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The Canadian Press: Oilpatch wondering who will use power from proposed Alberta nuclear plant

JAMES STEVENSON
August 28, 2007

(CP) – Bold plans to bring nuclear power to northern Alberta were unveiled Tuesday, but just exactly who’ll be using most of the megawatts remained a mystery even to many in the oilpatch.

It’s assumed that Energy Alberta Corp.’s proposed $6.2-billion project to put a Candu twin reactor in the sparsely populated Peace River area in the province’s northwestern corner is all about the oilsands, which require an immense amount of energy to squeeze oil from the ground.

The company and its partners said Tuesday that about 70 per cent of the 2,200 megawatts of electricity will be going to “one large, industrial off-taker” but declined to name names.

“At this time we’re not going to discuss those arrangements,” said Dale Coffin, spokesman for Atomic Energy of Canada Ltd., which is teaming up with Energy Alberta to build Canada’s first new nuclear power in nearly 25 years.

“We want to get through this first application and then we will, in due course, talk about the off-taker and what the plans are there.”

The Peace River oilsands deposit is much smaller than the main Athabasca deposit to the east that includes the oilsands city of Fort McMurray. And the Peace River reserve are often viewed as far more challenging to access.

But in recent years, energy companies have cast a keener gaze on the Peace region – particularly international giant Royal Dutch Shell (NYSE:RDS), which gained full control of Shell Canada earlier this year.

Yet while Shell currently has regulatory applications in the works to more than quadruple its production from the Peace River oilsands by 100,000 barrels per day, the company said Tuesday it had no intention of using nuclear energy to make oil.

“We are not currently pursuing nuclear energy as an energy option in the oilsands,” Shell’s oilsands spokeswoman, Janet Annesley, said Tuesday from Calgary.

Industry insiders said most of the vast new oilsands projects in the queue over the next decade or more include their own co-generation power plants and therefore wouldn’t need nuclear.

Greg Stringham, vice-president of markets for the Canadian Association of Petroleum Producers, said most of the plants envision using natural gas, gassification or even burning some of the bitumen extracted from the oilsands.

“And that generates the steam and the power and the hydrogen and so it fits nicely with the process they’re using,” he said. “And most of those are net exporters of electricity, so they’re not looking to be big consumers.”

Stringham said most of the oilsands projects forecast out to 2020 are using variations of current technologies to extract bitumen deposits located deep underground.

Steven Paget, an oilsands analyst with First Energy Capital Corp. in Calgary agreed.

“Typically, power is part of the package.”

But Paget also said the power could be shipped by transmission lines to meet the far greater demands of the Athabasca region.

Ally Sutherland, spokeswoman for the Alberta Electric System Operator, which manages the province’s power grid, said the province could use all the new power generation that could come from Energy Alberta’s nuclear aspirations.

And she said no large industrial customers in the province have mentioned plans to leave the grid in favour of their own, private supply of nuclear energy.

Copyright © 2007 The Canadian Press, All Rights Reserved.

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