Category Archives: Business

Mar 05 2015
1 Comment
Business, Energy, Oil and Gas, Politics

The Frick and Frack of shale gas in N.B.

IMAG0604

The absurd barn dance the New Brunswick government and the province’s gas exploration companies are performing would be mildly amusing to witness if it wasn’t so stubbornly frustrating to behold.

The Gallant government has been clear about its conditions for lifting its moratorium on hydraulic fracturing:  A “social licence” must be obtained; reliable research about the practice’s environmental effects must be undertaken; a strategy to limit the impacts on infrastructure must be written; an approach for negotiating with First Nations communities must be devised; and a royalty regime must be developed to spread the wealth equitably.

Fair enough. So, let’s get on with it.

But, no. Industry and Government are still curtseying and do-si-doing while New Brunswick’s economy – and all of its pent-up capacity – waits for this maddening hoofing to finally end.

Now, the Province finds itself in the broadly untenable position of pondering license extensions to established exploration companies, who have signed agreements to frack, only to avoid any legal repercussions that may stem from industry’s desire to sue its institutional arse in court for, in effect, revoking those agreements.

But will Government consider reversing its election promise (a moratorium on fracking), a move that would settle the conundrum once and for all, in return for closer public-private sector collaboration on all outstanding issues associated with shale-gas extraction?

Not on your life.

In fact, Energy Minister Donald Arsenault is adamant that he can dance quite well, even with his feet tied together.

To the Telegraph-Journal he declared the other day, “Despite what the (Tory) opposition is saying, SWN is not ready to run away from New Brunswick. I am not saying that they are in total agreement with a moratorium, of course not. . .But the fact that they requested an extension tells me that they are still interested in New Brunswick.”

On the other hand, he demurred, “I am not obligated to extend it (SWN Resources Canada’s license in New Brunswick). I have the authority to do it; it doesn’t mean that I have to do it.”

That’s what Frick says. What sayeth Frack?

Corridor Resources, the other major player in the provinces, is somewhat more loquacious on than subject than its competitor SWN, which refuses to respond to media interview requests.

Says Corridor CEO Steve Moran: “We have made application with government to. . .extend those leases for all the time the moratorium is in effect.”

What’s more, he says, “We pay them (Government) rental payments for our leases, but we also pay them royalties. We’re still paying them royalties on the producing wells. I don’t see why we should be paying them rental for lands that in essence are stymied.”

Frankly, neither do I.

Nor do I think that any of this even remotely serves the principle of informed consent in a province as evidently concerned about its democratic rights as is New Brunswick – let alone the long-term economic stability that necessarily girds such expectations.

Meanwhile, Moran warns darkly of the day when domestic supplies of natural gas will become scarce, forcing up the price charged to business and residential consumers.

In that eventuality, Arsenault counters, we’ll simply pull in more of the stuff from Pennsylvania where (guess what, boys and girls?) fracking is legal.

Huh?

So it’s okay to import gas, fracked from another jurisdiction at a premium; but it’s not to deploy a similar technology to produce a cheaper supply here at home.

Is it any wonder this province’s economy is on the skids.

Then again, we do love to dance with ourselves – in the dark.

Tagged , ,
Feb 26 2015
Leave a comment
Business, Economy, Politics

Juggling N.B’s balancing act

DSC_0005

For public leaders, the great challenge in stewarding an economy like New Brunswick’s is not, essentially, crafting jobs-vows and packaging promises for economic growth.

The great challenge is learning how to walk, chew gum, sing, dance, buy the groceries, and cook the dinner – all at the same time.

Of course, to prove to the common weal that they are, indeed, multi-tasking geniuses – gifted beyond reasonable doubt in the calculus of actually getting things done – young governments are inevitably tempted to issue a bevy of so-called “prosperity plans” and “opportunity programs”, which they insist clearly present the key that unlocks the door to durable progress.

It never does, of course. 

In fact, in every case, these “plans” and “programs” are anything but – more wish lists than articulate frameworks. But, they make great copy for newspaper editorialists; lamentably for everyone else, that’s about the sum total of their value.

Still, a government such as freshly minted Brian Gallant’s in this province owes itself and voters a valiant, mold-breaking exercise in economic specificity, in which plans really are plans, programs really are programs and vision is more than a talking point for a chamber-of-commerce audience of jaded luncheon rats. 

Happily, the early signs here are promising.

