peter Morton, Washington Bureau Chief
Financial Post
Monday, July 19, 2004
WASHINGTON - North America is heading toward an inevitable natural gas crisis that will not end until dozens of liquefied gas plants are built, according to a new study.
U.S.-based Cambridge Energy Research Associates says in the study released at the weekend that even the prospect of new finds in Western Canada will not be enough to head off the looming crunch.
"Western Canada has growth potential left, but it won't be enough to balance the North American market," Daniel Collins, CERA's associate director in Calgary, said in an interview.
He told the Financial Post the study was done to alert people to the expected gas crisis in which prices will hover between US$6 and US$7 per thousand British thermal unit at least until 2008 or 2009.
"We wanted to let everyone know its coming," he said, adding that prices could go even higher if there is unusual weather patterns. Current gas prices are between US$4 and US$5 per MMBtu.
The energy research institute based in Cambridge, Mass., found that despite near record levels of new onshore drilling in the United States, gas production in the country continues to fall. Even exports from Canada, the U.S.'s largest foreign supplier, cannot make up the difference.
Supplies of gas from Canada's Mackenzie Delta and eventually Alaska will not come into the U.S. market in time to head off the inevitable price crunch, said Mr. Collins.
"North America's natural gas supply shortfall -- the clear inability of domestic supply from available lands to keep pace with demand -- will challenge the North American natural gas market for the next several years," the study says.
"If no measures are taken to boost supply or dampen demand, North America is set to experience the highest sustained prices in the industry's history," it concludes.
Natural gas became more in demand several years ago when gas prices were relatively cheap, hovering about US$2 per MMBtu. Since no new nuclear plants were being built and coal-powered plants were considered polluting, many power generators built cheap gas-driven plants.
In fact, North America added 200,000 megawatts of new power capacity -- twice that of nuclear power -- in recent years with 94% of that gas driven, the study finds.
However, the run-up in gas prices over the past several years has prompted some electricity producers to consider shutting down those newer plants.
"Residential and commercial customers will see higher bills, impacting pocketbooks and the overall economy," CERA says.
The study warns that U.S. politicians should resist the temptation to accuse energy companies of price gouging and instead encourage the development of new sources of gas, especially liquefied gas.
"The finger-pointing and charged investigation that can be generated by an energy market suddenly out of balance will not result in an easing of high and volatile prices," it said.
CERA said there are some encouraging signs, including the moves recently in the United States toward building more LNG plants with more than 35 being proposed compared to 13 just a year ago. That could represent about 11 billion cubic feet a day compared to 1.4 billion cubic feet currently. North America uses about 68.3 billion cf a day.
Besides encouraging new LNG plants, CERA says the United States in particular should allow more exploration on lands considered taboo, such as offshore or in the Rockies.
As well, the United States should ease some of its restrictions on coal-fired capacity.
The CERA study, sponsored by the global consulting company Accenture, suggests there should be ways of discouraging the current trend toward short-term or spot gas buying among utilities since it tends to make gas prices more volatile.
Congress is struggling to push through a new energy bill that would, among other things, encourage the development of the Alaska gas pipeline through guarantees and other incentives.
"New North American frontier resources will become an important part of the supply mix if allowed or encouraged to proceed," CERA says.
© National Post 2004
July 16, 2004
South Meager Geothermal Project
On July 16, 2004, Western Geopower Corp filed a "pre-application" with the Environmental Assessment Office for the South Meager Geothermal Project. (link). The company hopes to be generating 100 megawatts by 2007 from their geothermal resource north of Whistler.
Western Geopower Corp
President: Kenneth McLeod
411 - 837 West Hastings St.,
Vancouver, BC, V6C 3N6
604-662-3338
Fax: 604-646-6603
info@geopower.com
www.geopower.ca
WGP on TSX-V
From the June 1, 2004 newsrelease
$14.5 million test drilling program in 2004
2 wells, 2500 feet deep
average temperature 220-240°C
max measured temp to date of 275°C
potential development capacity of 100 MW or more
"most likely capacity" of 192 MW.
From the company website:
The South Meager Geothermal Project is owned and operated by Meager Creek Development Corp. (MCDC), a wholly-owned subsidiary of Western GeoPower. The project is located 170 km north of Vancouver, British Columbia, and 70 km north of the town of Pemberton. The town of Whistler, located close to Pemberton, is the site of the 2010 Winter Olympic games. One of the underlying themes of the games is a commitment to preserving the environment, which geothermal energy symbolizes.
