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DAM-L Hydro is Doer's "ace in the whole" Free Press May6/01 (fwd)



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Date: Mon, 7 May 2001 15:35:14 -0500
Subject: Hydro is Doer's "ace in the whole" Free Press May6/01
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To:       William J Braun/Winnipeg/MCC
From:  wjb@mennonitecc.ca
Date:  05/07/2001  3:26:47 PM
Subj:   Hydro is Doer's "ace in the hole" - Free Press May6/01



Doer's vision
Manitoba premier sees province as a power house of hydrogen fuel
By Helen Fallding, Winnipeg Free Press, May 6, 2001

WHEN Premier Gary Doer dreams about the future, he sees northern Manitoba
rivers rushing through a dozen new generating stations staffed by aboriginal
people whose first nations are full partners in development.

But his energy visions go beyond old-fashioned electricity to a new
generation of fuel that could power the cars, factories and Internet servers
of his children and grandchildren's time.

In his first appearance as premier before the Winnipeg Chamber of Commerce
in late 1999, Doer outlined his hopes for the hydrogen fuel that could be
produced from Manitoba's abundant water and electricity.

"Alberta was the energy producer for the last 50 years; Manitoba can be the
energy producer for the next 50 years."

Although he leads a have-not province increasingly in Alberta's shadow, Doer
has been repeating that optimistic forecast for Manitoba Hydro during
breakfast, luncheon and dinner speeches ever since.

It's an economic vision with an NDP flavour -- a mix of Crown corporation,
green technology and cross-cultural harmony.

"It's our ace in the hole," Doer enthused recently.

Dreaming?

Is the premier merely dreaming?

Believers and skeptics have been debating for at least 15 years whether the
"hydrogen economy" will ever materialize. They're still arguing, but with
major car manufacturers, oil companies and governments now investing in
pilot projects, the scales are tipping in hydrogen's favour.

"We can't afford not to look at this," said Jim Crone, manager of the
province's initiative to attract energy-intensive businesses to Manitoba.

He is pulling together industry and government stakeholders to review the
research and identify what needs to be done to carve out a niche for
Manitoba.

B.C. has already made a name for itself with hydrogen fuel-cells developed
by Ballard Power Systems. In California, major oil companies and car
manufacturers are testing prototype hydrogen vehicles with fuel-cell
engines. Iceland is jumping into hydrogen power with both feet.

So far, Manitoba has the edge on a couple of fronts. New Flyer built six
transit buses with Ballard for testing in Chicago and Vancouver. Meanwhile,
Winnipeg's Kraus Group helped set up a prototype hydrogen refuelling station
at the Munich airport and is talking to the City of Winnipeg about doing the
same here to fuel transit buses.

But the greatest potential for Manitoba -- the possibility that makes Doer
starry-eyed -- involves running Manitoba Hydro's cheap electricity through
water to produce environmentally benign hydrogen gas for local use and
export.

Hydrogen fuel could eventually replace most other fuels for heating and
lighting buildings and powering vehicles. It can even be used to power cell
phones and vacuum cleaners. The first experimental applications are in urban
bus fleets, which fill up at their own refuelling depots.

If Manitoba Hydro doubles electricity production to 10,000 megawatts over
the next 30 years and hydrogen fuel proves more valuable than electricity,
the province could be headed for a windfall.

Spinoff benefits from dam construction and new hydrogen-based industries
might be enormous.

Still, it's hard to imagine ever matching the $10.5 billion the Alberta
government reaped last year in energy revenues.

This year, Manitoba Hydro expects to transfer less than $200 million to the
provincial government in water rental, fees and taxes.

Doer brags that Manitoba drains almost a quarter of the water in North
America, but the province is still only a niche player in the continental
electricity market. Ontario and Quebec already produce more than 25,000
megawatts each.

Commercial production of hydrogen-fuelled vehicles like DaimlerChrysler's
NECAR is expected by 2004, although widespread use is not expected until at
least 2020.

But David Drinkwalter, former chief economist for Ontario Hydro, believes
the hydrogen economy is much further off. "I wouldn't be rushing to invest
my money in it."

He thinks there will be no major investment in hydrogen refuelling and
distribution infrastructure until the world runs out of petroleum in about
50 years. By that time, windmills or solar power might be cheaper than
sending electricity or hydrogen gas over long distances.

Exciting opportunities

Drinkwalter believes Manitoba Hydro's most exciting opportunities are more
immediate and traditional -- increasing electricity sales to the U.S. If
polluting customers, such as smelters, eventually get carbon credits for
using clean hydroelectric power, Manitoba's electricity will sell at a
premium.

With U.S. President George Bush warning about an energy crisis, Manitoba
Hydro's competitive position has never been better.

The province has as much potential power on the Burntwood and Nelson rivers
as it has already harnessed. The new dams would flood only about a tenth as
much land as was put underwater in the 1960s and 1970s by Hydro
mega-projects.

Manitoba Hydro is working out partnership deals with affected first nations
in advance of development instead of engaging in prolonged compensation
disputes after the fact.

Rights of way for new transmission lines or hydrogen pipelines could be the
more significant environmental issue this time around.

Uncertain

Experts are still uncertain whether global climate change will lead to
droughts that threaten Manitoba Hydro's reservoirs.

Tory hydro critic Harold Gilleshammer agrees that Manitoba's undeveloped
hydroelectricity presents tremendous opportunities, but he said there is no
process in place for Manitobans to discuss the effects on consumers. The
public should also have a say on whether new projects could be shared with
private investors instead of relying on debt financing.

Hydro president Bob Brennan said there will be plenty of opportunity for
input, including environmental reviews, before any new construction.

One or more new generating stations could come on-stream within a decade if
Manitoba Hydro decides this year to go ahead. The three projects under
consideration would cost a total of $3 billion to build -- leading
Gilleshammer to question whether local hydro rates would rise while the
plants are under construction.

But Brennan said the Crown corporation would set aside profits in advance to
help finance the projects. "We wouldn't raise rates for a new plant," he
said.



New generating stations under consideration

Gull Rapids, Lower Nelson River:

650 megawatts, $2 billion, 42 square kilometres flooded

Wuskwatim, Burntwood River:

200 megawatts, $600 million, half-a-square kilometre flooded

Notigi, Burntwood River: 100 megawatts, $400 million, no land flooded

o To be considered if Manitoba Hydro secures a major new contract:

Conawapa, Lower Nelson River:

1,275 megawatts, no current estimate of costs, five square kilometres
flooded.

o Other potential sites:

Gillam Island, Lower Nelson River: 1,000 megawatts

Birthday, Lower Nelson River: 420 megawatts

First Rapids, Burntwood River: 210 megawatts

Kepuche, Burntwood River: 210 megawatts

Early Morning, Burntwood River: 70 megawatts

Red Rock, Upper Nelson River: 250 megawatts

Whitemud, Upper Nelson River: 310 megawatts

Kelsey extension, Upper Nelson River: 205 megawatts

TOTAL UNTAPPED POTENTIAL: 4,900 megawatts

________________________
This information distributed by:
Will Braun
Mennonite Central Committee
134 Plaza Dr.
Winnipeg MB  R3T 5K9
(204) 261-6381
wjb@mennonitecc.ca

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