[Shodan]

Carbon costs would hit Alta. hardest
Need for multibillion-dollar transmission lines compounded by climate-change laws

Darcy Henton
The Edmonton Journal

Sunday, May 27, 2007

EDMONTON - Albertans could soon be paying the highest electricity bills in the country as a result of new climate-change laws, the rising demand for electricity and the cost of building new transmission lines.

The climate-change costs will hit Albertans just as the province is grappling with escalating demand for power from a surging population in a sizzling economy, says the Consumers Coalition of Alberta.

A number of industry watchers, including Alberta Energy Minister Mel Knight, have been forecasting higher electricity costs for Albertans even before the Ed Stelmach government announced a new $15-per-tonne tax on carbon dioxide emissions.

And that's come on top of a $4.5-billion bill Alberta consumers are being asked to pay for desperately needed new transmission infrastructure.

"All of these costs will tend to fall down to the end consumer," said Jim Wachowich, the Consumers Coalition's lawyer and spokesman. "Everyone's bill is going up." Wachowich, who is running as a Liberal candidate in Edmonton Centre in the next federal election, noted Alberta already has high power prices because of its reliance on coal and natural gas to generate electricity.

Hydro Quebec rated Edmonton's residential electricity rate the fifth highest out of 11 cities in 10 provinces in 2006.

Provinces like Quebec, Manitoba and British Columbia generate cheaper hydro-electricity from abundant rivers, but about 70 per cent of Alberta's power comes from coal-fired plants that will be the target of the emissions law, which goes into effect in 34 days.

The new law is expected to increase the cost of producing electricity from coal-fired plants by a fifth of a cent per kilowatt hour, while electricity from gas-fired plants will increase a tenth of a cent.

Power producers and economists say they don't know how much that will add to the actual price of electricity for consumers. Any estimate of the impact of reducing greenhouse gas emissions "would be speculative," said EPCOR spokesman Tim LeRiche.

But company CEO Don Lowry told shareholders earlier this month the cost of the federal bill to his company could be $25 million a year.

Ottawa suggests its own climate-change law could drive up electricity prices by another 10 per cent between 2010 and 2020 in provinces that are reliant on coal-fired electrical generation.

And while polling suggests Albertans are willing to pay an additional cost to protect the environment, they are already paying "a grudge price," Wachowich said.

"If it reduces pollution and saves the environment, that's great, but it takes a long time to make that linkage and you will see these costs start immediately," he said. "It's not like you will look out the door tomorrow and see a greener Alberta."

Don Wharton, TransAlta's director of sustainable development, pegged the cost of Alberta's bill at about $100 million a year for the industry.

"Our earnings are $250 million a year, so $100 million a year is nothing to sneeze at," he said. "The big question is whether those costs flow through or whether they will back up and be stuck with the generators or retailers."

But he's confident the costs won't stop companies from investing in power.

ENMAX believes it can build a plant in three years at half the cost of a conventional coal-fired plant -- and reduce carbon dioxide emissions by half at the same time.

"As we looked at the rising cost of transmission and the rising cost of coal-fired generation because of the environmental levy, we could only see the prospect of rising prices," said spokesman Peter Hunt. "That led us to look afresh at whether there might be ways of generating electricity that would allow us to offer customers better prices."

Enmax's $1.7-billion, 1,200-megawatt power plant to be built near Calgary will generate electricity with gas derived from coal in a process called coal gasification.

Alberta opposition MLAs blame Alberta's climbing electricity prices on the government's ongoing deregulation of the electrical industry. "I think we're headed for another price surge unless this government gets its head out of the sand and re-regulates electricity prices," said NDP Leader Brian Mason.

Both the NDP and the Liberals say consumers should not have to pay the entire cost of new transmission -- a cost that used to be shared with producers.

The province has estimated that if all 100 heavy emitters in the industries of electrical generation, oil and gas, petrochemical and manufacturing fail to meet the province's deadline to cut greenhouse gas emissions intensity by 12 per cent and have to pay a penalty for their emissions, it could cost them $175 million annually.

