Saturday, December 09, 2006

Massive intrusion into Canada by the US!

My friends, Canada urgently needs a Canadian Department of Energy, centered in Ottawa, to protect us from the possibility of the American Department of Energy becoming the determinant of Canadian electric energy policy.

As an result of the power failure that started on August 14, 2003 (by failure of "FIRST ENERGY", an Electric Utility Holding Company in Ohio, to trim trees along one of its right of ways), a group of electric utilities of the USA formed a "club", calling itself the North American Electric Reliability Council (NERC for short). This club has persuaded all of the electric utilities of North America to join it.

Early in 2004 this NERC issued its first report:
(1) They expected that North America would need about 70 thousand megawatts of new generation by 2013
(2) They expected that North America probably would have 68.2 thousand megawatts of new generation by 2013.

Early in 2005 the US Department of Energy decided that the USA needed an Electric Reliability Organization, established the framework for this organization, and invited organizations to present proposals to become this ERO. Apparently the NERC applied to become this ERO, and was accepted so now the former NERC has become the ERO of the US Department of Energy and the US Department of Energy has powers, through the ERO, to apply heavy financial sanctions to any electric utility in North America that fails to deliver the energy needed.

I object to the US Department of Energy being able to apply economic sanctions to Canadian utilities without a formal debate having taken place in Canada's Parliament that has authorized the Canadian utilities to become entangled in American politics. The consequences of this entanglement could be the total loss of Canada's independence from the USA in all of our affairs.

To continue:

Late in 2005 this new ERO issued a revised estimate of available generation in North America. A comparison with the previous estimate follows:
Expected need in 2013 Expected available in 2013 Expected need in 2016 Expected available in 2016
thousands of meg. watt thousands of meg. watt thousands of meg. watt thousands of meg. watt
Estimates of 2004 70.0 68.2
Estimates of 2005 141.0 59

You will notice that the ERO expects more than twice as much power to be needed by 2016 than they had expected to be needed just a year earlier yet they had reduced the expected availability of power approximately 15% from their previous estimate. In simpler terms: they were being optimistic in their estimates of probably available power and being optimistic in the need for more power when they issued their estimates in 2004. Probably they were being optimistic in respect of Canada's export of electric energy as well.

I suspect that relatively few Canadians really understand the issues involved.

The Provinces of Quebec and British Columbia smelt huge amounts of aluminum. Each kilogram of aluminum represents about 15 kilowatt-hours of electrical energy.

In 1967 fully half of the aluminum which crossed an international border was ALCAN metal. (Not, by any means, is all of ALCAN's metal produced in Canada, however!)

Canadian British Aluminum also has a smelter in Quebec and I understand that there has been a huge smelter constructed near Quebec City. I succint terms, Canada's ability to smelt aluminum was huge and has grown substantially since 1967.

If the Government of Canada will not protect the livelihoods of Canadian smelter workers, who will? Don't expect the Americans to shed tears when Canadian workers become unemployed.

"Well", you say, "How does it follow that exporting electrical energy to the USA is so bad?"

When Canada declared war on Germany in 1939, Ontario Hydro wanted to curtail export of electric energy to the USA so that it could be diverted to refining aluminum which was desperately needed for airframes of fighters and bombers. American utilities protested to the International Joint Commission which ruled that Ontario Hydro could not curtail the export of electric energy to the USA. Refer to "CANADA: Peacemaker or Powder Monkey" by James M. Minniffee for these details.

The precedent has been established: once you sign on the dotted line you are committed for eternity and it does not matter if you are at war....

The next paper will provide estimates of cost to provide the 141 thousand megawatts of new generation by 2016....

Allan Dane, M.Sc.(EE)
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