The South Meager Geothermal Project is held under lease from the Province of British Columbia and is valid until 2017, at which time it will be renewable for an additional 20 years. The area under lease is 4,267 ha and has been extensively explored for its geothermal energy potential.
Western GeoPower’s independent consultant, GeothermEx, Inc. of Richmond, California, recognized as the world’s foremost authority on geothermal energy, has concluded that the South Meager Geothermal Project has sufficient heat potential to produce a minimum of 110 Megawatts (MW) of electrical power, up to a maximum of 250 MW, with a probable capacity of 200 MW. A production capacity of 200 MW is equivalent to the consumption of 160,000 households.
Upon the successful completion of the feasibility study and receipt of governmental project approvals, Western GeoPower intends to raise the capital required to achieve 100MW of generation in mid 2007 and 200MW in 2009.
BC Ministry of Energy and Mines Geothermal Resources
information webpages
geothermal rights Q&A
July 15, 2004
Energy surplus predicted to last
Wind power, conservation keys to stability
James Hagengruber
The Spokesman-Review
July 15, 2004
Power from the wind and increased conservation will add stability to Northwest energy prices, according to a report presented Wednesday at a monthly meeting of the Northwest Power and Conservation Council in Spokane.
Because of a sluggish economy and the lack of production from aluminum smelters, the four-state region continues to experience a significant surplus in power – enough to supply three cities the size of Seattle – but a boost in conservation will offer insurance against dry years and the type of price spikes experienced in 2001, according to Tom Eckman, conservation resources manager for the agency.
Conserving power is needed, Eckman said, "not because it's green, it's because it's cheap."
The group, which was formerly known as the Northwest Power Planning Council, consists of two governor-appointed members from each state in the region. The council's decisions influence energy policy for utilities and local governments. The group is currently drafting a new long-term energy plan, which is expected to be released for public comment next month.
Analysts predict the region's current energy surplus will last for another decade. By conserving an additional 30 to 50 megawatts per year, the surplus will last even longer and give utilities more time to develop new sources of power, Eckman said. Wind is being considered as the most viable option for a stable energy supply, but new gas-fired power plants and potential new oil sources from Alberta are also being explored.
The conservation is expected to come from a variety of sources – everything from consumer incentives to purchase energy efficient appliances to improvements in farm irrigation pumps. One of the biggest opportunities is in residential lighting, Eckman said. If every home in the Northwest switched to fluorescent lighting the region would save about 530 megawatts per year, which amounts to about half the power used by Seattle.
"Little things add up to a lot," Eckman said.
First permit approved for local wind power development
By Gary Rusak
Tuesday, July 13, 2004
Peace River Block Daily News
Land and Water British Columbia has finally approved the first permit for the Peace Energy Co-operative to begin working towards a wind farm on the Bear Mountain Ridge just southwest of Dawson Creek.
"It has been quite exciting," said Bill Studley, general manager of the co-op. "Basically our next step is to survey the area to find the best place to put the monitoring equipment."
The investigative use permit took the co-op almost a year of legal wrangling to secure. With help from South Peace MLA Blair Lekstrom, former manager David Kidd and more than a little patience, the group persevered.
"It has been quite a ride," said Studley. "This permit is the light at the end of what's been a long tunnel. We are ready to get things moving."
On the bureaucratic side of things the group must now file for a license of occupation and a final long-term development permit, but for the time being Studley is happy with the Peace Energy's progress.
"We are probably two years away from having the wind park permanently set up," he said. "We still have to do the monitoring and then the environmental assessment, but at this point things are looking really good."
Bear Mountain has been identified as a prime location for a wind power production by various studies including one released by BC Hydro late last year. The group believes that the site could hold up to 50 towers and possibly produce 50 megawatts, a significant amount of power.
"We will soon open negotiations with B.C. Hydro to get a test turbine hooked up to the grid," said Studley adding that Peace Energy would be the first to have a wind turbine in British Columbia feeding ?green power' into B.C.'s power grid.
As well, the co-op is looking to partner with a bigger firm to help them develop the wind power site.
"We are in negotiations with several companies," he said. "I would expect that we would have another announcement in the next couple weeks."
