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Energy

Nova Scotia and Feds kill offshore gas for good

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7 minute read

From the Frontier Centre for Public Policy

By Brian Zinchuk

Nova Scotia and the feds kill an offshore gas project, while their bills are paid by Alberta and Saskatchewan oil and gas

Well, isn’t that just peachy? Nova Scotia’s Progressive Conservative government teamed up with the federal Liberal government to put a bullet in the head of the province’s natural gas industry, whose body was apparently still twitching, despite having been thought dead since 2018.

On December 4, Tory Rushton, Nova Scotia Minister of Natural Resources and Renewables, and Jonathan Wilkinson, federal Minister of Energy and Natural Resources issued a joint statement overruling approval of the offshore regulator, Canada-Nova Scotia Offshore Petroleum Board.

The dollar figure, so far, wasn’t much, just $1.5 million work expenditure bid for the now dead exploration license. But if successful, the company in question, Inceptio Limited, could have maybe, just maybe, revived the offshore gas industry in Nova Scotia.

According to the regulator, there were two bids for eight parcels in the Sable Island area, only one of which was satisfactory. To be clear – the Canada-Nova Scotia Offshore Petroleum Board was apparently seeking bids for development. As in, they actually wanted companies to come and develop these natural gas resources.

But I’ll bet my reporter’s fedora someone realized it didn’t look good for Minister of Environment and Climate Change Steven Guilbeault speaking at COP28 in Dubai about how Canada would be eliminating venting and flaring, while his partner in crime Wilkinson had it in his power to kill off a new methane (natural gas) project in an area that had been purged of the demon gas industry.

No sir. That could not stand. Thus, the announcement killing the Nova Scotia exploration project on the same day as the announcement of the venting and flaring ban. (Saskatchewan calls that a “production cap by default”)

The message is clear to industry – no more new projects if the feds can stop them.

It was very clear in the joint ministerial statement that no more gas projects will be approved, so stop trying.

The ministers overrode the board, saying, “We recognize the expertise of the board and want to reiterate our confidence in the regulatory process that it undertook. However, we both agree that this decision must also account for broader policy considerations, including our shared commitments to advance clean energy and pursue economic opportunities in the clean energy sector, which are beyond the scope of the board’s regulatory purview. This decision will enable us to research and understand the interactions between the two industries as we transition to our clean energy future.

“Leveraging the experience of the Canada-Nova Scotia Offshore Petroleum Board as a world class regulator, Canada and Nova Scotia are actively pursuing the establishment of a joint regulatory regime for offshore renewable energy by amending the Atlantic Accord Acts to expand the board’s mandate so that it can regulate and enable the development of an offshore wind sector in Nova Scotia.

“This will ensure that Nova Scotians can seize the economic benefits associated with the energy transition, including the projected $1-trillion global market opportunity for offshore wind.”

In other words, there’s no future in oil or gas for you, so now you’re going to regulate offshore wind.

Never mind that just a little further down the coast, offshore wind projects are dying off. Never mind that offshore developers are in dire fiscal straits, with billions in losses. Expect the “Offshore Petroleum Board” to get a new name in the coming days.

And shame on the Conservative government of Nova Scotia for going along with this. While the governments of Saskatchewan and Alberta are standing their ground, reasserting control over natural resources, the Nova Scotia Conservatives went along with this travesty.

It’s pretty easy to do, if you don’t have to pay your own bills with your own resources. After all, Nova Scotia gets a huge chunk of its budget from the federal equalization program.

Here’s what Deputy Prime Minister and Minister of Finance Chrystia Freeland wrote to Saskatchewan Deputy Premier and Finance Minister Donna Harpauer in the most recent round of equalization payments:

“In accordance with the legislated formula under the Act and its regulations, your province does not qualify for an Equalization payment for 2023-24.”

Alberta, which has a massive oil and natural gas industry, was similarly stiffed.

And here’s what Freeland wrote to Nova Scotia Minister of Finance Allan MacMaster:

“In accordance with the legislated formula under the Act and its regulations, your province’s Equalization payment for 2023-24 will be $2,802.8 million.”

