Agreement on coal research

The action committee on Western Canadian Low- Sulphur Coal has endorsed recommendations calling for government support for the development of technologies to enhance the competitiveness of western coal in Ontario, says the federal department of Energy, Mines and Resources.

A report prepared by the committee’s Intergovernmental Secretariat identified several research, development and demonstration initiatives, to be undertaken in co-operation with the private sector, to which the funds would be directed.

“The action committee recognizes the role of the private sector in expanding coal sales to Ontario,” said Deputy Prime Minister Don Mazankowski, chairman of the committee, on behalf of fellow members Don Getty, Premier of Alberta: William Zalm, Premier of British Columbia; David Peterson, Premier of Ontario; and Grant Devine, Premier of Saskatchewan.

“Government support for these initiatives of the private sector will accelerate their development and will help industry enhance the competitiveness and long-term viability of coal.”

Costs will be shared by the federal and provincial governments and the private sector. Both the federal government and the provinces will contribute funding for research, development and precommercial demonstration phases on a project- by-project basis. The potential costs and benefits of each of the projects will be reviewed after each phase and before the next step. The private sector’s prerogative will be to commercialize the technologies after the demonstration phases have been successfully completed.

The action committee was established in 1987 in response to the Federal-Provincial Task Force Report on Western Canadian Low- Sulphur Coal, which found that increased use of western Canadian coal could reduce Ontario’s acid gas emissions and increase activity and employment throughout Canada.

Ontario Hydro has been buying low-sulphur coal from Western Canada since the mid-1970s to both reduce acid gas emissions and provide a diversity of fuel supply. Currently, western coal comprises some 36% of Ontario Hydro’s coal purchases, even though the delivered price can be up to 50% higher than U.S. coal.

“We have made significant progress in unitizing western Canadian coal,” said Premier Peterson, vice- chairman of the action committee. “Ontario is prepared to participate in and provide funding for the initiatives identified by the secretariat.” Ontario’s intention is to further increase the percentage of western Canadian coal in Ontario Hydro’s total purchase requirements,” the Premier added.

Premier Getty also commented that Alberta is prepared to commit funding and any other assistance to pursue additional markets for Alberta coal.

The Intergovernmental Secretariat has worked closely with the private sector to identify possible technological, commercial, regulatory and policy options that might affect the delivered cost of coal to Ontario. The most promising of these, 14 projects to cost an estimated $81 million for research, development and precommercial demonstration, were identified in the secretariat’s recommendations to the action committee.

The Intergovernmental Secretariat will continue to oversee the detailed development of the projects and recommend the amount of government funding for specific projects.

The federal government is prepared to contribute up to $27 million for these initiatives from the Western Economic Diversification Fund.

“Expanding domestic markets for western Canada’s abundant low- sulphur coal will contribute to the economic stability of the West,” said Bill McKnight, minister responsible for the fund. The action committee agreed to meet in August to review progress.