By Jody MacPherson

Facing community outcry over the location and regulatory rejection, Synapse Real Estate Group says it will continue to pursue its plans for a gas-powered plant and “Canada’s largest” data centre in the small farming town of Olds, Alberta.

Alberta’s utility regulator rejected the company’s application for a 1.4-gigawatt generating plant to supply the proposed artificial intelligence (AI) data centre, which would use as much power as one million homes. The gas plant would generate three times the power of Suncor’s Firebag cogeneration plant.

The Alberta Utilities Commission (AUC) issued [pdf] the decision in a letter to Synapse CEO Jason van Gaal on March 6, citing “significant deficiencies” in environmental evaluations, noise impact assessments, and “particularly” the company’s failure to consider concerns from those “directly and adversely affected by a proposed development.”

“I think, ultimately, the AUC wants to make sure that we’re communicating effectively with the community and receiving feedback, and we’re absolutely doing our best to do that,” van Gaal told The Albertan in an interview.

Van Gaal replied to The Energy Mix’s questions with a prepared statement, writing, “the commission made clear this decision does not assess the merits of the project and that Synapse can reapply once the required information is completed. We are reviewing the guidance and will work with regulators and the community to ensure the next application fully meets those requirements.”

More than 40 residents of Olds submitted objections to the Synapse power plant, citing concerns about noise, mental health impacts, health effects of air pollution, water usage, property values, stress on municipal infrastructure, electronic waste, chemicals, and affordability for low-income residents.

But Olds town council welcomed the province’s second-largest gas-powered plant to use 300 acres of farmland within the town’s eastern boundary, reclassifying it as “light industrial.” Olds is about 90 kilometres north of Calgary, and has a renowned agricultural college, beloved locally for its botanic gardens and wetlands.

“I don’t believe it is ‘light industrial’ zoning,” Janey Olson, an 18-year resident of Olds, told The Mix. “If you go by the description of what heavy and light are, this is heavy industrial.”

Olson said a group of residents who attended the town’s zoning meeting had asked the council to “please table that decision until we know more,” but the zoning decision still went ahead.

The Mix emailed Olds Mayor Dan Daley about the Synapse project zoning two weeks ago but he has not yet responded. This story will be updated with any new information he provides.

The town had declared the company’s development permit complete the same day the AUC decision was issued. Synapse has now withdrawn its development permit application, according to the Town of Olds website.

In its letter, the AUC said the company could reapply in the future, but detailed several deficiencies:

• The participant involvement program lacked detail and sufficient information;

• Information in the environmental evaluation document was provided in draft format;

• Field studies on wildlife and wetlands were incomplete;

• The noise impact assessment did not include the project’s 600 backup diesel generators;

• The plan was missing a reclamation security plan; and

• The company filed an incomplete listing of other approvals required.

Synapse stated in its application that the federal Impact Assessment Act did not apply to the project. But the AUC said Synapse would have had to submit a project description to the Impact Assessment Agency of Canada to determine whether the Act applies, adding that any new fossil-fired power generating facility with production capacity of 200 megawatts or more falls under the Act.

On March 9, Olds Chief Administrative Officer Brent Williams said he would be meeting with the company and the AUC separately in the coming days.

For some residents, the AUC rejection brings an opportunity to pause and take stock in what has been a busy couple of months since finding out about the proposal.

Eric Carlson, who lives about 600 metres from the proposed site with his wife and three children, told The Mix he had full trust in the AUC’s process and appreciated the care the commission took to ensure applications meet the required standards before moving forward.

But he is now preparing to go through the process again, since Synapse is pressing on with the power plant in its same location.

Rachel Sorenson, whose home is directly across the street from the project, said she wouldn’t be able to stay if the project goes ahead. A retired paramedic, she told The Mix she was elated when she heard of the AUC decision, but that was short-lived when she found out Synapse would be reapplying.

“I love Olds, it is a beautiful close-knit community,” she said, “but there are no health benefits to living next to a power plant.” She has serious concerns for herself and one of her grandsons who suffers from asthma. Sorenson believes the Synapse plant is not appropriate within town limits.

Edmonton-based resident doctor Julia Sawatzky, a board member and Alberta regional co-chair for the Canadian Association of Physicians for the Environment (CAPE), told the Mix in September that nitrogen oxides from gas turbines are released into local communities, causing air pollution that contributes to respiratory diseases.

