Category Archives: Energy

Jul 27 2013
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Climate, Energy, Environment

Here comes the sun in N.B.?

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Lost in New Brunswick’s roiling energy debates over shale gas (will hydrofracking transform us into mutant mole people?) and wind power (will the turning of turbines send us to the loony bin?) is one alternative about which you almost never hear.

You won’t find it easily in the official literature dutifully compiled by the province’s  energy and environment departments or by NB Power, now gamely justifying is disastrous investments in the Point Lepreau nuclear plant.

But it is the ubiquitous feature of every hot summer morning, every frigid winter afternoon and all the days between: the sun.

While much of Canada has been consumed, in recent years, by the thankless task of weighing the virtues and vices of its plentiful supply of fossil fuel, other nations of the world have been moving ahead with plans to increase their solar energy capacities. The reasons are as mundane and familiar as they come: improving technology and falling costs are making a solid business case for manufacturers and operators, alike.

Writing, recently, in the Huffington Post, reporter James Gerken observed, “A dramatic drop in the price of solar power technology last year helped the continued growth of renewable energy, according to a U.N.-backed report. . .Global energy-generating capacity from renewable sources rose by 115 gigawatts in 2012, compared with 105 gigawatts the previous year, the report by the Paris-based think tank REN21 showed.”

Specifically, he reported, “The drop in solar prices – fuelled by Chinese manufacturers – helped bring the overall cost of investment in renewables down 12 per cent to $244 billion from $279 billion in 2011, effectively boosting the amount of generating capacity investors can get for their money.”

Meanwhile, according to a Reuters piece last month, “New solar photovoltaic power installations in the United States totaled 723 megawatts (MW) during the first quarter, up 33 per cent over the same period in 2012. . .GTM Research and Solar Energy Industries Association (SEIA) forecast that during 2013, the industry will install 4.4 gigawatts (GW) of photovoltaic power facilities – enough to power about 800,000 average American homes.

“That will rise to nearly 9.2 GW annually in 2016. As the cost of solar photovoltaic panels declines, solar power is one of the fastest-growing new energy sources in the United States. ‘Installations will speed up over the next four years as projects become economically preferable to retail  power in more locations,’  said Shayle Kann, vice president of research at renewable power information company GTM, a unit of Greentech Media.”

In fact, in a recent letter to the Globe and Mail, a spokesperson for the Canadian Solar Industries Association declared, “Last year, Europe added almost all of Ontario’s current generating capacity in one year and most of it was solar.” Ian MacLellan went on to write, “The world is in the middle of a fundamental transition in our energy-based economy. It started about 20 years ago and it will take about another 20 years to complete. This transition is happening much faster than even most solar experts had predicted.”

That last statement might be a little rose-coloured. The economic forces that now make solar energy viable for many are also eminently reversible. What’s more, the biggest advances in all forms of renewable energy (including solar) appear to be taking place in developing and emerging economies, simply because these are, effectively, “greenfields” without integrated, fossil-fuel-dominated infrastructure.

Then, of course, there’s always the not-in-my-backyard syndrome, of which it is never wise to discount.

“A Devon (U.K.) councillor has branded solar farms as being like concentration camps after the latest plans to install panels in the countryside was revealed,” The Telegraph reported in April. “Julian Brazil, a Lib Dem councillor at Devon County Council, spoke out as another solar energy farm was given the green light by the council’s development management committee. He told the meeting: ‘They look horrible, not dissimilar to concentration camps. But we are told by the Planning Minister to press ahead with these.’”

Still, these problems are by no means unsurmountable. And solving them could happily preoccupy New Brunswick’s innovators (and elected officials), who are always looking for new ways to dispel the clouds that hang over the province’s economy and let in a little sunshine.

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Jul 03 2013
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Energy, Oil and Gas

Injecting reason into the fracking debate

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For academic geologists, who study the world’s reserves of oil and gas, which have slumbered beneath the surface for millions of years, time is a meaningless concept. For public officials, embroiled in the politics of petroleum development, it’s the only thing that matters. Or it should be.

One of the broad and exquisite ironies (and there are many) about the gathering controversy over shale gas in New Brunswick is that the provincial government has only just figured this out.

