FREE ESSAY ON RISE AND FALL OF THE NOVA SCOTIA COAL INDUSTRY

RISE AND FALL OF THE NOVA SCOTIA COAL INDUSTRY

Introduction
Coal mining has always been an important component of Nova Scotia's economy, landscape
and culture. Together with cod fishing it was the primary export and employer for the
regions population. With both industries now failing, the poor economic climate will no
doubt have an effect on the population. This paper attempts to examine the economic
conditions, market forces, and political maneuvering that gave rise to the coal industry
in Nova Scotia as well as those contributing to its demise.
Coal Formation
The first stage in the formation of the fossil fuel we know as coal is large
accumulations of organic matter, an anoxic environment, and large amounts of time. Dead
plant material readily decomposes when exposed to the oxygen rich atmosphere so an oxygen
poor environment is required. Common environments meeting these conditions were swamps of
the Carboniferous period. As plant life died in these swamps the dead organic matter sank
into the oxygen deficient stagnant water where it was partially decomposed by bacteria.
This partial decomposition lead to an accumulation of a spongy brown material known as
peat. Peat itself can serve as an energy source albeit not a very efficient one. The next
stage in coal development involves the burying of the peat accumulations by layers of
sediment (Montgomery, 1990). As the peat is buried more and more pressure and heat is
exerted upon the peat squeezing out the water and various gasses (volatiles) and
increasing the carbon content (Lutgens, Tarbuck, 1993). With shallow burial one gets
lignite, a soft brown coal. Then as more and more sediment is loaded on top of the
deposit more water and volatiles are pressed out increasing the carbon content changing
lignite to bituminous coal. With even more pressure and heat, like the kind associated
with mountain building one gets anthracitic coal. So generally the more pressure and heat
that the peat experiences the higher the concentration of carbon and the more efficient
the fuel. However, too much heat and pressure may result in the changing of coal to
graphite (See Fig. 1).
Fig. 1 Graph illustrating the relationship between carbon concentration and fuel
efficiency. Note the decline in heating 
value as more volatiles are removed Source: Montgomery 1990.
The coal present in eastern Canada was formed in the Fundy Basin of deposition. This
basin developed after the Acadian orogeny . After these mountains were formed they
immediately underwent physical and chemical weathering, and sediment washed down their
slopes to be deposited in the Fundy Basin. In the Fundy basin sediment was further
deposited in various sub basins compacting the peat layers present and forming the
coalfields of Nova Scotia. The Riversdale fields were the first to be covered by sediment
and therefore the oldest followed by the Cumberland deposits and the youngest and most
extensive deposits, the Pictou group (Calder, 1985).
Rise of the Coal Industry
The first historical mention of coal in Nova Scotia was by then Governor Nicholas Denys
in dispatches to France in 1673. In his dispatches he wrote that there was a mountain of
good coal four leagues up the Spanish River near Cow Bay, Cape Breton Island. The first
mining operation to be set up was by the French Acadians to supply the fortress of
Louisbourg with coal for heating and various industrial uses. Mining in Pictou county
started in 1807 after the discovery of coal there in 1798 by Reverend James MacGregor.
Other entrepreneurs quickly realized the potential for profits and several sank small
mines into the area (Calder, 1985).
The age of the private locally operated mines would soon come to an end however. The King
of England at the time was George the IV whose brother was Frederick, the Duke of York.
Through his high living and gambling Frederick had incurred a substantial debt. In August
of 1826 the King granted upon Frederick a sixty-year lease on all of the mineral rights
of the province of Nova Scotia to assist him in paying his debt. Frederick then
transferred the right to the General Mining association in 1827. Many thought it unfair
that the GMA have a monopoly on all the coal mining in Nova Scotia and the Nova Scotia
Legislature had the monopoly revoked in 1858 (Ryan, 1992).