The new appointees to the province’s Jobs Board (notably David Campbell and Susan Holt) have, in recent days, made useful points about the ways and means of building and sustaining industrial capacity.

In effect, these boil down not to one ingredient, but many, operating in concert to slowly, incrementally, convincingly improve the conditions for commercial growth, innovation, expansion and, naturally, job creation.

These necessarily require Government to hone its juggling skills just as they require public shepherds of long-term prosperity to focus more on the steak of their proposals than the sizzle of their pronouncements.

The traditional temptation is, however, to stray from this noble, difficult purpose. Often, it’s the sweet, low-hanging fruit that distracts.

In this context,  alone, the ostensibly good economic news about New Brunswick from the Conference Board of Canada this week is actually troubling.

For the first time since 2007, the organization insists, the province is set to surge ahead, posting better year-over-year GDP growth than the nation as a whole. This, the argument goes, will surely boost employment, reduce labour shortages and go a long way towards narrowing the wage-and-skills gap, especially in natural resources and goods-producing industries.

The problem with this rosy forecast is that it relies entirely on factors beyond New Brunswick’s control: an uptick in export business with the re-emergent American northeast and the consequent effect of depressed oil prices, i.e., a low Canadian dollar.

When things are fertile, who thinks about the inevitable drought?

Who thinks to leverage the good times (with, for example, ground-breaking, world-beating product and service innovations, strategic infrastructure, advanced training and education) to ameliorate the bad?

Similarly, the promise of better days ahead might lure policymakers into believing that the timing for a general tax grab has rarely been more efficacious. Several economists and, at least, one poverty group, have issued strong injunctions against such a move.

They are correct. Rash increases in income or consumptions taxes are not the way to go at the moment.

But neither is hand-wringing.

Everything must be in play in this province, and everything is of a piece – a piece of every other.

The Gallant government’s approach to date has indicated that it knows this. Temporary upticks in the economy are no more promising, in the long-term, than are sudden, socially irresponsible hikes in levies on citizens.

The future is in the long game – in the simultaneous chewing of gum, walking, singing, dancing, grocery buying and dinner cooking.

Let’s see that the big-picture plan contains enough meat to nourish future generations of this province.DSC_0005

Tagged , ,
Feb 22 2015
Leave a comment
Business, Economy

Is it a whole new ball game for N.B.?

cropped-img-20120922-000031.jpg

When a government seeks a home run in the early innings of its time at bat, it helps to have a couple of heavy hitters warming up in the dugout.

Last week, New Brunswick’s Grit Premier Brian Gallant announced his appointments of three all-stars in the field of economic and business development to help shepherd the province’s new Jobs Board secretariat.

According to the premier, Jacques Pinet (as the group’s new chief executive officer), Susan Holt (as the new chief of business relationships) and David Campbell (as the new chief economist of New Brunswick) “will work to set the conditions for growth so that we can help our province’s businesses and entrepreneurs create jobs which will, in turn, help improve our finances. . .These individuals each join government with a strong and diverse background in the private sector.”

For their part, the individuals in question appear as fired up about their new positions and the promise of making a difference as do their bosses Gallant and Economic Development Minister Rick Doucet, who jointly chair the Jobs Board.

“The time is right to change the way we approach economic development and job creation in New Brunswick,” said Pinet, a Moncton lawyer and former senior executive of Assumption Life. “It is clear the status quo is not working. Jobs Board represents a fresh opportunity to re-invigorate our economy. I am honoured to be part of these efforts.”

Added Holt, the former chief executive officer of the New Brunswick Business Council, “New Brunswick has a history of entrepreneurship and innovation. I am looking forward to working with our business community to unleash their ideas and establish the kind of environment that will lead to job creation and prosperity in today’s economy.”

In fact, said Campbell, an economic development consultant and researcher, “Together, Opportunities NB and Jobs Board will help the government better co-ordinate and evaluate job creation efforts. Diversifying the economy, developing the workforce and making strategic investments in infrastructure are all examples of the way we can work towards the common goal of job creation.”

To say that these folks have their work cut out for them vastly understates the case.

The province’s fiscal morass of rolling annual deficits amounting to hundreds-of-millions of dollars a year on a longterm, structural debt of some $2 billion reflects an even more worrying combination of conditions that have, for years, conspired to undermine economic capacity in the province.

The labour force is dwindling, strategic infrastructure for business development is only just keeping pace with the rest of the developed world, and innovation, commercialization and productivity rates haven’t budged convincingly since the turn of the century.

