What will it take to get Canada’s Arctic off diesel?

Charlie Kowcharlie standing at the point where the future hydro project is planned to cross the Inukjuak River. Photo Credit: Christopher Pollon

By , Reveal News | Posted March 23, 2017

Viewed from an approaching plane, the tundra around Inukjuak, Quebec, is a lifeless moonscape of rock and tiny crater lakes. It’s only once you’re on the ground, traveling inland from the shoreline of Hudson Bay, that the real tundra is revealed: a forest of lichen and moss in miniature, spotted with ankle-high dwarf willows, the closest thing to trees in this Subarctic landscape.

It’s unseasonably warm as Inuit hunter Charlie Kowcharlie speeds across the tundra on an ATV in early October 2016 — on his way to a clean energy site that promises to change the way the people of the region live. Kowcharlie eases off the gas, pointing to a gently rising plateau. He is well into his 60s, but his hunter’s eyes have spotted two arctic foxes that are little more than white pinpricks on the horizon.

His destination is a stretch of white water on the Inukjuak River, formed at a point where the river widens and plunges more than 36 feet from a rocky precipice. To the uninitiated, it’s a picturesque little waterfall; to Eric Atagotaaluk, the president of Pituvik Landholding Corporation (PLC), who is riding ahead in the lead ATV, it’s the future site for the Innavik Hydro Electric Project.

Atagotaaluk and Kowcharlie leave the trail to get a closer look at the rapids. “Right now, every single heating system in Inukjuak is run on diesel, and we want to replace that,” says Atagotaaluk. Like virtually all communities in Canada’s North, Inukjuak is disproportionately endangered by climate change, but at the same time is forced to subsist on dirty diesel-generated energy, which is fueling the problem.

Atagotaaluk is determined to change this with Innavik. Named for a pouch historically carried to store flint and moss for fire-starting, the small hydro project will take a massive bite out of the nearly 800,000 gallons of diesel this town of about 1,800 must burn each year to keep the hot water, heat and lights on. At the same time, it will provide precious revenue for a community hurting for adequate housing and jobs.

In spite of astronomical construction costs and a system that favors fossil fuels, Inukjuak has emerged as a beacon for the diesel-dependent North to follow.  If they can develop clean energy here, the floodgates could open across the Canadian Arctic. So the question now is, what will it take to make this one critical project happen, and what stands in the way?

The trouble with diesel

Barely 10 years ago, a little-known treaty led to the creation of a new Inuit homeland, a giant chunk of northern Quebec is now known as Nunavik. Today, serious challenges continue to persist across this energy-poor region — extreme poverty, high rates of youth suicide and chronic health problems.

For people to have energy access here, each year a single oil tanker makes a slow, plodding voyage across the Gulf of Saint Lawrence and north into the Labrador Sea. It rounds the horn of Quebec’s Ungava Peninsula, which has a land area larger than Western Europe, tracing the southern coastline of Baffin Island before descending into Hudson Bay toward the 14 coastal communities of Nunavik. This annual “sea-lift” of diesel is limited to a narrow, increasingly unpredictable ice-free shipping season that begins around late June and ends before Hudson Bay freezes solid — historically by late fall.

“It’s something we take for granted – that nothing is going to happen to those tankers coming to Inukjuak to supply the fuel that everyone needs,” says Pituvik’s general manager Mike Carroll. “But if those tankers don’t come, this town’s in big trouble.”

Arctic remoteness can be a blessing and a curse. While distance acts as a buffer protecting culture (virtually everyone here speaks Inuktitut), it also makes everything from the outside prohibitively expensive. A return flight to Inukjuak from Montreal costs about $2,700; a small package of bologna in the town’s co-op store costs nearly $10, after taxes. If you live up here, at least half of your food must come from the land. That food must then be preserved in a freezer powered by the diesel generators – that hum and spew particulates – on the town’s northwest corner, situated adjacent to a tank farm storing hundreds of thousands of gallons of fossil fuel.

