firm looks at selling power via cable under Lake
Superior to Michigan
BY JOHN MYERS NEWS TRIBUNE STAFF WRITER
partnership is joining with municipal utilities in Ontario
to build a power plant in Thunder
Bay and move the electricity through
cables laid under Lake Superior
Participants in the project also have
talked about shipping electricity down Minnesota's
from Thunder Bay,
although those plans so far haven't advanced.
The project, construction of which could
begin this summer, would include a 1,120-megawatt coke
gasification plant in Thunder Bay
and a 90-mile underwater electrical cable laid from the
at the Ontario-Minnesota border to the Keweenaw
Peninsula in Michigan.
It would be the first such major power
line under Lake Superior, officials
said, although a similar Canada-to-U.S.
line runs under Lake Erie and another
such line is being proposed there.
The proposed power plant would use petroleum
coke, a waste product in the oil and gas fields of the
Canadian prairie provinces,
as fuel. The coke would be moved by train to Thunder
Bay where it would be turned into
gas in a closed system called gasification.
The Thunder Bay
project is a joint venture between SynFuel of Glen Carbon,
Fort William First Nations and the Northwest Energy Association,
a partnership of six municipal utilities in northwestern
"We hope to see a shovel in the
ground this summer,'' said Larry Hebert, general manager
of Thunder Bay Hydro, part of the Northwest Energy Association.
"We still have to clear the regulatory hurdles. That's
going to happen; it's just a matter of when.''
The power plant would cost about $1.4
and transmission lines would cost about $700,000 per mile
on land and $1 million per mile underwater, Hebert said.
The project could total nearly $6.6 billion if all proposed
transmission lines are built, including lines to remote
villages in northern Ontario
-- a critical aspect of the plan.
Hebert said plans also have been discussed
based Minnesota Power to transfer electricity from Thunder
Bay into Minnesota,
although those plans are not advancing at this time.
"If we're going to be right to the
border with our new lines, it makes sense. It's just a
matter of getting down to their lines closer to Duluth,
maybe (off the) shore there,'' he said.
Minnesota Power officials said those
plans haven't progressed past the talking stages and are
not being pursued. Officials said the process of building
transmission lines even the short distance to Pigeon
"We talked, but there's nothing
there,'' said Eric Olson, Minnesota Power spokesman.
The Thunder Bay project follows several
electrical plants proposed for Northeastern Minnesota
-- planned for economic development and not demand. Most
of the electricity will be shipped to far-off places,
and that has some people concerned.
While emissions for gasification plants
tend to be lower than coal-burning plants, Julian Holenstein,
director of Environment North, a community watchdog group
in Thunder Bay, said residents have been provided with
"Especially on the emissions part,
we really don't know what they are proposing. I'm not
sure how solid this whole thing is,'' Holenstein said.
"It's also quite shocking to think that we're going
to be using our Great Lakes as corridors for electricity
and gas and whatever. I don't think that's appropriate
The group Great Lakes United is calling
for a ban on any new cables or pipelines under any of
the Great Lakes.
SynFuel is involved in a similar coke
gasification project in Oklahoma, said Bob Van Patten,
president of the firm. The gas produced by the Oklahoma
plant is captured for use in a nearby ammonia nitrogen
fertilizer plant. Such a spinoff also is a possibility
for the Thunder Bay plant. Gas from the Thunder Bay plant
could be shipped to areas such as Detroit or Chicago.
The Thunder Bay plant could be running
with 120-megawatt output within two years, and expand
by 500 megawatts in four, Van Patten said. Another 500
megawatts of output could be added, to make the total
But to go that large, the transmission
network has to be in place, and the end customers must
be in place, Van Patten said. "That's way more power
than Thunder Bay will ever need.''
The plant's exact location hasn't been
determined, but it will be on Fort William First Nation
(tribal) land just outside Thunder Bay.
One key aspect to the project's success,
Hebert said, is the deregulation of Ontario's electrical
generation and transmission system coming May 1. Until
then, Ontario Hydro has had a virtual government-sanctioned
monopoly on electricity in the region.
In addition to about 200 full-time jobs,
Hebert said the new electrical plant could be the catalyst
for several new companies moving into the Thunder Bay
area, which has lost population in recent years.
But it appears most of the new power
generated at the plant would go to the United States and
to remote areas of Canada. SynFuel's investors want to
sell the electricity at U.S. rates while building the
plant with cheaper Canadian dollars. The U.S. dollar is
worth about $1.50 Canadian.
"The goal is to take advantage of
lower construction and (fuel) costs up here and increased
demand down there,'' Hebert said, also noting tax advantages
of building on tribal lands.
SynFuel is handling the financing for
the project and several major U.S. and Canadian investors
have committed to the project, Van Patten said.
"We're still looking for some investors,''
Hebert said, adding that about half of the money already
is in place.
The only government money involved would
be for power lines to remote First Nations communities.
Indian and Northern Affairs Canada will provide up to
$1 billion for that.