For months, if not years, elected representatives of the Tory persuasion have ceded nearly all of the high ground in the battle to win the hearts and minds of the great, voting unwashed to the Internet-mining, documentary-viewing, anti-fracking, fossil-fuel-loathing constituency.

At times, Premier David Alward’s cabineteers have seemed downright flummoxed by the vehemence of opposition to shale gas development in the province. After all, they said as they scratched their scalps, as we don’t yet know whether there is an actual industry to despise, shouldn’t we identify its true, commercial potential before we lose our collective minds to inchoate outrage?

But, of course, such musings are not how you win a revolution. Environmental and community activists know well the first rule of effective civil action: Don’t wait for your enemy to set the agenda.

This is especially important in circumstances where your enemy has more money than God. If and when shale gas companies actually do fire up their production platforms, no amount of peaceful – if vitriolic – protest will ever shut them down. Only economics can achieve this. Hence, the marvelously orchestrated fury.

Lately, though, the Province has stepped up its game in defence of what it might term the prudent development of shale gas in New Brunswick. In two, surprisingly articulate, commentaries carried by the Times & Transcript’s sister organ, the Telegraph-Journal, Energy and Mines Minister Craig Leonard sets out his case. First, he says in so many words, “We can’t afford to do nothing,” before he declares, “We will ensure we can enjoy the economic benefits. . .while proceeding in a safe, responsible and sustainable manner.”

Of these, the strongest argument is the latter and, again, one wonders why it’s taken this long to make it this cogently.

At the heart of the opposition to shale gas is the conviction that hydraulic fracturing is inherently injurious to the environment and, by extension, to communities proximate to drilling operations. To support the claim, critics produce a virtual trove of information, gleaned from the Web, that clearly demonstrate just how fully industry players have desecrated whole regions of the United States with faint regard for their responsibilities, above those that secure shareholder values.

Some of the “proof” is spurious; some of it is persuasive. (Valid or not, it’s hard to counter a homeowner’s assertion that he abandoned the family farm because his once healthy child began coughing blood only after the nearby rig started drilling).

And yet the massive hole in this argument, through which no one in public office (until now) has seen fit to drive a rhetorical truck, is that New Brunswick’s opportunity lies before it. The province has a chance to do things better and more safely. It is not tethered to shoddy regulations and “industry-friendly” arrangements. It starts with a clean slate. Or, as Mr. Leonard, writes: “We designed the new rules for industry to ensure issues with the industry faced by other jurisdiction will not occur here.

“Whether it is requiring that all fluids used in the gas extraction process are kept in a closed loop system to ensure no contact with the land, the constant monitoring of air and water or improved construction of the wellbore, our rules will protect the land, water and air.”

The other piece is that no two shale plays are exactly alike. The experiences of one region are not reliably transferrable to another simply because we invoke the word “fracking” – like some, dark incantation – to describe industrial activity in both.

Mr. Leonard’s arguments will not convince everyone, of course. But they are, at least, useful contributions to what should be an informed, public debate. And, for once,  they are timely.

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Jun 26 2013
12 Comments
Economy, Energy, Oil and Gas, Politics, Science

On seismic testing, just the facts please

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Those of us who remain curious about the economic potential of onshore tight oil and gas in New Brunswick might as well face it: There is no perfectly safe way to develop an industry that pulls vast quantities of petroleum from the ground. There never has been, and there never will be.

The only thing that matters is identifying the level of risk we are prepared to assume in return for jobs, royalties and tax revenues. And to do this, we need facts. But where are they?

The news media is in its element when it covers controversy. Altercations and recriminations between shale gas protestors along Highway 126 and SWN Resources, which is undertaking exploration there, make headlines. Dispassionate examinations of the claims both for and against the technologies involved more often do not.

And so, we are left sifting through emotionally charged assertions for clues of validity. We are left, for example, parsing this statement from a local resident, whom the CBC quoted in a story the other day: “There’s lots of money in Alberta, but when people come home they don’t want to see this. The money is good, but the money isn’t everything. . .They still put charges of dynamite in the ground and they still blast them.”

