Sierra Club Atlantic Presentation to New Brunswick Energy Commission

 

Presentation to New Brunswick Energy Commission

 

On behalf of the Sierra Club of Canada, Atlantic Canada Chapter

17 February 2011

Saint John, New Brunswick

 

Good Afternoon Energy Commission members and Ladies and Gentlemen:

 

In planning for New Brunswick’s energy future, conservation should our very first order of business. Estimates vary, but energy experts agree that North Americans waste between 20 and 40 percent of the electric power that is produced from all sources, and New Brunswick is no different in this respect. The lion’s share of this energy that is presently being wasted can be recovered and “harnessed”, so to speak, by means of carefully planned, flexible conservation pricing. If this pricing structure for electricity is phased in over the coming year--which is when it should be initiated--conserving the electric power that is presently wasted would provide our province with more energy than it could obtain from any method of generating additional electric power, whether from existing sources or new ones. Conservation, in other words, can be one of our most important “sources”, so to speak, of electric power.

 

By conservation pricing we mean a price system that energy wonks refer to as a steeply ascending block system of electricity pricing. With this system residential and commercial consumers who consume very little electricity would see substantial reductions in their electric bills to reward them for their modest consumption.  Higher levels of consumption would be priced accordingly, with prices increasing significantly with each block of increased consumption so that consumers who use lots of power would be strongly motivated to reduce their consumption. They could do this by simple steps like turning off unused lights and equipment. But under this system the price of electric power for higher consumers would also be substantial enough to motivate them to invest in more efficient equipment, or--and this, as you know, is critically important especially in our province--to switch from the least efficient method of space heating, which is using electricity for heat, to alternative ways of heating homes and businesses,  all of which are more efficient than using electricity for heat.

 

We want to stress that mechanisms will have to be developed to protect renters, and especially lower income renters, from having higher electricity costs passed on to them by landlords whose properties are heated with electricity. However, combined with a program of tax and other incentives to encourage landlords to replace electric heating with other sources of heat, this protection for renters can be assured In fact we have developed an outline for assuring this protection for renters in the context of ascending block pricing of electricity that we’ll be happy to make available to you, Commissioners, on request.

 

To complement what we see as New Brunswick’s most effective power resource, which is conservation achieved through conservation pricing, we need to consider other energy sources, beginning with New Brunswick’s wood resource and how to use it responsibly and effectively. Because wood used to produce heat or energy is “carbon neutral”, from an environmental standpoint wood is a much better choice than most other options for providing us with heat and, potentially, with some of our electric power. And wood--if we learn to manage our forests cautiously and responsibly (something we have not done at all well in the past)--wood can be a fully renewable, truly sustainable resource. If we can learn to be conscientious, careful stewards of our forests, wood energy can sustain us and future generations of New Brunswickers as long as people live here and require heat and electric power.

 

New Brunswick should establish a minimum efficiency for biomass projects, at least any that may receive taxpayer subsidies or which qualify for favourable treatment by the province (e.g. a feed in tariff). An example of how NOT to encourage sustainable biomass can be found in Nova Scotia, where all the major biomass projects proposed so far will only exacerbate greenhouse gas production and climate change for decades because they use inherently inefficient technologies that burn a lot of trees and produce relatively little in the way of energy. Also, New Brunswick should give preference to community-based cooperatives or locally owned biomass energy projects that would not require unsustainable levels of harvesting, would maximize job creation, and would keep their income and profits circulating and benefiting our New Brunswick economy.

 

We should encourage and give priority to cooperative, community controlled utilization of our crown lands and other forests. Doing so will enable us to maximize energy self-sufficiency for New Brunswick, efficient use of energy close to where it is produced, and local employment well distributed throughout the province. The development of community managed forest cooperatives and forest-based wood enterprises, including cooperative wood pellet manufacturing facilities, should be among our highest priorities for achieving these essential goals.

 

We need to move away from the large centralized power plant mentality that has proved to be a drag on New Brunswick’s economy because of the massive repair, redesign and refurbishment costs required for these large centralized plants. Our reliance on big power plants has also severely limited the flexibility of our energy system and its responsiveness to changing circumstances. Developing, utilizing and learning to operate and rely on a  decentralized energy system made up of many disbursed, well-distributed smaller generating facilities, using diverse power sources including sustainable biomass wood-fired generators and carefully located  wind, wave, tidal and solar energy, will serve our needs far better than continuing along the old road of relying on large, centralized, polluting, unsustainable nuclear and fossil fuel-fired generating stations.