As the national unemployment rate continues to drop (to 6.6 per cent last month), New Brunswick’s remains stuck in the 10 per cent range (though, this is likely the most optimistic number a statistician will average, as the actual, seasonally adjusted, rate in many parts of the province is closer to 18 per cent, especially among young, employable people).

I know Pinet only by reputation. I know Holt only slightly better. But I’ve been a friend and colleague of Campbell’s for years and he is – as is I imagine each of his new colleagues – the right person for the right job at the right time.

He is certainly correct when he writes, as he did recently, on his blog, “If we don’t find a way to get the province’s economy back to at least a moderate level of economic growth no amount of fiscal austerity will be enough to bring balance to the province’s books.”

That sounds like a cue if there ever was one.

Dear Messrs. Campbell and Pinet – dear Ms. Holt – your time at bat is drawing near. Let’s see how you hit it out of the park.

Tagged , , , , ,
Feb 12 2015
Leave a comment
Business, Government, Technology

It’s a whole new game for the Hub City

DSC_0052

I despise the phrase, “game-changer”.

The words conjure, in me, images of small boys on a football pitch, bullied by larger boys stealing the ball, kicking shins, shoving urchins into the mud, scoring on empty nets and then triumphantly celebrating their victory as a well-earned win, marked fetchingly in the “if-you-can’t-stand-the-trampling-stay-out-of-our-way” category of crooked competition.

Sort of like Wall Street in 1929, 1987, 2001, 2007 and anytime soon (pick a year) coming to an RRSP near you.

But every once in a long while “game-changer” seems to be an appropriate description for small cities with big appetites and even larger ambitions to beat the bully-boys at their own game.

So, then, witness, last week’s launch of Fibre Centre in uptown Moncton (somewhere amidst the nine-foot drifts of snow and ice and Centennial Park, where the more placid of our urban ilk still appreciate a mid-morning ski outing on Nordic trails).

There, hundreds of business and political elites gathered to hear the great news: Greater Moncton carved another notch in its belt as one of North America’s most competitive cities with the first “network-neutral colocation and interconnection facility providing a three-way junction point linking submarine and terrestrial dark fiber assets in Atlantic Canada.”

And before you shrug your shoulders and mumble “uh, come again”, the new technology works this way: For the first time anywhere in the region businesses of every size, complexity and stripe – along with public and private institutions, governments and public organizations – will have seamless access to the world through unused (ie., ‘dark’) fibre-optic cables which just happen to flow through Moncton.

The secret: There’s a lot of state-of-the-art, digital pipe going begging in these parts, these days.

“Moncton now has a physical access point to the mass of fibre optic networks that pass through, but heretofore have not actually been able to directly interconnect with each other here,” said Ukrainian businessman Iouri Litvinenko, Fibre Centre’s co-founder. “Facilities such as these have proven to breed economic development globally.”

Added the firm’s other co-founder, American tech entrepreneur Hunter Newby: “Fibre Centre is a neutral meet point for networks of al kinds. We are not a carrier, or network operator, ourselves but rather (we) own the building, known as a ‘carrier hotel’, and provide the managed real estate environment, known as a ‘meet me room‘, as well as data centre space, where all networks can colocate and openly interconnect with each other.”

Four years in the making, the deal’s the official launch podium featured Ben Champoux,, CEO of Greater Moncton’s economic development organization, 3+ Corporation; James Lockyer, chair of 3+; Gaetan Thomas, CEO of NB Power; George LeBlanc, Mayor of Moncton; Newby; and, of course, Brian Gallant, premier of New Brunswick.

Said Gallant: “This is a phenomenal opportunity. . .We should all be very proud of this firm’s decision to choose Moncton. Arthur C. Clarke (the late science fiction writer) once said that any sufficiently advanced technology is indistinguishable from magic. I can tell you that Fibre Centre has a lot of magic.”

For his part, Mayor LeBlanc noted that the news burnishes Moncton’s reputation as one of the continent’s truly smart cities. “All digital roads lead here. . .or, rather, almost all,” he quipped. We, at the city, are happy to be Fibre Centre’s first customer.”

So, then, is this a game-changer for a community that has been switching up the rules for itself ever since the railway left and the nation’s retail behemoths took a powder?

Consider that nowhere in eastern North America is there as comprehensive and technologically sophisticated hub of fibre optic cable than here.

