Ottawa Citizen

Energy 'gold rush' sparks fears

Land-grabs pump up border tension

Kate Jaimet The Ottawa Citizen

Soaring oil and gas prices are causing a modern-day gold rush in the United States, as energy companies and speculators snap up land in search of a hydrocarbon bonanza.

But the stampede to exploit more hydrocarbon resources is creating environmental flashpoints on the Canada-U.S. border.

"Any industry where land is a critical component, you tend to have a rush," said John Martin, senior project manager for New York state's Energy Research and Development Authority. "People think: 'We've got to get into this play because if we don't, we'll get locked out.' "

The gold-rush mentality has led companies to snap up land, in the hopes of drilling for gas and oil and building power plants to sell energy on the electric grid. Land adjacent to major hydro lines and natural gas pipelines is considered prime real estate for power plants, and speculators are buying plots, hoping to resell them at a markup to energy companies.

But Allen Fiksdal, manager of Washington state's Energy Facility Site Evaluation Council, said he believes only a small number of the planned power projects will ever come to fruition.

"I think what you see is a lot of speculation on power plants," he said. "A lot of them have been announced. I don't think a lot of them will be built. A lot of times (people) will say they'll do this, and kind of test the waters, and if they don't get a backer, it goes away."

The industry rush has environmentalists worried -- especially coupled with U.S. President George W. Bush's recently unveiled plan to reduce federal regulations and open up sensitive land in the Rocky Mountains and the Arctic to drilling.

Along the Canada-U.S. border, some specific areas are becoming environmental flashpoints. One is the Washington-British Columbia border, where the congruence of natural gas pipelines and hydro lines makes an ideal spot for new power plants, designed to sell electricity to the nearby California market.

The most controversial of these is the proposed Sumas 2 power plant, a gas-fired 660-megawatt generating station which, if built, would emit yearly: 142 tonnes of nitrogen oxide, 202 tonnes of particulate matter, 42 tonnes of sulphur dioxide, 142 tonnes of volatile organic compounds, 96 tonnes of carbon monoxide and 2.2 million tonnes of carbon monoxide.

Much of that would drift over the border into B.C.'s Fraser Valley.

There is also a proposal for a 750-megawatt gas-fired energy plant to supply a BP oil refinery 30 kilometres south of the border. Neither of these projects has yet passed the American environmental approval process.

There has also been talk of a coal-fired plant, but Mr. Fiksdal said it has not yet filed for environmental approval and he doesn't give the project "much credence."

Other plans for power plants near the Washington-B.C. border include two smaller projects of 80 and 100 megawatts near Skagit, west of the Fraser Valley, and five power plants of less than 350 megawatts each in the Fraser Valley. These would provide energy for such industries as a pulp mill, oil refineries and a food processing plant.

Some of the smaller projects have been approved, while others are still in the works.

Mr. Fiksdal said the Washington state environmental authorities are taking into account the concerns of Canadians potentially affected by air pollution as they decide whether to approve projects.

"When you get into the size of hundreds of megawatts, you get hundreds of tonnes of pollutants per year. And when people hear that, they start getting concerned," Mr. Fiksdal said.

In the east, the Great Lakes may become another flashpoint, with plans by Michigan Gov. John Engler to allow companies to tap gas and oil reserves beneath Lake Michigan. Using a method called horizontal drilling, companies would set up their wellheads on land, several hundred metres back from the the lake's shoreline. The equipment would first drill downwards, then turn and drill horizontally, until it reaches the hydrocarbon deposit beneath the lake.

Liberal MP Roger Gallaway, who represents the riding of Sarnia-Lambton, has said he's concerned about the risk of oil from such a well leaking into the lake.

But directional drilling is already practised in Ontario, where 12 wells are tapping into oil and natural gas reserves beneath Lake Erie.

Horizontal drilling does not create a risk of oil leaking into the water because the oil pocket is 800 metres beneath the lake bottom, trapped by a layer of impermeable rock, said Rudy Rybansky, chief engineer with the Ontario Ministry of Natural Resources petroleum resources centre.

Ontario also allows drilling directly into Lake Erie from floating platforms but only for natural gas, which poses fewer hazards than oil in case of a leak. There are currently some 600 active natural gas wells in Lake Erie.

-- Rachel Gibson (rgibson@hotmail.com), May 21, 2001