Prior to the 1890's there were many unproductive Mines in Cape Breton. One Mr. A.C. Ross
is generally credited with realizing that a rail line from the rich Sydney coalfield to
the ice free port at Lousisbourg would allow year round coal extraction rather than have
to lay off workers in the winter, as ships could not enter Sydney Harbour. Together with
Boston businessman H.W. Whitney, owner of New England Gas and Coke Company, which needed
large amounts of bituminous coal, they presented a plan for the amalgamation of all the
coal companies to the premier of Nova Scotia. With this amalgamation and a large input of
foreign investment for modern equipment and transportation systems the output of coal
could be greatly increased thereby increasing royalties to the province. Leases were
granted in 1894 to the new Dominion Coal Company for ninety-nine years renewable for
another twenty upon expiration. Much of the increased output of the mines was sold to the
New England Gas and Coke Company facilitated by the construction of new piers in Boston
and improved loading facilities at Sydney and Louisbourg. The output of coal increased so
rapidly that it was soon realized that another major industry could be supported. Locally
limestone was available and an ample supply of iron ore on nearby Belle Island made the
construction of a steel mill in Sydney a logical decision. The construction of the mills
created a great need for labourers, which greatly increased provincial in-migration. The
migrants mostly came from other parts of Canada and the United States. Also many Nova
Scotian natives, who had left the province to seek work elsewhere during hard times, were
happy to come home to fill jobs. The first furnace was fired on December 19, 1900. These
were the boom times when coal was in high demand by industry and the proximity of iron
ore, limestone, coal, and the availability of low cost water transportation made Nova
Scotia steel very competitive in the world market (Mellor, 1983).
Decline of the Coal Industry
Coal use began its decline in the industrial sector, its biggest consumer, shortly after
WWII (Alm, Curham, 1984). Coal accounted for more than half of Canadian energy
consumption from 1890 to shortly after WW II. On Cape Breton peak coal production was
reached in the mid 1940's but the post war era brought a steady decline. By 1960 only
half of the original mines in the province were still operating (Ryan, 1992).
There were many reasons for the decline of the coal mining industry in Nova Scotia and
chief among them was competition. The coal industry is a business and like all businesses
if it becomes uncompetitive for whatever reason it will die.
One of the reasons coal became uncompetitive in the industrial fuels market is its bulky
nature. Solid coal has never been and will never be as efficient as oil or gas to handle
or transport. In 16th century England the price of coal doubled at a point eight
kilometers from the pit head due to transport costs (Langton, 1979). Oil initially
replaced coal as the fuel of choice for industries, then gas as these fuels were cheaper,
did not require expensive rail and/or barge infrastructures, and they stored easily (Alm,
Curham 1984). Prior to the 1950's oil and natural gas were too expensive to use outside
of the local production area but during that decade the government approved the
construction of 4 pipelines to be built to transport Alberta and British Columbia gas and
oil to Central Canada and Vancouver (McDougall, 1982). These pipelines drastically cut
the cost of transport (See Fig. 2) and allowed oil and gas to be competitive nationwide.
With the 
pipelines completed oil production increased from 30 million barrels in 1950 to 190
million barrels in 1960, and gas production increased from 70 million cubic feet in 1960
Fuel and transport method Transport Costs (Cents per 1.6 km per 1 short ton of coal
equivalent)
Electricity via high tension wire 316.5 - 395.5
Bituminous coal by rail 70 - 80
Bituminous coal by water 25 - 30
Natural gas via 34 inch diameter pipe 28- 40.8
Petroleum via 30 inch diameter pipe 9.0-13.5
Fig.2 Comparative costs of energy transport in 1957. From McDougall, 1982
to 500 million cubic feet in 1970. Increased production drove down the prices for these
new fuels and their use increased rapidly (See Fig. 3).
.
Energy Source 1950 1955 1960 1965 1970
Petroleum 29.8 45.7 48.6 49.4 48.1
Natural Gas 2.5 3.9 9.0 13.1 16.5
Coal and Coke 47.6 27.7 14.7 24.5 24.6
Hydroelectricity 20.1 22.7 27.7 24.5 24.6
Total BTU's (1012) 
2493 
3188 
3671 
4814 
6328
Fig. 3 Sources of Canadian Primary Energy Consumption (percentages) 1950-1970. From
Doern, Toner 1985).
Another factor instrumental in the decline of coal use is its harmful environmental
effects and their associated costs in today's more environmentally conscious society.