Maybe the biggest immediate spin-off for the group has been a marked increase in membership since the permit was awarded.
"It has been amazing," said Studley. "We are right now at about 125 members but if you call me back in an hour it will probably go up by two or three."
See also:
Land and Water BC, May 19 2004
8013937 Peace Energy location map
Blair Lekstrom, NLA, Hansard, March 1 2004, Page 34, line 1720 & following
I have a group of interested people in my area. Peace Energy is the name of the organization, and they're working on wind generation right now. There's a place in Peace River South not far from Dawson Creek called Bear Mountain. I have to smile when I say that. It's not a big mountain, but it's called Bear Mountain. It's one of the best locations for wind generation available in British Columbia today, and there's a lot of work and a lot of interest in that site right now. Again, I'm working with some groups, and hopefully, we'll see something transpire in the near future so that we can lead and possibly be world leaders again with opportunities that expand, for communities to be fully self-sufficient as far as power generation goes. You can just put your mind to it, and the thoughts are endless as to what we can achieve with that.
www.dawsoncreek.ca, Volume 1 2004
BEAR MOUNTAIN WIND FARM
Peace Energy has had their application to secure a lease for Bear Mountain Wind Farm welcomed by the Ministry of Land and Water BC. They should know shortly if the application is acceptable and then another 140 days to actually award the lease. Bear Mountain has been identified as a prime location for a wind power production by various studies including one recently released by BC Hydro. Peace Energy Group believes the site could hold up to 50 towers. If Peace Energy is awarded the lease, their next step would be to secure a partner who would help finance the project. Peace River Block Daily News
Wind to be monitored for power potential, Aug 9 2002
Peace Energy wants to be a player
Nootka Earthquake hits Vancouver Island
Moderate quake hits Vancouver Island
WebPosted Jul 15 2004 06:28 PM PDT
VICTORIA - A moderate earthquake woke residents on north and central Vancouver Island just after five o'clock Thursday morning.
B.C. seismologists recorded a magnitude of 5.5 on the Richter scale while the U.S. Geological Survey had a reading of 5.7.
LINK: USGS quake report
Taimi Mulder, a seismologist with the Geological Survey of Canada, says the quake was felt as far away as Vancouver.
"People have felt their chairs rolling, someone in Comox reported tree swaying. Doors were swinging back and forth for about ten seconds maybe."
Mulder says there are unlikely to be aftershocks from the quake.
There have been nine quakes of similar magnitude in the region in the past 30 years. This quake was centered about 40 kilometers off Nootka Island.
INDEPTH: Earthquakes
See also:
Strong quake jolts coast, June 28 2004
Pacific Geoscience Earthquakes Canada - West
What's BC Hydro done lately? Not much!
By Ian Cass
Opinion
Saanich News
14 July 2004
In the early 1990s, BC Hydro alerted the NDP government of the day
about the future security of electric power to Vancouver Island. In
1996, a power producers panel was set up to review this matter. On
their recommendation, the government directed Hydro to participate in
the gas-fired generation plant proposed at Campbell River. This
project finally overcame start-up problems and went into production in
May 2002. In the meantime, the government directed Hydro to pursue a
second gas-fired plant at Port Alberni. That site proved unacceptable
and was moved to Duke Point near Nanaimo. The Nanaimo project, named
VIGP, required prior approval of the B.C. Utilities Commission and a
hearing on this matter was held July 21, 2003.
It should be understood that Hydro's preference was for installation
of new, high-voltage undersea cables to the Island to continue to
secure power from the Mainland.
A system that had served us well for half a century.
It should also be understood that both NDP and Liberal governments
favoured the introduction of gas-powered plants for reasons many
people found hard to understand. I have already written extensively on
this, and I think the public needs to understand that the output from
both the existing and proposed gas plants can only produce a small
fraction of the Island's needs. In the event of a submarine cable
failure, we would still face a major blackout much like the power
failure of Christmas 2002.
Back to the hearing by the utilities commission regarding the VIGP
project at Nanaimo. The present Liberal government has, in its energy
plan of 2002, dictated that future power-generating capacity shall be
provided by the private sector and not BC Hydro. The commission ruled
that, with the proposed VIGP gas-fired plant, the private sector had
not been given full opportunity for alternative proposals. On this
basis, the Hydro application for approval was denied and they were
directed to invite the private sector to submit alternative proposals
and bids. This would enable the commission to decide whether or not
the VIGP at Nanaimo was the "most cost-effective solution to the
problem at hand."
