Tag Archives: shale gas

Mar 17 2015
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Energy, Oil and Gas, Politics

As the fracking world turns stomachs

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To emit or not to emit; that is the question – a reference, of course, not to the the vast amount of shale gas believed to be mercifully trapped in the ground of New Brunswick, but to the hot air issuing unmercifully and daily from Fredericton.

The deceptively simple ban on hydraulic fracturing in this province has become needlessly complicated ever since Brian Gallant sashayed into the premier’s office some months ago.

At the outset of the election campaign last spring, the matter seemed clear enough. Do five things, the surging Grits demanded of the shale gas industry:

Prove that you can make it safe; demonstrate that you won’t wreck roads and sewer systems; consult with First Nations communities before you break ground; ensure that everyone else in your exploration radii agrees with your plans; and adhere to tough, new regulations on your activities. Oh, and by the way, make darn sure that the taxpayers get a nice, juicy piece of the action.

Still, it’s never been clear that development companies want, or are even prepared, to rise to these standards – partly because many measures the provincial government imposes are hopelessly vague. How, for example, does the whole “social license” piece work in a jurisdiction that does not impose the same requirements on any other natural resource industry?

Meanwhile, the Province has just extended the exploration writs granted to SWN Resources Canada (potential fracker extraordinaire) even though that company’s ground-level executives have said – in letters to the Premiers Office and in public – that it would just as soon pull up its tent pegs and move on unless, of course, Premier “Gallanteer” reverses his position on banning the very means it proposes to make its bones in this neck of the woods.

As that’s not going to happen any time soon. Too much is at stake, politically, for a new government that promised to ride herd on industrial carpet-baggers and environmental poachers to recant its most successful election rhetoric.

No, as Energy Minister Donald Arsenault phrased it, quit revealingly, for the Telegraph-Journal earlier this week, “You don’t give an extension to a company who just wants to sit on a valuable piece of land. You still have to be committed to developing that piece of land – that’s usually how the (provincial) evaluation is made.”

On the other hand, he added, “Having said that, there are currently very extraordinary circumstances. . .It’s hard to show a program to develop the land when you’re not allowed to touch it with hydraulic fracturing. You have to be realistic. We know they (SWN) are committed, they would like to continue that work; however, they are not able to because of the conditions we set forth.”

So, then, why “give an extension to a company” who is forced to “sit on a valuable piece of land” only “because of the conditions we set forth?”

Ah, yes. . .so many soap operas in this province to peruse; so little quality downtime to watch.

Now, the official Tory Opposition weighs in with this absurd missive, issued this week: “The Liberal government’s ill-conceived policies have driven a $9-billion company out of New Brunswick, sending with them jobs for New Brunswickers at home and valuable investment dollars. This Liberal government refuses to accept responsibility for this disappointment, and have resorted to concealing the facts from the people of New Brunswick – but we deserve much better.”

We do, indeed.

We deserve clarity, coherence and political collaboration. We deserve solutions to common problems and humour instead of hubris.

To productively start, let’s first cap the gassy emissions from Freddy Beach.

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

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

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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.

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Feb 24 2015
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Economy, Energy, Politics

Dear potash, you may now kiss the bride

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Until recently, Potash and shale gas in New Brunswick have gone together like a horse and carriage if not, precisely, love and marriage.

But are we now witnessing from the sidelines of a new provincial Jobs Board – more concerned with marrying this region’s disparate economic opportunities than allowing their pervasive separations to widen – the opening gambit of some type of betrothal in the natural resources sector?

Politically, Liberal Premier Brian Gallant’s stern insistence on slapping a moratorium on hydraulic fracturing was a smart move. His Tory predecessors had utterly bungled the file with the predictable result of having neutralized any chance of engendering informed debate, let alone winning hearts and minds on either side of the controversial issue.

Those opposed to the practice of exploding rock deep beneath the ground to extract natural gas, potentially poisoning drinking water, relied on Internet research (some compelling good, some stunningly bad) to reinforce their intractability.

