Tag Archives: shale gas

Oct 08 2014
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Economy, Energy, Environment, Politics

Fracking’s other, hidden challenge

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New Brunswick Premier Brian Gallant did himself an enormous political favour during his recent election campaign by sticking to his guns, insisting that he would follow through with a temporary ban on hydraulic fracturing in the province until experts convinced him that the drilling practice is broadly benign.

After all, the one thing a lightly informed voter can get behind is a candidate for elected office who successfully appeals to the public’s expectation of clean water, air and soil.

But whether or not you believe fellows like Gywn Morgan, a former Canadian energy executive, who recently argued in a Globe an Mail commentary that the “technology. . .has one of the most impressive industrial safety records ever compiled,” that “in the United States, where some 1.2 million wells have been hydraulically fractured over the past 60 years, the Bureau of Land Management and the Environmental Protection Agency have found no supportable evidence of fracture-induced water contamination,” and that, “here in Canada, more than 200,000 wells have been fractured in Alberta, British Columbia and Saskatchewan with a similarly sterling record,” another problem emerges – one that’s not so cut and dry.

The chief argument for permitting the development of tight, onshore oil and gas plays in New Brunswick is economic. In fact, proponents routinely insist, it’s a no-braine:  the province needs jobs and the government needs new sources of money (i.e., taxes and/or royalties from production companies) to balance its books and pay down its accumulated debt. If fracking, girded by effective regulations, is safe, then what are we waiting for? Drill, baby, drill!

But what if the economics of shale gas extraction – at least to the host jurisdictions – are not always as attractive or predictable as they appear?

Jeremy Scott of Forbes magazine recently examined various U.S. state budgets, noting that, for the third consecutive year, overall tax revenues have risen. Referencing some enlightening numbers-crunching by Todd Haggerty, a policy specialist in the fiscal affairs department of the National Conference of State Legislatures (NCSL), Mr. Scott reported “state tax revenues went up 6.1 per cent in fiscal 2013 to a total of $846 billion, says the NCSL. Personal income tax revenues were up 10.3 per cent, while corporate collections surged 7.9 per cent.”

In fact, those states that opened their doors to frackers some years ago, have been leading the boom in tax dollars. Says the Forbes piece: “In 2004 North Dakota’s severance tax (a levy imposed on producers in the United States for mining or otherwise extracting non-renewable resources) raised $175 million a year. In 2013, it raised $2.46 billion. West Virginia’s boom hasn’t been as dramatic as North Dakota’s, but its severance tax revenue increased from $204 million in 2004 to $608 million in 2013.”

On the other hand, “in Kentucky, severance taxes raised $172 million in 2003, rose to $346 million in 2012, but then dropped back to $269 million in 2013.”

And herein lies the problem. The oil and gas industry is notoriously fickle and subject to its own pricing, supply and demand cycles. The industry can reliably guarantee a certain amount of economic activity accruing from its ministrations, especially at the outset of full, commercial production, but those assurances become less dependable as time goes on.    

“Kentucky illustrates the problem with relying on severance taxes and the fracking boom for revenue stability,” Mr. Scott writes. “As traditional energy states like Texas have shown, taxes on the extraction of natural gas can fluctuate wildly. Texas raised $974 million from severance taxes in 2004, $4.1 billion in 2008, $1.9 billion in 2010, and then $4.6 billion. That’s healthy growth, but it’s hardly consistent. Colorado is an even better example. Its severance tax revenue rose from $37 million in 2003 to $285 million in 2009, before falling back to $71 million in 2010.”

Of course, to fracking’s true believers in New Brunswick (and there are still a few), such revenue instability is better than no revenue at all.

But it could become a nightmare for any premier who, once convinced of fracking’s safety, relies too heavily on its proceeds to balance the public accounts.

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Sep 18 2014
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Economy, Energy

Boning up on fracking 101

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The spectacle of an energy company’s CEO teaching the abecedarian facts about a drilling technology that’s been around for at least ten years to candidates for the highest elected office in the province is undeniably amusing.

Still, one or two of our premier wannabes might have cracked a book before showing up for class.

One can only imagine what crossed the mind of Corridor Resources’ Phil Knoll when he decided to pen a lengthy letter to the heads of New Brunswick’s five political parties essentially explaining that, no, gentlemen, it is not possible to extract gas from shale formations in this part of the Maritimes without fracturing the rock.

According to the letter, acquired by the Saint John Telegraph-Journal, Mr. Knoll is categorical: “There is no other method to release the natural gas from tight sandstone or shale other than through fracturing the rock. That is the reality.”

