On Friday the Leader Post published an editorial in praise of the $1.5-billion Boundary Dam Carbon Capture facility. The newspaper also used the opportunity to make a number of patently false statements concerning wind and solar energy.

We responded to the Leader Post with an op-ed that addressed the points in their editorial. That elicited the following exchange;

On 21 September the Leader Post advised: "I feel I should mention that we give priority to letters from our circulation area in southern Saskatchewan".

We responded with this: "I cannot speak to your policies but note that ours is a province-wide organization and the subject of our letter concerns $1.5-billion invested into an infrastructure project in southern Saskatchewan with the result being the hidden transfer of $1-billion of government funds to a publicly traded oil company (that company also happens to have been the largest corporate donor to the SaskParty in 2014 & 2013) . If you feel that information does not merit an op-ed then no more need be said."

As at 16 October the Leader Post had still not published our response so it is included in full below - with references (and also here as a PDF);

 

 

Sir – We respond to your editorial ‘The Enduring Power of Fossil Fuels’ (Friday 18 September 2015). 
Your article touts the benefit of the Boundary Dam Carbon Capture and Sequestration project (BD3) but ignores serious financial concerns.  The fundamental questions you should be asking are: who paid and who benefits?


In March and given the unwillingness of the project’s proponents to answer those two simple questions, our organization released an extensive economic analysis of BD3. We demonstrated that it will result in financial losses of $1-billion for SaskPower (and consequently for Saskatchewan electricity users) while it will generate profits, of substantially more than $1-billion, for Cenovus Energy - an Albertan oil company.
It is telling that, in the six months since we released our report, there has not been a single substantive criticism of its assumptions, methodology or conclusions.

But why would the Government invest $1.5-billion of public funds in a massively loss-making project? 

The net generation capacity of BD3 is less than 3 percent of SaskPower’s total. Consequently the project is clearly not about “keeping the furnaces humming when the annual deep freeze strikes” and neither is it about “developing cleaner fuels” – both claims made in your editorial. 

Our March analysis suggested the answer and that suggestion was helpfully confirmed by a recently released SaskPower-sanctioned report. That report notes (page 14) that the oil industry had been lobbying SaskPower, since the 1980s, to provide them with cheap carbon dioxide for Enhanced Oil Recovery. Eventually (page20);

...by 2004…SaskPower was gradually becoming convinced by EnCana, Apache and other oil operators to become a Carbon Dioxide supplier to the industry in southeastern Saskatchewan.

In other words BD3 exists to generate carbon dioxide to ensure that the oil industry can continue to produce crude oil from the aging Weyburn oil field outside of Estevan.

As the Global Carbon Capture and Sequestration Institute itself notes;

Carbon Dioxide injection has been used for many years for Enhanced Oil Recovery in which case the goal has been to get more oil per well rather than for environmental reasons.

That BD3 is a $1-billion public subsidy to the oil industry might be acceptable if Saskatchewan did not have other, cheaper, power generation options: but the reality is that we do have such options. They include natural gas, hydro imports from Manitoba, wind energy, energy efficiency, solar power and biomass. 

As concerns wind and solar power: your editorial dismisses them because “they are not baseload”. Such a comment demonstrates a lack of understanding of the way in which power systems operate. How else do you explain this graph?

Source: The US Energy Information Administration.  Electric Power Monthly (February 2015). Data for  Full Year 2014. SaskPower 2014 Annual Report 

The SaskPower CEO, Robert Watson, who presided over the planning and construction of BD3, resigned in October a couple of weeks after the project was commissioned. Since his departure and after the appointment of the new CEO in April of this year, SaskPower called for a significant expansion of wind energy. It followed that last week by announcing the purchase of substantial quantities of hydro-electric power from Manitoba. That Manitoba capacity, in combination with Saskatchewan’s hydro and gas-fired capacity, will be used to convert variable wind to baseload AND flexible power in much the same way that a dam turns intermittent rainfall into on-demand electricity.

Saskatchewan has the best wind and solar resource in Canada. That resource, in combination with highly flexible hydro-electricity and advanced aero-derivative gas turbine power stations, can meet substantially more than 20 percent of Saskatchewan’s electricity needs in a cost competitive manner.  And it will do so reliably in both winter and summer. In energy terms this would be equivalent to finding another Weyburn Oil Field. Judicious development of our world class renewables would also create tens of thousands of jobs in construction, civil engineering, trucking, manufacturing, consulting and IT.  These benefits should be celebrated rather than derided – especially given the tens of thousands of oil patch redundancies we have seen in the last few months and which we can expect in the months ahead. 

SaskPower’s hydro and wind actions since April suggest that the company is starting to understand the poor economics of BD3 and the enormous potential of renewables.  It is disappointing that your publication cannot do likewise. Instead you prefer to lob cheap shots at the renewables industry while refusing to ask why the Government authorised the transfer of $1-billion of public funds from SaskPower to an oil company. Electricity users of Saskatchewan, who will as a result face higher electricity prices for years to come, might reasonably expect better from the Leader Post.