Dependence on diesel comes at a great cost, both financial and otherwise. In July 2015, human error during tank filling caused 3,400 gallons of diesel to soak into the ground adjacent to the tank farm. Every particle of contaminated soil and rock had to be scooped up, loaded onto a tanker and shipped south for disposal. By October 2016, the final phase of a diesel spill cleanup was just wrapping up. Two other communities in the region have had to deal with similarly severe spills in recent years. “The risk [of spills] from diesel plants is always going to be there,” says Atagotaaluk. “It’s giving us a good reason to be more positive about renewable energy.”

Stuck on the slow track

Finding a better way to generate energy is not a new idea in Inukjuak. A hydro project was introduced back in the early 1990s by the local municipality, but was rejected by residents. A decade later, Hydro-Quebec explored building a pilot wind project near town, but when that idea fizzled, PLC turned their attention to the Inukjuak River. Hydro was back on the table. Four sites on the river were identified as promising for a small “run-of-river” hydro plant, considered greener than Quebec’s system of large-scale hydro projects because it requires a much smaller reservoir, pipes water through turbines and then returns it downstream. Atagotaaluk says the waterfall Pituvik visited in October was by far the best of four scouted on the river: just 6 miles from town, it has the best gravitational drop and will impact fish less than other sites.

But progress on the project has been slow. It’s been in the works since at least 2006, stalled after 2010 by an impasse with Hydro-Quebec while negotiating a power purchase agreement (which sets the price the utility will pay for PLC’s hydro).

Among the biggest challenges of developing this hydro project is the astronomical cost of construction. It is among the biggest infrastructure projects ever planned in Nunavik, requiring the greatest single mobilization of resources, both human and material. A proposed 2.2-megawatt small hydro project on the remote northern coast of British Columbia was widely considered prohibitively expensive costing just over $25 million; Inukjuak’s 7.5-megawatt hydro plant is projected to cost almost $100 million in all.

Barriers to overcome

Addressing this cost has necessitated sharing the project risk by taking on a Montreal-based private sector partner, Innergex Renewable Energy. Innergex is an established clean energy developer with experience navigating the complex web of federal and provincial agencies and outside funders. By 2012, PLC had secured federal funding for 25 percent of the project cost, contingent on matching funds from the province of Quebec. Atagotaaluk says this arrangement is no longer in place, but discussions continue with both Quebec and the federal government to secure funding. The next pivotal step for the project, he says, is to negotiate a power purchase agreement that will finalize the price Hydro-Quebec will pay PLC to generate the hydro power. The power will then be sold to Hydro-Quebec and delivered back to Inukjuak residents by the utility.

“That will be the determining factor if it’s a go-ahead or not,” says Atagotaaluk of the purchase agreement, which is currently being renegotiated.

“You end up with this really weird situation where the true value of alternatives is not being credited.”–Chris Henderson, project advisor to PLC and Lumos Energy President

In past negotiations, Hydro-Quebec has offered to pay just half (about 42 cents per kilowatt hour) of what it costs on average to generate Inukjuak’s electricity, space heating and water heating with diesel. This price gap illustrates one of the biggest challenges for Canada’s estimated 200-plus diesel-dependent remote communities, most of them Indigenous. Christopher Henderson, a project adviser to PLC and author of “Aboriginal Power: Clean Energy & the Future of Canada’s First Peoples,” says utilities will often lowball the amount they will pay a developer like PLC to produce clean energy. They’ll only pay what it currently costs to supply diesel.

“Why 42 cents? Because it’s the cost of diesel fuel alone. They don’t price in the costs for capital systems, (diesel site) management, things like that, so you end up with this really weird situation where the true value of alternatives is not being credited in the contracting context,” Henderson says. “As a result, many of these projects cannot proceed because they don’t have the revenue basis to proceed.”

The price gap combined with a general lack of capacity in many Indigenous communities to navigate complex capital projects, says Henderson, are the two main barriers to clean energy across the North. “It’s why we have not yet made as big a dent in remote sustainable energy as we might.”

The downside of clean energy leadership

Call it the downside to being a clean energy leader: not only will building the project potentially open the floodgates for clean energy across the diesel-dependent region, but the price for Inukjuak’s hydro will set a precedent that the communities coming after will expect, at minimum, to receive.

