A Canadian company thats proposing to build a high-capacity power line from northern Alberta to Eastern Oregon says an $80 million-to-$100 million power-conversion station near Spokane would do much to optimize benefits from the line.


The company, Calgary-based NorthernLights Transmission, says that a Spokane conversion station would allow some of the power carried by the line to be sold in the Inland Northwest. It also would help relieve a bottleneck in the moving of electricity from Montana through Spokane to the Interstate 5 corridor, NorthernLights says.


Hugh Imhof, a spokesman for Spokanes Avista Corp., says, We are aware of the project. We are talking with them. It has some potential benefits for us and for our customers. Those discussions have included whether Avista might be involved in the project in some way, Imhof says.


Meanwhile, the Seattle-based Pacific Northwest Economic Region, a public-private partnership of five states, two provinces, and the Yukon Territory, is mulling ways for Spokane and other cities to capitalize on hundreds of millions of dollars of business that could flow from the power-line project. In addition, the partnership, which seeks to foster sustainable economic development in the region, is looking at opportunities from an estimated $17 billion of construction if two long-proposed natural-gas pipelines are built in Alberta, the Yukon, Alaska, and the Northwest Territories.


Pacific Northwest cities like Spokane could play a critical role in addressing work-force, training, and infrastructure issues arising from the three big projects, says Matt Morrison, the partnerships executive director.


Yet, he says, Theres no interaction between the Canadian provinces and Washington and Oregon. We tend to be colloquial; we look around in a 20- or 30-mile radius.


Nonetheless, NorthernLights has its eyes trained on Spokane as it works to develop its 1,000-mile power line.


Besides being between northern Alberta and the proposed lines likely terminus in Oregon, Spokane sits between four big coal-fired generating plants in Colstrip, Mont., and the power-hungry I-5 corridor, says Brad Thomson, NorthernLights president.


Spokane is awash with power, says Thomson. Youve got the Columbia (Basin Project), youve got hydro, youve got Colstrip power coming from the eastbut it cant get out of there. My understanding is there is capacity in the wires in Montana over to Washington state. We could put power from there onto the Celilo line if a power-conversion station is built near Spokane, Thomson says.


Celilo, Ore., near The Dalles, is the northern end of the Bonneville Power Administrations direct-current (DC) intertie, which carries electricity between the Northwest and California, and is a logical point to tie NorthernLights proposed line into BPAs transmission system, says Thomson.


BPA spokesman Ed Mosey says a DC intertiethe type that NorthernLights proposescan move large amounts of power between regions efficiently because of the low line-loss characteristics of DC electricity, but usually doesnt supply power to points along the line. People and businesses use alternating current, or AC, electricity, and conversion stations that transform power from DC into AC are expensive, Mosey says. BPA also operates an AC intertie.


NorthernLights estimates that its proposed DC line would lose into the atmosphere just 7.5 percent of the power it would carry, while an AC line would lose 20 percent to 30 percent, Thomson says. He adds that DC lines have fewer circuits than AC lines and thus can be constructed with fewer lines and smaller towers, cutting construction costs.


A Spokane conversion station would enable some of the power on NorthernLights line to be converted into AC and sold in the Inland Northwest when market conditions were right, Thomson says. The conversion station also could convert incoming AC power from Montana into DC so it could be put onto NorthernLights line and sent to Celilo, the I-5 corridor, and California, he says.


2,000-megawatt capacity


The power line would carry a hefty 2,000 megawatts of electricity, expandable to 3,000 megawatts, Thomson says. Usual demand for all of the Northwest U.S. is 22,500 megawatts, and peak demand is about 44,500 megawatts, says John Harrison, a spokesman for the Portland-based Northwest Power and Conservation Planning Council.


If the proposed line brought a significant new supply of electricity to the Pacific Northwest, it could drive power prices down, which would help both consumers and economic development, Harrison says.


The power that the line would carry, from cogeneration from extraction facilities in massive oil-sands deposits near Fort McMurray, Alberta, would be fairly cheap, which makes the project very interesting, says Cliff Perigo, a BPA senior account executive who met with NorthernLights executives last year.


The juice would be at least as competitive as any generation weve got in the Northwest, Perigo says. If the Northwest is going to be short of energyand Im not talking about next yearits something we ought to take a look at. Nonetheless, he says, The Northwest has yet to embrace that project.


To be sure, work wont start on the project soon. So far, NorthernLights doesnt have a U.S. partner to build the 400 miles of line between the U.S.-Canada border and Celilo. Still, its New York Stock Exchange-listed parent, TransCanada Corp., a Calgary-based pipeline giant, has growing U.S. operationsand on April 29 agreed to pay $1.7 billion for the U.S. natural-gas pipeline system of Gas Transmission Northwest Corp., which extends from Kingsgate, British Columbia, to the Oregon-California border.


TransCanada has the financial muscle to build the power line by itself, but would prefer to have a partner, because the project is so big and going it alone would be a pretty major step in a new direction, Thomson says. He says that even though TransCanada owns 4,700 megawatts of generation capacity and is building more, it has no experience in constructing lengthy high-capacity lines.