He was referring to the practice of seismic testing, which, according to the website naturalgas.org, “artificially (creates) waves, the reflection of which are then picked up by sensitive pieces of equipment called ‘geophones’ that are embedded in the ground.” Essentially, the procedure takes a picture of what lies beneath.

The question, of course, is whether this citizen’s concerns about the potentially catastrophic effects of the process on the water table and broader environment  – which, not incidentally, mirror those of many others in the province – are justified.

Or is Marc Belliveau of the provincial Department of Energy and Mines closer to the truth? Yesterday, he told this newspaper, “There is, unfortunately, a lot of misconceptions of what seismic testing is and what it is not. . .It’s used in making highways, it’s used in finding water sources for municipalities. . .There was seismic testing carried out along more than 500 kilometres in New Brunswick two years ago. . .There were no issues.”

Still, that was then. What about now? Back in the stone age, when I briefly majored in Geology at university, seismic testing was breakthrough technology in the oil and gas industry. And, like all breakthrough technologies – which are, by their natures, intrusive – this one did cause “issues”.

Even today, the procedure can be problematic. Earlier this month, oil and gas companies in the Gulf of Mexico agreed to forgo using the technology over concerns that it may harm marine life. According to a news report from KNOE.com, “Michael Jasny of the Natural Resources Development Council says the (moratorium) will give the government and industry time for required environmental studies and research.”

That said, the best evidence suggests that seismic testing in New Brunswick is about as safe as can be expected given the province’s regulatory framework and SWN’s statement of exploration practice, which appears on its website.

“The vibroseis technique is only used on roadways and provides quality signals with minimal disturbance,” the company declares. “Seismic vibrator trucks are equipped with an underlying vibrating plate to generate specific sound signals. . .The strength of the signal from one seismic vibrator truck is very small; several trucks need to be activated simultaneously to create a signal strong enough to be recorded. These vehicles create noise levels similar to that made by a logging truck.”

When no roads are available, SWN says it deploys the “shot hole technique”. In these instances, the company clears “a maximum three metre-wide path for a drill vehicle in the woods. No vegetation larger than 15 centimeters in diameter is cut. The track-mounted drill vehicle drills a hole 15 metres deep. A small seismic source is placed at the bottom of the hole and is sealed with clay and drill cuttings per provincial regulations. When safely secured, the source is activated with specialized equipment. Afterwards, the area is restored to its original state.”

Whether or not this statement can allay public concern depends entirely on the degree to which one is willing to allow fact to triumph over fear.

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Jun 23 2013
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Economy, Energy, Environment, Politics

Denial and deflection on shale gas

Too much official hot air as shale gas in New Brunswick bloats expectations

Too much official hot air as shale gas in New Brunswick bloats expectations

Into each political life, a little denial must fall. But the New Brunswick government’s contention that the tide of opinion in the province is turning in favor of shale gas development seems particularly delusional.

Survey after survey have clearly established that more people than not believe tight petroleum drilling – which employs the controversial method of hydraulic fracturing – poses a threat to the environment and, by extension, to communities in rural areas. A recent Corporate Research Associates (CRA) poll merely confirms what we have known for months.

“New Brunswick residents are concerned about the safety of shale gas exploration and are split on whether the process is important to the economic future of the province,” the Halifax-based opinion-taker announced this week. “One-half (48 per cent) of residents believe shale gas to be critically important or important but not critical to New Brunswick’s economic future, while a similar number (44 per cent) believe it to be not very important or not at all important to the economy of the province.”

Meanwhile, “when asked (about) the safety of shale gas exploration, on a scale of ‘1’ to ‘10’ where ‘1’ is not safe at all and ’10’ is extremely safe, the average rating was 3.9 indicating many residents perceive shale gas exploration to be unsafe. Those in the Northern Region (3.3) and Moncton area (3.5) are more likely to consider the exploration of shale gas unsafe compared with those in the Southern region (4.6).”

All of which moved CRA’s chairman Don Mills to observe, “it is clear that there will be significant and continuing challenges to government and industry in the development of shale gas resources in the province of New Brunswick.”

