A Senate proposal to increase the use of energy from renewable sources threatens to spark trade disputes between the United States and Canada.

Last week, the Senate approved a Democratic plan that would require companies that provide electricity to the public to gradually increase their use of renewable forms of energy, like wind, solar and geothermal power, as a partial replacement for oil, gas and coal.

The amendment û part of an energy bill that Senators are expected to vote on in April û requires the percentage of electricity from renewable sources to increase until it reaches 10 percent in 2020. Currently, about two percent of the nation's electricity is produced from renewables.

Canada is worried about how the United States would define renewable energy.. Its energy exporters rely heavily on hydroelectric dams and Canada contends that all power generated from large-scale hydropower projects is renewable. But many U.S. states that already impose a minimum level of renewable or "green" electricity use do not consider hydropower a green energy source.

Excluding hydropower would have wide economic consequences for Canada and would violate international trade rules, according to a statement released by the Canadian embassy here.

Regulating the import of electricity based on the manner in which it is produced would affect competition and "would be inconsistent with the North American Free Trade Agreement (NAFTA) and World Trade Organisation (WTO) national treatment obligations", says the statement.

Roughly 65 percent of Canadian electricity exported to the United States û valued at some 1.2 billion dollars in 1999 û comes from large hydropower, according to the commission for Environmental Cooperation (CEC), a Montreal-based inter-governmental body set up under NAFTA.

The real question is whether the powerful hydroelectric lobby will succeed in lobbying the United States to include hydropower in the definition or if the United States will instead yield to environmentalists who favour wind and solar power, says Scott Vaughan, head of the CEC's environment, economy and trade programme.

"The concern is whether adopting a national standard will result in raising renewable energy standards or bring it down to the lowest common denominator," says Vaughan.

Almost one-half of all U.S. states already have or have initiated mandatory "renewable portfolio standards", which impose a minimum level of green electricity to be sold in their jurisdiction. Among the 50 states, California's required 12 percent is the greatest.

Several states, including Arizona, do not consider hydropower a green energy source, even though hydroelectric dams û unlike coal powered energy plants û do not emit harmful air pollution, including the so-called greenhouse gases that scientists believe cause global warming.

Environmental organisations have long campaigned against large hydroelectric dams, arguing that they dramatically alter river ecosystems and endanger fish, molluscs, and other river species.

Because they alter the course of rivers and the balance of estuaries, dams have been a major cause of the precipitous decline of sea fisheries in the Gulf of Mexico, the Black and Caspian seas, California's San Francisco Bay, the Eastern Mediterranean, and elsewhere, according to the International Rivers Network, a U.S.-based advocacy group.

In response to these concerns, several states define green electricity as wind, solar, biomass, and other alternative energy sources but they do not always include hydropower. New Jersey, for example, presently requires 2.5 percent of all kilowatt-hours sold in the state to be from alternative energy that either does not include hydropower or includes small hydroelectric generation facilities of 30 megawatts or less.

A similar limitation exists in Maine, which considers power to be from a renewable resource only if it is produced by a facility with a total capacity of 100 megawatts or less. Other states with such restrictions include Arizona, California, Iowa, Missouri, Rhode Island, and Vermont. Missouri does not accept any hydropower as renewable energy.

While no uniform definition of renewable energy exists among the states, the fuel of choice tends to be wind power, according to a report released in February by the CEC. Approximately one percent, or 4,200 megawatts, of U.S. energy needs are met by wind power, twice as much as a year ago.

If the energy bill that is signed into law includes the Democrats' amendment on renewable energy, a uniform definition of renewable would be created, says John Audley, director of the trade, environment and development project at the Washington-based Carnegie Endowment for International Peace.

"It would resolve the issue among the states, but the three NAFTA members would still have to work it out," says Audley.

The House of Representatives passed a Republican energy bill last year. The legislation that the Senate eventually approves will go to a conference committee to work out the differences with the House version, which does not have a comparable provision on renewable energy. (END/IPS/NA/EN/DK/ML/02)

Copyright © 2002. Inter Press Service. All rights reserved.

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