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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - October 31, 1974, Lethbridge, Alberta Thursday, October THE LETHBRIDQE HERALD 29 Canada9 s coal reserves take on new respectability CALGARY (CP) Canada is suddenly paying more at- tention to its coal reserves, which had been largely ig- nored for 20 years as oil and natural gas became more at- tractive sources of fuel. But coal, nature's most abundant fossil on more lustre as con- ventional sources of oil and gas dwindle. It is being looked at as a source of synthetic gas to supplement or replace natural gas as a prime feed- stock for the expanding petrochemical industry. Canada has 1.9 per cent of the world's coal reserves, enough to last years at current rates of consumption. More than 95 per cent of known reserves of about 120 billion tons is in the three westernmost provinces. Most 'of the remainder is in the Maritimes. Alberta is Canada's leading 'producing province, nine mil- lion tons in 1972, followed by .British Columbia at 6.5 mil- lion and Saskatchewan, 3.3 million. In 1972, there were 39 coal Iinines in Canada employing persons. Canada produced 22.5 mil- lion tons last year, a record, "but production was still short sof domestic demand of 27 mil- lion. While 11.1 million tons of "metallurgical coal was ex- !ported, principally to Japan, million tons was imported the United States, most- >sly for use in Ontario. The major users in Ontario tare Ontario hydro, which con- "sumes about 10 million tons of I thermal coal, and steel com- in Hamilton and Sault "Ste. Marie, Ont, requiring 7.5 million tons of metallurgical coal. As the security of supply is threatened by the changing energy situation in the U.S., Ontario is looking at Western Canadian coal as an alterna- live. There are several factors working against supplying Western coal to the Ontario market. The cost of transportation is perhaps the most important. A 1973 study by CP Rail and Canadian National railways said that even if Western coal were given away at the mines it still could not compete with the delivered price of U.S. coal in Ontario. "This, added to an increase in U.S. freight rates, has made Western Canadian coal reserves not only important from a self-sufficiency stand- point, but also of interest in an economic says Energy Minister Donald mac- donaid. But Western Canadian coal, costing a ton f.o.b. Van- couver, still cannot compete with U.S. coal in Ontario. To become competitive, both the price and the freight cost have to be lowered. Another crippling factor is. transportation. Mr. Macdo- nald told the recent Canadian Conference on Coal in Cal- gary that "present facilities in Canada would be strained to transport anything more than 1.5 million tons of Western coal a year to eastern markets." The minister called the up- grading of the transportation system a matter of imme- diate priority and said Ottawa is encouraging industry to de- velop a terminal at Thunder Bay with a capacity of five million tons by 1976 and 10 million by 1980. An energy policy report published last year by Mr. Macdonald's department said the minimum target of Cana- dian coal production should be 37 million tons a year by 1980. A longer-term forecast is more difficult but E. R Mit- chell, head of the Canadian Combustion Research Labora- tory in Ottawa, places the an- nual demand between 60 mil- lion and 150 million tons by 1994. Assuming that Canada's nu- clear power capacity equals its hydro-electric capacity 20 years from now, Mr. Mitchell said the country would still need to produce 70 million tons of coal annually to be to- tally independent of outside sources. Should nuclear development stall-and Mr. Mitchell said it may reach only 30 per cent of its forecast an- other 70 million tons of coal would be required. One proposal to solve the transportation problem is to build a coal-iiKril slurry pipe- line. "The formation of a coal-in- oil slurry would raise the BTU content of the delivered fuel for Ontario thermal stations, nuking it a substitute for V S said the railways' study. But the problems of coal are far moi'e complex than just production and marketing. Said Elwood Cowley, Sas- katchewan's mineral re- sources minister: "As coal represents a sig- nificant portion of Canada's fossil fuel reserves, the Sas- katchewan government be- lieves that this energy re- source can play a key role in redressing the historical re- gional imbalances in Can- ada." Bill Dickie, Mr. Cowley's counterpart in Alberta, agreed that, like other energy resources, coal is a bargain- ing tool for secondary in- dustry and a transportation policy no longer detrimental to Western development. Another major problem fac- ing coal development is pres- sure from environmentalists. The industry, while accepting its responsibility, is concern- ed that it and ultimately the Canadian consumer may be victimized by unnecessarily tough legislation, as is al- ready the case in the U.S. Carl E. Bagge, president of the U.S. National Coal Associ- ation, said there are bills "which are so needlessly strict and myopic that I can only characterize them as a catastrophe for the coal in- dustry and the nation." "The surface-mining in- dustry in the United States has certainly committed its share of environmental sins in the past, but a maturing tech- nology and a rising market make it possible to do good reclamation now on mined land." A report released recently by the Environment Con- servation Authority of Alberta says that "in no case should a surface-mining operation be permitted unless the total benefits to the province can be shown to outweight the total disbenefits." Surface-mining is the cheapest method of extracting coal. Coal gasification will get its first field trial by the Re- search Council of Alberta in 1976. Norbert Berkowitz, head of fuel sciences of the research council and a member of the Alberta energy resources con- servation board, suggests that large-scale production of syn- thetic gas should be studied as an alternative to building pipelines from the Arctic. "From what we know of coal gasification technology, 10 plants of the size now being built in the United States could produce a trillion cubic feet of gas annually and cost billion to Mr. Berkowitz said. 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