Progress is similarly slow across the 25 diesel-dependent communities of neighboring Nunavut, home to about 28,000 Inuit. Sheldon Nimchuk, who oversees clean energy projects for a subsidiary of the Nunavut-based Qikiqtaaluk Corporation, says the only other Arctic clean energy project approaching the size of Innavik is a hydro project designed to power Iqaluit, Nunavut’s capital. He says this project was suspended about two years ago, largely because there were so many urgent competing priorities. “Do you build water treatment facilities and sewage lagoons, or do you invest in hydro?”

Nimchuk remains upbeat about clean energy prospects for the Arctic. Wind and solar technologies are plummeting in cost. In October 2016, Prime Minister Justin Trudeau announced that Canadian provinces and territories must impose a price on carbon, starting at $10 per ton in 2018 and rising to $50 per ton by 2022.

“Would it make sense for the government of Canada to provide hundreds of millions of dollars to upgrade (diesel) facilities, or is the time right to move that money to clean energy projects?”–Sheldon Nimchuk, project manager, Qikiqtaaluk Corporation

And on Feb. 10, CBC reported that the government is planning to commit $50 million in their 2017 budget to help get remote communities off diesel.  This funding comes on the tail of Trudeau’s signing of the Pan-Canadian Framework on Clean Growth and Climate Change in December 2016, a pact with eight provinces and three territories promising to ramp up clean energy and cut greenhouse gas emissions. No funds have been committed to this latter initiative yet, but even if more money is allocated it seems unlikely to be enough to have a significant impact.

The cost of the small hydro project in Inukjuak’s is projected to cost almost $100 million, double what the federal government is promising to help remote communities. In Canada there are over 200 communities that depend on diesel. Nimchuk says many of the diesel generation stations across Northern Canada — in Nunavut, Yukon, the Northwest Territories and Nunavik — are now decades old, necessitating hundreds of millions of dollars in investment to keep the same plants humming. Nunavut alone has requested $250 million from Ottawa to replace and upgrade its diesel plants and infrastructure. The national project of ending northern diesel dependence remains underfunded and stuck on a slow track.

So what can be done? Perhaps the greatest immediate opportunity for change involves end-of-life diesel plants says Nimchuk. “Would it make sense for the government of Canada to provide hundreds of millions of dollars to upgrade [diesel] facilities, or is the time right to move that money to clean energy projects as a contribution from Canada toward addressing climate change in the Arctic?”

Protecting a way of life while the climate changes

There used to be a regular pattern of temperature and weather that locals were able to predict throughout the winter, fall and summer, but now it’s rarely the same from year to year. Search and rescue expenses have gone way up as more and more hunters confront freak storms and dangerous conditions on the ice and tundra. Humans and the animals they chase are both at risk.

The climate here has gone haywire says Andrew Epoo. At 30, Epoo is not only Inukjuak’s youngest elected councillor, but he holds a good job as Liaison Officer for Youth, Elders, Health & Social Programs for Makivik, the legal representative of Quebec’s Inuit. Yet by his own admission, his success has come at a personal cost.

Every moment he is in the office or away in Montreal, he is not on the land, where many locals still regularly hunt for seal, ptarmigan and caribou, or fish for Arctic char, lake trout and cod. “A few generations ago we were nomadic,” says Epoo. “Trying to fit into both worlds is a struggle.”

The only answer is to “try to find modern ways to teach traditional ways,” he says. But this way of life is under threat, and it’s evident every time Epoo manages to get out on the land, ice or water.

Polar bears are a case in point: most of the coast around Inukjuak is protected by small coastal islands, part of a seasonal migration highway for the bears. The island-protected coastal waters freeze before the rest of Hudson Bay does, and the bears typically migrate across the early ice to the islands. There, they wait for the freeze-up. They will wander and hunt on the frozen bay all winter. But the freeze-up is now completely unpredictable. “In 2013, Hudson Bay did not even freeze over until February,” Epoo says. So the polar bears are increasingly forced to hole up on the islands, where locals have historically hunted bears for food and fur. The forced residency on the islands is exposing the bears not only to the threat of starvation, but to bullets too.

