Is the Castle Coal Project in the public interest of the people of Canada?

Reference Number
267
Text

This comment presents an informal Cost-Benefit Analysis of the Castle Coal Project. As such, it may inform decision-makers as to whether this Project is in the public interest of the people of Canada (ref Section 62 of Bill C-69, the Impact Assessment Act).

Benefits

  • The Project aims to produce ~10 million tonnes of metallurgical coal per year for “several decades”, to be used in steelmaking. Steel is an essential component of modern life. The sales value of this coal at today's prices is estimated at ~US$25 billion(1).
  • The Province of British Columbia will earn royalties on this revenue amounting to an estimated ~C$3.0 billion over 25 years(2), or ~0.2% of the Provincial Budget(3)
  • The Project will provide continuing employment for ~800 workers over its lifetime. As such, it will support the local economy by an estimated ~$70 million/yr(4)

Downsides 

  • It is pertinent to consider how this Project fits in with the overall vision of the government and the people of Canada, as outlined in the Generation Energy Council report of 2018, entitled “Canada’s Energy Transition” (5). This report details the steps this country believes are necessary in order to transition to a ‘Clean Energy’ future over the next generation, i.e. over the expected lifetime of this Project (see accompanying slides 1 and 2).
  • In contrast, the coking coal produced by this Project, estimated at ~250 million tonnes(1), will generate ~750 million tonnes of carbon dioxide when combusted. This is equivalent to the total GHG emissions of the entire Province of British Columbia for over a decade (9).
  • One of the four pillars Canada’s Energy Transition is the move away from fossil fuels towards more ‘Renewable Fuels’. For steelmaking, natural gas (e.g. as LNG) is a readily available alternative to coking coal and produces up to 50% fewer GHG emissions (6),(slide 3). Canada’s LNG exports are set to increase significantly in the near future (7)
  •  In the medium term, however, Hydrogen will be available as a cost-effective alternative. Canada in general and British Columbia in particular have abundant resources for the generation of both green and blue Hydrogen, both for domestic consumption and for export (8) (see slides 4 to 7).
  • It is pertinent to note that the main countries that currently buy Canadian coal are turning away from the use of fossil fuels, in order to fulfil their GHG-emissions reduction commitments as per the 2015 Paris Agreement (slide 8).
  • If this Project is Approved, it is argued that the Proponent should take action to offset the direct GHG emissions of the Project. These are estimated to be ~0.69MtCO2e/yr, or ~17million tonnes CO2e in total. As an example, IKEA Canada owns two wind farms in southern Alberta (slide 10) that produce four times the power requirements of all their Canadian stores.
  • The decision as to whether this Project is Approved, may have some ability to influence the fuel choices that the steelmaking industry makes over the lifetime of this Project. By making more cheap coal available, we effectively support the continued use of fossil fuels. Alternatively, if we choose to withhold this coal, we effectively support the Clean Energy Transition, via LNG in the short-term and Hydrogen in the medium-term, both of which Canada is well-equipped to supply.
  • In terms of the local economy of the Elk Valley area, it is argued that the interests of the people are better served by employing the available labour in the creation of Renewable Energy projects, in southern Alberta, for example (slide 8). The required investment could come from the Federal Carbon Tax, which is set to generate $3.2bn/yr from BC alone from 2022 onwards.
  • For the mineworkers themselves, the effects of many years of breathing coal dust should be considered. A Livability Study has been carried out in Sparwood; see https://sparwood.civicweb.net/document/87409, pp 33-34:-
    •  Respiratory Health. "Many comments were received about air quality and the possible impact of coal dust on respiratory health. Some questioned the validity of local respiratory disease data that has been shared, suggesting that incidences of respiratory problems may be under-reported as workers often access health care in other communities. Many cited the lack of access to physicians, and personal / family struggles with asthma.
      •  “There is so much dust these days, it can’t be good for our lungs if we have to wear respirators at the mines.“
      •  “I have been diagnosed with severe allergies and asthma in the last few years.”
  • In summary, this Project represents a significant step, either in support of the continued use of carbon-polluting fossil fuels, or in the direction of the Clean Energy Transition to which the people of Canada are committed.

References

(1) 2020 metallurgical coal prices: https://www.eia.gov/coal/production/quarterly/pdf/t12p01p1.pdf. The expected lifetime of the Project is described as “several decades” by the Proponent. For illustrative purposes, this has been taken to mean ~25years.

(2). BC Coal Royalties: https://www2.gov.bc.ca/gov/content/taxes/natural-resource-taxes/mining/mineral-tax

(3). $60.6bn in 2020: see https://economics.td.com/british-columbia-budget

(4). Average salary of a coal mine worker in Canada is $85,400. See https://www.payscale.com/research/CA/Industry=Coal_Mining/Salary

(5). See https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/CoucilReport_july4_EN_Web.pdf

(6). See https://www.reuters.com/article/australia-lng-emissions/qa-how-do-emissions-from-lng-and-coal-compare-idUSL3E7FS0HG20110510

(7). See https://www.nrcan.gc.ca/our-natural-resources/energy-sources-distribution/clean-fossil-fuels/natural-gas/canadian-lng-projects/5683

(8). Layzell DB, Young C, Lof J, Leary J and Sit S. 2020. Towards Net-Zero Energy Systems in Canada: A Key Role for Hydrogen. Transition Accelerator Reports: Vol 2, Issue 3. https://transitionaccelerator.ca/towards-net-zero-energy-systems-in-canada-a-key-role-for-hydrogen

(9). See http://www.env.gov.bc.ca/soe/indicators/sustainability/ghg-emissions.html

Submitted by
Robin Owens
Phase
Planning
Public Notice
Public Notice - Public Comments Invited on a Summary of the Initial Project Description
Attachment(s)
  • Is Castle Coal Project in the Public Interest.pdf (1.3 MB)
  • Comment Tags
    Climate change Need for the Project
    Date Submitted
    2020-11-03 - 11:09 PM
    Date modified: