ST. JOHN'S, N.L. - The Newfoundland and Labrador government says reliance on natural gas for future power needs would be too risky and expensive.
A new report by consultant Ziff Energy Group of Calgary is the latest in support of the proposed $7.4-billion Muskrat Falls hydro megaproject in Labrador.
The government commissioned Ziff to study the options of piping natural gas from offshore oil sites and importing liquefied natural gas to power an oil-fired power plant at Holyrood, N.L.
It concludes that a subsea pipeline would be at risk from icebergs and would cost $4.1 billion more than Muskrat Falls.
It also says buying liquefied natural gas for a small island on competitive world markets would cost at least $2.3 billion more than Muskrat Falls.
The Progressive Conservative government released the arm's length report in response to critics who said it had not fully explored other power generation options.
Crown corporation Nalcor Energy and private utility Emera (TSX:EMA) plan to bring power from Labrador's lower Churchill River to Newfoundland and Nova Scotia using subsea cables.