And if any political hopeful thinks that fracking (industry slang for hydraulic fracturing, the process by which water and chemicals, or, less commonly, gas, are injected under pressure into sedimentary rock to liberate the fossil fuel trapped there) can be restricted only to the production phase of development, he should think again.

“During the exploration phase, the only way to accurately determine the size of the resource and whether it can be produced economically is through the use of fracture stimulation,” Mr. Knoll explains. “Seismic research and the drilling of stratigraphic core holes can help evaluate the geological formations and their composition at different depths.”

What’s more, he writes, the debate in New Brunswick about hydraulic fracturing – whether, as its opponents claim, it will release vast quantities of methane into the drinking supply, enabling local farmers to literally light their water on fire – is largely misguided if not entirely moot.

In fact, over the past 10 years Corridor has used fracture stimulation to drill 43 wells with, as Mr. Knoll confirms, “no adverse impacts on potable water aquifers. . .Corridor operates some wells that were fractured 10 years ago and still produce natural gas without additional fracturing. Across North America, it is common to have wells producing more than 20 years after initial fracture stimulation.”

All of which suggests that fracking can, at least in this instance, be done safely. But that’s never really been at issue. The underlying quandry in the debate has always been: Will it?

That’s the question an article in Scientific American posed last year, to wit: “A new review article funded by the National Science Foundation and published in Science on May 16 examines what fracking may be doing to the water supply. ‘This is an industry that’s in its infancy, so we don’t really know a lot of things,’ explains environmental engineer Radisav Vidic of the University of Pittsburgh, who led this review. ‘Is it or isn’t it bad for the environment? Is New York State right to ban fracking, and is Pennsylvania stupid for [allowing it]?’ According to the review, the answer is no. ‘There is no irrefutable impact of this industry on surface or groundwater quality in Pennsylvania,’ Vidic says.”

Still, the article continues, “That’s not to say there haven’t been problems. That’s because there are many ways for things to go wrong with a natural gas well during the fracking process. A new well – or the 100,000 or so existing but forgotten wells – can allow natural gas from. . .deposits to migrate up and out of the rock and into water or basements. Leaking methane, in addition to being a potential safety hazard, is also a potent greenhouse gas that exacerbates climate change, although that environmental impact was not examined in this study.”

However New Brunswickers choose to chart their collective energy future, the wisest course will always begin with the self determination to obtain the best of all possible facts.

After all, to avert a risk, you must first understand it.

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Aug 22 2014
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Energy, Environment

Water, water everywhere and not a drop to protect

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It seems that the Alward government is bound and determined to pitch itself over the gunnels of the ship of state and drown contentedly in the political equivalent of Davy Jones’s locker.

For the second time in as many weeks, the ruling Tories (for now) are having to answer tough and humiliating questions related to their administration of shale gas development in the province.

The first controversy, indirectly but not tangentially related to water, involved its decision to proceed with an RCMP investigation of Calgary-based Windsor Energy in 2011. The Province claimed in a public statement that the exploration company had violated the Oil and Natural Gas Act by failing to obtain permission from the Town of Sussex before conducting seismic testing within its municipal borders.

The Mounties said the allegation was baseless and refused to lay charges. Emails obtained by this newspaper organization this month confirmed that a lawyer working for Communications New Brunswick at the time strongly urged the Department of a Natural Resources to back off days before government officials ultimately ignored the advice and decided to go public with its probe.

Guess who’s suing whom for libel, and to the tune of 100-million bucks? Hint: The grin on the face of Windsor’s CEO has achieved Cheshire Cat-like dimensions, of late.

It’s all priceless, given that the central worry among those who oppose tight oil and gas plays in the province is the degree to which the key extraction technology, hydraulic fracturing, might poison the water tables of largely rural communities, which still depend on wells.

To wit: If legislators don’t understand the scope of their own regulations, how can they be trusted to protect the public’s drinking water?

Now, the very same lawyer, Charles Murray, who told the government it didn’t have a legal leg to stand on three years ago, has issued a stinging indictment of the Province’s waterway protection policies. This time, though, he’s not a consulting factotum; he’s New Brunswick’s ombudsman.

Payback really is, well, a bummer.

According to Telegraph-Journal legislative reporter Chris Morris, in a piece this week, “Charles Murray states in the report of his investigation into a complaint filed last year by the Nashwaak Watershed Association that the existing regulation governing waterway classifications ‘is in some respects worse than having no regulation at all.’”