John Knapp, Alberta Environment's assistant deputy minister, said that's less than one-tenth of one per cent of Alberta's gross domestic product, so it shouldn't have any impact on investment.

The province has estimated the new law could also add between eight and 54 cents a barrel to the cost of producing conventional oil and bitumen.

Rick Hyndman, a climate change adviser with the Canadian Association of Petroleum Producers, says Alberta companies will have no choice but to eat the cost because the price of oil and gas is driven by international prices.

© The Edmonton Journal 2007

Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.

[Aegis]

You know.. I find it absolutely comical that this debate is framed in terms of "what will it cost industry?".. the fact is, industry passes those costs back to the consumer.

When the AB Government deregulated the electricity market, they told us that more competition would mean lower prices.

Now, due to "climate change concerns", the politicians are "forced" to implement a carbon tax on electricity...Costs aren't going down, they're going up.

Also.. given that our electricity infrastructure will need to be replaced in the coming years, guess who has to pay for that? The consumers.

It wasn't my choice for electricity generation to come from coal/gas..but now I have to pay as if I'm part of the problem. Meanwhile, we're told by the electricity companies that green sources of power are too expensive to build.

Seems to me, that if the consumers are paying for it.. they should get to decide.

When will this fraud be exposed??

[jbettcher]

What I find more comical is the fact that politicians are using new climate change policies to enforce whatever kind of taxes and protocols they want,
and nobody says anything about it because it's "good for the environment", :P give me a break man kind has such an inflated head about climate change, the volcanoes on our planet output more carbon emissions than mankind could ever hope to match. It's our policies about strip mining and deforestation that are more harmful to our planet than anything.

Don't dare look at historical climate change data, don't impose any restrictions on harmful emmissions from developing nations that are far worse than anything that comes out here nowadays.

Just tax the people that'll make it better. What I mean by that is by taxing industry we are going to suffer not the corporations in control of the facilities.

[Aegis]

What I find more comical is the fact that politicians are using new climate change policies to enforce whatever kind of taxes and protocols they want,
and nobody says anything about it because it's "good for the environment", :P give me a break man kind has such an inflated head about climate change, the volcanoes on our planet output more carbon emissions than mankind could ever hope to match. It's our policies about strip mining and deforestation that are more harmful to our planet than anything.

Don't dare look at historical climate change data, don't impose any restrictions on harmful emmissions from developing nations that are far worse than anything that comes out here nowadays.

Just tax the people that'll make it better. What I mean by that is by taxing industry we are going to suffer not the corporations in control of the facilities.

I know.. what is the point of ruining Alberta's prosperity when India, China, Russia, and the USA aren't doing squat? What matteres here is the magnitude of polution.. and if you don't have the big boys cutting back.. anything Canada is going to do is really not going to have much of an impact.

I am all for environmental responsibility..infact I assail large corporations on a regular basis for their lack of respect for the environment. I am not one of those head-in-the-sand nutjobs who thinks that pollution doesn't matter... but I still think Kyoto is total crap. It's an excuse for governments to increase taxes, or develop new sources of tax revenue. It's a way to make things taxable that weren't taxable before, under the guise of being friendly to the environment.

Does anyone really think all that money they're collecting is going to help reduce polution?? It's just going to be thrown into the general pot, and spent on whatever. At the end of the day, our environment is not going to be any cleaner, but our taxes will be higher.

The key to reducing polution is incentives: give the polluters incentives to clean it up.. give consumers an incentive to be cleaner, and they will. Don't tax things that we can't live without, such as electricity, and I'm sure that we'll be hearing about a water tax eventually.

Grr.

[CorporateWhore]

I know.. what is the point of ruining Alberta's prosperity when India, China, Russia, and the USA aren't doing squat?

You know what the sad thing is? You guys are looking at climate change as a liability instead of an opportunity.

