Frustration with coal’s future or lack thereof is reaching a boiling point in Estevan

From the Top of the Pile

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I’ve attended a lot of meetings with politicians at the front of the room since I moved to Estevan in late 2008, but in all that time, I have never seen a small-c conservative politician roasted as I did on Sept. 4.

On that day, Estevan MLA and Minister of Government Relations and Northern Affairs Lori Carr had her feet held to a coal-fired flame by members of the Estevan Chamber of Commerce, of which about 60 were present.

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I don’t get out to chamber affairs nearly as much as I used to, but I can tell you, that’s a pretty decent turnout. And there was a palpable feeling of consternation in the room, if not desperation. It’s a reflection not only of what the chamber members have been feeling, but I’ve been hearing, myself, for at least the past month. Numerous times throughout August I had similar conversations around town, sometimes multiple times in the same day.

There is a feeling of dread, of foreboding, permeating Estevan over the future of the community, and it is directly related to the future of coal-fired power generation, beyond what is happening in the oilpatch.

There is a broad concern among the people I’ve spoken to, and myself among them, that the provincial government’s decision not to go ahead with carbon capture and storage (CCS) on Boundary Dam Units 4 and 5 is a strong indication that there may not be future investments in CCS for Unit 6. I spoke to the president and CEO of SaskPower back in December after a similar chamber event where he indicated Units 4 and 5 were at the end of their life. In response to an analogy I proposed about fixing an 50-year old car or buying a new one, he indicated the choice would be to look at the new one.

Here’s the fundamental concern, from my perspective, although it is shared with many I have spoken with.

I should note that the cost overruns for the BD3 project were in large part due to issues in rebuilding the old Unit 3 part of the power plant, including issues with asbestos. If Units 4 and 5 are too old, and perhaps to costly to retrofit with CCS, doesn’t it stand to reason that the same argument would be made for Unit 6?

And if Unit 6 is closed, are they really going to keep a plant that once produced about 813 megawatts open if only Unit 3, producing about 127 net megawatts, is running?

And if you shut down Units 4 and 5, and then 6, how many draglines, coal haulers, dozers and the like will you keep running at the mines? Do you just shut down Unit 3 as well, despite the $1.6 billion invested into it? Even if it reduces emissions in an equivalency agreement?

And further down this path, how much of the mines do you keep operating if only Shand Power Station, with just one 300 megawatt generator, remains? At what point do the economies of scale collapse?

I am working on getting the actual numbers of how many people work directly for SaskPower at the two power plants and the mines. It’s the better part of 800, but I don’t have that number yet. And a very large proportion of those numbers make stable six figures. On top of that, there’s the associated service businesses who employ hundreds more, cumulatively.

So it was with this broad, community-wide concern that the members of the chamber took their MLA to task.

This also falls on the backdrop of a community that has already been beaten down by an oil downturn now in its sixth year. It’s no longer a downturn. It’s become the awful norm.

One woman told Carr Estevan had lost hundreds, if not thousands of jobs, already.

“Everybody is operating under a sense of fear. No business is investing. No people are investing. No homes are selling. Nobody wants to come here. Everybody wants out. So what do we do now, never mind 10, 20, 30 years down the road?”

Like I said, it was a tough crowd in a place where I was once told an empty Coke can had a better chance of getting elected than a member of another party.

This is not Carr’s fault, of course, in that the broader decision to “phase out coal,” as our prime minister has put it numerous times, is way above her pay grade. When that is the stated intention of the federal government, there’s only so much you can do.

But, indeed, there is something you can do. Saskatchewan can go whole hog on carbon capture and storage, implementing it across the coal fleet. A recent study suggested generation 2.0 of this concept would be as much as 67 per cent cheaper than the first generation.

Saskatchewan had been moving in a big way towards natural gas, in large part because it has been so cheap for the last decade, and seemed like it was going to stay that way. But a few months ago, the federal government made known that new gas-fired combined cycle power generation would also face the carbon tax, a decision which put the brakes on going ahead with a new plant of that variety at Moose Jaw. (We’ve already seen similar plants built at North Battleford and Swift Current.)

Might I add there’s another consideration I’ve come upon in recent weeks. I spoke to the Saskatchewan-born and raised CEO of a decent-sized Alberta natural gas company. He is keen on getting natural gas to the West Coast so they can get effectively double the price of what they are now. Upon reflection of that conversation, I wonder what that would mean for gas prices here? Would they double? And if not double, at least go up quite a bit? What does that do for future natural gas-fired power generation?

On top of this, if we implement CCS broadly, we can use the carbon dioxide to extend the life of the surrounding oilfields for generations by using it in enhanced oil recovery (EOR). And if local oil producers don’t want it, there’s a good chance we can sell it for EOR across the border in North Dakota.

Until the big decisions are made on CCS for Unit 6 and Shand, Estevan will remain in limbo.

The next meeting of this type might not be so civil.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

 

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