He continued: “Over 12 years have passed, and the Clean Water Act has been amended, yet (the water classification) regulation exists primarily as a mirage, misleading observers to their detriment. The history of this file leads us to conclude that the Legislative Assembly must take a more direct interest if it wishes the province of New Brunswick to have an effective Water Classification Program rather than an illusory one. . .(This is) like a smoke detector without batteries. It provides no protection.”

In its absurdly lame defence, the T-J reports, the provincial Department of the Environment (which is, by every observable standard, merely a bedroom community of the Department of Natural Resources), stipulates that it has “initiated a process to develop a provincial water strategy. This will include a public engagement component, and will include discussion concerning the existing Water Classification Regulation, and whether it is the right tool to achieve our water management objectives.”

It must be joking. What water management objectives? For more than a decade, we now know, the Province has had a law on the books that its various governments – both Tory and Grit – have repeatedly refused to parse, let alone enforce.

And not just any law. It deals with water, people. . .water! Ninety-per-cent of the stuff comprises our human body weight. If we stop drinking good, old H20, we die within seven days. No other consideration in economic development – especially of natural resources – occupies a position of primacy more than does this.

Indeed, it’s bewildering – in fact, it boggles the mind – that this government expects to create a shale-gas industry, expand mining and forestry operations across the province, track in a pipeline from the west whilst winning the hearts and minds of New Brunswickers for its intentions without a sound, responsible water protection regime.

Perhaps this government is weary of public office.

Perhaps it does, in fact, prefer to commit suicide by droning and then, finally, by drowning.

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Aug 20 2014
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Business, Politics

Shale gas lawsuit puts government credibility on the line

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The New Brunswick government ritually boasts it maintains the toughest, most circumspect regulatory standards for shale gas in North America. But that’s faint comfort if those responsible for enforcing them don’t actually know what they say.

No doubt to the grim satisfaction of opponents of the controversial drilling technique – who have always mistrusted officialdom’s supreme confidence in the structural integrity of its knowledge bank – a glaring case in point now plays out on the front pages of provincial newspapers.

According to Legislative reporter Adam Huras, documents obtained by Brunswick News show that the Department of Natural Resources was advised that an exploration company complied with the law (when it undertook seismic testing within the borders of the municipality of Sussex) before government officials issued a press release that stated precisely the opposite.

That announcement, on behalf of then-Natural Resources Minister Bruce Northrup, on November 9, 2011, read, in part: “I wish to inform the public that a complaint has been filed by the Department of Natural Resources with the RCMP alleging Windsor Energy Inc. of Calgary, Alta., violated the Oil and Natural Gas Act by directing a contracted company to conduct geophysical exploration within the boundaries of the Town of Sussex.

“Under regulation 86-191 of the Oil and Natural Gas Act, a municipality’s written permission is required before geophysical activity can be conducted inside the boundaries of an incorporated municipality.”

The epistle then concluded on a note of supreme sanctimony: “New Brunswickers can be assured that all companies exploring for or developing oil and natural gas reserves in our province are expected to observe our laws and that we will ensure these laws are upheld. The rules we have in place and those now being developed to strengthen our regulatory framework are intended to protect our people and our environment, and must be respected.”

Regrettably – if only for the government – it appears that Windsor violated no laws; that it was obligated to obtain permission to test from either the town (which it did not consult) or the Province (which it did), but not necessarily both.

Certainly, the company’s CEO, Khalid Amin, is sure Windsor did nothing wrong. Now, he’s suing the provincial government for $100 million alleging that Mr. Northrup’s comments in the November press release and the follow-up RCMP investigation (which produced no charges, naturally) were libelous.

There is much to ponder in all of this, starting with the investigative reporter’s credo: Who knew what, when?

The chain of correspondence at the end of October, 2011, clearly shows one Charles Murray, a lawyer attached to Communications New Brunswick, strongly advising Natural Resources to cool its jets: “It would perhaps have been good form or or polite of them (Windsor) to obtain the permission of both (the town and the Province). . .It was not, however, required under the provisions of the regulations. . .Given that, I am not at all in favour of the minister stating that Windsor violated the province’s Oil and Natural Gas Act.”

You can’t get any more categorical than that. So, then, why did government officials ignore the advice in its entirety? Did they believe they had a steadier grip on the relevant legislation than did the attorney they presumably paid to advise them on the one thing about which lawyers know more than anybody: the law?

According to Mr. Huras’s report, the emails he obtained “also show that government staff asked the RCMP not to publicly reveal the reason why the investigation into Windsor’s seismic work in the Sussex area would not result in charges.”

