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What doubling the grid really means

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From the Frontier Centre for Public Policy

By Brian Zinchuk

” imagine if someone said in the next 25 years and 11 months, we must twin every single freeway, highway, grid road, street and alleyway, across the entire country, at the same time. And along the way, we have to replace up to 89 per cent of the existing infrastructure, as well, because it is no longer considered adequate “

Recently my daughter called me while on her way back from a Costco run in Regina, heading home to Weyburn.

She noted that it appears they are twinning the highway between Regina and Weyburn. Indeed, they are, I explained. And several years later, they’ll probably get it all the way to Weyburn. Maybe by the time I retire, if I live that long, they’ll get as far as Estevan.

Indeed, those timelines are likely pretty close to reality, if the twinning of Highway 16, from Saskatoon to Lloydminster, was any indication. I used to drive from Saskatoon to North Battleford to get the newspaper I was working for printed, with road construction for much of that. And it took several more years to complete the Battlefords to Lloydminster portion. I was fortunate enough to be present at the ceremony for that. It was significant enough that Premier Lorne Calvert came out.

Twinning a major highway is a substantial undertaking. Historically, Saskatchewan could usually only afford to work on three separate areas at a time, typically doing 20 kilometres per year in each stretch. That was all the provincial finances could handle.

By adding an additional two lanes, you are effectively doubling the capacity of that major piece of infrastructure. It’s not easy, not cheap, and not fast.

Now imagine if someone said in the next 25 years and 11 months, we must twin every single freeway, highway, grid road, street and alleyway, across the entire country, at the same time. And along the way, we have to replace up to 89 per cent of the existing infrastructure, as well, because it is no longer considered adequate.

You’d probably think they were living in a dreamland, or quite possibly stark raving mad.

And yet this is precisely what the federal government is proposing, nay, demanding, of Canadians from St. Johns to Victoria to Tuktoyaktuk.

In order to save the world from anthropogenic (manmade climate change) and attain a “Net Zero by 2050” economy, we must increase the size of the electrical grid by a factor of 2.5x. And for Saskatchewan and Alberta, who on any given day get up to 88 and 94 per cent of their power, respectively, from fossil fuels, they must also replace that existing gas and coal power generation with non-emitting sources, at the same time as they’re building out the truly massive expansion.

The first reference I saw of the federal Liberal government’s intentions of this was in the 2023 budget, which noted expanding the electrical grid by a factor of 2.2 to 3.4 times. By August, when they released the proposed Clean Electricity Regulations, the government seemed to settle on a factor of 2.5 times for the high demand scenario.

So in the highway twinning example, that would be adding three lanes, not two, to every two lane highway, grid road, street and alleyway. For an existing four lane highway, you would need to add six lanes. For a six lane freeway like Ontario’s 401, you’d need to add an additional nine lanes, finding the right of way space, concrete, rebar, gravel, and asphalt for all of this. Again, all at the same time, in 25 years and 11 months.

There are several thrusts that the federal government is pushing. First, by 2035, they want to totally eliminate gasoline and diesel from new light vehicle sales. There’s currently only eight retail hydrogen fueling stations listed by the federal government and Shell in the entire country. There could be more, but they’re not listed. Realistically this means battery-powered electric vehicles (EVs). But nearly all of those EVs will require charging at home each night (and especially during winter, pre-conditioning those batteries, keeping them warm).

So every residence in the country will require 30 amp chargers for cars, and 80 amp chargers for pickups.

But the government is also now moving away from fossil fuels for home, heating, too. This was indicative of Prime Minister Justin Trudeau’s pause on the carbon tax for home heating oil (primarily used in Atlantic Canada, although I grew up in a house with that system). To do so, the feds are offering “free” installations of heat pumps (which are wholly inadequate at -30 temperatures, let alone the -44 seen in Alberta in mid-January). And those could be up to another 50 amps, per heat pump.

And that’s just residential, never mind commercial or industrial.

The Clean Electricity Regulations are meant to force fossil fuel power generation to go away. And since wind frequently drops to nothing, and the sun goes down every day, the only real alternative is massive expansion of nuclear power across Canada. We’re talking small modular reactors by the dozen in Alberta, Saskatchewan, and to a lesser extent, Nova Scotia and New Brunswick.

On Jan. 30, SaskPower announced a formalized agreement with General Electric-Hitachi for small modular reactors. But when I asked how many they plan on building, the CEO wouldn’t say. But he did speak of increasing the provincial grid from 5,400 megawatt now to 13,000 to 15,000 megawatts.

Hydro Quebec just released their plans to double their grid. Yet, perhaps miraculously, they’re not saying how many, if any, new dams will need to be built.

This doubling of the grid (actually 2.5x, but that’s not easy to say), means we’re going to need not only additional generation, but transmission lines, distribution lines, back alley pedestals, and wiring to every home, business and factory in the country. Where the materials come from? The contractors and workers? Will Not In My Back Yard (NIMBY) be universally trampled on by eminent domain orders, for the good of the planet? Or will it be a continuation of Build Absolutely Nothing Anywhere Near Anything Syndrome (BANANAS)?

A very real example is the Trans Mountain Pipeline. The original was built in something like 16 months, from scratching dirt to oil flowing. The expansion is taking a hell of a lot longer. Work started in 2018, and it is still not done. Any change in the plan had to go back to the Canadian Energy Regulator. Some First Nations fought it every step of the way.

Now do this for every single piece of existing power infrastructure. Wrap your head around that for a minute.