It's time for Canada to sack up and take up a leadership role, instead of always being the feeble follower. People are always complaining that nobody gives any attention to Canada....well, maybe the reason is that it's never willing to take charge and go out on its own. Whether the US or China is on board or not, taking steps to prevent climate change is the RIGHT thing to do. Like it or not, the issue is not going away.

If Alberta would be smart about it, it would be the first one in line to start developing green technologies in the energy field. Calgary could very easily become the world leader, the Silicon Valley of sustainable energy. It has the man power and the education...it just needs a slight shift of focus.

Somebody will take the leadership role, and that country in the end will become rich for it. The problem isn't going away...might as well make some money of the opportunity.

But I guess it's easier to whine.

[jbettcher]

I agree, but lets not take the role as the country that introduces useless carbon taxes on our industries. I think we need to do more to ensure that cities are doing more to recycle and that we reuse more of the goods we use.

That's the big battle, I hope people don't really think that enforcing taxes on industry is really gonna positively affect our environment and that the government will responsibly use such funds toward environmental measures.

The likely government scenario that will follow from creating this carbon tax is:

-Government creates agency to collect the tax (costs $$)
-Government hires people to enforce the tax (costs $$)
-Government creates agency to decide what to do with the tax money (costs $$)
-Government hires researchers to look into possible solution (costs lots of $$)
-Taxes are increased as the research and agencies grow less money is spent on solutions

This is what our government does.

[Aegis]

You know what the sad thing is? You guys are looking at climate change as a liability instead of an opportunity.

It's time for Canada to sack up and take up a leadership role, instead of always being the feeble follower. People are always complaining that nobody gives any attention to Canada....well, maybe the reason is that it's never willing to take charge and go out on its own. Whether the US or China is on board or not, taking steps to prevent climate change is the RIGHT thing to do. Like it or not, the issue is not going away.

If Alberta would be smart about it, it would be the first one in line to start developing green technologies in the energy field. Calgary could very easily become the world leader, the Silicon Valley of sustainable energy. It has the man power and the education...it just needs a slight shift of focus.

Somebody will take the leadership role, and that country in the end will become rich for it. The problem isn't going away...might as well make some money of the opportunity.

But I guess it's easier to whine.

Here's the problem with that argument: It does matter what Inda, China, the US, and other large economies are doing. If magnitude didn't matter, then pollution wouldn't even be an issue.

The point is, we could be 100% clean, and it wouldn't make a difference in the scale of the entire earth, because we're such a small economy, and a small population. I agree that if everyone thought this way, then we would be lost, but the reality is that the large economies contribute the majority of the world's pollution, and thus the solution rests with them.

[Aegis]

I agree, but lets not take the role as the country that introduces useless carbon taxes on our industries. I think we need to do more to ensure that cities are doing more to recycle and that we reuse more of the goods we use.

That's the big battle, I hope people don't really think that enforcing taxes on industry is really gonna positively affect our environment and that the government will responsibly use such funds toward environmental measures.

The likely government scenario that will follow from creating this carbon tax is:

-Government creates agency to collect the tax (costs $$)
-Government hires people to enforce the tax (costs $$)
-Government creates agency to decide what to do with the tax money (costs $$)
-Government hires researchers to look into possible solution (costs lots of $$)
-Taxes are increased as the research and agencies grow less money is spent on solutions

This is what our government does.

You're exactly right. And try getting rid of a tax, once it's there: basically impossible due to the special-interests that have formed around the tax.

Carbon taxes are not a disincentive to creating pollution when consumers have no choice: in this case, carbon taxes are simply punitive.

If we had real choice, then there would be good argument:

- Buy your electricity from green sources, it costs "x"
- Buy your electricity from polluting sources, it costs "x+1".

or

- Electricity usage between 1-300 kWh: $0.007/kWh
- Electricity usage between 300-700 kWh: $0.007 + carbon tax

The solutions are simple.. but yet our government simply wants to tax the hell out of us: now they have the perfect excuse: global warming.