That’s predictable. Stupid, but predictable.

In situations like these, the only reason why the cops would not pursue charges  is that they believe the subject of their investigation committed no infraction.

In this case, expunging a talking point from a communications strategy isn’t going to prevent anyone from coming to that conclusion, or that the provincial government’s ham-handed stick-handling of the whole affair undermines public confidence in its ability to administer and regulate the shale gas industry in New Brunswick.

After all, why is the original, offending statement – the one over which Mr. Amin is suing the Province – still posted to the Department of Natural Resources’ website, still out there in the public domain in all its taunting glory?

Forget about this government knowing what its own regulations say.

Does it even know what it’s doing?

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May 07 2014
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Energy, Environment, Oil and Gas

Slow-dancing with shale gas in New Brunswick

 

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Government and industry types, desperate to envision a way out of New Brunswick’s straightened economic and fiscal circumstances, routinely point their fingers to the future and declare it full of shale gas. 

Now, a new report by a group of people that actually knows something about science, evidence and the perils of jumping to conclusions advises us to cool our jets. The future isn’t all it’s cracked up to be.    

The multidisciplinary (and excessively named) Expert Panel on Harnessing Science and Technology to Understand the Environmental Impacts of Shale Gas Extraction, convened by the Council of Canadian Academics at the behest of Environment Canada, warns that not only do we lack adequate information about the effects of tight-play, onshore petroleum production in Canada, most of us are even too ignorant to ask the right questions.

In essence, to paraphrase former U.S, Secretary of Defense Donald Rumsfeld, we don’t know what we don’t know.

“Society’s understanding of the potential environmental impacts has not kept pace with development, resulting in gaps in scientific knowledge about these impacts,” the report says. “In most instances, shale gas extraction has proceeded without sufficient environmental baseline data being collected (e.g., nearby groundwater quality, 

critical wildlife habitat). This makes it difficult to identify and characterize environmental impacts that may be associated with or inappropriately blamed on this development.”

The solution, it appears, is to adopt a go-slow approach, the advantage of which “allow for additional data collection, to permit adaptation to the implications of new information, and to encourage integration of multidisciplinary expertise. . .There may also be some negative impacts of development that cannot be eliminated, and the scientific basis for identifying areas that are particularly vulnerable has not been established.”

None of which is especially good news for the likes of Premier David Alward or his energy czar, Minister Craig Leonard.

For at least three years, they, like most members of provincial cabinet, have been crowing as loudly as they can muster about the extraordinary economic benefits that will accrue from a safe, reliable, environmentally responsible shale gas industry. On this point, they have assembled, drafted, edited, amended and finally released what they claim are the toughest standards and guidelines for shale gas development anywhere in North America.

But, as the report points out, they’re getting woefully ahead of themselves.

Although the panel goes out of its way to acknowledge that the industry in Canada has cleaned up its act in recent years through “recycling (and) reducing land disruption by concentrating more wells at each drilling site, reducing the volumes of the toxic chemicals it uses, and reducing methane emissions during well completions,” it also stipulates that “other impacts, such as cumulative effects on land, fugitive GHG emissions, and groundwater contamination, are more problematic. 

“This is the case because available mitigation technologies are untested and may not be sufficient; scientific understanding is incomplete; and the design of an adequate regulatory framework is hampered by limited information.”

A proper rules system, the experts insist, “must be based on appropriate science-driven, outcome-based regulations with strong performance monitoring, inspection, and enforcement.”

For his part, Mr. Leonard is playing it cool. The report, he says, does nothing to dissuade him from pursuing the current course in the manner he has chosen. Slow down? But, of course, he declares. 

“When people say ‘Slow the process down,’ the fact is we haven’t done anything except for seismic testing over the last three years,” he noted last Thursday, following the report’s release.

“We aren’t going to have any new drilling taking place at least until next year and we probably won’t even have any actual hydraulically fracked wells being drilled in shale formations for a couple of years. So there is time to be building this information.”

And, perhaps, a better consensus across the province. 

Lack of information breeds systemic ignorance, which, in turn, fuels unproductive rancor and fear (as opposes to useful and constructive debate). 

The time this report suggests we purchase for ourselves should be spent educating ourselves about the true and likely impact of shale gas development in the specific geological and geographical conditions that are native to New Brunswick.

Only then will any of us possess the knowledge to accurately foresee the shape of things to come.

 

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May 02 2014
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Economy, Energy, Oil and Gas, Politics

Lessons for New Brunswick from The Lone Star State

 

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In Texas, to quote a phrase, they do things big.

