Making the Connections

I own a small woodlot in Cumberland County; it's a small island of forest in a sea of clearcuts. Most of the clearcut land around me is owned by the Irving forestry interests or the Crown, and other parts are owned by non-resident and dis-interested folk who probably have never visited their woodlot more than once in their lives.

There are two big pressures on the forests in my neighbourhood: one is government policy, and the other is energy prices.

This blog explores the intersection of those two pressures.

Saturday, July 7, 2018

Our Natural Gas Curse (2)

From Encana Corp
Until very recently, the market for natural gas was pretty much the continent on which the gas was found. The market for crude oil is the whole world because the oil can be poured into tankers and shipped anywhere, but natural gas mostly travels by pipeline and so is much more restricted. Gas can be liquefied and shipped around the world but that becomes a whole different market.

The price for natural gas on continental North America is most often set at Henry, Louisiana - the Henry Hub. Many pipelines meet here, and many contracts for gas are settled here, either by taking delivery of the gas or rolling the contract over for another month. The price of gas has been settling lately between $2.50 and $3 per thousand cubic feet. Natural gas is considered fungible - one bit of gas is as good as another - so the gas that a producer puts into the pipeline system may not be the same molecules that the customer takes out at the other end. Of course, standards are maintained - the gas must be free of contaminants and must have a Btu content within a specified range.

Gas in North America is most often sold in quantities of 1,000 cu. ft. (Mcf), which contains approximately 1 million Btu's  (MMBtu's)     Another useful approximation is that 6,000 cu.ft. of gas has the same theoretical  energy  content as a barrel of crude oil. So, when natural gas is selling for $3 per Mcf it means that the gas is about equal to crude oil selling for $18. Crude oil has been selling in the $60 to $70 range this spring.

Wednesday, April 18, 2018

Our Natural Gas Problem

Nova Scotia's offshore natural gas fields have turned out to be a curse rather than a blessing. The promise of great volumes of cheap natural gas nearby has led to the buildout of a significant gas infrastructure within the province, and now that the offshore gas is nearly gone we are left with lots of buildings and industrial boilers fitted to consume more natural gas than we have access to, which means that in the dead of winter the price of gas spikes - not really spikes; more like skyrockets. That's never a good thing.

When the Sable Offshore gas finds were developed in the late 1990's there were no local markets for gas, as there had never been pipelines into the Maritimes to deliver the gas. Natural gas is ubiquitous in many other parts of the country - when my wife built a new home in Burlington, Ontario in the late 1990's there were three utilities laid down on her street as the subdivision was developed - water and sewer, electricity, and natural gas. The gas was used for space heating and cooling, hot water and a gas fireplace, and it was incredibly cheap. I expect that gas was mostly from western Canada, brought to Ontario by pipeline.

Five years later Beth had a new house built in a suburb of Dartmouth; no natural gas was available so the furnace burned oil, the fireplace burned propane and there was no air conditioning. There is still no gas in that neighbourhood.

Friday, March 23, 2018

Chipping Our Hardwood Forests for Newfoundland

Holyrood Thermal Generating Station (Google Earth)
Bob Bancroft has recently pointed out (Halifax Herald, 6 Feb) that the Point Tupper biomass generating station has quietly resumed full production, consuming 60 to 70 trailer loads of wood daily.

The Halifax newspaper has also reported that the Maritime Link is now in operation, working backwards from its design intention, and it now being used to ship power to Newfoundland. 

Newfoundland gets a lot of its power from smallish hydroelectric plants all around the island as well as a few oil-fired plants, but the largest and most important of their power plants is at Holyrood, just outside St John's.  This plant typically supplies 25% of the province's electricity, and sometimes as much as 40%. A few years ago one of the turbines went down in winter and customers were being forced to conserve power and reduce their demands until the repairs could be made.

This plant burns light oil, typically diesel fuel, although I seem to recall that at one time it was burning raw crude from one of their offshore wells.

Now, the plant has been idled because Newfoundland can import power from Nova Scotia across the Maritime link, the huge undersea cable that was to bring electricity from Muskrat Falls in Labrador to Nova Scotia. Muskrat Falls is not yet in operation so it appears that an equally good use of the Link is to provide electricity to Newfoundland, presumably at a lower cost than operating the oil plants at Holyrood.

Nova Scotia Power uses a mix of fuels to generate its electricity. They have a few small hydro plants, a tidal plant at Annapolis Royal, several coal burning plants, most notably at Trenton and Lingan, a natural gas/oil plant at Tuft's Cove in Dartmouth, and, of course, the biomass plant at Point Tupper. They tend to use the coal plants to service the base load - coal plants are slow to bring online and do best when they can just chug along day in and day out. Gas turbines are the most flexible, as they can be kept spinning (almost in idle) and can be brought on very quickly when the load spikes. (Even countries like Germany which get so much of their power from wind turbines have to keep gas turbines ticking over and ready to take up the load when the wind suddenly dies.)

The load managers at NS Power probably use sophisticated calculations to decide which power plants to use at any point in the day: factors might be current load, projected load, plant capital cost, plant availability, fuel costs, degree of utilisation (can we use each plant at peak efficiency?), geographic location, availability of power from the inter-provincial grid, and more. It does appear, though, that when all those calculations are done, it pays Nova Scotia Power to chip our old growth forests to fuel the biomass plant in order to sell power to Newfoundland. In purely dollar terms, it is cheaper to chip our forest than for Newfoundland to burn oil. I cannot imagine that there is a significant reduction in greenhouse gas emissions from burning our forests instead of oil.

Bob Bancroft made an important point in his 6 February op-ed. He said that the decisions that are made about our forest are made by people, with names. Bancroft said he knew some of them. And some people in Nova Scotia have decided that it is acceptable to chip our hardwood forests and reduce the land to a moonscape in order to turn a dollar from Newfoundland. Natural gas is really expensive this month, but NS Power could sell coal or gas electricity to Newfoundland for a higher, fairer price, or Newfoundland could run their own oil plants. Is it really in Nova Scotia's best  interests to destroy our forests for Newfoundland's benefit?  

How do those people sleep at night?