A proven European energy source may be the solution to help Ontario reduce air pollution and secure its power supply. It's much cleaner than coal and significantly cheaper than oil and gas. That source is peat fuel.

Canada has the biggest deposits in the world. In turn, Ontario has the largest accessible supplies, none of which have been developed. According to a provincial government report, Northern Ontario's vast bogs have the energy equivalent of 72 billion barrels of oil - this province's own version of the Alberta tar sands.

Long associated with horticultural use or premium whisky, most North Americans don't realize that peat fuel has a long history in northern and eastern Europe as an economic source of energy.

Brownish black in colour, peat is a material formed from the partial decomposition of plants under very wet, acidic conditions primarily found in bogs and fens.

Peat energy provides 13 per cent of power needs for Ireland. The corresponding figure for Finland is 7 per cent, as well as contributing 19 per cent of that country's district heating requirements.

Earlier this year, Ireland opened two new peat-fired power plants at a cost of $570-million (U.S.). The country is known as the Celtic Tiger because of its booming economy and good business and energy policies.

"Peat fuel can help the Ontario government meet its commitments to replace the burning of coal without affecting the supply of power and provide economic development for Northern Ontario," says Peter Telford, president and CEO of Peat Resources Ltd.

The exploration efforts of this Ontario-based company are centred near the town of Upsala, about 100 kilometres from two coal power plants - Thunder Bay and Atikokan - scheduled for closure. Initial reports indicate enough resources to supply about one million tonnes of peat fuel a year.

"Production from this first site will allow the Atikokan power plant to burn this clean renewable energy source," says Mr. Telford. "And the conversion costs to burn peat are very, very low."

In fact, the Ontario government is studying possible green alternatives for the Atikokan generating station. The potential biofuels include wood waste and peat fuel.

The environmental benefits of peat for power production is that it has less than 10 per cent of the sulphur content of coal, no mercury and produces less ash waste and dust emissions. U.S and European agencies have classified peat as a renewable biomass.

Furthermore, Northwestern Ontario's peat bogs are very acidic environments that produce large amounts of methane, a gas that has 23 times the negative greenhouse impact of carbon dioxide.

McMaster University's Mike Waddington, one of the world's experts on peatland hydrology and greenhouse gases, says: "Harvesting peat from peatlands followed by active restoration or reforestation eliminates most methane-gas emissions and turns these rehabilitated environments into net carbon sinks."

There is also another enormous market for Canada's vast fuel peat resources. Tougher environmental regulations are forcing many of America's coal-fired power plants, which supply about 60 per cent of that country's electricity production, to install costly pollution controls or shut down. By mixing peat fuel with coal, sulphur and mercury emissions are significantly reduced for much less cost.

Peat Resources recently obtained rights to prospective peatlands in western Newfoundland near Stephenville. "Our Newfoundland properties are close to excellent port facilities," says Mr. Telford. "This opens up the vast American markets on the eastern seaboard to a clean, economic source of energy as well as providing much needed local economic development. It's a win for everyone."