 

A key component of accelerating the deployment of clean renewable energy sources is a policy known as the Feed-in Tariff (FIT). Under FITs, governments set cost-based rates for various types of renewable energy to allow modest profits to all interested developers of sustainable, renewable energy technologies.

 

This cost-based feed-in tariff system has proved to be the single most successful renewable energy policy in the world, having been implemented in over 60 countries on five continents. In May 2009, Ontario launched its Green Energy and Green Economy Act. This legislation, modeled closely on the highly successful German experience has  already started kick-starting renewable energy production in Ontario and is expected to  deliver over 10,000 MW of new sustainable electric generating capacity for that province.

 

Experience from around the world confirms that widespread renewable energy development has sparked significant economic growth in the renewable energy sector. This can provide a foundation for the transition to a more sustainable energy economy, by generating employment in sectors that are going to be significant drivers of job creation and the foundation of sustainable economies in the decades to come. In Germany alone, this policy has resulted in more than 300,000 new jobs. Ontario expects to create over 50,000 new jobs over the next few years as a result of adopting the German approach and adapting it for Canadian conditions.

 

Generating electricity from local renewable energy sources can and decentralizing electricity production can stimulate business activity and serve as a foundation for  sustainable economies in New Brunswick and throughout Atlantic Canada. And this in turn can help generate a sense of confidence and self-reliance in our Atlantic region, based solidly this time on sustainability rather than on unsustainable resource consumption. 

 

We cannot stress too strongly that shale gas exploration and development should not be encouraged or permitted in New Brunswick. Shale gas development involves a destructive kind of decentralization which entails the pollution and despoiling of entire landscapes with gas marker odours, a massive, sprawling complex of extraction infrastructure and the contamination of water supplies through the injection of hundreds of different chemicals, many of them extremely toxic, into the earth’s subsurface. All of these extremely negative effects are inherent and cannot be eliminated from the technology of fracturing underground rock strata to release and capture shale gas.

 

On a different front we also need to move decisively away from another mistaken policy of the past. We should not plan or try to build an energy system based on the idea of  exporting New Brunswick-generated energy to the U.S. or to other provinces. The failed “energy hub” policies of the previous New Brunswick government were only the most recent manifestation of this mistaken approach. One very big problem with producing energy for export is that it forces New Brunswickers to bear all the risks associated with generating power. With power exports we take all the risks--economic, health and environmental--that come from generating energy--and people elsewhere, if they decide to buy our power, get to use it without taking on these risks. Not a very even trade. Does anyone really believe the payments New Brunswick may or may not gain from energy exports will somehow “trickle down” to compensate New Brunswick people for the risks we bear when power generated here is sold out of province? We don’t think so, and most New Brunswickers don’t think so either. 

 

The folly of planning for power exports and exporting power involves another kind of risk that has become painfully obvious in recent months—the risk of marketing assumptions, dreams and economic forecasts that prove wrong. As you know, the much hyped and widely predicted energy shortage in the northeastern U.S. that was supposed to have created a voracious market for energy exports from New Brunswick has  failed to materialize. The U.S economy is now marked by energy surpluses and economic stagnation, and economies on both sides of the border must learn to adjust to new circumstances which require the construction of steady state economies built around  efficiency, reliability, and flexibility, all of which are all aspects of sustainability.

 

Rather than planning on or building for energy exports we should gear our economy around energy self sufficiency for our province and for its diverse regions. A modest margin of additional power capacity--on the order of ten or fifteen per cent--should be developed and maintained to provide for emergencies and other periods of extra high power demand--and also so we can share some of this standby power with our neighbouring provinces (or with the state of Maine) when emergencies or special circumstances require us to be good neighbours in this respect.

 

We’ve been told that the policies of NB Power are beyond the scope of this Commission, but, as we see it, energy policy is a seamless web, so we’ll complete our presentation today with the comment that a healthy, reliable self-sufficient energy system for New Brunswick should and must include net metering of electricity that must go beyond just giving credits on future power bills for home and business owners who produce power for themselves and an excess for the grid.

 

In pursuing the goals of provincial, regional and local self-sufficiency we should actively encourage and promote wind, solar and other on-site power generation by home and business owners and by communities. And when these units produce more power than their owners or communities need, NB Power should pay them for the power they add to the grid at favourable rates designed to enable and encourage this participatory power production, which can--and should--be an important building block for creating the set of community, business and people-friendly energy policies that our province needs and, most certainly, deserves.

 

Thank you for the opportunity to present these remarks and suggestions to the Commission today.

 

Respectfully submitted,

Larry Lack, Sierra Club representative for this Energy Commission presentation, and Gretchen Fitzgerald, Director, Atlantic Region Chapter of the Sierra Club of Canada