Those who supported the practice, believing that it could be safe as long as regulations in this province were tougher and more reliable than any found in the developed world, remained bewildered by the road blocks and burning police cruisers at Rexton, N.B., in the summer and fall of 2013.

And, as usual in these sort of contretemps, never the twain would meet.

Economically, though, Mr. Gallant’s “wait-and-see” policy regarding shale gas development (Is it benign? Can a social license be negotiated with affected communities? What’s the long-term, dollars-and-cents impact on the province’s finances?) is running down the clock.

The debt clock, that is: hundreds-of-millions of dollars in annual deficits; a $12-billion long-term debt that no degree of public-sector austerity will settle without robust, private-sector economic growth.

So, it comes as no surprise that the Grit government is now talking boldly about vastly expanding potash mining in the province.

In an exclusive for Brunswick News Inc., Adam Huras reports this week that the Province “will issue a request for proposals. . .to explore a massive stretch of land in southern New Brunswick it believes could be home to the province’s next potash mine.”

The area in question reportedly incorporates more than 24,000 hectares (240 million square meters) of land less than an hour’s drive north of Saint John.

Question: What do potash mining operations here use to power their facilities? Answer: hydraulically fracked shale gas.

Another question: Why? Another answer: Because it’s reliable, plentiful and, frankly, cheaper than any alternative.

Now, when a provincial government raises the possibility of opening up its public pocketbook to help finance a major expansion of a demonstrably successful resource industry in order to create good, sustainable, long-term jobs, the long bet appreciates that said government must also understand the importance of the fuel supply said resource industry deploys to justify embroidering its business plan.

It also stands to reason that Mr. Gallant’s cabinet and Jobs Board recognize that any move, on government’s part, to so convincingly enlarge a sector that depends on shale gas will goose opinion about the energy supply (for and against) in the public square, regardless of any moratorium.

Inevitably, that means a conversation – one that ended, unproductively, when the Grit team took office last fall.

Naturally, the talking points from the premier’s office, over the next few days, will tow the party line. No, we haven’t changed our minds, they will say. Yes, we believe there exist legitimate questions about the safety of hydraulic fracturing. Of course, until we know the truth, we will not act precipitously.

Still, that’s what every marriage broker says when he or she is conducting their due diligence.

Will the groom behave honorably? Will the bride comport herself in the best interests of her extended family and community?

How deliciously ironic that those who signed the first divorce papers might now officiate at the new wedding?

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Jan 05 2015
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Business, Climate, Energy, Idiocracy

My big picture on world views

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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.

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Jan 02 2015
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Economy, Energy, Politics

Shale gas greets new catchwords in 2015

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There is, as Ecclesiastics declares, nothing new under the sun; there is only the same, old trend, fashion or fad, freshly washed, dried, dressed, shod and shoved, once again, onto the super-highway of human history and told to survive if, indeed, it dares.

And, so, welcome to 2015 my dear “social licence to operate”. May we call you “social licence”? It’s shorter and that might be good for your image. Lord knows you’re going to need all the help you can get this year.

Actually, as shibboleths go, this is not a bad one. It’s not especially jargony. It seems reasonably comprehensible. In fact, New Brunswick Premier Brian Gallant is confident enough in his own understanding of the term, he’s started to deploy it as invocation whenever he talks about the on-again, off-again shale gas industry in the province (which is now off again).

“There shall be no drilling,” he says (or in words to that effect) until the companies responsible for hydraulic fracturing obtain the appropriate amount of social licence to proceed.

To which Corridor Resources’ CEO Steve Moran recently shrugged: “Huh?”

His actual words to CBC News were: “Even the premier when he was asked didn’t really have an answer in terms of what that means.”

Tory Opposition Leader Bruce Fitch concurred, as Premier Gallant attempted to clarify his position, telling the CBC, “We’ll certainly do the best we can to get the pulse, and the sense of New Brunswickers on whether any of these operations. . .have a social license.”