Big sky, big country, big portions, big ambitions all frame the tableau that is The Lone Star State.  So does “big energy”, but not always in a fashion that seems familiar to New Brunswickers embroiled in their own existential debate about natural resources development.

Yes, Texas is synonymous with the oil industry and is home to the famous (or, depending on one’s perspective, infamous) Barnett field, which in one recent year produced 1.11 trillion cubic feet of shale gas. But it is also home to the largest and most successful wind energy industry in the United States.

According to a Wikipedia entry, “wind power in Texas consists of many. . .farms with a total installed nameplate capacity of 12,212 MW from over 40 different projects.” In fact the state “produces the most wind power of any” in the U.S. 

Just as impressive, perhaps, is the speed at which the energy resource has developed there. In a scant 13 years, the state’s annual hours of wind generation by megawatts has skyrocketed from 492,000 to 36 million. How?

Again, the Wiki item is instructive: “The wind boom in Texas was assisted by expansion of the state’s Renewable Portfolio Standard, use of designated Competitive Renewable Energy Zones, expedited transmission construction, and the necessary Public Utility Commission rule-making. Wind power accounted for 8.3 per cent of the electricity generated in (the state) during 2013.”

So, the take-away from all of this is that a happy, productive collaboration between business and government has literally invented a clean, renewable and commercially viable alternative to fossil fuels for electricity generation where none existed at the dawn of the 21st century.

Now, not coincidentally, power rates from wind are among the lowest of any energy source in the state (only those from shale gas are cheaper). 

Even better, the billions of dollars the private sector has invested in the industry to become competitive and profitable has spurred economic development in rural areas, where thousands of people are gainfully employed. This has, in turn, attracted innovators and entrepreneurs chasing the main chances implicit in improving existing energy storage (battery) and smart-grid technologies. 

All of which raises a question: What does Texas know that New Brunswick doesn’t?

For years, we in The Purple Violet Province have known that we are home to enviably strong and steady coastal breezes. Back in 2007, a “wind energy map” of our environs conclusively proved that, with foresight and commitment, the resource was rich enough to support 5,000 megawatts of installed capacity. Currently, we have 500, which isn’t bad; but it’s still far below our potential. 

Last week, Liberal Leader Brian Gallant renewed his party’s commitment to installing a moratorium on further shale gas development in the province should he and his crew be lucky enough to form the next government in September. Citing public opprobrium and lingering doubts among various health experts, he wants more studies. Fair enough.

But a moratorium only delays the inevitable day of reckoning. It won’t convince those who adamantly oppose shale gas on principled (concern for planetary climate change) or practical (concern for local air, soil and water quality) grounds. 

It certainly won’t mollify the petroleum industry. It may buy Mr. Gallant a bit more time. Still, at what cost?

The clock is ticking in New Brunswick, where we have become absolute masters at telling private and public-sector authorities to pound sand whenever they have, on rare occasions, mustered the temerity to suggest that true economic development means taking chances. But if we are not prepared to risk what we cherish on shale gas, then what? What will we risk to build a better future for ourselves and our children?

The “aesthetes” of this province display an exasperating tendency to despise fossil fuel and wind power in equal measure. The former, they say, is smelly; the latter is ugly. These people revile change. They wonder why things can’t just go along they way they always have. This has produced, in government, a pathetic, if typical, response: ossification. Do nothing. Maybe, it will all work itself out, after all.

It won’t.

Texas knows this. Say what you like about that red-necked, killer-executing home of George “Wacko” Bush. 

At least, they do things big there.

 

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Mar 12 2014
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Energy, Environment, Idiocracy, Oil and Gas

The roiling tale of two imaginary pipelines

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In one hand, New Brunswick grips the key to its putative economic salvation; a pipeline spanning the better part of the second-largest landmass on the planet, from the oil fields and tar sands of Alberta right into little, old, plucky Saint John where the Irving refinery awaits, with bated breath, another profitable lease on life.

In the other, the picture-perfect province loosens it grip on everything its forebears allegedly designed (a healthy, self-sufficient, environmentally pristine part of the world) in the backwash of a curtailed and stolen future; a pipeline that would foul the ground, incinerate communities and spoil the water; a horrible industrial project that would return fleeting boons to short-term-thinking politicians, their confederates in commerce and not much else.

It’s odd how deliberately these opposing views manage to express themselves in New Brunswick’s print and broadcast media – as if never the twain shall meet, as if we, the sidelined majority, have nothing useful to lend to the debate over the province’s energy providence except, of course, our taxes and (sigh) our ears.