“We know that nitrogen oxides can contribute to both the development of asthma and chronic obstructive pulmonary disease,” she said. “And there’s also small particulate matter emitted from gas turbines which is similar to what is in wildfire smoke or other really visible heavy air pollution.”

The particulate matter is so small that it can lodge deep in the lungs and also cross over into the bloodstream, contributing to high blood pressure and causing heart attacks and strokes, Sawatzky said.

Gas turbines also emit volatile organic compounds that are known carcinogens, putting people at risk, or higher risk, of various types of cancer.

“It’s actually an environmental justice issue because the projects and the impacts and the harms are being put in places far away from places like Edmonton and Calgary where the decisions tend to be made,” Sawatzky added.

Sorenson said another citizen-led meeting March 13 will a chance for Olds residents to gather to discuss how the power plant and data centre will affect their daily lives. Olson said she’s written a letter to Premier Danielle Smith and, along with several other residents, met with the local Member of the Legislative Assembly, Tara Sawyer. She has questions about cumulative impacts on the regional water supply and whether the province is doing its due diligence on AI data centre developments, but said she has yet to receive answers.

“We’re not a big city, we are a small town, and I don’t remember when we agreed as a small town to become a tech hub for the province or for our council,” she said. “I just don’t remember that conversation happening.”

Synapse’s public statement about the setback concluded with: “We have taken the AUC’s guidance and our community’s feedback to heart, and we are pleased to launch www.synapsedatacenter.com/we-are-listening/ as a first step in facilitating our long-term dialogue.”

The web page includes a series of videos to answer common questions about the project. When Olson watched one of the videos, she noticed it had a “strange voiceover.”

“I might have been tongue in cheek, but I said, Jason, you didn’t hire a local voice actor, you hired an AI?”

The post Developer Presses Ahead With Mega Gas Plant After Alberta Regulator Rejects ‘Deficient’ Plan appeared first on Thoughtful Journalism About Energy's Future.

Canada has vast gasoline production and transportation infrastructure that ensures flexible and reliable supply for Canadians. Canada’s gasoline supply chain begins with oil extraction and processing. Most of Canada’s domestic oil production happens in the Western Canada Sedimentary Basin (WCSB).

Refineries located in, or near, the WCSB refine local domestic oil. In eastern Canada, refineries process less domestic crude and more imports. This is due to higher transportation costs, limited pipeline access to western Canadian domestic oil, and the inability of refineries to process WCSB heavy crude oil.

There are 14 gasoline-producing refineries in Canada (17 refineries in total): 6 in western Canada, 4 in Ontario, 2 in Quebec, and 2 in the Atlantic Provinces. Although production varies by refinery, gasoline comprises the largest portion of refinery output at 36 per cent, on average. Refineries also produce a number of other refined petroleum products (RPPs) including diesel and jet fuel.

Gasoline and other RPPs are transported from refineries to storage terminals near cities and towns. Gasoline markets are highly localized, and production in each region tends to stay local. A web of pipelines, railways, shipping routes, and highways is used to distribute gasoline from refineries to terminals between Vancouver Island and Thunder Bay.

Similar webs of infrastructure distribute gasoline from refineries in Ontario to terminals between Sarnia and Ottawa; from refineries in Quebec to terminals between Ottawa and the Atlantic coast; and from refineries in New Brunswick and Newfoundland to terminals around the Atlantic Provinces.

Terminals serve as receipt and distribution points for domestic and imported gasoline, and decide wholesale pricing for local markets. Due to the relatively small volumes demanded by individual and dispersed facilities, transportation of gasoline from terminals is done almost exclusively by truck.

After gasoline is purchased at local gas stations and bulk storage plants, it powers personal and freight transport vehicles, and other industrial machinery. In 2018, domestic sales of motor gasoline totalled 46 billion litres, and represented 42 per cent of total domestic RPP sales.

Gasoline Supply Chain Overview

In 2018, Canadians consumed 46 billion litres of gasoline. The first step in meeting this demand is the extraction of crude oil from domestic and international production areas.

Oil is transported to a refinery where it is produced into a number of chemically distinct products, including gasoline. From refineries, gasoline is transported to terminals near population centres. There, it is stored and blended with brand-specific performance and efficiency-enhancing additives, as well as ethanol according to government regulations. From terminals, gasoline is transported by truck to thousands of gas stations across the country.