In fact, though, there’s no great mystery around the meaning of “social licence”. The mining industry has plumbed the nuances of its definition for years, or so says the Fraser Institute, an economic and public policy think tank with offices in Vancouver, Calgary, Toronto and Montreal:

“The  social licence to operate (SLO) refers to the level of acceptance or approval by local communities and stakeholders of mining companies and their operations. The concept has evolved fairly recently from the broader and more established notion of ‘Corporate Social Responsibility’ and is based on the idea that mining companies need not only government permission [or permits] but also ‘social permission’ to conduct their business.

Indeed, the Institute states, “Increasingly, having an SLO is an essential part of operating within democratic jurisdictions, as without sufficient popular support it is unlikely that agencies from elected governments will willingly grant operational permits or licences. However, the need for and ultimate success of achieving an SLO relies to a large extent on functioning government and sound institutions. . .Many mining companies now consider gaining an SLO as an appropriate business expense that ultimately adds to the bottom line.”

If all this seems broadly familiar – just another way to renovate good, old “corporate social responsibility” (or CSR) and slap a “priced-to-sell” sticker on the front door – experts in these matters beg to differ (naturally).

“CSR is often too peripheral to the core business model, too much of a side-show, too far from providing real ‘shared value’,” writes John Morrison, executive director of the Institute for human rights and business, in a recent issue of the Guardian online. “Even more fundamental are the false dichotomies that CSR has set up. There’s the voluntary versus mandatory debate, companies that are ‘good at CSR’ are valued regardless of the impact of their core operations.”

What’s more, Morrison insists, “Social licence can never be self-awarded, it requires that an activity enjoys sufficient trust and legitimacy, and has the consent of those affected. Business cannot determine how much prevention or mitigation it should engage in to meet environmental or social risk – stakeholders and rights-holders have to be involved for thresholds of due diligence to be legitimate (sometimes even if these are clearly determined in law).”

Herein, of course, lies the rub.

Like its predecessor and memetic forebear CSR, social license, as a concept, is not especially difficult to comprehend or articulate.

What challenges policy makers, politicians, community representatives and industrial players, themselves, is making it work well or long enough to produce sufficient benefits to satisfy all competing competing interests at the table.

This is rendered all the more complicated by the fundamentally revokable nature of social licences. A company that meets its obligations in one area on any given day may not be deemed to have done the same elsewhere at another time.

Then what?

Under such circumstances, Premier Gallant’s shale-gas moratorium may be the lesser of two evils facing the industry in New Brunswick.

Then again, what else is new?

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Nov 27 2014
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Economy, Energy, Environment, Oil and Gas

Would fracking turn New Brunswick into North Dakota?

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For those of the anti-shale gas, “I-told-you-so” bent, a New York Times piece from last Sunday’s edition about the utter mess – both figurative and literal – North Dakota’s oil and gas regulators are making of their state provides for some delectable reading.

Some of us will peruse the weighty tome (it runs close to 5,000 words) with mock horror and secret delight as we study a jurisdiction so fascinated by the economic promise new, horizontal drilling technologies represent that it has, with few exceptions, thrown environmental caution to the wind of commerce.

As the Times article makes plain, “Since 2006, when advances in hydraulic fracturing. . .began unlocking a trove of sweet crude oil in the Bakken shale formation, North Dakota has shed its identity as an agricultural state in decline to become an oil powerhouse second only to Texas.”

But, according to the newspaper’s independent investigation, using “previously undisclosed” sources of information, “as the boom 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 (or so the implication goes), “forgiveness remains embedded in the (North Dakota) Industrial Commission’s approach to an industry that has given (the state) the fastest-growing economy and lowest jobless rate in the country.”

When the Times says “forgiveness”, it’s not exaggerating. Its research indicates that, since 2006, the Industrial Commission has collected a little over $1 million in penalties against oil and gas companies found culpable in environmental accidents. That compared with $33 million in Texas – no state of tree-huggers, it – during the same  eight-year period.

In other words, writes the Times, North Dakota is a “small state that believes in small government. . .It took on oversight of a multi-billion-dollar industry with a slender regulatory system built on neighborly trust, verbal warning and second chances.”

Meanwhile, “over all, more than 18.4 million gallons of oils and chemicals spilled, leaked or misted into the air, soil and waters of North Dakota from 2006 through early October 2014. The spill numbers derive from estimates, and sometimes serious underestimates, reported to the state by the industry.”