Alberta and Saskatchewan pay into equalization, largely with money from oil and gas, but Nova Scotia will continue to draw $2.8 billion from it, bit not develop their own natural gas resources.

Nova Scotia’s hospitals are still being paid for by natural gas, except that it’s Alberta and Saskatchewan’s gas, not their own.

Pretty peachy, indeed.

Brian Zinchuk is editor and owner of Pipeline Online, and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

Business

The world is no longer buying a transition to “something else” without defining what that is

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From Resource Works

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Even Bill Gates has shifted his stance, acknowledging that renewables alone can’t sustain a modern energy system — a reality still driving decisions in Canada.

You know the world has shifted when the New York Times, long a pulpit for hydrocarbon shame,  starts publishing passages like this:

“Changes in policy matter, but the shift is also guided by the practical lessons that companies, governments and societies have learned about the difficulties in shifting from a world that runs on fossil fuels to something else.”

For years, the Times and much of the English-language press clung to a comfortable catechism: 100 per cent renewables were just around the corner, the end of hydrocarbons was preordained, and anyone who pointed to physics or economics was treated as some combination of backward, compromised or dangerous. But now the evidence has grown too big to ignore.

Across Europe, the retreat to energy realism is unmistakable. TotalEnergies is spending €5.1 billion on gas-fired plants in Britain, Italy, France, Ireland and the Netherlands because wind and solar can’t meet demand on their own. Shell is walking away from marquee offshore wind projects because the economics do not work. Italy and Greece are fast-tracking new gas development after years of prohibitions. Europe is rediscovering what modern economies require: firm, dispatchable power and secure domestic supply.

Meanwhile, Canada continues to tell itself a different story — and British Columbia most of all.

A new Fraser Institute study from Jock Finlayson and Karen Graham uses Statistics Canada’s own environmental goods and services and clean-tech accounts to quantify what Canada’s “clean economy” actually is, not what political speeches claim it could be.

The numbers are clear:

  • The clean economy is 3.0–3.6 per cent of GDP.
  • It accounts for about 2 per cent of employment.
  • It has grown, but not faster than the economy overall.
  • And its two largest components are hydroelectricity and waste management — mature legacy sectors, not shiny new clean-tech champions.

Despite $158 billion in federal “green” spending since 2014, Canada’s clean economy has not become the unstoppable engine of prosperity that policymakers have promised. Finlayson and Graham’s analysis casts serious doubt on the explosive-growth scenarios embraced by many politicians and commentators.

What’s striking is how mainstream this realism has become. Even Bill Gates, whose philanthropic footprint helped popularize much of the early clean-tech optimism, now says bluntly that the world had “no chance” of hitting its climate targets on the backs of renewables alone. His message is simple: the system is too big, the physics too hard, and the intermittency problem too unforgiving. Wind and solar will grow, but without firm power — nuclear, natural gas with carbon management, next-generation grid technologies — the transition collapses under its own weight. When the world’s most influential climate philanthropist says the story we’ve been sold isn’t technically possible, it should give policymakers pause.

And this is where the British Columbia story becomes astonishing.

It would be one thing if the result was dramatic reductions in emissions. The provincial government remains locked into the CleanBC architecture despite a record of consistently missed targets.

Since the staunchest defenders of CleanBC are not much bothered by the lack of meaningful GHG reductions, a reasonable person is left wondering whether there is some other motivation. Meanwhile, Victoria’s own numbers a couple of years ago projected an annual GDP hit of courtesy CleanBC of roughly $11 billion.

But here is the part that would make any objective analyst blink: when I recently flagged my interest in presenting my research to the CleanBC review panel, I discovered that the “reviewers” were, in fact, two of the key architects of the very program being reviewed. They were effectively asked to judge their own work.

You can imagine what they told us.

What I saw in that room was not an evidence-driven assessment of performance. It was a high-handed, fact-light defence of an ideological commitment. When we presented data showing that doctrinaire renewables-only thinking was failing both the economy and the environment, the reception was dismissive and incurious. It was the opposite of what a serious policy review looks like.

