Why Canadians are embracing dirty fuels
By WENDY STUECK and MARTIN MITTELSTAEDT Globe and Mail
Vancouver and Toronto — High natural-gas prices are starting to exact an environmental cost as companies across the country switch to dirtier energy, such as oil and coal. Giant greenhouses in British Columbia are making the switch, as are Alberta cement plants and the district heating system that warms most of Toronto's big office towers. Natural gas, by far the cleanest of the fossil fuels and lauded by environmentalists as the easiest way of achieving dramatic air-pollution reductions, is proving just too expensive after huge price increases in recent months. David Ryall, operator of an 18-acre greenhouse growing tomatoes in Delta, B.C., said the switch was a matter of survival. Mr. Ryall changed his three boilers to heating oil in December. This was after his fuel bill shot up in October and November and he feared a $700,000-a-year increase in costs from natural-gas prices that quadrupled. He said he is not happy about the change: His equipment is set up to burn natural gas and he'd prefer to use the cleaner fuel. Mr. Ryall said he hopes to be back on natural gas by April. In the meantime, he's considering longer-term solutions such as clean-burning wood pellets, for example, or co-generation plants that typically use heat generated from operations to fuel some part of the facility. "There probably isn't a greenhouse in Western Europe that doesn't have [a co-generation] facility with it," Mr. Ryall said. The district heating system that serves Toronto's downtown is another victim of the surge in natural gas prices. This winter, Toronto's heating system will burn about 30 times as much oil as it did last year. Many of Toronto's large buildings, including the provincial legislature, are heated by steam from boilers that can switch between natural gas or oil. But the gas is delivered under contracts that are interruptible when demand is high, and suppliers have cut the flow dozens of times this year. Last year, that happened only once. "We don't have any choice" but to burn oil when the supply is interrupted, said Juri Pill, president of Enwave District Energy Ltd., the heating-system operator. Enwave is exploring some novel ways to reduce its dependence on natural gas, such as using methane from municipal garbage — so-called biomass — as a possible alternative. Ontario Power Generation, the provincially owned electric utility, recently completed a costly retooling of its Lennox generating station in Eastern Ontario to burn either natural gas or oil. But company spokesman John Earl said the plant is currently burning only oil, although there are hopes of cheaper gas prices in the summer. The Lennox plant shows some of the dramatic anti-pollution potential of natural gas. When it burns gas, emissions of smog-causing nitrogen oxides are reduced as much as 30 per cent. Carbon dioxide, implicated in global warming, is down as much as 20 per cent, and sulphur dioxide, a major cause of acid rain, is virtually eliminated. When coal is replaced by natural gas at generating stations, the improvements are even more dramatic. Carbon dioxide emissions fall 60 per cent; nitrogen oxides fall 90 per cent, and mercury is virtually eliminated. "Clearly, gas is the key to cleaning up our air at low cost," said Jack Gibbons, head of Ontario Clean Air Alliance, a group lobbying for conversion of Ontario's five coal-fired generating plants to natural gas. But higher gas prices are being used as an argument against the conversion in the province, the site of the country's worst air pollution. Though the increases have been a boon to gas producers in Western Canada, who, thanks to new export pipelines, can finally benefit from world prices for their product in the energy-hungry U.S. market, even western consumers are feeling the pinch. In Alberta, two cement makers that use natural gas are retooling to burn coal. The switch affects the Lafarge Canada Inc. plant in Exshaw, about 30 kilometres southeast of Banff, and an Inland Cement facility near Edmonton. Cement-making is one of the world's most energy-intensive businesses. The Exshaw plant alone burns enough natural gas annually to heat about 400,000 Calgary homes for a year. Both plants are being driven to dirtier fuel by competitive pressures. The Exshaw plant, for instance, would lose $50,000 to $60,000 a day at full production because of high gas prices. Company spokesman Gordie Miskow said the Exshaw plant has gone from being the most cost-efficient of Lafarge's 15 cement plants to the least efficient, all because of gas prices. "We definitely want to use coal, and we want to be on coal by the end of 2001 or 2002," he said. The result: a 6-per-cent increase in carbon-dioxide emissions and a 10-per-cent jump in sulphur dioxide. Mindful of the increases, the company has earmarked $12-million to reduce smog and particulate emissions. Not all companies are reacting to higher prices by staying away from gas. This month, Manitoba Hydro announced a $30-million conversion of its Selkirk coal plant to gas. But Manitoba Hydro undertook the switch for political reasons. The Crown-owned utility is involved in a bitter fight with natives and U.S. environmentalists over its exports to the United States. The increased use of dirty fuels has not brought an immediate rise in air pollution, in part because winter air is usually cleaner than summer air, but environmental officials are watching the situation. Monitoring stations for the Greater Vancouver Regional District have not recorded any increase in emissions that lead to smog, Bob Smith, the district's air-quality administrator, said. Mr. Smith's department is scrambling to find out how many businesses and institutions have switched to oil from natural gas. Although natural gas is far cleaner than coal or oil, environmentalists caution it is not the magic solution for eliminating air pollution. For one thing, natural gas is a fossil fuel, and hence a greenhouse gas, believed to cause global warming. Its production also exacts an environmental toll from sour-gas emissions and the disruption caused by drilling. "It's not pollution-free, and in the very long term, we want to get all of our energy from renewable sources and better energy efficiency," said Mr. Gibbons, the Ontario activist. But because the alternatives are far worse, he said, moving to gas will be "a key transition fuel to a truly clean economy." In the meantime, he's hoping that higher gas prices will encourage producers to find more natural gas, driving down prices and ultimately encouraging more use of the fuel. "Right now, gas is very [costly] because of the strong economy and cold winter. Over the next few years, we expect more supply to come on line and prices will fall dramatically," he said. |