This is, of course, just the kind of thing opponents of shale gas development in New Brunswick fear: The ready collusion (or, at least, the appearance of one) between those who would rape the good earth for its booty of fossil fuels and those who are empowered by law to protect the environment from such ritual violations.

After all, they insist as they point to their smudged copies of last week’s Times, if it can happen in North Dakota, it can just as easily happen here.

In fact, they’re not entirely wrong.

The slope to ecological perdition is, indeed, slippery, made all the more so by the oil and gas industry’s unquenchable thirst for growth. When a province, like New Brunswick, or a state, like North Dakota, believes it has few options to forestall economic collapse, it will, more often than not, sell out to the highest bidder with the fanciest drilling technologies and most accessible checkbooks.

Still, when a province or state has more things going for it, economically speaking, than simply its natural resources, there’s little temptation to relax regulations and oversight to buffoonish parodies of themselves.

The question is whether New Brunswick is anything like North Dakota?

In fact, there may exist some disturbing similarities between us. Over the years, we’ve both suffered from stubborn levels of underemployment, a perennial skills drain, a creeping fiscal morass, declining public revenue, and outmigration.

But our differences make a far more compelling argument that New Brunswick is better equipped than its American doppelganger to stick to its regulatory guns.

We have a history of protest against shale gas, especially hydraulic fracturing; North Dakota does not. We have a tradition of strong, involved central government; North Dakota likes to have its libertarian pie and eat it, too.

What’s more, New Brunswick already has, in place, a reasonably strong set of regulatory injunctions, starting with a moratorium (or, rather, the threat of one) on tight oil and gas drilling until the current Liberal government is satisfied about its safety.

All of which, perhaps, affords us the moral authority to tsk and cluck at our friends south of the border. They blew it.

But their bad examples should not lead us to assume that we are doomed to set our own, should we ever get around to believing in ourselves again.

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Nov 04 2014
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Business, Economy, Energy, Oil and Gas, Politics

It’s time to get clear on natural gas

Welcome to the energy big leagues, Mr. Premier.

Wheels upon wheels, gears upon gears, the squeeze play against Brian Gallant’s determination to impose a moratorium on hydraulic fracturing in New Brunswick – the preferred industry method for extracting natural gas, with water, sand and a proprietary soup of chemicals,  from sedimentary rock – has officially commenced.

Not that there’s anything especially surprising about Corridor Resources’ public insistence that 30 of its fracked gas wells supplies PotashCorp’s operations in the Sussex area of the province – to no ill effect on the water, soil and air – with a competitively priced, comparatively clean source of fuel with which to dry the fertilizer for market readiness.

Nor is their anything particularly shocking about PotashCorp’s addendum last week.

“Access to a secure, stable and sustainable gas supply is critical to our. . .longterm success,” New Brunswick General Manager Jean-Guy Leclair told the Telegraph-Journal. “While there are alternate fuel sources for our facility, they would have profound implications on our current and future operational costs.”

Read between the lines, Mr. Premier. That’s a palpable threat. By now, you must know this. What’s mystifying is why you apparently didn’t see it coming.

Or, perhaps, you did, and your hard line in the sand during the election campaign was merely a political gambit to win over some voters.

Maybe your strategists advised you to hold that line for as long as you could and then capitulate only when major industrial players left you no choice.

If I had been one of your back-room boys, I would not have counselled this: Stay true to your principles until such time as the oil and gas lobby intimates major job losses; then reverse course in the broader interests of economic development.

And, in the process, blame the big, bad bogey man of corporate Canada for forcing your hand. “The devil made me do it, folks,” you might plead. “What can I say?”

Whatever is the case, all of it has been poor politics, poorer public policy and a fundamentally bad start for a new government.

And it’s getting worse.

Cabinet solidarity is one of the rocks that grounds leadership in a parliamentary democracy. It tells the electorate that the men and women the premier has chosen has his or her back, and, in the process assures the great, voting unwashed that they haven’t made a colossal mistake at the ballot box.