Sulfur is a major environmental liability problem for coal, and the sulfur content of
coal can be as much as 3 per cent. When this sulfur is burned along with the coal it
produces sulfur dioxide (SO2). This gas is toxic and can be severely irritating to the
eyes and lungs. In the atmosphere sulfur dioxide combines with water vapour to produce
sulfuric acid which 
is then removed through precipitation and it falls to earth as acid rain. There are
presently methods available that are able to remove some of the sulfur from coal prior to
burning but the process is expensive and only partially successful. Another alternative
is burning low sulfur coal but more often than not this coal is lower quality coal and
more of it must be burnt in order to get the same output of energy (Montgomery, 1990). It
is also possible to remove the sulfur gases after the coal is burnt but before it is
released to the atmosphere through the use of scrubbers but this is expensive and can
increase the cost of using coal by up to 25 per cent (Alm, Curhan, 1984). Oil also
contains sulfur but most of it is removed during the refining process and by the time it
is burnt it only contains about 10 per cent of the sulfur that coal does.
The burning of coal also produces a great deal of solid waste. Ash left over from burning
coal can amount to five to twenty percent of the original volume. In the atmosphere it
fouls the air and if it is captured by scrubbers it still must be safely disposed of in
some manner. Coal ash is composed mostly of incombustible silicate materials but it also
contains toxic metals and even trace amounts of uranium. If left exposed to the elements
the fine ash weathers rapidly and the toxic metals leach out posing a pollution threat to
ground and surface water. A single coal fired power plant can produce up to a million
tonnes of solid waste per year, all of which must be safely disposed of or treated at
great cost (Montgomery, 1990)
Devco
By the mid 1960's coal mining in Nova Scotia was in serious trouble. With cheap imported
oil and an expanding network of oil and gas pipelines coal was becoming more expensive to
use than its alternatives. In 1963 the federal government established the Cape Breton
Development Corporation (Devco) to slowly wind down the industry and find alternative
employment and development opportunities for those affected communities (Doern, Toner,
1985). By 1971 Devco had cut mining employment by half.
With Devco now in charge and their agenda clear it looked like the end for the
unprofitable coal mining industry. Then the Arab oil embargo of 1973 quadrupled oil
prices and the interest in coal was rekindled around the world as every major oil
importing country gave high priority to reducing their dependence on foreign oil. Output
of coal by the industry increased slightly (see Fig. 4) but would never again be as great
as it was during the first half of the century. The second oil price increase in 1976
rose oil prices by another 160 per cent and the price of Cape Breton coal rose from eight
dollars per tonne in 1967 to 52 dollars per tonne by 1984. The company began to open new
mines Lingan in 1974, Prince in 1976 and in 1987 it began developing a new 600
million-dollar mine at Donkin, predicted to be the largest underground mine in North
America. The company was finding new export markets and had just received a 33-year
contract to supply the Nova Scotia Power Corporation, which was scrambling to convert its
generating plants to coal. The future once again looked bright for the industry as the 
Fig. 4 Graph showing the Nova Scotia coal output over the last century and a half. Notice
the peaks during the first and second world wars and the increase during the 70's.
Source: Statistics Canada.
price of oil was 40 dollars (U.S.) per barrel and was predicted to be 100 dollars per
barrel by the end of the century. The analysts were wrong however, by 1999 the price was
more like 15 dollars and the oil industry once again was on its way out (Cameron, 1999).
As mentioned before Devco was more of a regional development plan rather than a business,
else the Nova Scotia coal industry would have folded a lot sooner than it had. Devco
acted as a type of life support system for the Nova Scotian economy effectively serving
as a wealth transfer system transfering money from the have provinces to have nots. As of
1995 Devco had managed to acquire 1.2 billion dollars in losses in just 27 years in
operation (MacIsaac, 1995). Devco actually turned a profit every year from 1993 to 1997
but those profits were not enough to cover the companies non-operating costs such as
pensions, workers compensation, long-term liabilities, and decommissioning of the mines.