In an interview with the Telegraph-Journal this week, he went further: “The results say to me that the provincial government and the industry are both in a tough corner right now. . .There are so many people who believe that fracking is unsafe, I think the opponents of shale gas have won the day on that argument, at least at this point.”

What, then, justifies Energy Minister Craig Leonard’s sunny disposition? He also told the TJ this week, “(People) need to understand that we have the strictest rules in North America in place. But the support is growing and from what we are hearing on the ground, most people we are discussing this with say that even if they have concerns with the process, they want us to see what kind of resource we do have through the exploration phase.”

That’s hardly a ringing public endorsement. People are always willing to consider the necessary evils of their circumstances as long as those evils remain hypothetical. The moment the drills go into the ground and the gas starts flowing in earnest, it’s a whole new ball game. For the provincial Tories, the game may already be over.

CRA’s early June survey found that support for the government, among decided voters in New Brunswick, had slipped to just 29 per cent, down from 32 per cent in March. The Liberals commanded a 41 per cent approval rating, up from 35 per cent in the earlier three-month period. These shifts in electoral preferences neatly coincide with Grit calls for a moratorium on further shale gas development.

Now, in a tactical tour de force (though farce may be a more accurate word), the provincial government is hoping to secure acquiescence to onshore exploration by conflating the effort with a potential eastern pipeline into Saint John – a project for which there is broad, if not unanimous, support. This sort of deflection, though common enough among politicians, almost never works. Worse, in most cases, it backfires.

The plain, hard truth is that leadership in public office inevitably entails disappointing and angering many of those who put you there.

If shale gas is, in the opinion of this government, worth pursuing, then get on with it – safely, responsibly and openly, of course. But leave out the sugarcoating and magic tricks. No one’s buying any of it.

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Jun 05 2013
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Business, Energy

What are true benefits of an eastern pipeline?

As New Brunswick Premier David Alward fluffs the pillows and hoovers the welcome mat for his oil-rich, Alberta counterpart, who arrives for a chin-wag in Fredericton later this week, hope – with just a hint of desperation – is in the air.

Almost nothing, it is safe to say, has so animated this government’s aspirations for long-term prosperity than the promise of a west-east pipeline terminating at Saint John, where the mighty petroleum empire of Irving Oil holds sway over the Fundy basin. Indeed, Mr. Alward has designated the endeavour – still only a happy preoccupation – the crown jewel of his economic portfolio.

Some months ago, in an interview, he told me, “We’re investing significant energy in this. We’re meeting with leaders right across the country to see if there is a business case. We believe this could be as important to this century as the railroad was in the past.”

Naturally, then, Premier Alison Redford’s visit is about as propitious as it gets. According to news reports, she will tour Irving Oil’s refinery, address the Saint John Board of Trade and say a few words to the legislative assembly. Presumably, the VIP treatment will extend to the moment she boards a plane for her return trip home.

All of which is an entirely understandable, even reasonable, way for New Brunswick’s political elite to behave. After all, steering the provincial economy to even the semblance of a safe haven is proving tougher than fracking gas from a tight play (the other illusory gem in the diadem).

Still, it’s not the 6,000 or even 10,000 jobs a pipeline would immediately generate  during the construction phase that principally matter. It‘s the degree to which the enterprise – should it come to fruition – manages to change the economic culture of the province – from one that is, too often, underachieving, unimaginative and impassive, to one that is assertive, innovative and responsive.

Historically, Atlantic Canada has measured its economic well-being by the number of mega-projects it undertakes. The Atlantic Provinces Economic Council (APEC) – arguably, the region’s leading, independent think tank on such matters – leads the news whenever it releases its annual compendium of major industrial initiatives. This week is no exception.

“It (APEC) says the 388 projects in Atlantic Canada account for a record $115 billion worth of investment, an increase of 15 per cent over 2012,” The Canadian Press reported yesterday. “In Newfoundland and Labrador, investment in major projects is up 12 per cent over the previous year, with 113 developments totalling $54 billion. Nova Scotia trails behind in investment with 156 projects worth $40 billion, an increase of 23 per cent over last year mostly due to a proposed $5-billion liquefied natural gas export facility at Goldboro. The council says the potential for a west-east oil pipeline in New Brunswick and new housing projects in P.E.I. have also contributed to the increase.

