Ontario fiddles while gas burns: get ready for another energy price hike

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Last Friday, the Ontario Minister of Energy gave the operator of the province’s four coal-fired electricity generating plants until 2011 to cut annual greenhouse gas (GHG) emissions by two-thirds. I support emission reductions, but there are good ways and bad ways to achieve them. This is not one of the good ways. In 2007, GHGs from Ontario coal plants were well over 30 million tonnes. This means that the new government-mandated emission reduction won’t happen unless much more of the province’s 5,000 megawatts of gas-fired capacity enters into baseload operation. Gas emits nearly half the GHGs as coal.

Nobody outside the gas industry thinks gas-fired baseload generation is a good idea. As Ontarians were reminded last week, the price of natural gas has spiked into the stratosphere. This will make it more expensive to generate electricity, and will inevitably force up the retail price of power.

Can Ontarians afford yet another energy price hike? Given motorists’ outrage over spiking petroleum prices, and the hostile response Stéphane Dion has received to his fuel tax proposal (even the NDP are against it), I’d say most people think not.

And most people are right. Ontario is heading into an economic downturn, and its electricity-dependent manufacturing sector—still the engine of Canada’s economy—is under increasing economic threat. The auto industry—the biggest part of Ontario manufacturing—is reeling from the recent devastating layoffs. Ontario manufacturing can’t handle yet another financial hit, in the form of skyrocketing electricity costs.

A good way to reduce emissions. In 1994, Ontario’s electricity generating sector emitted less than half the greenhouse gases (GHGs) it does now, while generating the same amount of electricity (see source). This was because all the provincial nuclear plants were operating at capacity.

If Ontario were to return to the energy supply mix of 1994, its power generation sector would be better than Kyoto compliant.

If they really want to craft effective environmental policy, Stéphane Dion and his fellow Liberals might want to consider British PM Gordon Brown’s experience with green taxes. The Independent warned on May 2 that the British public doesn’t like them.

Brown didn’t listen, and the voters punished him for it in yesterday’s by-election.

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