The vast majority of this process occurs in Canada and by Canadian companies; however, in 2018, imports of oil represented 46 per cent of Canada’s refinery inputs, and imports of refined gasoline amounted to 7.9 billion litres.

In many cases, a single company will control multiple aspects of its supply chain, managing oil production and refining operations, as well as owning, operating, or contracting with distribution terminals and retail stations. This is called vertical integration. Many of Canada’s major refiners – including Imperial Oil, Shell Canada, Suncor Energy, and Husky – are vertically integrated. Some refiners such as Irving Oil, Federated Co-op and Valero do not have crude oil production, but operate distribution terminals and retail stations.

Domestic Oil Production and Imports

All gasoline comes from crude oil. In Canada, most domestic oil production happens in the WCSB, which covers almost all of Alberta, as well as parts of Saskatchewan, Manitoba, British Columbia, Yukon, and Northwest Territories.

Outside of the WCSB, production off the coast of Newfoundland and Labrador contributes to approximately 5 per cent of Canada’s domestic production. Crude oil imports occur primarily in Ontario, Quebec, and the Atlantic Provinces, and comprised 46 per cent of Canada’s total refinery inputs in 2018.

Logistical and economic factors determine where refineries source their crude oil, and the complexity of each refinery dictates which types of oil it can process. Refineries in western Canada process exclusively domestic oil due to their proximity to inexpensive WCSB production. These refineries process more oil sands synthetic crude and bitumen than refineries elsewhere in Canada. The westbound Trans Mountain and southbound Plateau pipelines supply crude from the WCSB to refineries in Burnaby and Prince George, respectively.

Figure 2: Major Crude Oil Production Areas and Refinery-Supplying Pipelines

Refineries in Ontario process a more diverse crude slate, supplementing domestic WCSB crude with United States (U.S.) imports, primarily from North Dakota and Texas. These refineries process much more conventional light and medium crude than in western Canada, and less oil sands synthetic crude and bitumen.

Domestic crude is transported from the WCSB to refineries near Sarnia and Nanticoke via the Enbridge Mainline and Line 9 pipelines.

Along Line 9 from Ontario to Quebec, transportation from the WCSB becomes more expensive, and imports of crude oil by marine vessel are more attractive for refiners.

Despite having slightly less refining capacity than Ontario, Quebec imported around three times more oil than Ontario in 2018. These imports, mostly from the U.S. and Algeria, supplement domestic supply to Quebec refineries via Line 9. Quebec’s refineries process almost entirely light, medium, and synthetic crude.

Oil pipeline infrastructure currently extends as far as Quebec, leaving the Atlantic Provinces largely without cost-effective access to domestic western Canadian crude.  (New Brunswick sources some of their supply from the WCSB by rail.)  As a result, Canada’s easternmost refineries process mostly imported crude from the U.S., the Middle East, Africa, and Europe, as well as relatively small volumes of domestic offshore production.

Refining

Complex refining processes break down the crude oil by separating light and heavy hydrocarbons. This results in a number of chemically distinct RPPs such as gasoline, diesel, jet fuel, and other fuels.

Gasoline accounts for the largest portion of RPP production at Canadian refineries at 36 per cent, followed by diesel and middle distillates (such as light fuel oil) at 33 per cent. Despite comprising only slightly more than a third of total refinery production, gasoline has the greatest impact on the daily lives of most Canadians.

Figure 3: Simplified Illustration of a Petroleum Refinery

Canada has 17 refineries in operation, with 14 refineries producing gasoline. (The Moose Jaw (Saskatchewan), Lloydminster (Alberta), and Sturgeon (Alberta) refineries do not produce gasoline.)

Generally, refineries are located on major waterways, near major cities, or near crude oil production. For example, all Alberta refineries are located in the heart of the WCSB, where they source their crude oil.

Similarly, all Ontario refineries are located in the south of the province on major waterways or near major cities where demand for their refined products is highest. Refineries in Quebec and the Atlantic Provinces are located on major waterways that allow them to source their oil by marine vessel from overseas.

In general, refineries and their domestic markets tend to be highly localized. (Although some refineries also serve export markets, the portion that stays in Canada is generally consumed locally.)