Also consider that nowhere in eastern Canada would an announcement like this draw hundreds of people to a spare auditorium, providing no parking, in sub-zero temperatures, surrounded by mountains of frigid white.

Game-changer, indeed.

I’d call it a game-opener.

Tagged , ,
Jan 28 2015
Leave a comment
Business, Demographics, Economy, Energy, Politics

The good news for New Brunswick: Here, in this place 

DSC_0026

“Finances bleak, but province not bankrupt” – headline news in the Moncton Times & Transcript, Friday, January 23, 2015

Dear New Brunswick,

Here’s what you do when you’re about to go under: Put on your Sunday best, paint a smile on your face, take a walk through all your favorite haunts, count your blessings, and, above all, keep your mouth shut.

You would not believe how ennobling simple measures can be when you are about to lose everything.

After all, what is “everything”?

Is it a house, a car, a snowmobile?

Is it a wife, a husband, a son, a daughter?

Oh well, easy come, easy go.

We can’t have it all.

Gone – that’s the poetry of our times.

Gone.

In fact, when you think about it (and you’ll have plenty of time for that), “Gone” is a pretty fantastic place to live.

No more obligations, expectations or dreams. No more plans, plots or potting beds. No more of. . .well, anything, really.

Just silence, sleep, and the slow inexorable crawl to the circus tent, where all are destined to find their final resting places – just some sooner than others.

Still, dear New Brunswick, don’t forget to slap on that lipstick, don that boater, adjust the suspenders on the oak barrel you’re wearing. The world is watching you. You want to be presentable when you finally succumb.

Don’t you?

Fear not at all, noble province. Those who were smart enough to leave in time to make their bones in far-off places – where big, rock candy mountains still transform black gold into fountains of toonies – will return to bless your own inert skeleton.

Speaking of them, what of Jules and Jim 15 years from now.

In January 2031, Jules is running a hand through his thinning, grey hair, glancing occasionally at the clock on the wall of the departure lounge. “Looks like we’re running out of time,” he mumbles. “What else is new?”

The storms of late December had minced the schedules of the one airline that still bothers to call on New Brunswick. Normally, any delay en route to the oil and gas fields of northern Alberta mean long lineups for itinerant Maritimers arriving late to Fort Mac’s weekly job lottery.

But, today, Jules doesn’t mind so much. His traveling companion is late. Might as well sit tight, he tells himself. A pipe-fitter by trade, 25 years of going down the road and back has taught him how to wait. He’s good at it; waiting and thinking.

He’s old enough to remember a different New Brunswick, when his native home was not just a regional staging ground in the brisk business of exporting human capital. That was before the Wall Street money lenders had called the loans, effectively throwing the province into receivership.

Really, he thinks, what other choice did they have?

In 2024, the provincial government had failed to make the minimum payment on its long-term debt of $42 billion. Sporting an operating budget deficit, in that fiscal year, of $7 billion, it had needed a miracle to cover its financial obligations. And there hadn’t been one of those in this benighted corner of Canada for some time.

Still, Jules recollects the word “miracle” being used when he was a boy and Greater Moncton, for one, was an authentic economic nexus of the Maritimes.

He checks the clock on the wall again.

“Where is that whelp?” he mutters to no one in particular. “The boy is 45 minutes late, and the plane is here, finally.”

As his 16-year-old nephew Jim’s bonded master, Jules is almost looking forward to showing his young apprentice the ropes in Alberta.

Jim, apparently, has made other arrangements.

Dear New Brunswick, here’s what you do when you’re about to go under: Put on your Sunday best, paint a smile on your face, take a walk through all your favorite haunts, count your blessings, and, above all, shout from whichever rooftop you still own.

Shout loudly and shout boldly.

“I am still here.”

Tagged , ,
Jan 18 2015
Leave a comment
Business, Economy, Energy, Oil and Gas

Oh, what a messy slick we spill

DSC_0034

Oil has a nasty way of sticking to everything it touches, including the best-laid plans of men, governments and hired gunslingers in the spin-rooms of the nation.

Not so long ago, black gold was Canada’s economic salvation. It was better than  manufacturing, technological innovation in the non-resource sector, and even financial services at generating long-term jobs and huge dividends for high-flying investors.

Indeed, so went the fairy tale, oil was the last, best hope to power these industries and aspirations and return the country to its always mythological status as the world’s next, big superpower of opportunity.

Oh well. Easy come, easy go – which has become, in New Brunswick, our preferred provincial slogan, beating out such bromides as “Be in this place” and (my personal favorite) “Hell, it could be worse, though we don’t possibly see how”.