The melting of permafrost is another serious issue. Back in the summer of 2005, Inukjuak woke to a strange, muted explosion that lingered for several seconds. It was the sound of a 100-yard chunk of island coastline, 15 miles to the south, detaching and plunging into the sea. Scientists studying the region have told them to expect more of the same.

The top 20 feet of ground have always been subject to a degree of summer melt, but historically, the layer below that was frozen. Michel Allard, a professor of geography at Laval University, has documented a general rise of 2 C in ground temperatures between 1993 and 2005 in the Canadian Eastern Subarctic; across eight Nunavik communities, significant changes in both soil temperature and active permafrost layer thickness have been recorded since the mid-90s.

As a consequence, houses and roads not built over bedrock are vulnerable to structural damage from sinking and shifting. This means massive future costs for places like Inukjuak, where housing is already so scarce that it’s common for three generations to squeeze into a five-bedroom house. It also affects future planning: the vision to expand the town across to a nearby island via a bridge was chosen not only for its proximity to the community, but for the bedrock that underlies the island.

The disastrous legacy of hydro

People here are understandably fearful of climate change, so the fact that the Innavik project will prevent nearly 17.5 million kg of carbon dioxide emissions each year once in operation was a big motivator for moving forward. This was reflected in a 2010 referendum on the hydro project, where 83 percent voted in favor of moving forward (72 percent of eligible voters showed up). But this is not to say that hydro was an easy sell in this community at first.

“Pituvik had to be really careful about pitching hydro to the community, because with James Bay, there is a bad history with hydro,” said Epoo. This history goes back to 1971, when Quebec announced the pending construction of the James Bay hydro project on lands not yet ceded by either the Cree or Inuit of northern Quebec. A court case ensued, and both groups settled out of court for millions of dollars in compensation and a framework plan to create limited self-government over vast tracts of the Quebec North. The James Bay project was eventually built, wiping out an estimated 10,000 caribou and flooding a patch of wilderness bigger than Jamaica — 4,440 square miles in total. The flooding created a toxic spike of methyl mercury as the submerged vegetation decayed. Out of the battles to stop hydro megaprojects, Nunavik was born.

It has now been six years since PLC last updated the community on the Innavik hydro project. “We have never heard what’s going on with the dam,” says Inukjuak Mayor Pauloosie J. Kasudluak of Inukjuak residents. “I know they’re waiting for some funding from government,” he says, adding that only the mayor and council were kept updated.

In early October, most of the people encountered outside the co-op store — one of the town’s public gathering spots — were still in favor of the project moving forward, even though no one had been updated on the project. But during a visit to a senior class at Inukjuak’s Innalik School to talk about energy, two hands shot up when asked if anyone was concerned about the hydro project. “Things will change,” said one of the students. For some in the community, including more than 15 percent of 2010 referendum voters opposed to the project, potential impacts to water were the biggest concern, says Kasudluak. “I think they were worried that [the hydro project] is in our river, that’s where we get our drinking water.”

Even Epoo, who works for Makivik and is in favor of the project, says he will base his final opinion on the updated environmental impact studies that Pituvik has promised to share with the community this winter.

Faced with climate change impacts now

On the day Kowcharlie and Atagotaaluk visited the hydro site, the return to town was delayed when both ATVs got trapped in deep pools of mud. Kowcharlie shook his head as he heaved to liberate one of the vehicles. “This never used to happen in October. The ground was always frozen solid by now.”

It’s just another sign of how much the world is changing for the people in the North. While climate change remains a subject of doubt or indifference for many living in the big cities of southern Canada, the reality is much harder to ignore when remoteness and the needs of subsistence require that you live in a close rhythm with the seasons.

There’s something more. Strewn across this tundra landscape littered with wind-bleached caribou bones, hidden from the eyes of outsiders, are largely unexplored archaeological sites — including remnants of sod houses made with driftwood, historically preserved but now decaying as the permafrost melts. Archaeologists don’t have enough money to preserve them, say locals, so many of the artifacts of local Inuit cultural heritage are being lost. Runaway climate change not only endangers the present and future, it is erasing the past.

This story was originally published by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in the San Francisco Bay Area. Learn more at revealnews.org and subscribe to the Reveal podcast, produced with PRX, at revealnews.org/podcast.

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