Refineries in western Canada supply gasoline to western Canadian markets, from Vancouver Island to northwestern Ontario, as well as to Canada’s northern territories. Ontario refineries supply Ontario as far east as Ottawa. The Ontario market also receives RPPs from refineries in Quebec, although the main markets for Quebec refineries are east along the St Lawrence River, including Montreal and Quebec City. Refineries in New Brunswick and Newfoundland and Labrador supply the Maritime Provinces, and occasionally Nunavut.

Figure 4: Canadian Refineries and Capacity

Transportation, Storage, and Retail

Gasoline is transported from the refinery to primary storage tanks, which are located at or near the refinery. From there, gasoline is transported to distribution terminals near major markets. Terminals are strategically located near gasoline demand centres across Canada. They function like batteries that can be drawn on by local retail stations and bulk storage plants, which in turn supply industry and the public.

Many major markets for gasoline, including Vancouver, Calgary, Saskatoon, Winnipeg, southern Ontario, and Montreal, connect directly to refineries by pipeline. Along Canada’s Coasts, as well as in the Great Lakes and St. Lawrence regions, many terminals can be supplied by barge. Inland, rail shipments supply major terminals.

At terminals, retailers blend their gasoline with proprietary blends of performance and efficiency-enhancing additives, as well as with ethanol, according to federal and provincial renewable fuel requirements. As regional distribution centres, terminals are used as reference points for pricing at gasoline retail stations.

Many terminal operators, including Petro-Canada, Shell Canada, and Valero, post their wholesale, or “rack”, prices publicly. Rack prices factor in costs incurred throughout the supply chain, including the price of crude oil, refining margins, and costs of transportation to the terminal, including tolls on gasoline-carrying pipelines.

Aside from a relatively small marketing margin applied by the retailer, the entire cost of production (including profit margins) is included in the rack price. Government taxes applied at the pump comprise most of the difference between rack prices and pump prices.

As of 2017, there are 78 terminals registered with Environment and Climate Change Canada. (The Canadian Environmental Protection Act (CEPA) classifies terminals as “Petroleum Product Wholesaler-Distributors”, and requires that they report to the National Pollutant Release Inventory (NPRI). The information collected here is used in evaluating sources of pollution in Canada.)

All terminals in Canada have truck-offloading capacity, and some also have capacity to offload onto ships, railcars, or even pipelines. Logistically, tanker trucks are the most practical and economical way of getting gasoline to retail stations, because they allow for flexibility in both the volume and destination of each shipment. In the Atlantic Provinces, many terminals also have marine offloading capabilities, which allow them to supply smaller towns along the coast.

The Kent Group’s National Retail Petroleum Site Census reports 11 948 retail gasoline stations in Canada as of 2017. Many of these are controlled by major oil companies and integrated refiner-marketers and sell their respective brands of gasoline. Many other independently-controlled retail stations contract to sell the same well-known brands.

To illustrate this, the Kent Group reports that 39 per cent of gas stations across Canada carry Suncor, Esso, or Shell brands of gasoline, while 11 per cent of all stations are price-controlled by these companies.

Overall, Canada’s seven integrated refiner-marketers determined prices at 23 per cent of gas stations.

Transportation in Western and Northern Canada

Three major pipelines connect Edmonton, the hub of western Canadian gasoline production, to major metropolitan areas in British Columbia and the Prairie Provinces. The southbound Alberta Products Pipeline carries gasoline destined for terminals in Calgary. The Trans Mountain pipeline runs west, supplying terminals in Kamloops and Burnaby, British Columbia. Eastbound, the Enbridge Mainline carries gasoline to terminals in Regina, Saskatchewan, and as far as Gretna, Manitoba.

Drawing from the Enbridge Mainline, the Saskatchewan Pipeline transports gasoline from Milden, Saskatchewan, to terminals in Saskatoon, and the Winnipeg Products Pipeline from Gretna to Winnipeg, Manitoba.

Edmonton refineries are also connected by rail and truck to smaller terminals in Alberta. The only registered terminal in Canada’s northern territories is located in Hay River, Northwest Territories, and connects to Edmonton by rail.

Most of the gasoline produced in British Columbia’s two refineries is transported by rail, ship, or truck. The Burnaby refinery transports some gasoline by pipeline to Parkland Fuels’ adjacent terminal. Some gasoline is also transported by ship to terminals along the West Coast, and by rail and truck to terminals on the mainland. Husky Energy’s Prince George refinery supplies terminals across northern British Columbia and the Yukon via rail and truck.

