Natural Resources Committee on May 14th, 2007

[Todd Russell, Liberal, Labrador, NL]

These efficient plants that are now being built--your claim is a 20% intensity-based reduction--you say might be able to meet what the government wants.

[Dr. David Lewin]

I hope so, yes.

[Todd Russell, Liberal, Labrador, NL]

That means that you would not need to go, if you didn't choose to go, to gasification or some other type of technology if you didn't want to. Is that right?

[Dr. David Lewin]

With respect, I think we will have to go to gasification. The standard doesn't sit there. Maybe it's okay in the initial years, but the standard is increasing all the time at a rate I think of 2% per year.

Eventually you're forced into making a decision. Do you buy offsets to get down to the standard for the existing technology, or do you move to a new technology, which is gasification?

Being a promoter of going the technological route toward meeting these new targets, I would say that it's absolutely essential for the industry to move toward coal gasification, oxy-fuel, and so on, where you can capture the CO₂, for example, and store it underground and have store recovery, and so on.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Russell.

We'll go to Madame DeBellefeuille.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you, Mr. Chairman.

Mr. Lewin, in the conclusion of your document, you state that electricity can be produced with 90% CO2 capture and removal of all emissions. You indicate that such production is technically feasible, but that it can only become economically viable at certain locations.

What do you meant by that? Are you saying that it is not feasible or not viable in certain locations in Canada?

[Dr. David Lewin]

It depends on the type of coal you're using, which will determine the percentage of reduction. But generally speaking, using coal gasification, something in the order of 80% or 90% of all of those five emissions, which I mentioned, can be reduced.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you.

You spoke to us about your project, which will be funded equally by the Province of Alberta, the federal government and the industry.

Are you requesting those $11 million from the ecoEnergy Technology Initiative? Was your funding project submitted to the federal government via that program?

[Dr. David Lewin]

The simple answer is, yes.

But I suspect it's up to Natural Resources Canada where they find the funding.

Our request is simply for funding for that particular project, for the SaskPower project, and for a Nova Scotia Power project.

Frankly, I don't really mind where the funding comes from, but I assume it's from that eco-fund.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you.

Mr. White, you told us that the leadership must come from the businesses. If that's the case, what do you expect the government to do to facilitate your adaptation to new technologies?

[George White]

I apologize, but my French is not good. I have not lived in Longueuil for a long time now.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Well it's certainly better than that of many of the people sitting around the table. Don't be too concerned about it.

[George White]

Thank you very much.

How is industry going to lead this whole process? Is that the question you were asking?

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

No, my question is more about your expectations. You have demonstrated leadership and you appear to want to adapt so that you can produce electricity in a more ecological fashion. So what are your expectations from the government?

[George White]

The most important thing from an industry point of view is that we have some understanding of what's going to unfold, that we see policies and regulations come out with a realistic timeframe, from a business point of view.

What I see in the long run is that a lot of the less efficient plants will eventually close down because they get older anyway. Taking away the capital stock that's out there was what Dave was talking about.

Some of those plants will be replaced with new, modern plants based on the 20% technology. Others will be based on gasification technology that can give us maybe an 80% improvement.

But we don't have total control over that technology train. We can put more energy, time, and effort into doing these kinds of projects, but the technology has to evolve and become more viable and reliable as time goes on. If we can somehow marry the expectations of the regulators and the government with the possibilities and limitations the technology presents, I think that would be the best of both worlds. This is the kind of thing we would look for.

We may need research in certain areas. We need infrastructure in a lot of different areas. When we talk about sequestering carbon dioxide, right now there is no carbon dioxide to sequester, so industry hasn't developed that yet. But if we did have it, there is no infrastructure with which to move it around to where we need to sequester it.

So there is a lot of planning that has to go into the whole process over the next number of years. Industry, regulators, and governments can work together to make all of this happen. I think that's going to be the smoothest transition.

Hitting us with regulations that we can't adhere to is going to cause us tremendous difficulty in the short run.

[The Chair, Conservative, Lee Richardson]

Thank you, Madame DeBellefeuille.

Mr. Stoffer.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chairman.

Thank you, gentlemen, for appearing today.

I can't help but think of Judy Garland in The Wizard of Oz when she said, “Lions and tigers and bears! Oh, my!” I just think of NOx and SOx and particulates, oh my!

I think we should get Judy Garland to help us out on this one. What do you think? Bring her back from the dead?

[The Chair, Conservative, Lee Richardson]

I think she did the last NDP policy.

[Voices]

Oh, oh!

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

I think so, yes. Right on.

I just wanted to say that Canadians are obviously watching all of us and industry on how quickly we move forward. The figures given by the previous witnesses of 20, 20, 20, 30, are they realistic?

[George White]

Take a look at the existing projects that are out in the world today. Most of them were built seven to ten years ago. None of them has operated totally reliably. They were demonstration projects, and they were designed to be such. They tried different things. The ones that have survived, four or five of them—three in the United States, say three in Europe that I know about and have visited—are viable operations today, but not without a tremendous amount of difficulty in getting going.

Now we're into the second phase of building what we would call demonstration plants for the gasification technology. It's not without risk. We can build those plants for capital costs that are somewhat higher than the existing technology, maybe 20% or 30% higher, but that's not the problem. The problem is with the reliability of the plants in the early stages of their life. You can build a plant, but it has to start operating pretty much immediately. If we look at Genesee 3, it started up and I don't think it's ever shut down really. It has been a very reliable plant based on a lot of technology that's out there and proven. These new plants will probably not behave that way, and as a result, industry is very often reluctant to get involved with things they know are going to lose money in the beginning years.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you.

Sir, you indicated in your slide that the Canadian Clean Power Coalition also has U.S. coal and coal-fired electricity producers as part of the association. Are they being asked in any way to assist in payment of the one-third, one-third, one-third? Have they been asked?

[Dr. David Lewin]

They have. And to date they are participating, but they're not putting in funding. They're providing expertise, knowledge, and so forth, particularly the people from EPRI, the research institute in the U.S. They're providing, basically gratis to the project, a lot of expertise.

Let me back up on your previous question that George was answering. I was down in Tampa last week visiting the pulp plant there that Tampa Electric have had operating now for 10 years. Granted, that was built with some Department of Energy money in the U.S., and it's gone through its teething problems and so forth, but that's the kind of technology we can learn from, build upon, and improve upon when we build our own Canadian technology.

I asked what was the most challenging part of the whole system. It wasn't so much the technology of gasification or the turbines where they've had some challenges; it was mostly on treating water that comes out of the plant and getting it down to the state levels and so forth. They've learned an awful lot. Again, through people like EPRI, that kind of feedback of information is available to us.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

In the two countries, gentlemen, how many coal-fired plants do we have? A ballpark figure.

[Dr. David Lewin]

I'm not sure how many we have, but in Canada about 17% to 20% of our total electricity is provided through coal. In the U.S. it's about 52%.