This decision was handed down in an 80-page report dated September 8,
2003, which said, among other things, "the future reliability concerns
remain and the Commission expects Hydro to reapply for approval by
Spring 2004 to resolve these concerns."
Current comment by Hydro is that they plan to have a resubmission
ready for November this year. This date seems optimistic to say the
least.
And now, gentle readers, let's see if we can summarize to this point.
We have gone 10 years since Hydro alerted government with concerns
about the reliability of electric power supply to the Island. For the
past 50 years we have enjoyed cheap, reliable and clean power from the
Mainland via submarine cable and generated by the infinite power of
evaporation and condensation - our rivers system. During this time,
although much has been said about our decaying undersea cables,
nothing has been done to apply adequate replacement of the cables or
to expand the water generation capacity either here or on the
Mainland. In fact, the condition of the cables themselves does not
appear to have been given proper examination and appraisal. Instead,
the NDP gave their backing for gas-fired generation in supporting the
Campbell River unit, while their successors have done even worse.
It might be useful now, briefly and mercifully, to cover the actions
of the present government with respect to the matter of electric power
and the Liberals' contribution to its continued provision, by clean
hydro-generation in an economic and reliable fashion.
The fact is they have done nothing positive. We remain as vulnerable
now as when they were elected, even more so as the present system is
three years older and more prone to breakdown. Not one watt of
additional power has been produced nor one dollar spent in
refurbishing our cable system.
In fact Campbell's government - or more correctly, Campbell and a few
"advisors" - have totally emasculated what was BC Hydro in terms of it
being a fully, vertically-integrated and efficient power utility,
operating well in the interests of its public owners while also paying
tax revenue to the government. The dismemberment of BC Hydro and the
introduction of an outside agency, Accenture, and the separation of
other activities has left us with a real dog's breakfast in terms of
responsibilities and ownership. In addition, the Minister of Energy,
Richard Neufeld, has issued an official government Energy Plan that
belongs in Alice in Wonderland. Macbeth would have said the plan is
"full of sound and fury, signifying nothing," to paraphrase from that
well-read play.
It says nothing on the all-important subject of hydro-generation
expansion here or on the Mainland, although a major expansion on the
Peace River has already been designed.
It does say BC Hydro shall not be involved in building future
generation projects. That means our experts at Hydro are no longer
available to build generators, just as our ship builders are not
available to build new ferries.
Unfortunately, space does not permit a more detailed summary of the
current situation (pun intended) but I'll just leave you with a couple
of thoughts. Hydro generation is non-polluting, non-consuming and
comes at a low cost of about $23 per megawatt hour.
Gas-fired generation is polluting, consumes a finite resource with no
price control and costs about $70 per megawatt hour. The provision of
a significant volume of gas-fired generation on the Island is a
billion dollars away and 2010 is an optimistic time frame.
Whoever hopes to succeed this government had better come up with a
sensible plan to deal with this impending disaster before the next
election. The first price increase will be here shortly and the next
one just after the election. Of course we have to spend money but, as
we said years ago, fix the cables first. The gas will still be there
later if needed as a backup.
* Ian Cass is a former Saanich councillor and a long-term contributor
to the Saanich News.
July 08, 2004
A warm welcome to the attitude change on global climate change
By ERIC REGULY
Globe & Mail
Thursday, July 8, 2004 - Page B2
A couple of weeks ago, a speech on climate change was delivered at the Council on Foreign Relations, the New York think tank and publisher. "It would be too great a risk to stand by [and] do nothing," the speaker said. Fighting climate change later, when it becomes a serious problem, instead of now, while there's still some chance it can be controlled, could be "so disruptive as to cause serious damage to the world's economy."
Another alarmist eco-fanatic on the pulpit? The speaker in fact was John Browne, chief executive officer of BP, the world's second-largest oil company. Global warming is happening, burning hydrocarbons is responsible for it and measures can be taken to slow the rate of increase, he said, such as converting coal-burning electricity plants to natural gas, improving the fuel economy of cars, building nuclear generating plants and developing wind and solar power.