The BPAs Mosey confirms that a power-conversion plant near Spokane would resolve a bottleneck that we would like to alleviate. We could move power from the eastern coal-fired plants in Montana and the dams on the mid-Columbia River to the population centers.


The Pacific Northwests transmission system works like a doughnut, with links across the North Cascades, along the I-5 corridor, up the Columbia River, and on to Spokane, Mosey says.


Yet, when Kaiser Aluminum & Chemical Corp.s Mead Works aluminum smelter went off line, and a second aluminum smelter in Columbia Falls, Mont., fell idle, it was as if someone had nibbled away part of the right side of the donut. Hundreds of megawatts of power from Eastern Montana suddenly didnt have a delivery point, Mosey says. To help get that power west of Spokane and to address other power-line congestion issues, BPA launched last year a $175 million upgrade of one of five power lines that stretch from the Bell substation, near Spokane, to Grand Coulee Dam, he says.


Mosey cautions that as NorthernLights project was discussed with officials last year, the Spokane terminal is secondary to the one at Celilo, which would be built at the southern end of the line.


Yet, Thomson sees the Spokane conversion station as important to optimize the lines benefits. He asserts, I just look at it and say it would be a shame if you didnt put the right number of on and off ramps on such a system.


While big $300 million-to-$600 million terminals would be needed at either end of the high-capacity line, the ideal configuration would be you would have a couple of other terminals, Thomson says. A converter terminal around Spokane would be in the (right) neighborhood. A station there eliminates some of the congestion around Spokane. Moreover, taking some power off the congested AC grid around Spokane and putting it onto the new line would increase the carry-away capacity of the AC grid and reduce its line losses, Thomson says.


They havent rejected it


While Northwest energy officials havent embraced NorthernLights high-capacity line yet, they certainly havent rejected it, either, Thomson says. Theyre waiting for confirmation that the first part of the project is going to get done. We have to have one side locked up and ready to go before the other side can embrace it.


A big part of what must happen on the Canadian sidegeneration of large amounts of inexpensive powernow has been solidified, thanks to massive development in the oil sands, where oil companies already produce 1 million barrels of crude a day and hope to increase that to 3 million barrels a day by 2020.


Theres $60 billion worth of projects that have been announced in the oil sands, Thomson says. Now that were confident of whats going to happen in Alberta, we can circle in and talk to people in the U.S. with confidence about the high-capacity power line.


The oil industry says it has proven reserves of 177 billion barrels of oil in the oil sandsor close to 20 years of supply for all of North Americabut believes theres another 2.2 trillion barrels embedded there. It estimates that just with todays technology it can extract a total of 315 billion barrels, says Bill Almdal, executive director of a regional issues working group in Fort McMurray. He says the industry believes that over time it will be able to tap into at least part of the rest of the oilgiving long-term potential to cheap cogeneration.


Huge cogeneration potential


While most of the oil that has been removed to date has been extracted through open-pit mining, more and more projects involve heating water to create vast quantities of steam and injecting the steam into the ground to liquefy the thick, gooey oil while leaving the sand in place. Creating so much steam will yield enough waste heat to produce an estimated 5,000 megawatts of electricity through cogeneration, TransCanada spokeswoman Heidi Feick says.


Theres no market near sparsely populated Fort McMurray for that much electricity, so NorthernLights hopes to carry the juice to faraway markets with its proposed power line.


We will build at least as far south as Calgary, but its our objective to serve the whole region, Thomson says. If the power line doesnt come farther south, that would be a huge waste of the resource; the generation would never be developed, he says.


The province of Ontario has expressed interest in the electricity, but Thomson says its more likely it will be sent to the southand the Pacific Northwestthan to the east.


Ontario has huge power problems right now, he says. Theyre looking at shortages, but candidly, the way things are lining up, an energy backbone that goes north and south makes more sense than one that goes east and west.


NorthernLights line would provide a first-ever direct link to transmit electricity from Alberta to the Pacific Northwest and California, Thompson says.


Right now, everything from Alberta must go through British Columbia, he says. When Alberta generators send power to the Pacific Northwest, they pay tariffs to B.C. Hydro, which operates the Canadian side of the B.C.-U.S. link, and must play second fiddle to B.C. Hydros own usage of its line.


FERC permit in hand


In October 2002, NorthernLights received a permit from the U.S. Federal Energy Regulatory Commission for its line from the U.S. border to Celilo, although Thomson says that permit applies only to tolls and tariffs. In the U.S., the states control power-line routes moreso than the federal government, and NorthernLights will apply in the coming months to state and provincial agencies on both sides of the border for permits for a power-line route, Thomson says. Tentatively, the U.S. part of the line would be built in a corridor for energy infrastructure that a utility industry group is trying to persuade the White House to approve.