Meanwhile our hydro-based electricity system is facing historic challenges: long term droughts, soaring demand, unanswered questions about how growth will be powered especially in the crucial Northwest BC region, and continuing insistence that providers of reliable and relatively clean natural gas are to be frustrated at every turn.

Elsewhere, the price of change increasingly includes being able to explain how you were going to accomplish the things that you promise.

And yes — in some places it will take time for the tide of energy unreality to recede. But that doesn’t mean we shouldn’t be improving our systems, reducing emissions, and investing in technologies that genuinely work. It simply means we must stop pretending politics can overrule physics.

Europe has learned this lesson the hard way. Global energy companies are reorganizing around a 50-50 world of firm natural gas and renewables — the model many experts have been signalling for years. Even the New York Times now describes this shift with a note of astonishment.

British Columbia, meanwhile, remains committed to its own storyline even as the ground shifts beneath it. This isn’t about who wins the argument — it’s about government staying locked on its most basic duty: safeguarding the incomes and stability of the families who depend on a functioning energy system.

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Energy

Tanker ban politics leading to a reckoning for B.C.

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From Resource Works

That a new oil pipeline from Alberta to BC is being aired by Ottawa and pushed by Alberta has, in turn, critics eagerly pushing carefully crafted scare stories.

Take the Green Party’s Elizabeth May, for one: She insists that oil tankers leaving Prince Rupert would be sailing through “Canada’s most dangerous waters and the fourth most dangerous waters in the world.”

First, this “dangerous waters” claim is unsubstantiated, unproven, and hyperbolic. It is apparently based on a line in a 1992 federal guide to marine-weather hazards on the west coast, but it is not credited or supported there.

Second, who says a new oil pipeline would go to Prince Rupert? No destination is specified in the memorandum of understanding published by Ottawa and Alberta.

It speaks of a commitment to “enable the export of bitumen from a strategic deep-water port to Asian markets.”

Energy Minister Tim Hodgson: “There is no route today. Under the MoU, what (Alberta) would need to do is work with the affected jurisdiction, British Columbia, and work with affected First Nations for that project to move forward. That’s what the work plan in the MoU calls for.”

First Nations concerned

Now, the MoU does say that this could include “if necessary” a change to the federal ban on oil tankers in northwest BC waters.

Some First Nations are strongly fighting the idea of oil tankers in northern BC waters citing fears of a catastrophic spill. The Assembly of First Nations (AFN), for example, is calling for the Canada-Alberta pipeline MoU to be scrapped.

“A pipeline to B.C.’s coast is nothing but a pipe dream,” said Chief Donald Edgars of Old Massett Village Council in Haida Gwaii.

And AFN National Chief Cindy Woodhouse Nepinak said: “Canada can create all the MOUs, project offices, advisory groups that they want: the chiefs are united. . . When it comes to approving large national projects on First Nations lands, there will not be getting around rights holders.”

Alberta group interested

But the Metis Settlements of Alberta say they’re interested in purchasing a stake in the proposed pipeline and want to “work with First Nations in British Columbia who oppose the project.”

The Alberta government’s Indigenous loan agency says a new oil pipeline to the BC  coast could deliver “significant” returns for Indigenous Peoples.

Alberta Premier Danielle Smith has suggested the pipeline could bring in $2 billion a year in revenue, and that it could be as much as 50 per cent owned by Indigenous groups — who would thus earn $1 billion a year,

“Can you imagine the impact that would have on those communities in British Columbia and in Alberta? It’s extraordinary.”

And we note that in 2019 the First Nations-proposed Eagle Spirit Energy Corridor, which aimed to connect Alberta’s oilpatch to Kitimat, garnered serious interest among Indigenous groups. It had buy-in from 35 First Nations groups along the proposed corridor, with equity-sharing agreements floated with 400 others. (The project died with passage of the tanker ban.)