So, under these circumstances, what are we to make of Mines and Energy Minister Donald Arseneault’s freelance, off-playbook commentary last week?

“I was the minister back in 2007 who struck the deal to attract that investment of $2.2 billion (PotashCorp’s expansion) to New Brunswick,” he told the Telegraph-Journal last week. “We do know that Corridor feeds gas to the potash mines, and for me that is a very important component. . .For me, PotashCorp is a major player in New Brunswick. . .The last thing we want to do is potentially put certain operations in jeopardy.”

Now, we cut to a Page 3 story in the same organ on the same day.

“No,” declared Premier Gallant, “for us, it is a hydraulic fracturing moratorium, and we’re certainly willing to meet with different operations, different businesses, all stakeholders and New Brunswickers to understand the best way to implement this moratorium.”

None of which actually clarifies anything, except that the young premier of this province understands practically nothing about energy politics and, far more troubling, he seems oblivious to the worries of at least one of his important lieutenants – the one in charge of, arguably, the most important economic portfolio.

What now shall we expect? Will a great muzzling commence?

There is a way, of course, to safely and responsibly frack for gas in New Brunswick. We’ve been doing it for years. As long as we adhere to the tightest regulations our democracy provides — with the most comprehensive environmental oversight common sense produces — we have an even chance to reduce our reliance on far dirtier forms of fossil fuel and maybe, just maybe, generate the economic incentive to fully transition into a renewable, sustainable society. There is nothing new in any of this.

What is new is that we, in this fine, elegant, innocent part of the world must face the fact that we need the hard, tough, clear leadership to get us where we need to be.

Welcome to the energy big leagues, New Brunswick.

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Nov 01 2014
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Energy, Environment, Oil and Gas

What’s the fracking story, already?

On the endlessly controversial subject of hydraulic fracturing for natural gas in this province, New Brunswick’s Liberal leadership has, in the span of just one month, gone from reliably hard-headed to unpredictably incoherent.

Here’s Premier-designate Brian Gallant talking to the CBC, following his election win last month: “There will be a moratorium on hydraulic fracturing and those businesses (oil and gas explorers), I’m sure, are not surprised. This has been talked about, discussed and debated as a province for months if not years now. . .I think we have jurisdictions around us where I think we’ll be able to pull some of their experiences, how exactly this should be instituted, what’s the best way to go about it and what are the next steps.”

He even speculated almost sanguinely about the possibility that one or more of the drilling operations might sue the province as a result of his determination to the toe the environmentally expedient line: “(A legal action) is certainly something that could become a reality. We recognize that. We will certainly meet with (shale gas companies) and we will explain why our position is what it is.”

Now, here’s newly appointed Minister of Energy and Mines Donald Arseneault explaining to the Telegraph-Journal this week that he is well aware of the relationship between Corridor Resources and PotashCorp – in which the former supplies the latter with fracked, New Brunswick gas and has for years.

“The last thing we want to do is potentially put certain operations in jeopardy. For me, PotashCorp is a major player in New Brunswick. It’s a concern for me. It doesn’t mean that it gives everybody a green light, but it’s definitely in the back of my mind that I’ve got to be conscious and responsible going forward.”

To which the averagely informed, casually interested follower of the public-policy follies that constitute a permanent entertainment event in Fredericton (regardless of the party in power) might react thusly: Huh?

Does this mean the Grits are backtracking on their promise to temporarily forbid fracking? Or is their position merely, as the spin doctors like to say, “evolving”?

A more urgent question concerns the fate of PotashCorp’s new Picadilly mine without ready supplies of fracked natural gas. “That’s a valid point,” Mr. Arseneault told the T-J. “And those are the questions we are going to be asking the company. If we didn’t impose a moratorium, what is the activity they have planned for the next couple of years? Having a moratorium, how will it impact their operation? Will it impact potash? We haven’t settled on a specific menu other than we know there will be a moratorium.”

Again: Huh?

Dear reader, now to recap:

There will be a moratorium on fracking at some point in the near, to mid-term, to distant, future. But whether or not it will be a comprehensive, province-wide ban or a series of selective prohibitions depends entirely on whether or not the injunction injures the fortunes of one of the province’s largest industries.

