Investments in peat fuel promise big potential for Aboriginal partners.

Prospecting for peat may be the next pet project in Northern Ontario.

Peat fuel, relatively ignored in North America, is now more attractive than ever as First Nations, government and industry examine ways to fortify northwestern economies and the provincial power supply.

Peat is found in blanketed bogs where high rainfall occurs. A handful of peat and a handful of coal can produce the same amount of energy, but peat has one-tenth the sulfur, negligible mercury and reusable ash residue, Peat Resources Ltd. regional manager Wayne McLellan says.

If the new fuel gets Ministry of Energy approval, McLellan says a facility would be set up 130 kilometres northwest of Thunder Bay near a town called Upsala to harvest 200,000 tonnes of peat using backhoes and a dredging system. The squeezed, dried and heated material would be refined into pellets with a 10-per-cent moisture content. The product would be fed to nearby Lac des Mille Lacs First Nation reserve to build up their energy infrastructure.

In the 1950s, most of the band members left the Lac des Mille Lac region after being flooded out. The resource bog, found on their traditional land, could lead to the repatriation of the First Nations people, band manager Quintin Snider says.

One million tonnes of peat could be extracted annually, which would mean at least four other plants would be constructed resulting in 200-full-time direct jobs in the northwest, says McLellan. That isn't counting the jobs that would be saved in Atikokan by converting the coal-fired plant to a peat-fuel facility.

The partnership between the First Nation and Peat Resources is amiable. Snider, "is hoping the provincial government will give Peat Resources the green light to go ahead."

He has some questions regarding the environmental impact of the process, but says experts tell him once the peat grade is taken away bogs could be replaced with fish aquaculture, wild rice farms, or water fowl habitat.

A closer proximity to the peat source for the processing plant means minimal impact on the boreal forest.

"The biggest problem with the project is that any time one wants to utilize boreal's natural resources, people object," McLellan says. "There is a strong environmental faction that says 'No way, don't want to hear anymore, go away.'"

Harvesting from the boreal forest is a sensitive topic, but McLellan says "we have a very sound reclamation plan that is feasible and we have the scientific back-up to show how it can be done. That will be the main thrust in the environmental assessment."

The province has pledged to shut down the Atikokan ignite coal-fired generating station and convert the Thunder Bay plant to a natural gas facility by 2007.

Government studies are underway to find the peat feedstock, and determine sustainable harvesting quotas.

Peat humus grows at about a half a millimetre a year.

"It is slow growing," Dr. Luc Duchesne, president of Forest Bioproducts Inc., says. Duchesne has been selected to assess the availability of biomass for the Atikokan plant.

Examining environmental impacts and determining the costs of bringing it to the converted generating station is also part of the study.

Officials will have "to go beyond the paperwork and figure out what makes sense from an economic development (point of view) for the region," Duchesne says.

The steering committee, under supervision by the Ministry of Natural Resources, the Ministry of Northern Development and Mines, representatives from the Atikokan Generating Station and the town mayor, will submit a study to the Ministry of Energy by March.

"We are accountable to a whole lot of people to make sure all the different interests are represented," Duchesne says.

Canada's peat fuel stock is equivalent to 29 billion tonnes of coal and covers 10 per cent of the country, according to information from the Peat Resources website. Ontario's peat source alone is equal to 14 billion tonnes of coal.

In various parts of Europe and Scandinavia, peat has been burned to generate electricity for years. Ireland recently opened two new peat-fired power plants at a cost of $570 million. An estimated 20 million tonnes of United States coal is imported into the province for electrical generation at a cost of $1 billion.

Peat Resources has spent up to $1 million exploring the black humified grades. Government land use permits allowed geologists and engineers to confirm that peat fuel material was plentiful. How they will extract the resource and convert it to energy consumption will be included in Peat Resources' Terms of Reference, which will be handed into the Ministry of Energy.

Peat has never been used as a fuel in Canada before, so an environmental assessment is needed to ensure the fuel meets various regulation standards. It will take three months for the Terms of Reference to be developed and approved before the EA can get started. "We expect it to take (another) six months," McLellan says.

He is confident environmental questions will draw sound answers.

"We feel we can show that these bogs, which are not wetlands, are old bogs with a lot of humidified material below-good for fuel purposes."

Independent Thunder Bay-based DST Consulting Engineering Inc. confirmed over 20 million tonnes of fuel grade peat could be extracted from the area and replaced with natural indigenous plant life.

Biologists have travelled into the bog to determine flora and fauna risk factors.

"These bogs can be excavated without damaging the boreal ecosystems," McLellan says.

"There is not much happening up there."

www.peatresources.com

www.energy.gov.on.ca

By KELLY LOUISEIZE

Northern Ontario Business