Lord Browne is no energy industry pariah. Last month, Ronald Oxburgh, chairman of Shell Transport and Trading, the British arm of the Royal Dutch/Shell Group of companies, said he sees "very little hope for the world" unless there is a reduction in the emissions of carbon dioxide, the main greenhouse gas. About the same time, John Rowe, CEO of Chicago's Exelon, a $22-billion (U.S.) electricity and natural gas company, told a global warming conference it is time for the U.S. government to limit carbon dioxide emissions. For some time, he has been saying "I think the climate change problem is real."
In Canada, Frank Dottori, CEO of Tembec, one of the largest forest product companies, argues that the Kyoto accord on climate change, of which Canada is, at best, a half-hearted supporter, should not be tossed onto the scrap heap (as the Americans have done, and the Conservative Party wants to do, but not the NDP or the Bloc Québécois). Greenhouse gas emissions have to come down for the sake of the planet, he says.
What is happening here? To read the mainstream press in recent years, you would think anyone who still believes global warming is man-made is crazy, misinformed, hopelessly biased or all three. Those who think global warming should not be ignored, a group that includes hundreds, perhaps thousands, of peer-reviewed scientists and climate change experts, get little attention. The smaller number of skeptics continues to get disproportionately large coverage.
Take BP's Lord Browne. When he outlined his plans for carbon dioxide reduction, the Competitive Enterprise Institute, the U.S. public policy group that thinks any form of environmental regulation is an attack on life, liberty and the pursuit of SUVs, called Lord Browne's agenda "misdirection and wasted effort." The institute's comments were widely reported.
When Exelon's Mr. Rowe had the nerve to say industry is spewing out too much carbon dioxide, Republican Senator James Inhofe pumped out a press release that dismissed his speech as "hypocritical." Why? Because Exelon, an owner of nuclear generating plants, would benefit if carbon dioxide restrictions put a few coal burners out of business. Mr. Inhofe, chairman of the Senate environment committee, dismisses global warming as "a hoax" (he has also voted against protecting drinking water and improving auto fuel economy standards).
It would be stretching it to say the executives who believe climate change is an environmental and economic disaster in the making are finally winning the publicity war. But more and more of them say something has to be done.
The European executives are at the forefront of effort. In Europe, saying global warming is a threat that has to be dealt with hardly makes you a freak. This is partly because the European Union has adopted Kyoto and will launch a mandatory greenhouse gas emissions trading scheme early next year. So fighting Kyoto has become somewhat of an exercise in futility. The EU, though, has won support among many industries because the trading system is designed to take some of the pain out of reducing emissions. If your company brings its emissions in below the target level, it can make money by selling surplus emissions credits to companies above the target. Industries also find that using less energy has the twin benefit of reducing costs and the output of greenhouse gases.
In North America, fewer executives in fewer industries will say climate change is a danger that has to be controlled. Their belief, apparently, is that energy use will soar, taking greenhouse gas emissions up with it. In other words, the emissions are a necessary and inevitable byproduct of economic growth, so don't fight it unless you want to put a lot of people out of work. Nonetheless, a few executives, such as Exelon's Mr. Rowe, think the fight is not futile.
This is what Lord Browne believes, and he says limiting greenhouse gas emissions can be done "without doing serious damage to the economy" through the use of market-based mechanisms such as an international emissions trading system. The Competitive Enterprise Institute and other skeptics will continue to argue the opposite, as if innovation has suddenly vanished from the American economy. But at least some credible executives are starting to argue that the naysayers may be wrong. If big oil companies say global warming can be controlled, why not urge them on?
July 02, 2004
Water powers the future at Site C
By Scott Simpson
Vancouver Sun
Page H01
02-Jul-2004
Vancouver Sun business reporter Scott Simpson and photographer Ian Lindsay recently spent several days in the Peace River Valley area gathering opinions and images for a five-part series, which begins today, on the proposed Site C dam project. What they discovered was a complex and controversial undertaking that may become a central focus of the province's future energy policies.
- - -
CREDIT: Ian Lindsay, Vancouver Sun
GENERATING CONTROVERSY ON THE PEACE RIVER: The W.A.C. Bennett Dam is now one of two dams generating electricity on the Peace River near Hudson's Hope. BC Hydro is now considering building a third dam at what is known as Site C.
---
HUDSON'S HOPE - The phone started ringing in Mayor Lenore Horwood's office soon after the news broke about Site C Dam.