Still, Alberta’s blackened, big sky country may want to rip a page from the picture-perfect province’s sloganeering songbook as it begins to send thousands of expat Maritimers back home to their sea-bound coasts.

With oil hovering below $50 a barrel – down more than 100 per cent since mid-October – and no discernible bottom to the price plunge, the West’s formerly gilded streets are about to be lined with foreclosure notices, each prettily packaged in recyclable envelopes, courtesy of your friendly, neighbourhood big, Bay-Street bank.

Oh, how the ironies abound.

To Stephen Harper’s Conservatives, oil meant certain reelection in October. That’s because royalties from this resource enabled their utterly fantastical predictions of surplus, their wholly irresponsible promise to permit income splitting among families that could well afford to pay the tax man that which is properly due to him, and their cynically calculated (and needlessly costly) diversions regarding the Child Tax Credit.

Now, they’ll be lucky to muster enough cash to cover the cost of the laces for the finance minister’s new shoes come budget time some months away.

As it is, they can’t work fast enough to fit themselves for boots of clay.

According to a Globe and Mail report last Thursday, “The Conservative government will not release the federal budget until at least April, a delay meant to give Finance Minister Joe Oliver more time to assess the impact of plunging oil prices on the Canadian economy.”

As Mr. Oliver told a press conference in Ottawa, “Given the current market instability, I will not bring forward our budget earlier than April. We need all the information we can obtain before finalizing our decisions. . .“This new reality poses a great, though not entirely unprecedented challenge. . .It represents the third largest price decline in the last four decades, exceeded only by the 1986 OPEC collapse and the sharp decline and rapid recovery we saw during the Great Recession. . .Given the current volatility, there is no consensus about how low will prices fall and how long they stay there. Nevertheless, every knowledgeable person I have spoken to believes, and history tells us, that prices will eventually move well above (the) current level.”

In fact, though oil’s price may not have yet bottomed, there is, evidently, a point at which the Canadian economy’s ability to compensate for its clear and utter dependence on the stuff simply fails.

Only a week ago, Ontario Premier Kathleen Wynne all-but bragged about the coming resurgence in her province’s manufacturing sector. Low petroleum prices, she noted, meant a lower valuation of the Canadian dollar against its U.S. counterpart. Since south of the border is where more than $300-billion of this country’s good wind up each and ever year, logically the boon to exporting ought to be commensurately marvelous. Read: Who needs oil?

Well, apparently, we do; and the sticky, messy stuff is not cooperating.

Says former finance department deputy minister Scott Clark, in a separate Globe piece last week, “If the government tries too hard to show a surplus, in other words twists and turns in the wind and does everything to show a surplus, I think you lose political and professional creditability. . .The reality is a lot has changed and if I were the Conservative government, I’d be saying ‘that’s the fact.’ Things have changed and we should just realize that and deal with it.”

Of course, that makes just too much sense for this country’s leadership, almost more enamoured of its own talking points on oil than it is with the sticky stuff, itself – if that’s even possible.

Tagged , ,
Jan 14 2015
Leave a comment
Business, Media

For a prominent prognosticator, no easy answers in the year ahead

DSC_0058

Reading The Economist’s redoubtable annual turn as Nostradamus, we will be forgiven if we emerge shocked, appalled and fundamentally confused.

After all, this is what the western world’s leading print pundit of fair-market capitalism does best: perplex.

“The World in 2015” imparts much the same wisdom as the various “Worlds” the magazine has published since big-picture, 30,000-foot views became both the sage and financially responsible way to board-up the bottom lines of publications heading into the otherwise preoccupied end-of-year times, just around the Christian holidays.

In the early 1980s, at the Globe and Mail’s Report on Business, these annual numbers were considered essential reading for cub reporters – just as important, for example, as the Canadian Securities Institute’s textbooks for aspiring investment, dealers, brokers and floor traders.

And as metro and national beat scribblers might have tucked into Charles Dickens, while the snow fell gently on the gritty curbs of downtown Toronto, we trenchers at the ROB studiously perused the writings of Walter Bagehot, The Economist’s preeminent editor (between 1860 and 1877) for clarity about the how the world’s financial systems worked then, and perhaps now, to sadly little avail.

Complexity is, of course, the essential nature of modernity. And accepting intricacy – nay, embracing it – in the affairs of men and women of good conscience is, arguably, what The Economist does best (hence, the name of the publication). In this regard, the 2015 outlook edition does not disappoint.