[The Kid]

[QUOTE]The solutions are simple.. but yet our government simply wants to tax the hell out of us: now they have the perfect excuse: global warming.[/QUOTE

and that's the bottom line folks....couldn't have said it better.

[tokama]

Here's the problem with that argument: It does matter what Inda, China, the US, and other large economies are doing. If magnitude didn't matter, then pollution wouldn't even be an issue.

The point is, we could be 100% clean, and it wouldn't make a difference in the scale of the entire earth, because we're such a small economy, and a small population. I agree that if everyone thought this way, then we would be lost, but the reality is that the large economies contribute the majority of the world's pollution, and thus the solution rests with them.

I think what Corporatewhore means though is why not make a profit off of being the "center" for renewable energy. Be an example of how to do it and then SELL that idea to the big economies. The bigger economies will go green eventually (whether it is too late to save us is still arguable) - but Alberta should be pushing ENERGY not just oil. Refining solar and wind, pushing the envelope with nuclear and setting the pace for standards and tech (and filling our pockets) at the same time.

Sorry I don't mean to speak for you corporatewhore but I think Alberta should be pushing these fields much more than we do.

[Aegis]

I think what Corporatewhore means though is why not make a profit off of being the "center" for renewable energy. Be an example of how to do it and then SELL that idea to the big economies. The bigger economies will go green eventually (whether it is too late to save us is still arguable) - but Alberta should be pushing ENERGY not just oil. Refining solar and wind, pushing the envelope with nuclear and setting the pace for standards and tech (and filling our pockets) at the same time.

Sorry I don't mean to speak for you corporatewhore but I think Alberta should be pushing these fields much more than we do.

I agree, but and if the government would encourage this kind of industry through tax incentives, grants, partnerships, changes in regulation, and other measures, then I think we could have a good shot at it!

Canada is a supremely advanced country in terms of access to technology, economic freedom, high levels of education, and a culture that values the environment: I don't know why the government won't take a leadership role here!

If you have ever travelled to other parts of the world, especially China, you'd see pretty quick that respect for the environment isn't even on the radar of priorities..

[Aegis]

Also I would like to add.. I think the environmental movement has made the fatal mistake of aligning itself with "green friendly" governments.

Consumers can do more than any government could ever do: consumers, if motivated, can demand change from business and government.

Governments are aligned with the business interests that fund them, thus, I believe governments will only do enough to appear like they are "green", with minimal cost towards actually being "green".

Surprisingly.. lawyers often a glimmer of light for the consumer in the fight against corporatism.

[CorporateWhore]

Sorry I don't mean to speak for you corporatewhore but I think Alberta should be pushing these fields much more than we do.

No need to apologize, you got it bang on. I think Alberta should take advantage of this movement and become a leader. Whether people accept it or not, green technology will become a very huge industry in the coming decades. We can either chose to be a part of it, and reap the benefits, or we can stick our head in the sand until it bites us in the ass. We have the knowledge and the work force...why not be business savy it?

[CorporateWhore]

btw, for those of you who think China isn't starting to get onto the Green movement, look up the city of Dongtan (there's a nice little write up in this issue of Wired)....

[niwell]

I agree with your comments completely CorporateWhore. The green business is poised to boom, and if Alberta can get into it they will cement themselves as a growth province for the forseeable future.

As for developing countries: it's not really fair to say that we (developed natiosn) can take full advantage of non-renewables with total environmental disregard to develop (see the industrial revolution) and they can't. Rather, if we help setting the example for a nation that can keep it's economic position with green industry then we can set an example.

[canucklehead2]

Isn't there that saying that in Chinese the same word for crisis is used for opportunity?