Finally in January of 1998 the federal government announced that it was privatizing Devco
and quitting the coal industry it had supported since 1967. In 2000 Devco was down to one
working coal mine which Ottawa planned to sell along with the rest of its coal assets by
the end of the year. However there is no guarantee that a private company will emerge to
take over operation of the Prince mine (Cameron, 1999).
The collapse of any regions major industry will have a serious impact on the population.
Regional net migration is affected by Push/Pull factors. Push factors are those that
cause people to leave an area. In the case of Nova Scotia the major push factor is a lack
of jobs available due to the collapse of the coal mining industry and the recent
moratorium placed on the cod fishing industry. Things have gotten so bad that a 12 dollar
an hour job in the west has been sufficient to convince some people to leave the province
(Daily Commercial News, 2000). Pull factors are those that attract people to a particular
region. Recently the trend is a general migration westward towards the booming economies
of Ontario, and British Columbia (See Fig. 5). This creates a more favourable economic 
climate for both regions as one gets relief for it's social assistance programs and the
other gets much needed labour.
Province Total In-Migrants Total Out-Migrants Net Migration
Newfoundland 4779 8603 -3824
P.E.I. 1438 1233 +205
Nova Scotia 8260 9340 -1080
New Brunswick 6484 7215 -731
Quebec 12295 19180 -6885
Ontario 41719 37660 +4059
Manitoba 13339 11267 +2072
Saskatchewan 11093 13309 -2216
Alberta 29412 29647 -235
British Columbia 37172 26510 +10662
Fig. 5 Interprovincial migration January-June 1995. Source: Western Report Nov. 27 1995.
The Future of the Nova Scotia Coal Industry
If the OPEC years have taught us anything its that our reliance on foreign oil can leave
us vulnerable to fuel shortages. Shortages not only caused by embargoes, but since
fossil
fuels are a non-renewable resource, from just depleting the worlds finite supply. As seen
in the seventies when the price of oil rose drastically, interest in coal mining was
renewed and such will be the case again. Coal is the most abundant fossil fuel on the
face of the earth (see Fig. 6) and its use was only discontinued because the other, less
abundant, fuels were cheaper to transport. As our reserves of natural gas and oil deplete
the law of supply and demand states their price will go up until such a time where coal
once again becomes competitive in the industrial market.
As well there are various technologies that exist in order to change the form of coal so
it is more easily transported. Currently there are two processes; Gasification and
Liquefaction. Coal gasification is a process for converting coal partially or completely
to combustible gases. After purification, these gases - carbon monoxide, carbon dioxide,
Fig. 6 Energy content of the world's initial supply of recoverable fossil fuels is given
in units of 1015 thermal kilowatt-hours. Coal and lignite, for example, contain 55.9 x
1015 kilowatt hours of energy and represent 88.8 percent of the recoverable energy.
Source: Siever, 1978.
hydrogen, methane, and nitrogen - can be used as fuels or as raw materials for chemical
or fertilizer manufacture. There are many techniques to accomplish this but all involve
heating the coal with steam in the absence of air. Currently the heat from burning this
gas amounts to only 15 to 30 per cent of what can be obtained with an equal volume of
natural gas (Montgomery, 1990). Coal liquefaction is a process that involves first the
manufacture of carbon dioxide and hydrogen gases from the coal. Heating these gases in
the presence of a certain catalyst at high temperatures will cause them to be transformed
into liquid hydrocarbons (petroleum). Currently these processes are uneconomical and only
those countries, which have no domestic oil or gas reserves, have made them viable.
Germany used this technique to produce synthetic diesel fuel during WWII and currently
South Africa has a coal liquefaction plant in operation making gasoline and fuel oil
(Miller, 1996).
Summary
In summary, the Nova Scotia coal mining industry is not dead, it is only on standby until
such a time as it becomes economically viable. The same market forces and concepts that
had given rise to it, and led to its demise will eventually revitalize it. Once the oil
and gas reserves of the western provinces have been depleted Nova Scotia may become one
of the have provinces supporting their failing industries. We may even see a shift in
net-migration eastward. How far off into the future this will take place no one knows for
sure, but the worlds hunger for fossil fuels is insatiable and it is only a matter of
time.
Bibliography
Literature Cited
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