There is an Arab saying: “My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.”
Will we see a Canadian version of this prediction become a reality in our country? Stories from my father about working in the woods with a bucksaw and hauling wood out of the forest with horses remind me of how close we are to the lifestyle of the pioneers of this country. And perhaps that was not a bad thing to live closer to nature. Certainly, the oil-fuelled industrial prosperity has brought us many benefits that we will miss greatly if we don’t succeed in reducing our energy footprint and substituting renewable and other sources of energy for oil.
In the other category is the paradox of nuclear energy, which has been troubling for many citizens. Certainly, over the past 50 years, we have not succeeded in implementing a satisfactory permanent solution to the spent fuel. There are many who worry about the possibility of some type of accident whether based on a technical glitch or the actions of a terrorist. These worries may or may not be founded.
On the positive side, the safety record of the nuclear industry has been remarkable over the past 50 years and the reduced CO2 and other pollutants from these clean plants has delayed the onset of global warming.
Some interesting information gleaned from NB Power annual reports
- 25% electricity comes from nuclear generation at Lepreau
- 15% from Hydro (varies with rainfall)
- 60% from Carbon sources (oil, coal, natural gas, and misc.)
Its heavy oil bill has been close to $200 million in recent years. The 04/05 annual report put their heavy oil cost per barrel at $28USD. Heavy oil, also called #6 residual oil, is the left over oil after the refining process. Presently, the cost of heavy oil varies in the $45 to $50 US$/barrel range.
NB Power points to oil prices as driving up rates. What will be the rate increase when their oil hedging runs out and they have oil costs of $350 Million a year? ($50 / $28 = 1.78 x $200M = $350M). If $10M equals 1% rate increase then we can expect ($150M/10M) a 15% increase. Subtracting the recent 8% increase, we might believe another 7% rate increase will be brought forward in the near future, just for oil. There, we’ve saved a $10M hearing at the PUB. Just give NB Power another 7% or more next spring.
Beyond the reality that oil is just too expensive for electrical generation even now, is the looming decline in oil production that will start sometime in the next ten years. When production does not meet demand, the price of oil is going to rise to extreme levels. If NB power is still buying oil at that time, then rate increases could be as high as 100%.
In contrast to the high cost of oil, the fuel for Lepreau was $9M in 2004/05 fiscal year. The site at Point Lepreau has the potential for other units that would significantly displace oil generation in NB, PEI, and Nova Scotia and perhaps be of interest to Quebec as a resource when hydro is low there.
The annual mortgage payment on a $2 billion nuclear generating plant at 7% interest would be $171 million per year. Given some fuel, and operating costs, the mathematics looks very attractive.
The benefits would be:
- Reduction of CO2 emission by 4 or 6.3 Million tonnes, depending on the size of the plant chosen. To put this in perspective, annual emissions in New Brunswick are 20 million tonnes. This reduction could bring us to the Kyoto targets.
- More stability of price and security of supply when compared to oil. Displacement of oil delays the onset of peak oil decline.
- Improves the Canadian balance of payments and creates employment in Canada. A 1000 MW plant displaces 12.7 million barrels of oil a year. At $45 / barrel for residual oil, this is $571 Million per year.
Personally, I would prefer extreme conservation measures, wind and small hydro power additions as the initial step towards a saner energy policy, but is the general public ready to change their lifestyles? Are we going to continually export petro-dollars to oil producing countries when we have other options within our grasp? What is the best forum for energy leadership on this most important issue? Will the newly formulated PUB serve this purpose?
How do we change from an oil-centric society to a conserving sustainable society? What are the targets for energy reduction that would be necessary? How much is wind power going to help? When are solar cells coming down in price enough to help us? Is coal even an option if we consider global warming to be important? As well, will coal prices be stable for long when coal-to-oil gasification takes off?
A recently announced wind turbine project 13 miles off the coast of Cape Cod has seen environmentalist Robert Kennedy Jr. opposing the installation of 170 turbines. What part will NIMBY (Not In My Back Yard) play in our decisions? The wind is typically consistently strongest over water. If we can’t agree to install something as benign as wind turbines, then we have a great problem. The Bay of Fundy is shown on wind charts as having excellent wind speed for wind turbine production. Where does aesthetics rank in the battle to reduce greenhouse gases? What will local environmentalists say about the Bay of Fundy as a location if it is suggested here?
If nuclear is a part of the energy and Kyoto greenhouse gas solutions, then it would normally be built by NB Power. Given its present financial situation, an alternative might be to form a cooperative entity between NB Power, Nova Scotia Power, Maritime Electric, Hydro Quebec, and others interested parties to develop this site. This transfer of Lepreau 1 and construction of Lepreau 2 to this partnership would see NB Power’s balance sheet improved with new generation in the region and less dependence on foreign oil.