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Cablegate: Canada Forges Ahead On Clean Coal

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 OTTAWA 003046

SIPDIS

SENSITIVE

STATE FOR EB/ESC/ISC, OES/EGC AND WHA/CAN
DOE FOR INTERNATIONAL AFFAIRS (DEVITO, PUMPHREY, DEUTSCH)
DEPT PASS USTR (MELLE, CHANDLER)
DEPT PASS FERC (LONGENECKER)

E.O. 12958: N/A
TAGS: ENRG ETRD SENV CA
SUBJECT: CANADA FORGES AHEAD ON CLEAN COAL

REF: OTTAWA 2263 (NOTAL)

1. (U) Summary: The Canadian Clean Power Coalition, an
association of coal and energy producers, is developing a
"roadmap" for building a clean coal power plant in Canada by
2012. The group comprises public and private entities which
are responsible for over 90 percent of Canada's coal-fired
electricity generation capacity, and is supported by the
Canadian federal government and several provincial
governments. The goal of the Canadian project will be to
construct a demonstration coal-fired power plant whose
emissions are comparable to a similar sized unit using
natural gas feedstock. The project will also examine
retrofit technologies for existing coal plants, and will seek
to lower costs for both new plants and for retrofits. End
summary.

2. (U) Coal currently accounts for about 19 percent of
Canada's total electricity generation (reftel). As plants
age, their replacement or retrofitting with clean coal
technology would be fully consistent with Canada's
commitments under the Kyoto Protocol, which it signed in
2002. Figures vary considerably regarding Canada's coal
reserves, but at current production of about 70 million short
tons per year, Canada's proven reserves of 6,200 million tons
would last at least 85 years. Canada's ultimately
recoverable coal reserves may be as high as 43,000 million
tons of all types of coal.

3. (U) The recently completed Phase I of the Canadian Clean
Power Coalition (CCPC)'s activities was a technical and
economic comparison of different potential clean coal
technologies, and the potential of each with various types of
coal found in Canada. Among the CCPC members are TransAlta,
Luscar Ltd., Ontario Power Generation, SaskPower, Nova Scotia
Power, and the California-based Electric Power Research
Institute. The federal government and the provincial
governments of Alberta, Saskatchewan, and Nova Scotia also
actively support the CCPC.

4. (U) The Phase I study concluded that Integrated
Gasification Combined Cycle (IGCC), although not a fully
developed technology for power plant applications, presented
the best option for a clean coal power plant in Canada. The
CCPC also examined other possible clean coal technologies
such as oxyfuel (combustion with oxygen and CO2) and amine
scrubbing, but noted that IGCC potentially can deliver lower
cost electricity and more efficient sequestration of carbon
dioxide (CO2) than the other options. The study also noted
that IGCC is the best technology for producing hydrogen from
coal, and can thus support Canada's burgeoning hydrogen
technology industry.

5. (SBU) According to officials at the Canadian government's
CANMET Energy Technology Centre, GOC spending on clean coal
is about C$25 million annually (one Canadian dollar equals
approximately .84 U.S.). Support for the CCPC accounts for a
major portion of the GOC's clean coal budget, with the GOC
providing overall policy coordination and the use of its
research facilities. CANMET officials told ESTOFF that
Canadian government and private sector researchers are
closely following the progress of the U.S. zero-emission
FutureGen project, but have no plans to formally participate.

6. (SBU) The CCPC's Phase II will consist of identifying
sites for a demonstration project, as well as recommending
which types of coal offer the best potential for power
production and CO2 storage. The study is currently
considering sites in Saskatchewan (using lignite coal) and
Alberta (where sub-bituminous coal is abundant). The CCPC is
also examining retrofit technology for better capture of
sulfur dioxide and nitrous oxides at existing plants. GOC
officials commented that Alberta is probably the best
candidate for construction of Canada's first clean coal
facility, due to energy requirements in the oil sands,
abundance of coal, and opportunities for sequestration of CO2
in depleted oil wells.

7. (SBU) According to GOC officials, a key part of the
CCPC's Phase II study will also be to make a business case
for an IGCC power plant. While CO2 capture can raise the
cost of electricity by as much as 50 percent over current
rates, officials believe that this cost will be reduced
through technology development, and further offset by
producing hydrogen and other chemical by-products. GOC
officials see the issue of reducing cost as the key to clean
coal's success, especially for retrofitting of existing
plants. The older plants may require extensive
re-engineering to capture CO2, and retrofitting is especially
problematic if there is no adequate site nearby for
sequestration.

8. (SBU) Comment: GOC officials readily acknowledge that
Canada has thus far made halting advances on clean coal
technology, but believe they are now catching up with the
United States and other countries which are pursuing the
technology. While interested in the progress of FutureGen,
they believe that Canada has a sufficient industrial and
scientific infrastructure, as well as vast deposits of
specific types of coal, to justify its own continuing work on
clean coal technology. Progress on changing the political
environment for clean coal may be more difficult, however.
Ontario's energy minister, showing no signs of backing down
on his pledge to close all coal plants in Canada's most
populous province, recently declared that the term "clean
coal" is an "oxymoron." In Canada, as in other places,
coal's image as a dirty fuel may linger in the public mind
until clean coal becomes a proven technology. End comment.

Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

CELLUCCI

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