Avista has a permit to build a power line between Spokane and the Canadian border along a different route, and it has talked with NorthernLights about whether the Canadian company might use its corridor for part of the high-capacity line, Imhof says. Thomson says Avista could use its corridor to bring hydro down from B.C., or we could be working with them to build part of NorthernLights proposed line in that corridor.


In todays dollars, the estimated cost of the entire 1,000-mile line is $1.5 billion to $2 billion (Cdn.), says Feick, the TransCanada spokeswoman. That equates to about $1.1 billion to $1.5 billion U.S.


It would take two to three years to obtain approval of a route and to get other permits, and another three years to build the line, but its too premature to say when work would start, Feick says. Says Thomson, Youd have thousands (working) on construction on both ends of the border, and the lines in-service date probably would be 2009 or 2010.


Morrison, the Pacific Northwest partnerships executive director, says economic opportunities also could be available to Spokane and other Pacific Northwest cities from a proposed $5 billion, 800-mile natural-gas pipeline between Inuvik, in the Northwest Territories McKenzie Valley Delta, and the northwest corner of Alberta. Hart Searle, a spokesman in Calgary for Toronto-based Imperial Oil Ltd., one of four major gas producers involved in that project, says, Were targeting to file our applications this summer. He says 7,000 workers would be needed to build that pipeline, and it could go into operation in 2009.


Pacific Northwest cities, Morrison says, could enjoy yet more opportunities from TransCanadas proposed $12 billion, 1,000-mile Alaskan Highway natural-gas pipeline, which would connect at the Yukon Territory border with a 750-mile stretch of the pipeline in Alaska. On June 2, TransCanada filed an application for right of way across Alaskan state lands.


Its too early to say when that project might start, says Feick. There are a number of milestones that need to be reached.


Neither pipeline is a sure thing. Trans-Canada has been working on the Alaska Highway Pipeline Project for more than two decades, and Searle says that over the years a number of attempts have been made to monetize the McKenzie Valley Delta gas, found in the early 1970s.


Environmental issues, tribal issues, the vagaries of the energy and capital markets, and other issues confront both projects. Still, Morrison thinks U.S. and Canadian officials should work together to overcome labor shortages and other concerns.


Infrastructure for pipeline projects


There are no infrastructure facilities for work crews where much of the two pipelines would be built, and Spokane and other northern U.S. cities could be a key in meeting housing demand, Morrison says. He says many of the workers would fly back and forth from the U.S. as they worked a several-days-on, several-days-off schedule.


People will be flying in and out, he says. A Spokane, Portland, or Seattle flight to Whitehorse (the Yukon Territorys capital) or Calgary is a lot better than a flight from London. What theyre doing right now is bringing in people from London to the oil sands. Alberta has a big labor shortage, but theyre also looking for people with the right skills.


Lets make sure that everybody is aware of the number of workers that will be needed, and the skill sets that they will need, Morrison says. No one right now is training the kind of high-tech welders that are going to be needed.


Jeff Schwab, a welding and fabrication instructor at Spokane Community College here, says, The guys who have been welding for a few years are going to take those gravy jobs. Theyre going to suck welders up there. Everybody else then moves up a notch.


Of pipeline welding, he says, I dont know if its so much high-tech as theres a quality factor. The tools that they use are industry standard. Were a community college, so were trying to get guys ready for what goes on locally.


Mary Harnetiaux, a spokeswoman for Community Colleges of Spokane, says the schools Institute for Extended Learning could offer welding classes for pipeline workers, but isnt involved in such training right now.


Theres one more twist to the energy industrys continent-wide planning that could have a bearing on Spokane. Its been suggested that if the rail systems of Alaska and Canada were linked, and the builders of the Alaskan Highway pipeline could transport huge sections of pipe by rail, they would save more than the $3 billion estimated cost of the track extension, giving them a big incentive to help build it.


A rail link to Alaska?


Such a rail link, moreover, also would connect the Alaska rail system to that of the Lower 48, which Morrison says could have implications for Spokane, where Burlington Northern Santa Fe Railway Co. operates its second biggest rail yard.


Theres been no study of how such a link would affect rail traffic in railroad centers such as Spokane, but I would assume if we had this connection it would increase rail traffic all over, says North Pole, Alaska, resident Jeannette James, who is Alaska Gov. Frank Murkowskis rail adviser. She says development of timber and industrial and precious minerals in Alaska and the Yukon has lagged because of lack of transportation infrastructure, and potentially productive agricultural land lies idle because it costs too much to ship fertilizer in and carry crops out.


BNSF spokesman Gus Melonas says that assessing the potential benefits from a link to Alaska would require study.


We bring a lot of lumber in from Canada, and petroleum products, Melonas says. He says the BNSF track into British Columbia from Bellingham, Wash., is much busier than the railroads links with Canada on the east side of Washington state.


While a rail connection between Alaska, Canada, and the Lower 48 is a long way from being assured, Morrison says the potential benefits stem beyond increased freight shipments. He says, It would open up tremendous circle-tour opportunities for people coming through Spokane to travel all the way to Alaska by rail and have fantastic views of the wild lands.