Saturday, December 21, 2013

Frak'n gas, short term plans, A Russion reactor in Finland, and provincial electricity pricing.

Donald Jones has a new article that looks at the emissions and energy security issues of Ontario's latest energy plan.

Ontario’s electricity – greenhouse gases up, cost up, security down – 2013 December
With the increasing demand for non-renewable frackgas the effect of short and long term supply shortages and price increases on the space heating needs of homeowners and industry must be examined. Using frackgas for heating and for electricity generation in North America should be an obvious life and death concern given Ontario's cold winters. A "short" term plan would be to stop using frackgas for electricity generation to ensure supplies for home heating.
Graphic from Forbes
In Quebec, reports Quebec might need to import power to meet peak demand is noted by Alain Dubuc in advocating for a switch from electric to gas heating.

In New England, where gas is used for heating and increasingly for generating electricity, Forbes' headline tells you most of the story:  Cold Snap Sends Energy Prices Into Stratosphere in New England.

The rising prices have had an impact in Nova Scotia too, as NSP cuts use of natural gas due to prices:
Electricity from coal is 14 per cent higher than projected this year.
Nova Scotia has gotten 63 per cent of its power from coal in 2013, compared to a forecast of 49 per cent.
High demand for natural gas in New England, coupled with pipeline constraints in the U.S. northeast, has driven up prices in this region.
“We saw some colder weather in December, particularly in New England, and that’s driven prices and demand up,” O’Connor said.
The U.S. EIA (Energy Information Administration) issued and early release overview of it's Annual Energy Outlook 2014 last week, and that did not see gas prices moving significantly higher, but they've raised the pricing outlook from the previous forecast.
Two years ago I was introduced to "The Coming Glut of Energy" - written at the head of the 1970's oil crises.  It seems to me a coming shortage might be the outcome of the very low prices.

More from Donald Jones' article:
Gas prices will increase. The conventional gas supply from Alberta to Ontario is running down and is being replaced by frackgas. Well depletion rates for frackgas are high resulting in the need for more and more wells. It is said that production costs at the moment with some companies are more than the market price, being subsidized by sales of other commodities like oil. This cannot continue.
Mr. Jones isn't the lone voice cautioning on hydrofacking; Thomas Homer-Dixon has an article posted to the Globe and Mail's site, We’re fracking to stand still
...flaring is a staggering waste of energy and a significant source of carbon emissions. But waste and environmental damage get short shrift in the popular discussion of these energy plays. Instead, the buzz is about how new hydrofracking technologies that liberate oil from shale have changed our energy future. The United States is on course to be the world’s biggest oil producer and to achieve energy independence, the story goes. Shale plays around the planet mean we’ll soon be awash in oil and prices will plummet.
But evidence is accumulating that fracking, at least when it comes to oil, has been hyped. Yes, the U.S. is experiencing a short-term production boom, lasting perhaps another 10 to 15 years. Then, its output will fall steeply.
Homer-Dixon may have a point, but it won't be strengthened by ripping into the largely U.S. hydrofracking in a Canadian paper months after ripping into what he called The Tar Sands Disaster in the New York Times.


Rod Adams' Rosatom achieves a marketing win in Finland to supply Fennovoima could be read as a superior sequel to my post yesterday:
... Fins have done the math and understand the options. They took the right lessons from Olkiluoto and did not abandon nuclear energy technology, they abandoned western European nuclear technology suppliers who had allowed their skills to atrophy and who had accepted suboptimal design requirements in an attempt to appease what they thought the EU regulators wanted them to do. Instead, they chose Rosatom, a Russian nuclear power plant supplier that has been engineering and building nuclear power plants consistently for several decades.
Rosatom will supply a reactor with the model designation of AES-2006, a VVER (Russian for pressurized water reactor (PWR)) that meets all Finnish nuclear standards and also meets all international safety requirements.
Adams' article has some useful information on the economic structure in Finland that allows for reactors to be funded.

The Calgary Herald's Licia Corbella has a useful column in response to Hydro Quebec's Comparison of Electricity Prices in Major North American Cities
Last week, Hydro-Quebec released a survey that stated that Calgary residential power bills are the third highest in Canada and seventh highest in North America.
It’s the kind of shocking information that makes most Albertans want to blow a fuse. But if you do a little more research into Hydro-Quebec’s report, besides its inherent flaws, it’s clear that instead of boasting about its cheap electricity prices, it should be embarrassed, since one of the main reasons its rates are so low is because it subsidizes the price for its customers on the backs of its future generations and on the backs of Albertans.
In short, Hydro-Quebec has an enormous debt of $36.8 billion. And other jurisdictions with ample hydro power and monopolistic Crown corporations are similarly burdened.
According to information gleaned from Statistics Canada, Alberta is the only province where taxpayers do not carry any utility debt.
I'd suggest Corbella is more wrong than right as debt does not equate to subsidy, but the size of the debt is shocking for utilities that have existed for over 100 years, and the absence of a liability in Alberta is noteworthy.
On the other hand - meaning Edmonton - Keith Provost's letter in the Edmonton Journal argues both that Alberta pricing is much higher than necessay, and that they have potential hydro sites too (but not economical ones, all things considered):
Lack of hydroelectricity is not the cause of high, volatile electricity prices here. Alberta has thousands of megawatts of potential hydro electricity. Sites on the Slave, Peace and Athabasca rivers have been investigated but not built because the costs are too high.
Yes, the fuel costs are zero but the capital costs are huge. Manipulation is the cause of high, volatile electricity prices in Alberta.
The system does function very well for the generating companies, but consumers are required to pay an extra $2 billion to $3 billion a year toward the generator's bottom line.
Both Corbella and Provost could be right: privatization does/should mean profits, but in Alberta it looks like it has also meant transparency on public debt levels and likely a more complete valuation of the commodity.

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