Peat Resources Limited
Toronto, ONTARIO (CANADA), Canada

Peat Resources Limited is a Toronto-based clean energy company, listed on the TSX Venture Exchange, which was formed to develop and produce peat fuel.

The Company has identified large biomass resources of fuel-grade peat on its properties in Ontario and Newfoundland. The northwestern Ontario property contains over 155 million tonnes, sufficient to supply OPG’s (Ontario Power Generation) northern generating stations for more than 20 years. In Newfoundland, over 40 million tonnes have been defined on about 9,000 hectares of permitted areas. 

Peat is biomass. It is used in electricity generating stations and other facilities requiring a long-term assured supply of environmentally favourable, economically competitive and consistent quality fuel. It's also a source material for value-added biocarbon products such as activated carbon.

Peat Resources Limited aims to be the principal supplier of peat fuel, on a profitable and sustainable basis, to the North American energy market.

When biomass such as peat is thermally decomposed in the absence of oxygen, one of the resulting products is biocarbon, typically a solid compound rich in carbon, and inorganic elements. A derivative form of biocarbon is activated carbon.

Activated carbon is a generic term for a family of highly porous carbons with an increased surface area for application in adsorption and reduction processes. For example, activated carbon adsorption is used to reduce heavy metal contamination in both gas and liquid phase. A wide variety of activated carbon products are available exhibiting markedly different characteristics depending upon the raw material and activation technique used in their production. Commercially, activated carbon is available in dry powders, granular chips, pellets, briquettes, liquids, and tablets.

The global market for activated carbon products is lucrative, currently under-supplied and experiencing abnormal market growth. The largest market for activated carbon products is for water filtration, treatment and purification, while the fastest growth segment application is for mercury capture and removal from flue gas streams of coal-fired power plants. Currently, global sales of activated carbon products total over $1.8 billion dollars.

SOURCES

Activated carbon is generally manufactured from coal or coconut shell-based materials but any suitable carbon-based material, including peat and wood, can be used as the source. The feedstock undergoes either chemical or physical activation. Chemical activation is primarily used in production of activated carbon for wastewater treatment. Physical activation usually produces either granular or pelletized products for gas purification, although physically activated carbon that is injected into gas streams for purification, as in mercury capture and removal from flue gas streams of electricity generators, must be crushed to a powder form.

Surface area and pore distribution of the carbon are directly associated with the adsorption characteristics of the product, and are influential in determining the appropriate application of the product. The source-material characteristics will have a major influence on the achievable surface area and pore distribution of the processed activated carbon.

Torrefaction enables the conversion of a heterogeneous supply of biomass, such as peat pellets, to a homogenous carbon well suited for manufacture of activated carbon. The marketing advantage is that most North American activated carbons are produced from non-renewable, GHG emitting sources, such as Texas Lignite or Central Appalachian Bituminous coals. Coal-based activated carbon also contains 10-20% ash, while when made from biomass sources it generally only has about 1-2% ash, thus increasing the carbon per pound produced. 

USES

Activated carbon has a diversified product market with over 150 specialized applications. It is used for potable water treatment and flue gas treatment, and for a variety of functions in the pharmaceutical, food, beverage, and oil and gas industries. 

The adsorbing character of activated carbon is useful for many purposes, including municipal drinking water purification systems and in electrical power generation facilities for injections into the flue gas stream for mercury abatement programs. These markets, along with residential drinking water purification, have a tremendous growth potential. 

Other specific adsorption applications include, but are not limited to, decolourisation of sugar and sweeteners, drinking water treatment, gold recovery, production of pharmaceuticals and fine chemicals, off gas treatment of waste incinerators, automotive vapour filters, and the correction of colour and odour in wines and fruit juices. 

Type of feedstock and activation technique influence the performance and quality of the activated carbon, and therefore indicate its most appropriate application. 

MARKETS

Because of its wide range of applications and uses, trading of activated carbon is extensive and international. Global production is approximately 1.2 million tonnes and this is expected to increase over the next five years to about 1.9 million tonnes. Prices for activated carbon in international markets range from $500 to $3,000 per tonne dependent on quality of the product, with an average of $1,900 per tonne. Some very high quality activated carbon products sell for as much as $9,000 per tonne.

Current annual production of activated carbon in the United States is approximately 200 million kilograms, however, future forecast indicates that the U.S. demand for activated carbon will expand 4.3 percent annually to 475 million kilograms. Other estimates indicate much higher demand because U.S. EPA regulations under the Clean Air Act call for increased reduction of mercury emissions from coal-fired power plants and will require significantly greater usage of activated carbon.

Activated carbon use in automotive emission canisters is also benefiting from environmental legislation.

(Information drawn from a variety of published and unpublished sources.)

Ontario Centre for Excellence for Energy allocated $1.6 million in provincial funds for two research projects on "wet harvesting of peat" and "co-firing of peat and biomass with coal for power generation". The research was carried out in the 2007-2009 period by scientists at Lakehead and McMaster Universities. Peat Resources Limited was a private sector partner with OPG and others in this research program.

