Natural-gas line into Belledune among options after coal phase-out, minister says

The New Brunswick government says it's talking to Ottawa about getting federal subsidies to run a natural-gas line to NB Power's Belledune generating station so gas can replace coal at the plant.

The federal Liberals announced this week they'll beef up regulations to phase-out the use of coal to generate electricity by 2030.

I'm not committing to burning natural gas as of today. It's one of the options.- Donald Arseneault, New Brunswick cabinet minister

​Belledune is NB Power's last coal-fired generating station and it is facing an uncertain future if coal is banned.

But Liberal cabinet minister Donald Arseneault told a CBC political panel Thursday that one option is for the federal government to use its $21-billion green infrastructure fund to pay for a conversion of Belledune to natural gas.

"It is one of several options for Belledune," he said. "I'm not going to get into specifics."

He confirmed though that using the federal subsidies for Belledune "is part of those discussions" the province is having with Ottawa.

No commitment

"I'm not committing to burning natural gas as of today," said Arseneault, who has several portfolios, including Intergovernmental Affairs and Post-Secondary Education. "It's one of the options."

Extending Enbridge Gas's network to Belledune would not only allow the plant to stop burning coal. It would also solve another longstanding energy policy problem.

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Governments have said for years they wanted to find a way to extend natural gas service to northern New Brunswick. Getting more gas customers would let Enbridge broaden its customer base, pay down more debt from building its network and ease the upward pressure on rates.

But Enbridge has always said the lack of a major industrial customer in the north meant it wasn't viable to run a line there.

Settlement made talk possible

Federal subsidies and a guaranteed demand from NB Power might make it possible, though Arseneault wouldn't speculate about that Thursday.

He did say such scenarios weren't even on the table until the Gallant Liberals settled Enbridge's two $820-million lawsuits against the province, filed in 2011 over a new rate system imposed by the previous Progressive Conservative government.

"Six months ago you couldn't have that conversation with Enbridge to invest in New Brunswick," he said.

Announcing the coal phase-out on Monday, federal Environment Minister Catherine McKenna singled out New Brunswick as being in line for announcements soon on how federal money could soften the blow.

Nova Scotia has deal

She said there were "discussions about different options, certainly" for Belledune, and said Ottawa would also play a role "to ensure that [the coal phase-out] does not increase prices to ratepayers."

Nova Scotia signed a deal with Ottawa on Monday that will let the province's coal plants run beyond 2030 if it finds other ways to reduce emissions by an equivalent amount.

Progressive Conservative MLA Ted Flemming asked Arseneault during the panel why New Brunswick had not secured a similar exemption for Belledune.

"How come the federal government hasn't ponied up?" Flemming asked. "You brag about your relationship [with the federal Liberals], but Nova Scotia seems to have a better one than you do."