Progressive Conservative Leader David Alward lined up with his party's candidate in the upcoming election, Joseph Elias, to form a human chain around the Dalhousie Generating Station on Wednesday. As far as political stunts go, this one was pretty standard fare.
But Alward came with a message: he would postpone the Liberal government's plan to shutter the northern power plant.
"We believe that a more economical and ecologically friendly source of energy can be found," Alward said in a press release.
Now let's review an earlier blog post from Spin Reduxit in which it was argued that policy and not politics should decide the fate of the Dalhousie Generating Station. If you don't have time to read the entire blog post, Alward said in January that "the government should be more proactive about moving away from its fossil-fuel burning plants."
Although Alward did not name Dalhousie specifically, there aren't that many NB Power stations in the province. If energy policy is going to trump partisan politics in making this decision, these are some of the questions that need to be answered.
NB Power announced in April the 300-megawatt power plant would be sold but if no one wants it, it will be closed. Dalhousie is burning cheap oil that it's getting from Venezuela after the South American country's state-owned oil company halted shipments of Orimulsion. The power plant will no longer be considered economical after the fuel contract with Petroleos de Venezuela, S.A., expires this month.
If the human chain was not just a political stunt and Alward really thinks the Dalhousie station can be kept open, what will he burn there? He says in his press release that he wants an ecologically-friendly source, so that rules out almost every economically viable alternative for a plant currently structured to burn Orimulsion or oil.
People have bandied about the possibility of natural gas. So is Alward willing to build a natural gas pipeline to Dalhousie or find another way to ship natural gas to the local port to burn there? If the northern power plant is going to survive by burning another type of fuel, how much will that cost and how much is Alward willing to spend - or allow NB Power to spend - on refurbishing the facility? Let's just recall how well the $747-million Coleson Cove Generating Station project went.
Not to belabour this point, but will this new fuel be tied to the price of oil? We've seen the upward cost trajectory of those fuels. Or will it be a new technology, commercially unproven in a large power plant?
And how long is Dalhousie going to be left in limbo as this new fuel source is found for the generating station? Will NB Power be forced to continue burning expensive fuel in the northern power plant and have the rest of its ratepayers subsidize that through higher power prices until the new fuel is picked?
NB Power has a 24-hour trading desk that decides what stations should be producing power based what is the least expensive, or whether it is cheaper to buy power from the United States. Often it is cheaper to import electricity than to use NB Power's fossil fuel-burning fleet, particularly Coleson Cove.
So if Alward is going to spend money to keep the Dalhousie facility operating, will he mandate NB Power to actually use it even if it is more expensive than importing electricity from the United States? Coleson Cove's refurbishment cost the province $747 million and it barely operates, so from a policy perspective is that a decision that should be replicated?
The other important policy question that must be asked is why is it necessary to keep the power facility operating. The Abitibi-Bowater mill is closed and being turned into scrap metal, and the two chemical plants in the area have closed. Power is lost when electricity travels a long distance to its user, and there are serious policy questions surrounding a decision to keep Dalhousie open when the local electricity demands are just not there any more.
When the Tories, with Alward around the caucus and cabinet table, reformed NB Power in 2003 their modus operandi was to make the utility run more like a business. When former premier Bernard Lord hired David Hay and Derek Burney as chief executive officer and chairman, respectively, the implication was they would run the Crown corporation more like a business. This announcement sounds like Alward is going to base his energy strategy on politics, not policy or business judgments.
Lastly, how much is Alward willing to spend to keep the Dalhousie station open? Shouldn't that policy decision be known now heading into an election? Alward should tell the public if he is willing to spend $200 million, $500 million or $750 million to refurbish the plant or build whatever is necessary to make the new technology viable. This way people will know at what cost point the Tories would also decide to scrap the plant.
Losing a power plant and the direct and indirect jobs is tough on any community and Dalhousie, given its recent history, is facing economic hardship that is hard to match. But one has to question whether it's time to stop using NB Power as an economic development tool and leave that, and the costs associated with it, to other parts of the provincial government.
- Daniel McHardie