“Putative” and “alleged” are good words to describe the cases for and against a pipeline that does not, in fact, yet exist.

There are, of course, several ways to build a permanent way into a community. None of these, however, should have anything to do with terrorizing the citizenry or fictionalizing the landscape.

When Colleen Mitchell, president of Atlantica Centre for Energy, boosts on the front page of the Saint John Telegraph-Journal the benefits of an East Coast pipeline (without, I will note, a word of reasonable rebuttal), her kite flew so low, her hot air claimed its tail. She both terrorized the citizenry and fictionalized the landscape.

Here she is on her extraordinarily well-written rant:

“Five years (after the Great Recession of 2008) the gap between Atlantic Canada and the rest of Canada remains significant. . .The development of key oil and gas projects have the potential to reverse these economic trends. . .This project (TransCanada’s East Energy pipeline) is of such significance that if it proceeds to completion it will have a profound impact on the Atlantic region”

So profound, she says, it could amount to $35.3-billion in new gross domestic product across the country. So profound, she says, it could result in $266 million in new taxes to New Brunswick (during pipefitting) and maybe as much as $500 million after that. Moreover, she claimed with the sort of authority only an insider gets (and, trust me, she’s no insider), Irving Oil might just well spend upwards of $2 billion upgrading its coking and refining facilities in Saint John.

Oh, really?

This is irresponsible, unverified piffle; its feedstock derives directly from industry, itself. There is no way to credibly measure the merits of her assessments, just as there is no way to calibrate the real value of what she parrots are vast reserves of trapped shale gas in New Brunswick sedimentary rock. Why? Because industry, itself, is still reckoning the commercial viability of the resource. And, frankly, they’re not talking (which, in and of itself, should tell us something).

Still, she’s not the only partisan in the arena. Bid a welcome to the died-in-the-wool naysayers, who would rather buy their hemp oil from The Body Shop than see any of the dirty, necessary stuff that fuels their spectacularly energy-efficient homes spoil their golf-course-sized and well-fertilized lawns and gardens splendidly attended by certified “green” landscapers.

TransCanada Corp. has run afoul of four of nine National Energy Board regulations regarding its proper care and feeding of pipelines. This motivates New Brunswick Green Party honcho David Coon to theorize that “anything that suggests an increased risk of leaks will make everyone nervous.”

Furthermore, he postulates, “Since Stephen Harper has been prime minister, his orientation has been to ensure the National Energy Board is greasing the wheels of pipeline construction, not slowing it down because of things like safety and environmental impact.”

In other words, he seems to be saying, since the National Energy Board is, ipso facto, already compromised by the Conservative agenda, we must assume that its recent “harsh” judgement of TransCanada Corp. actually amounts  kid gloves’ treatment.

Again, so much for empirical evidence.

In one hand, the conspiracy theorists taketh away.

In the other, the apologists giveth back.

And, finally, no hands actually come together.

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Feb 20 2014
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Climate, Energy, Politics

Plotting some common ground for shale gas

Beyond the headland, off to meet the horizon

It is only my uncommon determination to discount the fruits of my fevered and hyperactive imagination that prevents me from earnestly entertaining my latest New Brunswick Economic Development Conspiracy Theory, version 2.0.

But for this mindful discipline, however, my theory might go a little like this:

At some point in the not-too-distant past, Progressive Conservative Premier David Alward sat down with Liberal Opposition Leader Brian Gallant in a dark, windowless room in the basement of one of New Brunswick’s seedier hotels. They had agreed to meet to hatch a plot, the outcome of which, then prayed, would be to their mutual advantage.

Each man knew that the shale gas controversy was not going away any time soon. Too much emotional capital had been spent for either opponents or their opposite numbers in industry to retreat from the front lines of lunacy. Too much empty rhetoric had been spilt for the sake of hearing one’s voice repeated ceaselessly on the nightly newscasts.

Yet, as political leaders, Messrs. Alward and Gallant recognized their respective responsibilities to take firm and preferably opposing positions on the issue.

The problem was that they also recognized, in each other, if not kindred spirits then at least a meeting of minds.

Though Mr. Alward argued publicly that shale gas was New Brunswick’s last, best hope for economic salvation, in his heart he worried about the environmental impact of an industry whose North American track record was, at best, spotty.

Conversely, though Mr. Gallant vigorously called for a moratorium on exploration and development until such time as two new studies shed better light on the subject, in his heart he worried about the province’s long-term economic future without the royalties and taxes a shale gas industry would generate.

