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Feature Story
Who Owns This River?
Page 5

Roughly 85 percent of everything Canada exports flows to the United States. Denver-based Xcel Energy, the fourth-largest energy company in the United States, buys about 40 percent of the electricity exported by Manitoba Hydro. This represents only 4 percent of Xcel's total energy grid. But it is one reason why Manitoba Hydro is such an important cash cow for the province. In 2002 the provincial government took an additional $162.5 million from Hydro to cover its spending for 2002-2003. (Manitoba's government is entitled to requisition funds from its utility as needed.) Hydro and the other "crown corporations," or public utilities, are schizophrenic enterprises, ruthlessly capitalistic and profit-driven, yet ultimately socialistic in intent: The profits help fund services like free health care and education, and the electricity itself is very cheap. "As the government becomes more dependent on Manitoba Hydro to make up its shortfalls, there is a strong incentive to build more dams," says Sullivan. "It's hard to wean a baby off a bottle once it has had it for so long."

Hydro's plans bear this out as the company prepares for a new round of dam building. Hydro hopes to start with a $720 million, 200-megawatt dam on the Burntwood River called Wuskwatim. (These new dams, ironically, have Cree names, a sort of consolation prize to the Cree for having their homelands compromised.) But Wuskwatim is only the beginning. Hydro wants to build another dam to go into service by 2013, the 640-megawatt Keeyask, and another one by 2017, the 1,250-megawatt Conawapa. Both would be located on the Nelson, with Conawapa way up near the river's mouth at Hudson Bay. All told, Hydro has identified 12 new sites for dams and generating stations.

I want to understand the rationale for all these new dams, so I sit down with Manitoba Hydro's CEO, Bob Brennan, in his office in the corporation's glass headquarters in Winnipeg. A man who strikes me as supremely comfortable in his own skin, he has been at Hydro for 40 years. Brennan assures me that "Wuskwatim is going to flood only 0.2 square mile -- smaller than a golf course -- and it's purely for domestic consumption. The juice will flow to northern population centers like Le Pas and Flin Flon, down as far as Dauphin. Electricity is like water flowing through a tube: It goes wherever there is an opening."

In a second conversation in February Brennan tells me that Wuskwatim's energy, and that of the two other proposed dams, is going to be exported until 2020, feeding a revenue source that has become crucial for both Hydro and the province. But so far, no one has signed up for the new offering. Xcel renewed its contract with Hydro in 2002, but for no more than what it is already buying. Other utilities serving Minnesota, which lies just south of Manitoba, are feeling pressure from state officials, and from the grassroots outfit JustEnergy, to ensure that sources of electricty would do no further damage to Canada's boreal wilderness or violate the rights of the native people who live in it. "We don't know who the energy will be sold to -- Saskatchewan, Ontario, or the States -- but there will be a market for sure," Brennan says with genial optimism.

This sounds to me like speculative capitalism, supply in search of demand -- not a good enough reason to destroy more of the boreal or to do further damage to its rivers. Ken Adams, Hydro's vice president in charge of power supply, seems to agree. He tells me, flat-out, "There's really no need for these new dams, in the sense that the energy for Manitoba isn't going to run out." Hydro's plan is to maintain its levels of revenue from exports (even though there is no one to sell the energy to at this point) and to build dams because it is still profitable to build them.

What is most dubious about Hydro's agenda is that there are more sensible choices. Even Adams is able to tick off alternative ways that Hydro can produce more energy without putting in these new dams. It has already created a 292-megawatt "virtual dam" by helping its big industrial customers do simple things like replace their commercial T-12 lighting with energy-saving fluorescent T-8 bulbs, and it has initiated a conservation project that will provide 640 more megawatts within 13 years. Hydro has signed a contract to buy 99 megawatts from a private wind-energy company and is expecting to buy at least another 150. At the moment, 10 percent of Hydro's electricity is lost in the transmission lines -- a solvable problem. But Brennan claims that building the dams now rather than later fixes the price of energy for the lifetime of those plants. "It's like building a house and selling it in 10 years. You can't help but make a profit."

"To a certain extent you are fixing the price of energy 10 years from now by building now, because with inflation the construction costs are bound to be higher," explains Philip Raphals, an expert on the economics of dams and director of the Helios Centre, a research group in Montreal. "But if by the time you've laid out your construction costs your cost to generate energy is six cents per kilowatt-hour and the Midwest is paying only four cents, you're in trouble."

Political leaders in Manitoba and neighboring Ontario support the new spate of dam building, though they have their own reasons. Last September the premiers of both provinces unveiled Manitoba Hydro's $1.6 million feasibility study for Conawapa to a gathering of industrialists and potential investors at the Empire Club in Ottawa. Manitoba's premier, Gary Doer, argued that Conawapa would provide the single largest reduction in greenhouse gas emissions in the country. Canada, unlike the United States, is a party to the Kyoto Protocol and is taking seriously its commitment to return its emissions to l990 levels by 2010. If energy from Manitoba Hydro were to replace coal-fired plants in Ontario -- and that is a big if -- it would reduce the country's greenhouse gas emissions by 7 megatonnes per year. But toxicologist Green points out that if you flood forests and bogs to create reservoirs for dams, you lose significant carbon sinks; and flooded bogs release methane, whose global-warming impact may be 20 times more potent than that of carbon dioxide. "It is true that hydropower's carbon emissions are much less than coal power plants," says Casey-Lefkowitz at NRDC. "However, hydropower's impact on the environment and people has to be measured in more than carbon emissions; it must also be measured in terms of its impact on the land and the people living there. We don't need to choose between the land and climate change -- that's as false a dichotomy as the old division between economic development and the environment."

Europe's Black Triangle Blooms
Europe's Black Triangle Blooms
Alexander's Marvelous Machine

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Where the Action Is


These groups are involved in the campaign for Manitoba's proposed World Heritage site:

NRDC
Manitoba Wildlands
Boreal Forest Network






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Map: Small World Maps

OnEarth. Spring 2005
Copyright 2005 by the Natural Resources Defense Council