It says current-year spending on major projects in Atlantic Canada has grown by five per cent to a record $14.3 billion.”

The news source quoted APEC’s major projects director Patrick Brannon, who said in an interview, “It’s catching national attention. Certainly people are looking now to Atlantic Canada for opportunities. There’s a growing investment from foreign companies in Atlantic Canada. They see the opportunities of our commodities and our resources as a future growth area for them, and they’re focusing their funding in this region now.”

Well, yes and no. Only a few months go, APEC painted an entirely different picture of the region’s economic condition, calling it “weak” and blaming it for the persistent and pernicious deficits and debts that plague the provinces. “New Brunswick had the largest deterioration in fiscal performance in the Maritime provinces in 2012/2013 with its deficit more than doubling to $411 million,” it said in a news release. “The government is examining a number of revenue measures, such as raising its Harmonized Sales Tax (HST), introducing a health care premium or retracting previous income tax reductions in an effort to return to balance.”

This is the economic dialectic of our region: booming and busting; cycling up and cycling down; hoping and despairing.

An west-east pipeline is an enormous opportunity for New Brunswick, but only if we learn how to sustain its immediate impact durably; in a culture of novelty and innovation.

May 13 2013
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Energy, Environment, Oil and Gas

Shale gas flows with hot air

Is what lies beneath enough?

Is what lies beneath enough?

At the current rate of progress, shale gas in New Brunswick is fast becoming the best-regulated industry that never was.

After two, exhaustive reports by independent auditors and a best-practice framework covering the dos and don’ts of resource exploration, extraction and production, the Alward government has now released a 37-page “blueprint” that ties up the whole, messy business with a bright, Tory-blue bow.

All this even before the industry, itself, has determined whether shale gas is, in fact, commercially viable. And yet, there are those who continue to believe the province is not going far enough to protect the interests of average citizens from the presumed avarice of the petroleum lobby.

The blueprint, say the opposition Liberals, is conspicuous for its lack of rigor. Quoted in news reports, environment critic Bernard LeBlanc said, “New Brunswickers’ environment and health are at risk based on the actions of this government moving forward. There are glaring oversights in this document, including a proper discussion about greenhouse gas emissions.”

Added Green Party Leader David Coon: “A lot of what is in the document says, ‘the government will continue to‘ or that things will be ‘ongoing’. It doesn’t contain much new and it leaves out considerable things.”

In fact, though, absent an actual gas-producing industry, the blueprint goes about as far as it can and, indeed, should.

Much of the debate over shale gas development in this province has been wildly chimeric – informed as much by horror stories about industry’s past abuses in small towns and communities south of the border as by engineering science and the lessons lawmakers elsewhere in North America have learned.

Far less attention has been paid to likelihood of commercially exploiting a proportion of the estimated 67 trillion cubic feet of shale gas that lays beneath the surface in quantities sufficient to justify the cost and inevitable disruption, let alone the regulatory regime. At the moment, that’s not a question boosters, opponents or even governments can answer.

In a letter to the editor, published by Newsday in March, Jannette M. Barth (who is described as “the founder of the Pepacton Institute, an economic research and consulting firm”) writes: “Gains from shale gas development in the United States are greatly exaggerated. Macroeconomic models do not capture regional, state or local impacts. It is possible that the combined losses at these less-aggregate levels will be greater than any macroeconomic gains.”

She continues: “Peer-reviewed research and other research not funded by the natural gas industry have found only modest short-term employment gains to regions with shale gas development. Research also shows that economic impacts concluded by industry-sponsored studies are likely overstated, and that regions with shale gas development end up worse off in the long run, with higher levels of unemployment and long-term poverty.

“A survey of municipalities in 12 Marcellus-area counties in Pennsylvania  found that while 26 percent of the municipalities experienced increased expenditures from Marcellus Shale development, 75 percent said it had not increased their revenue, indicating that costs to communities are increasing without any offsetting increase in revenue.”

New Brunswick industry types will almost certainly take issue with these conclusions, but even they are determined to inject a note of caution into the discussion. As Brunswick News reported on Friday, Contact Exploration president Steve Harding thinks “there has been so much energy that has gone into this potential resource and, to be fair, that’s all it is today. We haven’t been able to quantify it as something that is commercial.”