BC Hydro's oft-discussed $3-billion proposal to build a third dam on the Peace River near Fort St. John was back on the Crown corporation's agenda.
It had been more than a decade since Hydro last put the controversial project in limbo, but demand for electricity is expected to skyrocket by 40 per cent over the next 20 years and Hydro officials have to figure out a way to provide all that power.
Site C is one way to meet B.C.'s future energy needs, but the corporation is considering everything from coal-fired thermal generation to fledgling technology that seeks to harvest energy from the flow of ocean tides.
The first telephone calls about Site C came from reporters looking for a reaction from Horwood, whose quiet community already has two dams located at its outskirts -- the giant WAC Bennett and Peace Canyon dams.
Horwood told them she didn't want to see another dam in the Peace River Valley, even though her husband is one of a preponderance of Hudson's Hope citizens who work for BC Hydro at one of the existing dams.
After that pronouncement, the calls started coming from residents of communities as far from northeastern British Columbia as you can get.
The callers wondered why Horwood was opposed to a project that would provide what they considered -- and what Hydro considers -- to be clean, green energy.
"I've had so many people call me from Vancouver Island and say: 'We think that dam would be a great idea'," Horwood recalls.
Surely, they suggested, Site C was a better alternative than the natural-gas-fired thermal generating station that is still under consideration for construction at Duke Point on Vancouver Island?
"I said, 'But it's not in your backyard. It's in my backyard, because I live right on the river there.'
"They said: 'We don't want anything on Vancouver Island, a coal-fired plant, a gas-fired plant. We want you to build the power up there and ship it to us'."
Horwood does not appear to be the kind of mayor who raises her voice or pounds her desk.
But that kind of logic tends to raise a lot of hackles in a community, with a population of 1,100, that will celebrate its 200th birthday next year.
A lot of people in Hudson's Hope don't have telephone service, or natural gas, and although they live within a few minutes' drive of the biggest hydroelectric facility in the province, some don't even have electricity.
They think the notion that B.C.'s northeast should continue to make sacrifices in order to sustain the populous southwest and Vancouver Island is, to be polite about it, amusing.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The W.A.C. Bennett dam, named after the late Socred premier of B.C., is on the Peace River near Hudson's Hope.
- - -
"Some people have been relocated because of the first dam. They would have to be relocated again," Horwood said.
"We're living in a place where we contribute a third of the electricity created in the province, but we still have people who can't get phone lines, or electricity, or natural gas.
"Some who don't have electricity can see the W.A.C. Bennett Dam from where they live -- and they can see the lights from the dam at night."
If Hydro decides to go ahead with Site C, and if the provincial cabinet decides to approve the project, it would take nine years to build.
Hydro began accumulating the land for Site C in 1975, and estimates that an area of almost 6,000 hectares of Peace River Valley -- 15 times the area of Stanley Park -- would be flooded or developed for the creation of a new reservoir on the Peace.
The dam itself would be located about 90 kilometres downstream from the WAC Bennett and Peace Canyon Dams, seven kilometres southwest of Fort St. John.
It would annually produce about 5,000 gigawatt hours of electricity -- more than enough to supply two cities the size of Surrey. It would boost Hydro's total capacity to produce electricity by five per cent, or about five years' population growth in British Columbia.
The floodwaters of the reservoir would extend about 85 kilometres back upriver to Lynx Creek, a subdivision of Hudson's Hope.
The Crown corporation continues to be the largest landholder along the river, employing a property management company in Fort St. John to lease its property to local farmers and ranchers.
Public display boards at Peace Canyon Dam, which opened in 1980, have always referred to Site C as part of Hydro's plans for the Peace.
In a submission earlier this year to the B.C. Utilities Commission, Hydro included Site C on a list of four potential dams that could be built over the next decade -- at a total cost of at least $5.2 billion.
Others on the list include two additional dams on the Columbia River, and one in the Lower Mainland on the Elaho River, which is the main source of water for the Squamish River.
Hydro warns that the Elaho project, a 145-metre high earthfill dam, is likely to meet strong opposition from the Squamish First Nation, and the actual unit-cost to produce electricity there would be about double the expected cost to produce electricity at Site C.
Hydro says the Border Dam and Murphy Creek Dam on the Columbia in southeast B.C. carry similar liabilities, with environmental, social and economic issues making their development highly uncertain.
