Irving's next frontier: electricity
COMMENT: Last year an LNG import terminal and regasifier was approved just east of St. John's, New Brunswick. Then a pipeline was approved which would move the gas directly to Maine. The NEB approved natural gas import and export applications. Then the economy fell apart.
Natural gas prices have plummeted. The cost of LNG relative to natural gas prices in North America flipped. So what is the "highest and best use" (or the most profitable, or are those the same thing?) of this gas now?
This article is about a proposal to use some of that natural gas to generate electricity, and wheel the electricity into Maine and thus into the eastern US grid.
Think there might be a few New Brunswickians who don't think this is all good, that their province and coast should be the oil and gas gateway for Maine and the US northeast? Some echoes of Sumas Energy 2, as well.
OTTAWA — Irving Oil Ltd. is looking to expand its energy exporting empire into electricity with a proposal to build a 600-megawatt gas-fired power plant that would be a key supplier to an ambitious new “energy corridor” that New Brunswick and Maine plan to develop.
New Brunswick Premier Shawn Graham and Maine Governor John Baldacci Wednesday launched a study to determine the feasibility of a new transmission corridor, which would carry electricity, natural gas and gasoline from the province to the energy-hungry U.S. Northeast.
In an interview Wednesday, Mr. Graham said the energy corridor is the “missing link” in the province's plan to encourage construction of billions of dollars worth of energy projects aimed at export markets.
“The energy corridor is a unique concept in that it is an energy pathway or highway that is going to bundle together different forms of energy, which is going to increase the security and reliability for the northeastern states,” he said.
“And it also minimizes the environmental impact, which is critical for this project.”
The project would include transmission lines for up to 1,500 megawatts of power exports, as well as pipelines for increased gas and petroleum exports. There are currently transmission lines and pipelines from New Brunswick to the United States, but they are at or near full capacity.
On behalf of the two governments, Irving will conduct a feasibility study to determine the best route and most efficient configuration for the proposed new energy corridor.
The company, which is owned by the Irving family, is a major regional producer of oil and gasoline and is completing a $1-billion liquefied natural gas (LNG) plant. It also has plans with partner BP PLC to spend up to $8-billion to double the size of its Saint John refinery to become the largest in North America.
Now, the company is planning to expand its power business, using feedstock from the LNG facility to fuel a power plant to be built near Saint John. It would then export the electricity to New England, where prices are among the highest in North America.
Irving already has two smaller gas-fired power plants that feed the New Brunswick grid and provide some electricity for export.
“This is in direct response to our regional leaders' vision to supply secure, reliable and clean energy to the New England marketplace,” said Jeff Matthews, Irving Oil's director of business development.
“It's also a response to the vision of President Obama and Prime Minister Harper in terms of internationally securing a supply of energy, building ties between our two countries and tapping into the renewable resources that we have specially here in New Brunswick and Maine,” Mr. Matthews said.
He said the natural gas plant would provide both base-load electricity and incremental capacity that could be used to backstop the huge but inconsistent wind power generation that is being developed in the province and in Maine.
Irving itself is conducting feasibility studies on wind power and on tapping the tidal power of the Bay of Fundy. But Mr. Matthews said the company is ready to work with governments and other power companies to ensure development is complementary.
The other potential customer for the expanded transmission capacity is the proposed nuclear reactor that would be built at Pointe Lepreau, N.B., and owned by a investors' consortium led by Atomic Energy of Canada Ltd. and its private sector partners.