In his piece, the magazine’s editor-in-chief, John Micklethwait, writes, “Of all the predictions to be made in 2015, none seems safer than the idea that across the great democracies people will feel deeply let down by those who lead them. In Britain, Spain and Canada, elections will give voters a chance to unleash some of those frustrations.”

Are you listening Messrs. Harper, Mulcair and Trudeau? How about you, Barack Obama, one-time savior of the disavowed?

“The levels of unpopularity and disengagement in the West have now risen to staggering levels,” Micklethwait continues. “Since 2004 a clear majority of Americans have told Gallup that they are dissatisfied with the way they are governed, with the numbers of those fed-up several times climbing above 80 per cent (higher than during Watergate. Britain’s Conservative Party, one of the West’s most successful political machines had three million members in the 1950s; it will fight the (general) election in May with fewer than 200,000.”

So, then, we may reasonably assume, democracy is on the run.

But, wait, here’s what The Economist’s foreign editor, Edward Carr, writes in the same issue:

“Look on the bright side. . .Armed with more realistic expectations, optimists can point to three reasons for hoping for something better in 2015. The first is that democracies take time to respond to new threats and dangers, but when they do they tend to be committed to their new policies. . .The second reason to temper pessimism is adaptation. . .In 2015, China and Japan will begin to put aside their differences. Not because either is willing to give ground on their in their long-running territorial dispute over some rocky outcrops in the East China Sea, but because both need the economic boost from sustained trade and investment between them. . .The third reason concerns America. . .(Some have said) that (Barack Obama) is weak and distracted, and others (have said) that the United States is falling into decline. The charges distort Mr. Obama’s thinking and vastly overstate America’s loss of power.”

In fact, it’s hard to argue with a five-year recovery that has returned five million jobs to the biggest economy on the planet, reduced unemployment to below 5.6 per cent, and goosed annual GDP growth (in that country) to between three and 3.5 per cent over the next 15 months.

Perplexing, indeed.

Are we going to hell in a hand basket; or are we at the cusp of a new age of fair-market capitalism, powered by democracy movements that fully appreciate the role that healthy public institutions play in realizing their peaceful, common goals?

Let us dust off our crystal balls, for all the good they will do us.

Tagged , ,
Jan 05 2015
Leave a comment
Business, Climate, Energy, Idiocracy

My big picture on world views

IMAG0604

In recent months, readers of this column have sometimes complained that my opinions about politics, the economy and life as we live it in this alternately blessed and benighted corner of the unpredictable planet are inconsistent, unreconcilable and, therefore, incoherent.

What, they have invariably demanded, is my world view?

I’d give them one, if I had one.

Frankly, the one unshakeable opinion to which I cleave is that world views, such as they are, are for dictators and salesmen.

One wants you to knuckle under; the other wants to rob you blind. In either case, you’re left with few choices, other than those your political or corporatist overlords prescribe.

Still, the complaints ring with such predictable complacency that they might as well be a popular gospel.

“Why do you hate the wonderful earth we cherish so much?” one scribe asked me in early August. “How can you support the shale gas industry in New Brunswick when, as an intelligent man, you must know how much harm it causes?”

Precisely three days later, another reader accused me of runaway tree-hugging: “It boggles my mind that you, as an intelligent man, slam the only industry that has any chance of rejuvenating the New Brunswick economy.”

Again, with the “intelligent man” stuff!

Yes, I have an IQ above room temperature, but I like to think that this fortunate happenstance engenders a predilection for at least a modicum of critical thinking.

For those of you out there who are similarly equipped, here’s a question: Is it not possible to walk and chew gum at the same time?

The shale gas industry in New Brunswick has operated without incident for more than 10 years. No spills, no poisoning of water tables, no soil decimation, no air pollution have ever been recorded, reported or, even, imagined.

These facts, alone, should prove that the industry, here, understands (at least, intuitively) its “social licence”. And if it doesn’t, provincial rules and regulations governing the locations of, and practices involved in, hydraulic fracturing (which are still on the books, despite the recent moratorium) evidently enjoins it to smarten up.

That said, other jurisdictions around the world have not demonstrated New Brunswick’s perspicacity on this socially volatile energy issue. North Dakota and parts of Appalachia have all but abandoned their side of the social-licence bargain, preferring, instead, to let the industry have its rapacious way with privately-held lots, paid for willingly with up-front buy-downs and long-term royalty agreements.