As with the Elaho, they would produce less than a third of the electricity Hydro would gain from Site C -- and only about one tenth of what the W.A.C. Bennett dam produces.
Murphy Creek would flood some populated areas, including a wastewater treatment plant in north Castlegar and a "significant amount" of low-lying properties.
Border Dam would cause some flooding around Trail, and would threaten some local fish populations.
"There is little to no local support for these projects as this is one of the last undammed sections of the Columbia River. There is significant intrinsic value to keeping it in its natural state," Hydro states in its submission to the BCUC.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The Gates of the Peace River, formed where the river cuts through rock, will be covered up to two-thirds of its height if BC Hydro goes ahead with its Site C dam proposal. Biologist Brian Churchill looks out from one of the bluffs.
- - -
Hydro's submission estimates that electricity from Site C would cost about 5.4 cents a kilowatt-hour to produce, based on the $3-billion capital cost of the facility and other factors.
Electricity from the other projects would be substantially more expensive, running at between eight and 11 cents per kilowatt hour to produce.
That appears to make Site C cheaper than almost any other form of electricity production that could be brought on-line in British Columbia.
Hydro also calculates that it's as cheap or cheaper than any alternative technology including coal-fired thermal generation, which is the main source of electricity across North America.
However, strong doubts about Hydro's projected cost for Site C are surfacing at electricity rate hearings in front of the B.C. Utilities Commission.
By some estimates, the cost to produce electricity at Site C will be at least 50 per cent higher than Hydro's comparatively rosy prediction, pushing the cost of energy from Site C to about 8.1 cents.
Hydro's initial published estimate for the project was $2.1 billion, although that figure was enlarged to $3 billion in June during a series of hearings in front of the commission.
Hydro is using the $2.1-billion figure as the basis for its estimate of a production cost of 5.4 cents per kilowatt hour of electricity from Site C.
At $2.1 billion, Site C is the cheapest option in the province for new electricity supply, next to coal-fired thermal generation.
But when the extra $1 billion is added in, the cost to produce electricity from Site C jumps to about 8.1 cents a kilowatt hour.
At that price, Site C no longer stands out from the pack. It would be comparable in cost to electricity that could be produced from burning woodwaste, or natural gas, or from wind power, or even geothermal energy.
Hydro is preparing to spend $1.9 million on preliminary studies, and the corporation estimates that the final cost to complete all studies associated with Site C will be about $17.4 million.
"Before they spend a penny, why don't they give us the business case and the financial model showing whether or not this thing is even in the ballpark in terms of being an economic source of electricity?" Hydro critic David Austin asks.
"They should not spend even a dime before they do that."
Of the four hydroelectric projects on Hydro's list, Site C is the most advanced.
- - -
Given the controversy Hydro expects for the other three, it may be safe to say that Site C will be the last large hydro project to receive serious consideration in British Columbia.
Hydro is proposing a wide array of projects and scenarios to meet demand over the next 20 years -- including energy conservation programs, independent power projects, generation fired by gas and even coal, and additional supply from existing facilities.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
Lenore Horwood, the mayor of Hudson's Hope, knows the history of BC Hydro's Site C proposal in detail.
- - -
In many scenarios, Site C isn't even a factor, with Hydro instead proposing state-of-the-art gas-fired generation plants at Kelly Lake near Clinton to meet the bulk of new demand.
Other scenarios show a mix of new supply from independent power producers, plus Site C, plus repowering of the Burrard thermal generating station.
Nearly all the plans call for significant contributions from the installation of additional generators at the existing Mica and Revelstoke facilities.
Reinvestment at Hydro's existing facilities, including generator system upgrades at W.A.C. Bennett/G.M. Shrum Generating Station, would provide modest gains, and the Power Smart electricity conservation program would add a bit more.
Hydro also continues to pursue a range of projects on Vancouver Island, including a 275-megawatt gas-fired thermal generating plant near Nanaimo.
Although Hydro and the provincial government are trumpeting all of these projects as potential solutions to B.C.'s dependence on electricity imports, there is nothing in the plan to suggest that Hydro is going to stop buying electricity from sources outside the province.
Imports from Alberta and the United States annually provide B.C. with roughly half the amount of electricity that Site C would produce.
In its submission to the BCUC, Hydro says it's going to continue to buy electricity elsewhere.