Barbara Pike, executive director of the Maritimes Energy Association, concurs: “The fact that the government recognizes that we still don’t know whether there is a substantial onshore natural gas industry in New Brunswick. . is important.”

Until they do – know, that is – there’s not much point is wasting further breath on fanciful predictions of either doom or boom. If and when the industry decides to pull the trigger, that’s when a true, independent analysis of its claims should inform public policy and draft the next, and final, blueprint for New Brunswick’s energy future.

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May 02 2013
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Economy, Energy

Canada’s future isn’t what it used to be

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When, exactly, the Conference Board of Canada decided it would serve the interests of policy makers better by dusting off its crystal ball and throwing caution to the wind is not immediately clear. But wonks and pundits of all stripes owe this sturdy think tank a debt of gratitude for producing its first report under its Strategic Foresight Initiative.

This slim study, which weighs in at only 12 pages, posits four possible “energy futures” for The Great White North, and each one makes for fascinating reading. But first, the obligatory disclaimer: “Unlike traditional economic forecasting that focuses on development of a probable or most-likely future, strategic foresight aims instead to develop a series of plausible futures. Its goal is not to predict the future – or even suggest which direction might be most desirable.”

Rather, the authors state, “The goal. . .is to offer insights to decision-makers in governments, businesses, and other organizations on how best to prepare for all possibilities, what they might do to shift toward a future they prefer, and how to recognize and adapt to events and trends that may point toward a specific future.”

That dutifully said, the Board can’t disguise the delightful fact that it had a ball conjuring four distinct scenarios for the shape of things to come “out to 2050” or that the document reads, in places, like Hugo Award-winning science fiction.

Consider scenario number one, also known as “Hockey Stick”.

It’s a world in which “the Greenland ice cap has shrunk, as has Antarctica. Rising sea levels and an increased frequency of extreme weather events are forcing coastal cities to build massive dykes, with low-lying countries suffering extensive damage from storm surges. The Gulf Stream has shifted south, leaving much of Europe to shiver even as former breadbaskets like the American Midwest have baked into desert. Extreme weather has become frequent – damaging crops, disrupting transportation, and eroding infrastructure.”

As for Canada, where “personal vehicles have become a luxury”, we’ve been hit hard. Fortunately, we anticipated “a world of energy scarcity and environmental trauma,” and so “recognized the need to shift” our economic centre of gravity beyond both resources and manufacturing, toward a competitive post-industrial base.”

The section entitled “Superpower” describes a somewhat happier condition for the nation. This is a world in which, “The opening of Arctic waters has enabled exploitation of other energy pools as well as easier access to mineral deposits, and Canada’s North has become a booming frontier. Canadian producers have been able to reap the higher world prices for oil and gas. But even as export pipelines were planned, reviewed, and built, Eastern provinces have moved quickly to build up their own energy sources.”

Life is, indeed, grand for Canadians. But, as the paper warns, it may be too grand: “For more than a generation, they have been getting rich by selling the world what it wants. But most of what they have been selling is finite. Eventually the party must end. The question now is whether Canadians are setting aside enough of their current income – and investing it well enough – to fund their future well-being in a post-resource world.”

Perhaps, a better, more sustainable, future for the country is the one outlined in “Green Machine”. This states that “Governments have quickly recognized the importance of supporting clean energy development through a combination of technology investments and regulation. Major breakthroughs have been made in energy storage technologies for variable energy sources and massive efficiency improvements for renewable energy generation and transmission.”

As a result, “there is a sense of balance across the country, and general optimism about the ability of technology to handle the continuing evolution of the global environment.”

Then, of course, there is the status quo of “Made in Canada” in which economic stagnation in formerly growing and emerging economies has secured Canada’s role as the world’s premier location for immigrants. Moreover, “With gas cheap and the economy strong, there has been little constraint on urban sprawl and lots of money for more roads in provinces with significant energy resources.”

Will any of these scenarios play out in the years to come? Crystal balls are notoriously cloudy. Still, the fun is in the peering.

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