The result is exactly what New Brunswick opponents of shale-gas development fear: pollution, social dislocation and (let’s face it) death by fossil fuel.

But simply transplanting other provinces’ and states’ experiences and decisions here is a meaningless exercise in organized paranoia. It supplants the agency of our own minds with that of those who are determined to dictate or sell their own agendas, either quasi-corporatist or pseudo-environmentalist.

The middle of the road, negotiating the traffic to the left and right of us, is where we must live now if we have any hope of charting a sustainable, prosperous future.

Those who demand that the world’s petrol-economy can and must end today are either hypocritical or deranged.

At the same time, those who insist that fossil fuels still promise an eternity of risk-free, environmentally benign energy are either sadly delusional or deliberately prevaricating.

The bucket slung around the world’s neck is full of oil. Currently, there’s so much sloshing around in capital markets, literally no one knows how to prevent its pricing from decimating resource-producing economies (including Canada’s).

Still, let’s say that we – all of us in this province, at least – engage in a thought experiment. Let us suppose that oil and gas were not primary commodities, but rather seed capital for sustainable energy research, manufacturing and deployment.

Let us imagine that the engines and factories that burn fossil fuel are actually generating new ways to radically curtail its casual use.

Let us hope that the judicious, reasonable use of “black gold” produces a sea-change in attitudes about the way we treat the planet we share.

Finally, let us propose that partisan bickering about “world views” falls silently, gently, coherently to the good earth we vow to protect from (who else?) ourselves.

Tagged ,
Dec 30 2014
Leave a comment
Business, Government, Oil and Gas, Politics, Science

Oh, a-fracking we will not go. . .

DSC_0033

You have to hand it to him. If nothing else, New Brunswick Premier Brian Gallant is a man of his word.

He galloped into office with a promise that, he believed, resonated with most voters: No more fracking, of any kind, until proof emerges that the process can be rendered safe and harmless to the environment (by which standard, we might all be wise to follow our children west to Alberta, where fantasies do, indeed, come true).

Then, a week before Christmas, he brought down the hammer.

“We have been clear from Day One that we will impose a moratorium until risks to the environment, health and water are understood,” Mr. Gallant told reporters in Fredericton, after he announced new amendments to the province’s oil and natural gas act that prohibit both water and propane-based fracking in the search for commercially exploitable shale gas.

The premier also made it clear that companies may continue to explore for resources. It’s just that they can no longer frack in their efforts to assess the potential of some 77-trillion cubic feet of onshore shale gas that is estimated to lie beneath the surface – which is a little like telling someone that he may own a car, just not the engine.

Still, Mr. Gallant allowed, “We’ll certainly always listen to businesses that may have concerns and try to mitigate some of the impacts if they (believe) them to be negative on their operations.”

Not surprisingly, the CEO of Corridor Resources had a few choice words to share. “We have always maintained that a moratorium is not necessary for an industry that has operated responsibly and safely in this province,” Steve Moran told the Saint John Telegraph-Journal on December 18. “Here is an industry that wants to create more jobs and they just basically shut it down. . .We expect that the government of New Brunswick should want to fully understand the potential rewards of allowing the industry to proceed, while ensuring the risks are manageable and acceptable.”

What’s more, he said, “The only certainty is that nobody will ever know the economic potential, should hydraulic fracturing no longer be permitted. To not allow the work to continue, would amount to a refusal by the government of New Brunswick to ask the question  of what the reward of pushing this resource might be. We would consider that a wasted opportunity for the people of New Brunswick.”

And, not incidentally, for Corridor, itself, which has over the past several years invested upwards of $500 million on the industry in this province.

Still, it’s not as if Mr. Gallant had left many options for himself. Breaking so fundamental a campaign promise in these early days of his term might have been politically suicidal (though, a strategist might argue that this is precisely when one wants throw one’s pledges under the bus; the public’s memory grows mighty short when economic development flowers from a broken word or two).

Mr. Gallant’s predecessor, Tory Premier David Alward faced a similar Faustian decision: raise the provincial portion of the HST, as every mainstream economist advised, or keep his campaign promise to maintain the status quo (note, of course, how well that worked out for him in the end).

Politics aside, it’s not clear, in any of this, what will constitute “safe” and environmentally benign fracking procedures. According to the premier, “Any decision on hydraulic fracturing will be based on peer-reviewed scientific evidence and follow recommendation of the Chief Medical Officer of Health.”

