Canada finds one-fifth of its landmass is an energy source

Satellites, probing the earth's surface from several miles up, beamed back the message: Fully 18 percent of Canada - some 690,000 square miles of it - is peatland.

Until the age of satellites and the development of remote sensing technology, the Soviet Union was thought to have the world's most extensive reserves of fuel peat. Now the world knows better: Canada is king.

''Muskeg'' is one of the Canadians' kinder terms for those vast areas of stinking, rotting, often eerie wilderness that have challenged development since white settlers first arrived. These boglands, often with the odor of a septic tank and home to blackflies, mosquitoes, and other irritants, require some innovative engineering whenever man attempts to settle there. Roads, railways - even an occasional airfield - have sunk, quite literally, into the earth.

But now a new respect is dawning. The worthless wilderness, as it was once called, represents a vast energy reserve, second in potential only to its coal deposits. The province of Ontario, which little more than a decade ago was officially considered to have ''no peat,'' at least none worth developing, has been found to have the world's third-largest reserves all its own - reserves that, if fully exploited, represent the energy equivalent of 26 billion barrels of oil. (To get some idea of what that means, the United States uses some 15 million barrels of oil a day, or 5.75 billion barrels yearly.)

Suddenly aware that Canada has an enviable wealth of peat on its hands, the country's National Research Council has set up a Peat Research Division to look into every aspect of peat from harvesting through processing to marketing the many end products - chemicals, plastics, distillates, and pelletized fuels, even cattle feed - as well as the basic sod used to fuel stoves and furnaces.

Environmental-impact studies are also a part of this research, according to T.E. Tibbets, who heads up the peat program from Halifax, Nova Scotia. Should a particular bog be harvested? If so, how much peat should be taken, and should the harvested bog be turned over to timber or crop production, or left to natural regeneration?

''The whole question of peat harvesting is very complex,'' Mr. Tibbets says. ''We expect no quick answers and few simple solutions.''

Peat bogs rise the tiniest fraction of an inch a year (a millimeter or two at the most), so that peat cannot realistically be termed a renewable resource. But when a land the size of Canada has almost a fifth of its surface covered in peat bogs, the reserves are unimaginably vast.

Peat is coal in its earliest stages, needing only several million years and the buildup of some massive pressure from above to turn it into the black, rock-hard substance that made possible the Industrial Revolution. Peat burns, so the saying goes, ''hotter than wood, and cleaner than coal.'' As Tibbets points out, peat produces less creosote than wood, and has none of coal's sulfur, so that burning it will never contribute to acid rain.

For the homeowner burning sod in the hearth, as many Europeans do, peat has yet another advantage: It is free from the termites and carpenter ants that may infest wood. In short, if it can be harvested readily, it becomes a very useful fuel, and it can be processed into any substance currently derived from petroleum or coal.

Peat accumulates wherever an excess of water inhibits the decomposition of vegetation by starving it of oxygen. A cool climate also contributes to slowed decomposition, which is why most extensive peat deposits occur in the more northerly reaches of America and Europe. But in the US, isolated pockets of commercially viable peat exist as far south as the Carolinas.

A peat bog typically starts out as a shallow pool or lake of stagnant water. The vegetation, which comes to consist mostly of sphagnum moss or sedge grass, grows, dies, and falls into the water, where it partly decomposes. New vegetation grows upon the old and falls in the same manner. Because new growth occurs faster than the old growth can decay, peat deposits accumulate. Most Canadian deposits, the result of 13,000 years of accumulation since the retreat of ice-age glaciers, range from a meter (a little more than a yard) or so thick in some areas to more than 100 meters (about 330 feet) in others.

The top layer of sphagnum peat (and that of some sedge peats, too) is used principally in horticulture as a soil amendment - peat moss. But beneath the surface, where more humification (slow decomposition) has taken place, the peat is almost fiberless, dark brown to black in color, and greasy to the touch. This is the fuel peat, the ''soil'' that startled Roman soldiers observed Germanic tribesmen burning some 2,000 years ago.