Vancouver more likely

More recent chatter, including remarks by BC Premier David Eby, would suggest oil from a new pipeline would more likely be through Vancouver, rather than via Prince Rupert or Kitimat BC. And tankers have been carrying oil from the Trans Mountain Pipeline System’s Burnaby terminal since 1956 — with no spills.

Oft cited by northern-port opponents is the major spill of 258,000 barrels of crude oil (more than 40 million litres) from the tanker Exxon Valdez, which ran aground in Alaska’s Prince William Sound in 1989.

The resulting spill killed native and marine wildlife over 2,100 km of coastline.  The U.S. National Transportation Safety Board found that the spill occurred due to human error. It cited a tired third mate on watch, and noted the captain had an alcohol problem.

But the Exxon Valdez was a single-hull tanker. Its spill led to the phasing out of single-hull tankers, replaced in the ensuing 36 years by new generations of double-hull vessels (with an inner and outer hull separated to contain spills if the outer hull ruptures), new tanker safety rules — and new ways of dealing with the far-fewer spills.

Among those new ways is the Western Canada Marine Response Corporation: “Our mandate is to ensure there is a state of preparedness in place when a marine spill occurs and to mitigate the impacts on B.C.’s coast. This includes the protection of wildlife, economic and environmental sensitivities, and the safety of both responders and the public.”

What about LNG carriers?

At the same time, fear-mongers are actively flogging scare stories on social media.

One opposition group sees future LNG carrier traffic along the southern BC coast as potentially numbering “in the realm of 800+ transits a year.”

Eight hundred a year? BC Ferries runs more than 185,000 a year. And the ferries don’t have tethered tugs helping them to get safely from LNG terminals. And they don’t have BC Coast Pilots on the bridge to keep progress safe. Oil tankers leaving the Port of Vancouver have both.

As marine captain Duncan MacFarlane of LNG Canada in Kitimat says: “LNG carriers are some of the most sophisticated ships in the world…Once loading operations are complete (at LNG Canada), three BC Pilots will join the ship and start navigating up the Douglas Channel, which is approximately 159 nautical miles out to the Prince Rupert pilot station.”

LNG Canada has partnered with HaiSea Marine, which is a company formed between the Haisla Nation and Vancouver-based SeaSpan, to provide two escort tugs and three harbour-assist tugs to safely move the vessel out of the Douglas Channel…once the vessel drops the pilots at Prince Rupert, it starts a seven- to ten-day voyage to its discharge port. To assist with this, they’ll use satellite navigation, weather routing, and a variety of other technologies to get to their port the safest and most efficient way.”

The same would apply to oil tankers from any northern port in BC.

BC’s tanker-safety record

As the small-c conservative Fraser Institute points out: “Pipelines are 2.5 times safer than rail for oil transportation, and oil tankers have [the] safest record of all.”

And it adds: “The history of oil transport off of Canada’s coasts is one of incredible safety, whether of Canadian or foreign origin, long predating federal Bill C-48’s tanker ban. . . .new pipelines and additional transport of oil from (and along) B.C. coastal waters is likely very low environmental risk. In the meantime, a regular stream of oil tankers and large fuel-capacity ships have been cruising up and down the B.C. coast between Alaska and U.S. west coast ports for decades with great safety records.”

This last refers to the 200-230 tankers a year that now carry crude oil from Alaska through Canadian waters south of Haida Gwaii and then down BC’s Inside Passage or outer coastal waters to Juan de Fuca Strait and Washington refineries.

While these tankers do not transit Hecate Strait (the north end of which is the area of concern about spills from tankers from Prince Rupert or Kitimat) all these US tankers are double-hulled, must report positions, speeds and routes in real-time, must carry certified pilots, must use traffic-separation routes (like traffic lanes), and must slow to 11 knots in sensitive areas.

And as Pipeline Action says: “Canada is not inferior — If Norway can move tankers safely through fjords, if Japan can operate in some of the busiest waterways on Earth, if Alaska balances ecological protection with responsible shipping and if Eastern Canadian ports manage tankers every day, then Canada’s West Coast, with its governance standards, technical capacity and Indigenous partnership potential, can certainly do so.”

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