This could be the defining moment in Canadian history when Alberta finally becomes a green energy giant, and weans itself off the teat of oil and gas dependency forever, so like CorporateWhore and Niwell, this could be a great opportunity for Alberta to go green in a big way. I think the foundations for such a movement is already here, but it needs to be embraced in a big way. I mean Calgary is already taking the lead with it's wind-powered C-Train, and Edmonton with its advanced blue bag and composting systems...

One thing that I think would help is the elimination of the wind-power cap that apparently our province has instituted. That almost seems insulting that our province would try and limit one of the most promising green power sources this province could excel in developing...

[Xelebes]

The reason there is a cap is because wind is inconsistent. We want to avoid brownouts.

However, I'd be curious to see the capacitors they have nowadays to eliminate this. It would have to be at least 5 farads with high amperage!

[Daver]

The environment is only another "industry" wanting it's piece of the pie. They could give a shit if the air is clean of not. (Kyoto Protocol)

Environmental change can only happen if "everyone" is on board. (Will never happen) It's just a money transfer is all...

Like any other industry.

[240glt]

[Environmental change can only happen if "everyone" is on board. (Will never happen) It's just a money transfer is all...



Agreed that it won't happen until a vast majority are on board, but it will happen, and those who don't embrace it will be forced, kicking and screaming, to change their habits.

[Daver]

Agreed that it won't happen until a vast majority are on board, but it will happen, and those who don't embrace it will be forced, kicking and screaming, to change their habits.

Kyoto it self isn't environmentally visable, so how can you say that everyone will be forced to change... that's just short sighted. The protocol is designed to have industrialized nations reduce their emissions to 12% below 1990 levels. If any country does not meet that requirement, they are to purchase green credits from countries that are meeting the reguirements or are non-indutrialized nations or third world. So given the fact that the western democracies are industry developed and driven they cannot reduce their emissions if they want to contunually grow (Free Market Economy, or freedom for short) effectively forcing them to purchace so called green credits so thay can resume polluting well above 1990 levels and beyond.They don't have to stop polluting it's easier to pay for the green credit/penalties


Kyoto is a liberal idea that simply produces a wealth transfer of money from rich nations to the poor, it absolutely has nothing to do with the environment

Developed nations can't stop developing...they grow...that's what they do! They can however institute better emission controls at best but never to the result anywhere near 1990 levels.

Anyone that believes in the Kyoto Protocol was suckered

You do the math.

[240glt]

Where in my post did I mention anything about the Kyoto Protocol ?

[frinkprof]

I'll echo some of the thoughtlines of CoporateWhore. Canada is most certainly in a position to be a leader in green energy sources and green technology. Quebec has hydro, Manitoba is going to ramp up hydro power, Alberta has wind power, we have lots of ocean coastline for the developing wave-power technology. PEI is actually putting a lot of effort into wind power and I believe it is UPEI that has recently started up a wind technology diploma or degree program.

Not to bring up the nuclear debate again, but a nuclear-powered oilsands would do a lot for the economy and the environment. Ontario and New Brunswick are over 50% powered by nuclear plants. There are talks of expanding New Brunswick's nuclear facilities. I'm not sure if it was to be a whole other plant or just more reactors at the existing one.

I think it was maybe Boris that had a graphic representation of the energy sources by province. Could that be posted again?

The building blocks are there for Canada to improve its environmental well being while also bolstering the economy. Who likes the idea of selling wind or hydro power to the States?

[Daver]

Where in my post did I mention anything about the Kyoto Protocol ?

You didn't....there's no other signed agreement on a large scale that "will force everyone kicking and screaming" to endorse environmental initiatives. Or would that be you forcing everyone to comply.

[240glt]

You didn't

:cool:

there's no other signed agreement on a large scale that "will force everyone kicking and screaming" to endorse environmental initiatives. Or would that be you forcing everyone to comply.


What about supply & demand, growing ethical concerns and awareness of environmental issues ?


Any one of those could have major impact on how many people think about the environment, or at the very least how much it costs them to pollute. Think, Daver. It can't always be the liberals' fault!