The question, they reckoned, was how to have one’s cake and eat it too. Is it possible to satisfy both commercial and community interests without requiring unacceptably high sacrifices?

The related, if more urgent, question was how to take the mickey out of the public debate long enough to peaceably erect an industrial and regulatory apparatus acceptable to all but the most ardent green warriors (certainly all the Tories and Grits from here to the horizon)

And their stratagem?

That’s easy: Bore everyone to death, or at least until most people in the province would rather have their incisors pulled than stand to listen to a) one more meaningless, partisan diatribe about the dangers of hydraulic fracturing; and b) one more corporate shill expounding on the environmentally risk-free bounties from that friendliest of all fossil fuels.

Once the electorate is properly and finally focussed on other, more diverting  affairs like, say, the homophobic Winter Olympics 2014 (and not constantly expected to tender their proudly uniformed opinions, for or against shale gas) then, and only then, can the real, grown-up, bipartisan work of shaping a safe, regulated, productive, job-generating, income-producing, made-in-New Brunswick solution; the envy of the industrialized world.

Yup, it’s a nice theory and it does look good on paper. Too bad it’s bogus.

That constant whining sound emanating from Fredericton’s political class on the subject of shale gas is merely the all-too-familiar politics of disputation for the sake of disputation. No plan; nothing special. It’s politics as usual; that is to say, as usual Premier Alward blasts Mr. Gallant for standing soft on the issue and Mr. Gallant returns the favour by charging Mr. Alward with willful misrepresentation.

In fact, of the two, Mr. Gallant is more consistently correct and thoughtful with his criticism. But, at this point – where we seem to have come to a full stop, crumpled over by the burden of all our words – does it matter?

Where are our deeds? Where is our determination to forge practical alliances that span party and ideological lines to extract and sell our natural resources as safely and sustainably as possible?

While we’re at it, where is our courage to collectively face the essential energy paradox of our times – that we actually need the cleaner-burning fossil fuels to bridge us and our technologies to a greener more renewable future?

In the end, alas, politics upends even our finest conspiracies.

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Jan 23 2014
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Economy, Oil and Gas

The stiff upper lip to success

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New Brunswick’s estimable finance minister, Blaine Higgs, promises as a matter of course that he will announce no new tax hikes at next month’s grand budget reveal. To which we curtsy politely and thank the graveyard of foreboding that dominates Fredericton for small mercies.

Still, at this stage in the daily, grinding, “this-too-shall-pass” culture of what is, indisputably, Canada’s least economically promising province, higher taxes will serve precisely no purpose.

The time for a boost in the HST was four years ago. Today, when a precipitous drop in revenue to government coffers is related entirely to a concomitant decline in business income, the taxman’s various dogs just won’t hunt anymore.

Meanwhile, the list of likely economic saviors grows ever longer, even as it begins to blur the boundaries of credibility.

There is a pipeline into Saint John. It will, we are assured, bring Alberta oil into the Port City for refining and subsequent export to locales both exotic and mundane. In the process, it will employ hundreds of skilled and able-bodied men and women (thousands during the construction phase). At least, that’s the scuttlebutt. Boosters are still looking for the project’s starter pistol, which seems to have gone missing.

There is some fresh promise in the mining sector, no thanks to The Potash Corporation of Saskatchewan which, according to a CBC report in early December,  “issued a blow to one of the Alward government’s hopes for job creation in the province.

The company is laying off more than 1,000 people, including 130 in New Brunswick, due to what it describes as slumping demand for its potash and phosphates, which are used to make fertilizer. . .Just last week the provincial government issued a request for expression of interest to explore for and mine potash in New Brunswick.”

Of course, there is always (groan!) shale gas. In fact, there might be 70 trillion cubic feet of the stuff below ground in New Brunswick. If any of it is extractable in a commercially viable sort of way (that is, before oil and gas prices wobble too far into the red zone), then a new fossil fuel industry could create hundreds of jobs and top up the government’s bank account with new taxes and royalties.

On the other hand, there is the little matter of the screaming meemies to which the chronically anxious among us succumb whenever the phrases “government oversight” and “hydraulic fracturing” appear in the same sentence.

It appears that the rest of us are fated to follow their lead as it is embraced by the next premier of the province, Brian Gallant, who has already announced his planned moratorium on further shale gas development once he trundles into power this fall.

And yet, somewhere, in all of this, we’re missing something vital, and it’s getting us down. Behind every commercial and industrial project – large, like a pipeline; or small, like a high-tech joint venture – are people.

