NB Power pulls out of Maritime Iron project, company says

NB Power is pulling out of a proposed joint project with Maritime Iron that would see a high-emissions iron processing plant built in the village of Belledune.

Maritime Iron confirmed in a written statement that it was "surprised and disappointed" that the utility had withdrawn from talks on the proposal "despite continued positive progress that has already resolved most challenges to date."

Maritime Iron had been hoping to start building the iron processing facility this year. It said it would create 1,300 direct jobs during construction and 200 permanent jobs during the plant's operations.

The plan was to link the plant to NB Power's Belledune generating station, which would burn gas byproduct from the iron plant, allowing the utility to reduce its coal consumption.

"NB Power's decision to suspend negotiations means that we will jointly miss an opportunity for substantive economic development in the province," said the statement from Maritime Iron's vice-president of communications and public affairs Elena Mantagaris.

She said the company will continue to seek "direct engagement" with the provincial government to keep the project alive.

"We remain certain that there are multiple ways to advance this project in New Brunswick," she said.

But Maritime Iron's own environmental impact assessment document, submitted to the province in January, made it clear that the business case for the project was stronger with NB Power involved.

"A standalone operating scenario configuration was investigated but determined to be less favourable than the integrated scenario configuration," it said.

The document says putting the iron plant next to the generating station would "result in fewer overall greenhouse gas emissions, and … in significant savings in capital expenditures."

Stumbling block

Even with NB Power's participation, the proposal faced a huge environmental stumbling block.

Maritime Iron's submission says the two facilities would emit a combined 4.9 million tons of greenhouse gases, almost double the 2.6 million tons Belledune now emits alone.

NB Power's withdrawal would mean even higher emissions: the EIA submission says the two plants operating separately would emit a combined 6.5 million tons of GHGs.

NB Power spokesperson Marc Belliveau refused to confirm the utility's withdrawal Friday afternoon.

In the EIA document, Maritime Iron argued that supplying the Belledune plant with a gas byproduct as a fuel source would reduce coal consumption by 50 per cent and allow the power plant to continue operating past a federal coal phaseout in 2030.

But any continued burning of coal at Belledune would need the province to sign a so-called equivalency agreement with Ottawa to exempt the plant from the phase-out in return for equal emissions cuts elsewhere in New Brunswick.

Maritime Iron has argued that the higher emissions from its plant would be offset by global emissions reductions, because the New Brunswick plant would displace higher-emitting iron processors in other countries and would enjoy shorter shipping distances to buyers.

But Canada, and New Brunswick, can't earn any credit for such reductions because there is no global agreement in place on how to measure and exchange reduction credits.

New Brunswick's official emissions reductions goal for 2030 is 14.1 million tons. Data from 2018 show the province emitted 13.2 tons in 2018, meaning the net increase of 2.3 million from Maritime Iron plant would cause the province to start exceeding its targets again.

"Implementing the project will make it difficult for New Brunswick to achieve its current aspirational climate change goal" once the plant begins operating in 2022, Maritime Iron said in its EIA submission.