Greener policy in the pipeline
CANADA'S Northwest Territories is an area twice the size of Texas with just 42,000 inhabitants. What it lacks in population, however, it makes up for in untapped natural gas reserves. It is a potential Klondike of this clean-burning fuel, which could greatly reduce US and Canadian reliance on coal, the biggest fuel emitter of greenhouse gases. But development of this gas will continue to lag if President Bush sticks to the no-mandate policy on greenhouse gas reductions that he repeated at his climate change conference last week.
To capitalize on the Arctic gas fields, the crucial first step is building a pipeline to the south. Once the pipeline is in place, energy companies will be much more willing to drill new gas wells in the region. Both the pipeline and the drilling would move faster if Canada and the United States would commit to a tax on carbon emissions or a tough cap-and-trade system for limiting emissions.
Contrary to claims that such policies will hurt the economy, the proposed pipeline is a good example of the kind of valuable investment that will be made if the United States acts to counter climate change.
Without mandated curbs on greenhouse gases, natural gas will still cost much more than coal, so utilities will be less willing to choose gas-burning power plants either to replace coal ones or to meet increased demand for electricity. A carbon tax or cap-and-trade regime would increase the urgency - and improve the economics - for both the Mackenzie Gas Pipeline from the Northwest Territories and a parallel one planned from Alaska to the south.
Recently, the Northwest Territories' industry minister, Brendan Bell, was in Boston to talk up the potential of the $16 billion Mackenzie pipeline. But the project is not expected to start producing until late 2013 or early 2014. Hurdles include tax agreements with the petrochemical companies building the pipeline, regulatory issues, and settlement of claims by aboriginal tribes.
Bell said people in Arctic regions like his are keenly aware of the effects of global warming. Not only are polar bear populations declining due to the loss of Arctic ice, but residents of the far north are also witnesses to one of the most worrisome of the vicious cycles caused by climate change: As the permafrost in northern lands melts, it emits methane, a gas that has 21 times the greenhouse-creating effect of carbon dioxide.
This should be setting off alarm bells in the United States, which gets half of all its electricity from coal-powered utility plants. The natural gas potential of the US and Canadian Arctic demonstrates that there are ways to keep the lights on - even if a carbon tax or cap-and-trade system were to throttle back the use of coal in power plants.