That may sound trite, but our tendency is to perceive our economy as intractably composed of forces that are largely beyond our control. This is the language we allow our political leaders to adopt when times are tough and they shrug their shoulders in defeat: “Hey. . .Whaddya gonna do?”

In most cases, the answer to that question is: “Plenty.”

New Brunswick’s future might look rosier than it presently does if mega-deals for oil and gas and other natural resources were firmly on track. Still, this is not the alpha and omega of the province’s potential.

The real, durable future is being written in the idea factories of the private sector, in the common markets of the province’s small cities and feeder towns and villages, on the entrepreneurial front lines where problems are things you solve and obstacles are things you hurdle.

Listen closely, and you will still hear the relentless hum of enterprise, which remains happily oblivious to the macroeconomic demons that torture the province’s elected leaders, appointed officials and, as often as not, professional chatterers like Yours Truly.

If, as one of my colleagues in arms recently claimed, GDP is two-thirds consumer confidence, then attitude is everything.

Perhaps, then, we should try stiffening our lips and, for once, whistle obstinately past that graveyard of foreboding.

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Jan 18 2014
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Idiocracy

It’s time to stop thinking magically about the future

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Those of us who are well-established in our irascibility – a function of our sullen conviction that most people are thoroughgoing nincompoops – approach the dawn of a new year experiencing an odd mixture of dread and resignation.

Didn’t we just come off the tail-end of one of the stupidest 12-month periods in recent Canadian history? Why must we do this all over again? Do we really expect to get it right this time when getting it wrong is what we do best?

Of course, part of getting it wrong – maybe the most important part – is making darn sure that otherwise eminently solvable problems become utterly intractable and, so, eternally, nauseatingly durable.

Consider, in this context, shale gas.

There might be 70 trillion cubic feet of the stuff trapped in sedimentary rock beneath the surface of New Brunswick. Presently, a handful of companies pursue exploration leases to determine whether any of the resource is commercially exploitable. If any of it is, then a new industry dedicated to its extraction and export could create hundreds of jobs and replenish provincial government coffers with royalty revenues.

Meanwhile, cognizant of the potential environmental hazards associated with drilling operations, the Government of New Brunswick has released not one, but three sets of guidelines to govern industry practices. Premier David Alward calls these rules “the toughest and most comprehensive in North America.” He’s not wrong.

All things being equal, then, one should expect a broad level of public support for the investigative phase of this resource’s development. After all, no one’s building a strip mine or digging a quarry, many of which exist in New Brunswick, posing far more of an existential threat to potable water and uncontaminated soil than do shale gas wells.

But lest John Q. Public becomes confused, he must always ignore the facts. Now, the only images tight plays of petroleum conjure in the minds of the majority are those of angry, rural locals (and their urban, politically correct confederates) who are convinced that democratically elected governments cannot be trusted to regulate industry responsibly.

Somehow, placards, barricades and protest lines do a far better job than does the law of holding accountable those dirty, rapacious drilling operations.

Equally absurd, and no less irksome, is the notion, gaining widespread currency in the mainstream of the population, that New Brunswick should abandon all efforts to develop any of its natural resources – non-renewable and otherwise.

The argument against harvesting and processing fossil fuels is already familiar and, though not actually practical, not without some merit. But many of those who decry pipelines for Alberta bitumen into Saint John’s refinery also condemn wind turbines, which pollute nothing, contribute no green house gases to global warming, as they add 500 megawatts of electricity to the province’s power grid each year.

With evidence that is almost diaphanous, opponents of “big wind” claim that proximity to the rotating blades produces everything from migraines to vertigo to brain tumors. Besides, they whine, they’re ugly.

Such was the condition of New Brunswick’s polity in the year that was. Such, we may reasonably fear, will be its condition in the year ahead, solely because, in this province, a lack of intellectual firepower is matched only by a catastrophic failure of the collective imagination.

Increasingly, far too many of us cannot conceive of a day when we will witness the economic engines and commercial levers freeze for good. It’s never happened before. We’ve always managed to pull through, demanding and pretty much getting everything we’ve asked our politicians to deliver.

The corollary effect, of course, is that we get politicians who will only pander to our misguided, uninformed expectations.

But the day of reckoning is nearly upon us. A province of 750,000 people, sporting a structural deficit of $500 million on a long-term debt of $11 billion – a province that is shedding people and jobs faster than any other in Canada – cannot afford to engage in magical thinking about its future.

Should this realization eventually dawn on New Brunswick, version 2014, I’ll gladly apologize to all those of my fellow citizens who once apprenticed in this sullen, self-satisfied land as nincompoops.

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