The corporation tends to import electricity when it's cheap, and sell it when it's expensive, so a continuation of that strategy is annually worth hundreds of millions to the B.C. provincial treasury.
The major snag in the entire system seems to be the distance between the biggest sources of electricity, such as W.A.C. Bennett, and the biggest groups of consumers, in the Lower Mainland and on Vancouver Island.
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About seven per cent of the electricity travelling along transmission lines from major facilities in central and northern B.C. is lost en route as heat, so there's economic advantage to having local sources of power.
Hydro has already begun to suggest that Vancouver Island would have a more reliable electricity supply if it was generated on the island.
It also talks about a "regional disparity" that exists on the Lower Mainland as well, with the most populous part of the province consuming electricity that is delivered via long-distance transmission lines that are already close to capacity.
The proposal would have to be approved by the BCUC, and then given assent by provincial cabinet, before Hydro could take any action.
The utilities commission won't render a verdict until later this year, although B.C. Energy and Mines Minister Richard Neufeld is already talking about it.
Hydro CEO Bob Elton emphasized that there are still a lot of unanswered questions about Site C.
"We don't actually have a bias one way or the other," Elton said. "We know it's an option that might be attractive, but we don't know if it's the best option."
That's why, he said, Hydro wants to undertake a preliminary $1.9-million study that would seek to determine if there are any large obstacles, or advantages, to moving ahead with it.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The intakes for the ten generating units of the W.A.C. Bennett dam bring water from the Williston reservoir.
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Elton agreed with a suggestion that, beyond Site C and the three other projects under consideration, the era of big hydroelectric developments in British Columbia is over.
"If you look around the world there aren't that many large hydro projects being built. There are some countries that are building them, but it's a hard thing to do."
He said the advantage of Site C is that it would be located on a river that's already host to two dams, rather than a pristine stream.
He said Hydro remains certain that B.C. requires large-scale electricity projects, whether it's hydro or some other form of production, in order to provide the province with a secure supply that's capable of delivering energy when demand hits its peak on cold winter evenings.
"I think initially the debate should be: 'Would you prefer a dam to be built on the Peace, or would you prefer a large gas plant, or a large coal plant, or would you prefer to rely on electricity imports?'
"We're trying to do two things. We're trying to provide all of British Columbia with enough energy so that when you turn on the lights, every day of the year, there's enough of it to satisfy everyone's requirements.
"Second, we're trying to provide you with capacity -- so that at 6 p.m. on a really cold Monday evening in January, the capacity is there to meet that peak demand.
"We cannot rely purely on a lot of smaller projects. We need some large ones to go with the small ones. Site C at this pint is jut one of the possibilities, and we don't know if it's the best one."
In 1981, the B.C. Utilities Commission accepted Hydro's contention that it was in the interest of its customers -- the residents of British Columbia -- to create a new source of electricity so long as demand continued to escalate.
The commission concluded that there were no "overriding impediments which would dictate the abandonment of the Site C project."
However, the commission noted that Hydro had not demonstrated that it was preferable to any of the alternatives that could be undertaken in order to keep up with demand load.
If the utilities commission expresses unqualified support this time around, Hydro would then have to consult with stakeholder groups including First Nations, undertake environmental studies, and nail down the financial costs.
Beyond that, the final decision would rest with provincial cabinet.
Hydro is currently proposing to spend $1.9 million on initial studies that could provide some direction to cabinet, and to the utilities commission, on whether more detailed work should proceed.
Meanwhile, the people in Hudson's Hope wonder what's going to happen.
Hydro has been holding onto land in the Peace Valley for 30 years, and Mayor Horwood is anxious for a decision, one way or the other.
"If Hydro hadn't put Site C in their plan, I would have been the first person to call and say: 'Then sell the land,' " Horwood said.
"The holding of the land is part of the municipality's concerns. It's holding up development for our community. There is land along the river that could be developed for recreation, for tourism -- all because of a project that has been on the books for 30 years.
"It might not happen for another 20 years, so it's a 50-year plan as far as I'm concerned.
"Should one level of government have the ability to hold the land for that period of time?"
TROUBLE ON THE PEACE:
Day 1:
BC Hydro's $3-billion dream
Day 2:
The Alberta impact
Day 3:
The massive W.A.C. Bennett Dam
Day 4:
Life in the floodplain
Day 5:
Native opposition