Regina’s Co-op Refinery supplies small terminals across Saskatchewan, as well as in Alberta and Manitoba via rail and truck. The refinery also ships gasoline on the Enbridge Mainline to Manitoba.

Some retail facilities in Nunavut receive supply by ship from the Atlantic Provinces, as well as from the U.S. and overseas. The Yukon occasionally imports gasoline from Alaska. Aside from this, western and northern Canada as a whole is largely self-sufficient in its supply of gasoline.

As of 2017, there are 29 terminals in western Canada and one in northern Canada registered with Environment and Climate Change Canada.

Figure 5: Refineries, and Major Gasoline-Carrying Pipelines in Western Canada

Transportation in Central and Atlantic Canada

The Sarnia Products Pipeline and Sun Canadian Pipelines connect refineries in Sarnia to terminals in London, Hamilton, and Toronto. The bi-directional Trans-Northern Pipeline flows north from the Nanticoke refinery, supplying Oakville, Mississauga, and Toronto; and south from Montreal to Toronto and Ottawa. Quebec’s easternmost Jean-Gaulin refinery connects to a terminal in Montreal East via the St Laurent Pipeline, as well as by rail.

Most storage terminals in Ontario are supplied by pipeline; significant volumes are also moved by ship and rail, and some small shipments by truck. Marine terminals at the Jean-Gaulin refinery and in Montreal supply most terminals around Quebec. Nearly all terminals in the Atlantic Provinces are supplied by ship from the Saint John and Come by Chance refineries, with small volumes transported by rail and truck. Atlantic refineries also occasionally supply gasoline by ship to terminals in Nunavut.

As of 2017, there were 21 terminals in Ontario, 11 in Quebec, and 16 terminals in Atlantic Canada registered with Environment and Climate Change Canada.

Figure 6: Refineries and Major Gasoline-Carrying Pipelines in Central and Atlantic Canada

Gasoline Pricing

The retail price paid at the pump consists of the following major components:

• Crude Oil Price: The commodity input cost of crude oil. Crude oil prices account for some of the volatility and price fluctuations seen by consumers at the pump.
• Refining Margin: The cost of processing the crude oil into gasoline. This can be calculated as the difference between the price of crude oil, and the wholesale price at which the refiner sells transportation fuels. This also includes the cost to transport crude oil to refineries.
• Marketing Margin: The costs associated with selling the gasoline to consumers at the local station. This can be calculated as the difference between the wholesale price, and the retail price of gasoline, without taxes. This also includes the cost to transport gasoline from the refineries to the gas stations.
• Taxes: The taxes paid to provincial, federal, and sometimes municipal governments. These can be a flat per litre charge, or a percentage of the per litre price.

Canadian Retail Gasoline Prices (Figure 7a, 7b, 7c)

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On average, Canadians consume about 136 grams of Halloween candy at this time of year

Across Canada, each Canadian consumes almost 136 grams of Halloween candy every year around All Hallows’ Eve.

In energy terms this translates to about 57 000 gigajoules. According to the National Energy Board, that is nearly the same amount of energy needed to heat 570 Canadian households for one year.

Statistics Canada says Canadians consume on average 17.2 kilograms pounds of sugar per capita annually. Of this, roughly 7 per cent is derived from confectionary items, mostly chocolate bars and candies.

The sale of these is approximately 20 per cent higher than average in October. Assuming candy consumption follows sales patterns, combined with Canadian population data, the NEB estimates that approximately 57 000 gigajoules worth of candies are consumed by Canadians during the month of Halloween.

When compared to common fossil fuels Halloween candy can pack a bigger energy punch than coal but not as big as light crude oil or natural gas.

Halloween candy contains calories. Calories are the measure of energy content found in carbohydrates, fat, and protein. Like candy, fossil fuels also contain energy which is stored in the bonds between hydrogen and carbon atoms. Just like different types of food have different amounts of caloric content, different fossil fuels have different amounts of energy content.

The chart below compares the energy content of Halloween candy to commonly used fossil fuels in kilojoules per 100 grams.

Energy Content

Halloween candy might not be quite the sweet fossil fuel alternative we’ve been looking for but it tastes better!

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