In this instance, concern for the water table – the moral justification of the moratorium in the first place – takes a back seat to the more pragmatic realities of economic development.

Then again, the mere fact that Corridor has been operating in New Brunswick without incident for 10 years at least raises the possibility that drilling for tight shale gas – either hydraulically or with propane – can, in fact, be done both safely and responsibly. And, so, the purpose of a moratorium becomes what, exactly?

Mr. Arseneault appears to suggest it’s partly about election-campaign promise fulfillment – the Grit’s analogue to the previous Tory government’s refusal to consider raising the HST even a little just because, while running for office, they said they wouldn’t.

“At the end of the day,” the minister said, “our principals don’t change – we are going to implement a moratorium. I didn’t lie about it (to industry). I made that very clear. But we just need to determine now with the information that we gathered from them and other stakeholders as well as what kind of moratorium we want to implement.”

In other words, just as soon as this new government gets its story straight.

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Oct 29 2014
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Economy, Energy, Oil and Gas

New Brunswick: Last stop on the trolly to the great hereafter

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And now for something completely obvious.

News flash: New Brunswick (Nova Scotia, too) is in the grip of its very own, made-in-the-Maritimes “death spiral”. The question, of course, is: what does the afterlife look like?

Former Premier and current Deputy Chairman of TD Bank in Toronto didn’t actually pronounce the time of this province’s passing – under the weight of its own inertia and all that sand that’s piled up around the hole into which its head has been stuck lo these many years – at a ballyhooed energy conference in Saint John last Friday. But he came darn close to pulling out the heart panels.

“Clear. . .zap. . .clear. . .again. . .clear. . .zap. . .clear.

In fact, Mr. McKenna said this: “Our regional economy is flatlining. We are depopulating. Our population is not just leaving; it’s getting older. It’s aging at twice the rate of Alberta’s. (Well, naturally it is, as that’s where capital markets and the current federal government encourage every mentally healthy, able-bodied young person in this country to go and become reliable, God-fearing taxpayers).

Here’s another snippet from Mr. McKenna’s all-too-familiar tirade against complacency:

“We are in an endless cycle of high deficits, declining population, higher interest rates and payments, a aging population, higher cost of services, less equalization, less personal income, higher taxes and consumption taxes. It’s a death spiral that we’re in if we don’t do something about it.”

Ah. . .and therein – as the Bard might have said, watching the surfer dudes ride the Pettitcodiac’s mighty tidal bore – lies the rub. What, indeed, is to be done?

We could eschew the costly histrionics surrounding shale gas development, based on a largely discredited “docu-drama” some years back, which featured (among other provocative absurdities) a guy lighting his tap water on fire (Reality check: the water table in upper Pennsylvania had been laced with trace amounts of methane long before fracking technology was the apple in the drilling industry’s eye).

We could concentrate on building the safest means – pipelines – of transporting crude oil from Alberta to Saint John and, in the process, create thousands of short-term, and hundreds of long-term, jobs for New Brunswick.

We might even work to leverage these energy opportunities to lure much-needed venture capital to the province for. . .oh, I don’t know. . .economic diversification away from natural resources and into educational centres of excellence that would pioneer commercially viable, sustainable, renewable, and exportable manufactures in the fields of wind, tidal and solar.

Or, we could go the other way.

We could put the province and all its lands and buildings up for sale to all those national and international bidders who boast the biggest coin in their pockets.

Dear China, the ad would read, “We, in New Brunswick, know how polluted your mega-cities are. Come on over to New Brunswick. We’ll treat you right fine. We’ll sell you our property, and we won’t even charge you minimum wage for the privilege of cleaning your kitchens and bathrooms – you know, the ones that used to be ours.”

Hey Alberta, we might exclaim, “We know you have our children in a ‘death-spiral’ of expanding expectations and blossoming debt. Someday, you know that bubble is going to burst. And when it does, you might like a safe haven to park your aging human capital.