In Ireland, long a peat-burning nation, homeowners have returned to burning it with renewed enthusiasm, since the cost of fuel oil has risen so dramatically. The Irish also harvest peat to feed plants that currently generate a quarter of their electricity.

The Finns, too, generate electricity from peat, but the Russians are the biggest consumers of peat for this purpose. Some 100 million tons of peat are harvested each year in the Soviet Union, most of which fuels 80 electrical generating plants. The Swedes, long producers of horticultural peat, are beginning to exploit their fuel peat deposits, too. In Asia, China is a major user.

The technology, then, for both the harvesting and use of peat is well established, particularly in northern Europe. So Canada, with 170 million hectares (420 million acres) of largely untapped reserves (the USSR has 150 million hectares, or 370 million acres, of peatlands) has begun testing European operating techniques on North American peat.

The Ontario provincial government, aware now that it boasts impressive peat reserves of its own below Hudson and James Bays, is taking the lead. It has a provincial goal of producing better than a third of its primary energy from in-province sources by 1995. As Ontario has very little oil, much of this power will come from its research into peat and other energy sources.

A peat bog's capacity as an energy resource can be extended long after the harvestable peat has run out by planting the bog with the new, hybrid poplars developed specifically for fuel production. ''Energy plantations'' is the term used for new stands of these poplars. They grow rapidly under normal conditions. On old peatlands they are expected to grow at even more accelerated rates, because the organic matter, able to decay at normal rates once the water is removed, releases copious quantities of plant nutrients, particularly nitrogen.

Finnish equipment is being tested in Ontario, both because it adapts readily to Canadian-built tractors and also because Finland's climate is similar to Ontario's during the harvesting period of May through September.

Canals are cut and bogs drained, preferably for two years, before harvesting begins. Machines either cut the surface into blocks or mold it into briquettes, which are then left on the surface to dry. Another proven option is to till the peat and push it into windrows for drying, after which the peat is hauled in to the plant for processing into pellets. But the big breakthrough will come when wet slurry mining becomes economical. The Canadians are within striking distance of that goal, according to Mr. Tibbets.

Under this system, the bogs are left undrained and the peat dredged up in slurry form and pumped to a processing plant, where it is dewatered. Conventional thermal dewatering uses as much energy in the drying process as the peat itself contains. But there are biological approaches, in which bacteria are used to drive off the excess moisture, that appear very promising. If successful, this method would extend the harvest period from five to 10 months of the year, according to Tibbets, and the economics of fuel peat would be dramatically enhanced.

At the present stage of the technology, milled fuel peat is extremely bulky and cannot be shipped more than 65 miles and still remain competitive with coal or oil. Sod peat (peat turf cut into blocks) can be moved twice that distance by rail, and briquettes twice as far again. In contrast, the higher value of horticultural peat means that it can be shipped vast distances (Canadian sphagnum peat moss is available in Australian garden centers).

So Canadian fuel peat will be used initially by industries and communities near the bogs. Pulp and paper mills are logical users, and several experiments involving such mills are under way. Peat could readily fuel electrical generating plants in more remote communities, some of which have to keep flying in diesel fuel. And the local bog could become to nearby homeowners what the wood lot is to many other North Americans.

Even this limited use could meet 1 percent of Canada's energy needs, which is a ''big lump of energy,'' Tibbets says. And while it might seem to make a small contribution to the nation's needs as a whole, it will make a significant impact on many local communities.

There is the possibility, too, that large generating plants could one day convert peat into electrical power that can be readily transmitted to much more distant regions. Peat could also become an alternative source of petrochemicals and other oil-derived substances. But all this is well down the road. The groundwork must first be laid, and many years of research and development lie ahead. Still, the promise of peat is bright indeed.

As Tibbets points out, Canada would much rather face up to the problems that come with exploiting its peat reserves than to have no problems and no peat at all. The rainbow, you might say, is already in the sky, even if the pot of gold is not yet in place.