Clean coal a decade away

The company is committed to a diverse range of power-producing technologies and environmental strategies, Don Lowry, the city-owned utility's president, told a group of University of Alberta students touring Epcor's Genesee power plant.

"It's technically feasible to do it. It is not a question of science and technology to deliver it. It is a question of cost," Lowry said afterwards about efforts to draw methane gas out of coal without creating emissions.

Once the retail price of natural gas exceeds $5.50 to $6 a gigajoule and 30-year supplies dwindle, it will be more economical to use coal "gasification" to produce electrical energy and leave gas to value-added petrochemicals and other uses, Lowry said.

The transition is driven by market demand, but it makes sound business sense, given Alberta's 800 to 1,200 year supply of coal, Lowry said.

Epcor now burns pulverized coal to generate electricity.

The electrical sector is seeking clarity from regulators and governments on emission strategies, in terms of meeting Canada's Kyoto commitments, Lowry added in an interview.

Canada has signed onto the global accord to reduce overall greenhouse-gas emissions to six per cent below 1990 levels by 2010. The oil and gas industry has won exemptions from Kyoto for expansion projects, but Lowry does not foresee electricity producers banding together to reach a similar compromise.

Epcor supports Kyoto goals, but whether it can meet imposed deadlines is an open question, he said.

"We will gradually improve our emissions. Rather than debate if we can meet a deadline, we will agree with Kyoto and directionally we will be better. We are not convinced we can get to an exact date, but we will be taking steps over time."

Epcor has 1,700 trades workers on site building Genesee 3, a 450-megawatt generator slated for completion in early 2005. By that spring, it will produce electricity sufficient to power 600,000 households.

The $695-million project, jointly owned by Epcor and Transalta, will complement two existing power generators providing 762 megawatts to the Alberta power grid.

Genesee 3 will use the most advanced coal-combustion technology available, which added about $100 million to the plant's price tag, Lowry said.

Coal consumption from an Alberta mine operated by Luscar will grow to 5.3 million tonnes a year with the third generator, up from 3.5 million currently.