Fueling North America’s Energy Demands
New developments at Irving Oil and Point Lepreau will bolster New Brunswick’s already substantial energy production capabilities.
New Brunswick’s energy exports account for 57% of the Canadian province’s overall exports, and this percentage is set to grow thanks to several recent developments. A new terminal being built by Canaport LNG; a proposed second refinery to be built by Irving Oil; and the proposed construction of a second reactor at Point Lepreau Generating Station, along with ongoing refurbishment of the existing reactor will all help the province become one of North America’s leading energy exporters. New Brunswick is adjacent to the United States border and 100 million North Americans live within a radius that is less than a day’s drive from New Brunswick, all of which makes for remarkably convenient distribution. Discussing New Brunswick’s proximity to New England, Minister of Energy Jack Keir observes that the Canadian province “sit[s] on top of the largest demand market in North America.”
One of the new facilities that will help meet this demand is the Canaport LNG terminal being built in St. John, New Brunswick. The company is comprised of a joint venture formed between Irving Oil (which owns 25% of the company) and Repsol YPF (which owns 75%). LNG is an acronym for liquefied natural gas, a raw material that will be supplied to the Canaport terminal by Repsol. The terminal will reconstitute LNG back into gas in a process known as regassification, at which point it will be marketed in Eastern Canada by Irving Oil and in the remainder of Canada and in the Untied States by Repsol. The natural gas produced at the site ultimately will be used by consumers for heating, cooking, and electricity.
First formed as a stand-alone company in 2005, Canaport LNG’s terminal will be completed by the end of 2008. It is slated to supply 20% of the natural gas required by Canada and the American Northeast. The $750 million facility is the first of its kind in Canada, and there are only six such existing facilities in all of North America. Set to process 1 billion cubic feet of natural gas per day, the terminal will deliver gas to the American border via a $200 million 90-mile pipeline that also is currently under construction. As of February, roughly 50% of the physical construction was complete, and about 70% of the overall site had been developed. By summer of 2008, an estimated 700 additional jobs will be created to aid in the completion of the facility.
Perhaps the biggest new development in New Brunswick is the proposed construction of the Eider Rock refinery, which would be the second Irving Oil refinery in St. John. Irving Oil was founded by K.C. Irving in 1924 and is still owned and operated by the Irving family, employing more than 7,000 people. Remarkably, the existing refinery in St. John is the largest in Canada, producing over 300,000 barrels of petroleum products per day. In fact, more than 75% of the refinery’s output is exported to New England, and Minister of Energy Keir notes “six out of ten cars in Boston are fueled by Irving Oil.”
Like the existing refinery in St. John, Eider Rock is projected to produce 300,000 barrels per day. Having begun the extensive permitting process in January 2007, construction was originally set to commence in 2009; that estimate has since been pushed back to 2010. Should the project go forward, the refinery would be operational by 2015. The facility will be built at an estimated cost of $7 billion, and the construction alone will create 5,000 new jobs. Once the facility is running, 1,000 permanent jobs will be created. Eider Rock will be the first new refinery built in North America since 1984. New facilities like Canaport and Eider Rock are “huge projects,” states Keir, and New Brunswick “has a community of folks who see the opportunities” presented by them.
BP, a leading oil and gas company with worldwide operations, also sees the opportunity inherent in the Eider Rock refinery project. On March 17, 2008, the company announced its agreement to work with Irving Oil on the engineering and design of the proposed facility,contributing $40 million to the $100 million design phase that is currently is underway. The company also has announced that it may form a joint venture with Irving Oil if the facility construction goes forward as planned. “We are excited that a company of BP’s caliber sees the potential in our region and in this project to meet the need for a reliable and secure supply of refined products for the northeast,” says Kenneth Irving, president of Irving Oil.
The multi-year proposal process for Eider Rock is the result of “the rigorous permitting process outlined by our Federal and Provincial Governments,” says Kevin Scott, Irving Oil’s Director of Refining Growth. Indeed, the environmental impact of the new refinery is of the utmost concern to New Brunswick officials and to Irving Oil. The proposed refinery is being designed with environmental concerns as a top priority, and the existing Irving refinery already captures its carbon dioxide output for recycling as soda carbonation. During the past five years the recycling initiative has prevented 450,000 metric tons of carbon dioxide from being released into the atmosphere, and it would take 20 million trees to accomplish the same in that period. Regarding Eider Rock, “we will continue to consult our community to ensure that, if the project proceeds, it will be one the community can be proud of,” Scott promises.
On the nuclear power front, environmental impact also is of the utmost concern. A multi-year proposal process similar to that being undertaken by the Eider Rock refinery also is in motion for the Point Lepreau Generating Station (PLGS) in Lepreau, New Brunswick. Point Lepreau currently supplies New Brunswick with 30% of its power, and also distributes power to parts of New England. In August 2007, the Government of New Brunswick accepted a proposal to conduct a feasibility study regarding the construction of a second nuclear reactor at the Fredericton plant. The $2.5 million study has been proposed and funded by Team CANDU New Brunswick, a representative of five different nuclear technology and engineering companies. One of the companies involved in the proposal is Atomic Energy of Canada Limited (AECL). Ken Petrunik, chief operating officer of AECL, explains, “We are extremely pleased that the Province of New Brunswick has accepted Team CANDU New Brunswick’s proposal. We are confident the study will clearly demonstrate that a second unit will provide an energy-secure future and economic self-sufficiency for the province.”
New Brunswick Premier Shawn Graham says the project study “further cements New Brunswick’s growing position as an energy hub on the Eastern seaboard and could be yet another catalyst towards our goal of self sufficiency by 2026.” Indeed, the new reactor will be in operation for 60 years. Should the $6 billion project go forward, it will create 4,000 construction jobs and 500 permanent jobs. This estimate, however, does not account for the nuclear research, training, and manufacturing industries that the new generator will attract. Keir claims that the proposal “already has brought positive spin-offs for the province like a Centre of Excellence for Retubing of CANDU reactors,” and adds that the project has “the potential to bring transformational change to our province.” Patrick Lamarre, president of SNC-Lavalin Nuclear, another of the Team CANDU companies, comments: “Team CANDU NB fully supports the province’s vision to become a world-class center of excellence for nuclear power.”
PLGS began refurbishing its existing generator in March 2008. The $1.4 billion project is expected to reach completion in September 2009. Ga‘tan Thomas, vice president of NB Power Nuclear, states that the initial process of shutting down the reactor went very well.
“There was a lot of pride amongst our employees as many of them were there and worked at the station when it was first built,” he says.
The station has been operating commercially since 1983, and the refurbishment should extend the generator’s life for another 25 years. New Brunswick is the only Eastern Canadian province licensed to operate a nuclear power plant. The refurbishment is the first ever attempted on a reactor of the type located at PLGS.