This supposed energy transition, from fossil fuels to electric everything, does not work if you cannot build out the electrical infrastructure, everywhere, and essentially all at in the next 25 years and 11 months. Either the timelines need to be stretched to a generational scale, or more realistically, the whole concept needs to be entirely rethought.

As Saskatchewan Premier Scott Moe has said more than once, “We will not attempt the impossible  when it comes to power production.”

 

Brian Zinchuk is editor and owner of Pipeline Online, and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

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Canadian Energy Centre

Report: Oil sands, Montney growth key to meet rising world energy demand

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Cenovus Energy’s Sunrise oil sands project in northern Alberta

From the Canadian Energy Centre

By Will Gibson

‘Canada continues to be resource-rich and competes very well against major U.S. resource bases’

A new report on North American energy highlights the important role that Canada’s oil sands and Montney natural gas resources play in supplying growing global energy demand.

In its annual North American supply outlook, Calgary-based Enverus Intelligence Research (a subsidiary of Enverus, which is headquartered in Texas and also operates in Europe and Asia) forecasts that by 2030, the world will require an additional seven million barrels per day (bbl/d) of oil and another 40 billion cubic feet per day (bcf/d) of natural gas.

“North America is one of the few regions where we’ve seen meaningful growth in the past 20 years,” said Enverus supply forecasting analyst Alex Ljubojevic.

Since 2005, North America has added 15 million bbl/d of liquid hydrocarbons and 50 bcf/d of gas production to the global market.

Enverus projects that by the end of this decade, that could grow by a further two million bbl/d of liquids and 15 bcf/d of natural gas if the oil benchmark WTI stays between US$70 and $80 per barrel and the natural gas benchmark Henry Hub stays between US$3.50 and $4 per million British thermal unit.

Ljubojevic said the oil sands in Alberta and the Montney play straddling Alberta and B.C.’s northern boarder are key assets because of their low cost structures and long-life resource inventories.

“Canada continues to be resource-rich and competes very well against major U.S. resource bases. Both the Montney and oil sands have comparable costs versus key U.S. basins such as the Permian,” he said.

“In the Montney, wells are being drilled longer and faster. In the oil sands, the big build outs of infrastructure have taken place. The companies are now fine-tuning those operations, making small improvements year-on-year [and] operators have continued to reduce their operating costs. Investment dollars will always flow to the lowest cost plays,” he said.

“Are the Montney and oil sands globally significant? Yes, and we expect that will continue to be the case moving forward.”

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Energy

Ottawa’s emissions cap—all pain, no gain

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From the Fraser Institute

By: Julio Mejía, Elmira Aliakbari and Tegan Hill

According to a recent analysis by the Conference Board of Canada think-tank, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

According to an announcements last week by Premier Danielle Smith, the Alberta government will use the Alberta Sovereignty within a United Canada Act to challenge Ottawa’s proposal to cap greenhouse gas emissions from the oil and gas sector at 35 per cent below 2019 levels by 2030.

Premier Smith, who said the cap will harm the economy and represents an overstep of federal authority, also plans to prevent emissions data from individual oil and gas companies from being shared with Ottawa. While the federal government said the cap is necessary to fight climate change, several studies suggest the cap will impose significant costs on Canadians without yielding detectable environmental benefits.

According to a recent report by Deloitte, a leading audit and consulting firm, the cap will force Canadian firms to curtail oil production by 626,000 barrels per day by 2030 or by approximately 10.0 per cent of the expected production—and curtail gas production by approximately 12.0 per cent.

Deloitte estimates that Alberta will be hit hardest, with 3.6 per cent less investment, almost 70,000 fewer jobs, and a 4.5 per cent decrease in the province’s economic output (i.e. GDP) by 2040. Ontario will lose 15,000 jobs and $2.3 billion from its economy by 2040. And Quebec will lose more than 3,000 jobs and $0.4 billion from its economy during the same period.

Overall, the country will experience an economic loss equivalent to 1.0 per cent of the value of the entire economy (GDP), translating into lower wages, the loss of nearly 113,000 jobs and a 1.3 per cent reduction in government tax revenues. Canada’s inflation-adjusted GDP growth in 2023 was a paltry 1.3 per cent, so a 1 per cent reduction would be a significant economic loss.

Deloitte’s findings echo previous studies. According to a recent analysis by the Conference Board of Canada think-tank, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

Similarly, another recent study published by the Fraser Institute found that the cap would reduce production and exports, leading to at least $45 billion in lost economic activity in 2030 alone, accompanied by a substantial drop in government revenue.

Crucially, these huge economic costs to Canadians will come without any discernable environmental benefits. Even if Canada entirely shut down its oil and gas industry by 2030, eliminating all GHG emissions from the sector, the resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent with virtually no impact on the climate or any detectable environmental, health or safety benefits.

Given the demand for fossil fuels, constraining oil and gas production and exports in Canada would likely merely shift production to other countries with lower environmental and human rights standards such as Iran, Russia and Venezuela. Consequently, global GHG emissions would increase, not decrease. No other major oil and gas-producing country has imposed a similar cap on its leading export sector.

The Trudeau government’s proposed cap, which still must pass the House and Senate, would further strain an already struggling Canadian economy, and to make matters worse, do virtually nothing to improve the environment. The government should cancel the cap plan given the economic costs and nonexistent environmental benefits.

Tegan Hill

Director, Alberta Policy, Fraser Institute

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