Results of the research are becoming available and an article New Peatland Research Site Established in Northwestern Ontario, Canada has appeared in a 2009 edition of the journal Peatlands International.

Peat is a sustainable resource that can contribute significantly to Ontario’s economy and help reduce carbon emissions from coal burning power stations.

Peat in northern Ontario has an allowable harvest potential of 8.8 million dry tonnes per year. This is determined using Ministry of Natural Resources methodology (for wood harvesting) based on harvesting only new annual growth¹ and leaving the growth capital in place. From data published by the Ministry of Energy, 8 million tonnes of peat fuel can generate 3200 MW of electrical power at 8 cents (or less) per kWh. For example, peatlands held under permit by Peat Resources Limited in northwestern Ontario contain sufficient fuel-grade peat to supply the Atikokan and Thunder Bay Generating Stations for more than 20 years. 

Wet peat harvesting is an ecologically sound way to manage peatland ecosystems. Wet peat harvesting is a new process for harvesting fuel peat and eliminates the problems caused by dry peat harvesting. In Canada, 1.2 million tonnes of peat for horticultural use are harvested annually² by draining peatlands to permit the drying of peat for dry harvesting methodologies. The wetland function of the bogs is permanently eliminated. In contrast, wet peat harvesting, as developed by Peat Resources Limited, does not drain peatlands. The wetland functions are maintained and through careful land use planning the bogs can be restored for other uses. Wet harvesting permits peat ecosystems to recover quickly after harvest and application of ecological rehabilitation approaches allows the wetland to begin accumulating carbon within 2-3 years. 

Managing peatlands has a positive impact on the provincial carbon budget. Fuel peat is decomposing plant material under an active layer of living Sphagnum moss. Peatlands accumulate carbon by fixing atmospheric carbon dioxide through photosynthesis in the active layer. As proven by our comprehensive field research, peatlands with a high water table emit methane gases in excess of absorbed carbon dioxide. Methane is a greenhouse gas with 23 times the greenhouse warming potential of carbon dioxide. Therefore, removing fuel-grade peat from peatlands with high methane emissions leads to a net overall reduction in greenhouse gas emissions. More importantly, the process can generate additional carbon offset credits especially when plant growth is restored after harvest. 

Burning peat fuel can lead to carbon offsets. Under ISO 14064, as defined by the Canadian Standards Association, material used to displace coal can generate carbon credits³ . Peat, when harvested using wet harvesting methods, may generate carbon offset credits under cap and trade systems. These credits are that much greater if the fuel peat is harvested from ecosystems where greenhouse warming gases are significant because of high methane emissions. Peat Resources Limited is the only company in Canada to measure methane emissions for its proposed harvesting sites⁴ . Use of peat fuel therefore provides additional and cumulative economic benefits. 

Peat is an economically better fuel than wood fibre. Peat fuel can be used directly as a substitute for coal in power generating stations⁵ . In contrast, wood pellets require new technology for handling and processing as well as extensive retrofit of existing coal burner systems. The current downcycle of the forest industry has led to the freeing of some wood resources but not enough to support economically the demands of Ontario power generation. There is also a need to protect wood assets to support the forest industry during the next economic upswing. As a study commissioned by the Government of New Brunswick shows, diverting forestry resources to wood pellets offers the least economic benefit as compared to other fibre usages⁶ . 

Fuel peat supports local economies. Currently, lignite coal for OPG’s generating stations is purchased from Saskatchewan and Wyoming. It is brought to the end users by ship and by rail. Every tonne of coal purchased exports at least $44 outside the Ontario economy. Every tonne of peat harvested and processed in Ontario adds $150 to the Ontario economy through economic multiplication factors. A 1.5 million tonne per year peat fuel production operation in northwestern Ontario, which would satisfy the biomass fuel demand of the Atikokan and Thunder Bay Generating Stations, would generate over 200 new permanent direct local jobs and annually inject $225 million into the economy of northwestern Ontario.

Peat Resources Limited was formed to explore, develop and produce high quality peat fuel for use in electricity generating stations and other facilities requiring a long-term assured supply of economically and environmentally attractive fuel. In response to market opportunities and in order to establish a strong resource base, the company has focused its activities in the Canadian provinces of Ontario and Newfoundland and Labrador.

The company holds Land-Use Permits (issued by Ontario Ministry of Natural Resources) on about 19,000 hectares of peatlands in the Upsala area of northwestern Ontario, 130 km northwest of Thunder Bay. Resource evaluation (43-101 compliant) of these properties has defined about 155 million tonnes of in situ fuel-grade peat. This resource could be processed into over 22 million tonnes of peat fuel which is sufficient to meet the fuel needs of the Atikokan and Thunder Bay coal-burning generating stations for over 20 years.