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Thursday, February 02, 2012

Wading into Muskrat Falls
Why not natural gas or wind as options?

Why hasn't the use of natural gas not been talked about as a viable option to Muskrat?

Wasn't it government's contention to get our fingers dabbling into the natural gas markets? Wasn't there some interest being generated in the possibility of getting gas onshore here? (remember FOGO?)

My role with the Consumer Group for Fair Gas Prices involves trying to save the consumer out there a few bucks, and to try to keep everyone up on heating options, besides prices. So, I do a little comparison of prices between heating oil, Muskrat electricity prices and natural gas.

Consider what I found out, and I would caution that some data I got was off some natural gas companies sites, like Heritage Gas in Nova Scotia and Saskenergy in Saskatchewan, and some of what I have thought of comes from myself. Some prices here come from some of these natural gas companies own calculations, while others, come from people who volunteered energy costs to their households.

I even went as far as to email some people I know just to see what they're paying in comparison to others who use different types of heating, like oil.

The first thought I had was that, according to the Bruneau study on gas onshore, it can be done at a cheaper cost to the province over what is being proposed under Muskrat. According to Bruneau's study, in 2005 dollars, we could have natural gas generated electricity onshore for somewhere in the area of a billion dollars, while the Muskrat proposal costs are ranging $6.2 billion, not including cost over-runs.

But here's what else we get, if we bring in natural gas, and what else we can do with it.

Consider the facts on natural gas itself.

  • Natural gas prices are predicted to be very low for at least the next ten years as inventories of gas are constantly being increased. Just mention fracking, and you know where the future price is going even after that. They may increase slightly, but nothing in the order of what they're predicting for oil prices, for which I also have doubts.

  • It's cleaner than Holyrood and Kyoto compliant. I live under the stacks of Holyrood now, and I would love to see it gone myself.

  • We open ourselves up to using wherever the gas comes onshore, to use the location of it as an anchor-point to the possible export to other markets. Would we take a line and run it further to connect to the North American gas grid, for example?

  • Natural gas price equivalent to heating oil? Yes, if heating oil was 54 cents a litre, prices for natural gas could be compared to that.

  • Compared to electricity? Natural gas equals 5.1 cents a kilowatt hour in Nova Scotia. 7.1 cents in Saskatchewan.

  • If natural gas was also opened to be sold in Newfoundland and Labrador, how much of an effect on other energy prices would there be? I would think that home heating oil prices would come down in response.

  • Consumers would remove themselves from electrical consumption for heating purposes, considering cost factors alone. You would have more electricity on the grid because of less consumption of it, and prices should also come down in order to compete with natrual gas heating. The utility market would have to try to save their market share.

  • We open the province's treasury to royalties on the sale of natural gas, IF we had a gas royalty regime in place.

  • Industry gets attracted to cheap heating costs.

  • We get a modern and up to date natural gas thermal station that will need a whole lot less maintenance than Holyrood is said to be costing.

  • In a non-demand season, where the natural gas would not be burned, we could sell it on the markets. According to Bruneau, we now have enough gas in the present oil fileds, to last us well close to a hundred years.

  • The fees for service brings in new funding measures for municipalities. Look at someone's natural gas bill and most have a 3% municipal charge.

    Why not wind as an option?

A story on windpower cost on BNN the other day caught my ear...

The gentleman was representing a company called "Western Wind Energy" and stated how costs for alternative generation methods, like wind and solar, are getting cheaper by the minute and will continue to get cheap as other countries become more adept at the production of the technology. He also further stated that wind power can be installed and produced by Asian companies now for $1.2 million a megawatt. If that is the case, what's the rush to get Muskrat up and running if we can get power at a cheaper cost?

I don't know if it's just me, but when I look at a heating bill from Alberta that tells me a three bedroom family home in Calgary only paid something in the order of $130 for a months heating, I'm asking myself why we're not looking at all the options.

Again, besides the fees, I get a note from a friend in Saskatchewan that tells me he just paid $60 for his heating, I have to ask again why natural gas isn't being taken as an option. Yes, let's be responsible and ask about all the options before we rush into a hurried decision.

The right choice could save consumers here thousands in heating costs, and the wrong one could cost us the opposite...

Let's look at it.

Let's look at it all...


George Murphy

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