Peat Fuel for Ring of Fire and Aboriginal Communities: Economic and Environmental Benefits – by Stan Sudol (June 27, 2013)

One of the biggest issues with the Ring of Fire development and the surrounding Aboriginal communities is the lack of competitively priced electricity and the enormously high cost – about one billion dollars – of connecting the region to Ontario’s power grid.

Currently, isolated First Nations depend on very expensive diesel fuel that must be supplied by trucks on winter roads or flown in. The proposed mining operations are projected to need about 30 megawatts (MW) of power.

Amazingly, most of the swampy lowlands and many parts of the Canadian Shield throughout northern Ontario contain a source of energy that has been used for centuries in Europe – peat fuel.

This slowly renewing bio-mass energy source – distinct from fossil fuel – is formed from the partial decomposition of plants under very wet and acidic conditions. It is usually made up of two separate layers, the top being lighter in colour, less decomposed and used primarily for horticultural applications while the dark dense lower layers are excellent for fuel. Peatlands can be described as a wet spongy “floating carpet” of land and are often known as bogs, fens, mires, moors, or in Canada, muskeg.

Peat can be processed into fuel-grade material with energy values equivalent to coal but with only ten per cent of the black rock’s sulphur content, virtually no mercury and produces less ash waste and dust emissions. Canada has the world’s largest area of peat lands, estimated to be 41 per cent of the world’s total, half of which is located in northern Ontario. Yet none of this valuable resource is used to produce fuel peat.

Sustainably harvested peat fuel provides 5% to 7% of energy production in Finland and about eight per cent in Ireland, the two largest users in Europe, of this slowly renewing biofuel. The Irish company Bord na Mona completed a new 150 MW peat-fueled power station in 2005. Finland, with a population of slightly over five million people, is the largest user of this bio-fuel in the world, while Vapo Oy is the leading producer of peat-generated electricity and district heat in that country.

In the early 1980s, the Ontario Geological Survey studied about 88,000 square kilometres of northwestern Ontario peatlands as part of a province-wide program. By just focusing on the best deposits with no land-use conflicts, they estimated that this fuel-grade peat resource had the energy equivalent of 330 million barrels of oil. By comparison, tiny Ireland, which in the 1950s depended on peat fuel for about 40% of its power production, could comfortably fit into northern Ontario nine times over.

Dr. Peter Telford, CEO of Peat Resources Limited (and the former manager of that 1980s government peat program) thinks that peat bio-fuel could be an economic answer for many First Nations communities that generally need less than three to five MW of power generation for their electrical and heat requirements.

Telford says “In some cases the cost of electricity in Aboriginal communities that rely on fly-in diesel fuel supply, can be over $3.00 per kilowatt hour while the cost of peat – fuelled power would be at a much more reasonable rate, therefore significantly reducing energy costs in these remote First Nations.”

Peat Resources Limited has developed a wet-harvesting approach – unlike the European dry-harvesting system that is not suitable to the colder climate of the northwest – whose low environmental impact has been confirmed by independent, government-funded research at Lakehead and McMaster universities. Harvested peat bogs can also be rehabilitated as productive wetlands.

The company has a pilot facility in Stephenville, Newfoundland that is rated to produce 5,000 tonnes a year of peat fuel pellets and is the right size for use in small remote communities . At this plant, they have successfully produced a dry (25-30% moisture level) fuel-grade peat pellet that can be used in the generation of electricity using an off-the-shelf power plant. Their peat pellet samples have been shipped to many locations in Canada, the U.S. and as far as China.

Telford continues, “The sustainable harvesting, production and use of peat fuel would also provide permanent new jobs for community members.”

While Dr. Telford’s proposal is only focused on electricity and heat production, we could also consider combining this power project – due to the much cheaper and localized source of energy – with the construction of greenhouses that could supply freshly grown vegetables and fruit, an expensive rarity in most northern communities.

Not only would there be jobs in the digging and processing of peat fuel and eventual land restoration but in greenhouse food production as well. And the less deep layers of horticultural peat could be an ideal growing medium for the agricultural activities inside the greenhouses as well as outdoor gardens during the summer.

The company is currently looking for an interested First Nations community who would want to host the demonstration plant – one of the Ring of Fire communities would be an excellent choice – as well as public sector engagement and funding to make the project financially feasible.

Once small peat fuel power plants are successfully operational in a number of First Nations – a high probability due to over a half century of successful European experience – remote mining camps may start to see this abundant and economically priced fuel as a viable energy alternative.

The potential of small – five MW or less – power facilities that use local energy resources, sustainably developed and managed by First Nations communities, not only creates employment and economic opportunity but addresses the need for environmentally friendly alternatives to the very expensive diesel fuel currently used for off-grid power generation.

Stan Sudol is a Toronto-based mining analyst, communications consultant and owner/editor of the website.