If the approach now involves reviewing the evidence of natural degradation from fracking in jurisdictions other than New Brunswick, how relevant is one state’s or province’s experiences to our own?

According to a New York Times investigation, published last month, in North Dakota “as the boom (in shale gas) really exploded, the number of reported spills, leaks, fires and blowouts has soared with an increase in spillage that outpaces the increase in oil production,” partly because “forgiveness remains embedded in the (state’s) Industrial Commission’s approach to an industry that has given North Dakota the fastest-growing economy and lowest jobless rate in the country.”

Four our part, the tolerances of New Brunswick’s own regulatory regime are not something we’re likely to test any time soon.

On that, we have Mr. Gallant’s word; and, so far, his word is good.

Tagged , , , , ,
Dec 29 2014
1 Comment
Business, Municipal Affairs

Will this be the year of the ‘centre’?

As 2014 rounds the bend and dashes straight for the finish line, Moncton remains that one indisputably bright beacon of economic hope for New Brunswick.

Far less certain, however, is the role the Hub City’s urban core will play in providing cultural and commercial coherence for the broader municipal area.

A vacant lot now yawns where Highfield Square once stood – the future home, presumably, of a mixed-use entertainment and sports facility.

Public opinion surveys over the past couple of years have suggested that most residents both want and expect a new events centre to tie together the loose ends of Moncton’s downtown.

And yet, whenever I broach the subject either in conversation or print, I’m just as likely to evoke bitter opposition as I am support for such a project. (In fact, I am growing quite fond of the hardy cohort of outraged readers who insist that my endorsement only proves that I have sold my God-given talents to corporate demons who just want public dollars to build them another hockey rink).

Indeed, the city’s collective mind seems torn between dueling conceptions of civic life: forced development and revitalization or market-driven urban sprawl.

Still, a city without a vibrant downtown is, simply, no city at all; and there is very little doubt that a new centre (hockey rink and much more) will go a long way towards consolidating the urban core.

As Mayor George LeBlanc once declared in a promotional video posted to the city’s website, “Pursuing a new downtown, multipurpose sport and entertainment centre has been one of my key priorities for Moncton. . .It will make the downtown more vibrant and prosperous. It will be a catalyst for. . .development.”

Not long ago, Moncton economic development consultant David Campbell and university economist Pierre-Marcel Desjardins put numbers to the boast.

According to the former, in a report to City Council, a new centre will annually “attract between 317,000 and 396,000 people. . .generating between $12 and $15 million in spending.” In the process, it will “support retail, food service, accommodation and other services in the downtown,” where it “should also support residential growth.”

Meanwhile, Mr. Desjardins estimated that the construction phase, alone, would generate $340 million worth of “economic impacts” for New Brunswick and other parts of the country, as well as nearly $17 million in taxes for the provincial and federal governments. Moreover, he indicated, sales from ongoing operations could easily reach $9.5 million in 2015 (assuming, of course, the centre is open for business by then).

But the crucial point, which Mr. Campbell argued rigorously and cogently, is that a new centre is not – as some have proposed – a luxury; it is quite nearly a necessity.

“Downtown – only 1.5 per cent of the city’s land area – generates nearly 10 per cent of the total assessed tax base and over 14.4 per cent of property tax revenues,” he notes. In fact, the urban core “generates nearly 11.5 times as much property tax revenue, compared to the rest of Moncton, on a per hectare basis.” What’s more, “the cost to service the downtown is much lower compared to many other neighbourhoods and commercial areas around the city.”

Yet – though it plays host to 800 business, 3,000 bars, restaurants and cafes 18,000 workers, and anywhere from 1,200 to 5,700 residents (depending on how one fixes downtown “borders” – the area is in a state of disrepair.

“The economic engine is showing signs of weakness,” Mr. Campbell lamented. “There is currently over 350,000 square feet of vacant office space in the downtown. Office space vacancies across Greater Moncton have risen from 6.6 per cent in 2011 to an estimated 13.5 per cent in 2013. Residential population in the core declined by 9.1 per cent between 2006 and 2011. Including the expanded downtown, the population dropped by 3.3 per cent. (This) compared to a robust 7.7 per cent rise across the city.”

A new centre that hosts a wide variety of events, with enough seats to compete for top shows, will incontestably revitalize the downtown area.

The real question is whether that’s still a priority in the little city that could.

Tagged , , ,
← Older posts
Newer posts →