“Consider New Brunswick as Canada’s preeminent retirement village. After all, as we never risked a damned thing on anything, including natural resources, our minds and hearts are clean. We are your last, best hope for a comfortable, easy death. . .Just bring your cheque books, because our B&Bs and private hospices are going to bruise those babies American-style.”

Indeed, given New Brunswick’s appalling fiscal condition, it’s dreadful demographic decline, its moribund economy, its listless and fearful political classes, it’s astonishing that this province has anything to offer the world or even its own people.

Of course, it is our own people – our entrepreneurs, in every shape, size, colour and stripe – who will (who must) save us from our collective inertia.

That, too, remains completely obvious.

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Oct 28 2014
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Energy, Environment, Oil and Gas

Drilling for common sense in the energy debate

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If all politics is the art of the possible, then the genre that inhabits New Brunswick is surely the craft of the calculating.

During the recent election campaign in the province, former Liberal Premier and current Deputy Chairman of T-D Bank Frank McKenna reportedly worked hard behind the scenes (and sometimes in front of them) to help the party’s fair-haired boy, Brian Gallant, comport himself well enough to hold on to the lead right into office.

Of course, that’s what political elders do: they mentor.

Still, given Mr. Gallant’s stand against shale gas development in the province, the pairing did seem odd.

In an interview, two years ago, Mr. McKenna told me in certain and enthusiastic terms, “We have in situ now, calculated by Corridor Resources Inc., 67 trillion cubic feet of gas. That’s bigger than western Canada. It’s a huge deposit! If 10 per cent is exploitable, that’s enough to create a revenue source for New Brunswick for decades to come. All in, it would result in about $15-20 billion in investment and 150,000 person years of work. And for governments, it would result in between $7-9 billion worth of royalties and taxes. . .The way I look at it, the real win comes when we take our indigenous shale gas in the province and hook it into the Canaport liquified natural gas (LNG) facility in Saint John.”

In other words, he said, New Brunswick’s shale reserves could change the conversation about the province’s anemic economy forever. They could transform the region into a jurisdiction whose wealth rivals that of Alberta, Saskatchewan, Pennsylvania or North Dakota.

“What we need to understand is that just by the roll of the dice, we have landed in exactly the best position on the board at this moment in time,” Mr. McKenna said. “We have a Canaport facility with massive storage and with a jetty, getting right into deep water. We have a port that’s ice free and has the capacity to accommodate the biggest vessels in the world. The West Coast can’t do that.”

The former premier was similarly straightforward about the province’s overall condition: “This isn’t just a problem of leadership in government. It’s also a problem of followership. Our citizens have to understand the full depth and breadth of the dilemma that we are facing, and they have to be prepared to face up to some inconvenient truths. It means that they have to become less reliant on government and more entrepreneurial. It means that they have to take responsibility for their own futures.”

Still, if Messrs. McKenna and Gallant stand far apart from each other on tight onshore gas (though they remain generally linked by shared political purpose), the division is not likely to last long.

By vigorously arguing for a pipeline – perhaps, two – to transport Alberta bitumen into Saint John, the current premier is actually, though unwittingly, eroding the rhetorical wall he has erected around the shale gas industry.

That’s because it’s getting increasingly difficult for the unaligned majority in this province to appreciate the logic of Mr. Gallant’s position on fossil fuels.

For reasons that resist trenchant examination, we are told that pipelines transporting crude into New Brunswick are safer, more environmentally responsible energy developments than is drilling for natural gas using only proven, contemporary technology under a regulatory regime that’s reported to be the toughest in the world.

Wouldn’t it make more sense to do as Frank McKenna has suggested: Permit both undertakings to proceed carefully, yet expeditiously?

In the alternative, if the issue is less about safety than global warming, shouldn’t we take a page out of New Brunswick Green Leader David Coon’s playbook: Stop both projects from happening?

Banning one, and not the other assumes expectations of harm and safety that may be mismatched. After all, pipelines have been known to leak. If we are being asked to assume that risk, however small, maybe we should take another look at the safety record of the shale gas industry before we eject it from the field of possibility.

It’s a tricky calculation, but it’s one we may well be forced to make make sooner than we once thought.

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