Atlantic Canada: A regional energy superpower?

Over the past few months, a number of individuals and politicians have started to refer to Canada as an "energy superpower". This title would appear to be deserved, as the number of energy-exporting countries continues to decline, Canada stands out for a number of reasons: not only has it been blessed with copious amounts of coal, oil, and natural gas, it has as rivers that can be harnessed for hydroelectricity and some of the richest deposits of uranium in the world.

Canada's abundance of these energy sources allows the majority of Canadians to live comfortably, while simultaneously exporting about one-third of the energy it produces (as oil products, natural gas, and electricity), primarily to the United States. These facts form the basis for naming Canada an energy superpower.

However, it is a myth to call Canada an energy superpower, as this portrays Canada as a single, homogenous energy producer. The truth is, Canada consists of a number of regions, unequal in the quantity or type of energy resource. For example, not all provinces have the large-scale hydroelectric capabilities of British Columbia, Manitoba, Ontario, or Quebec. Similarly, the distribution of crude oil in Canada is not uniform; in fact, Alberta's production of light and medium conventional crude oil is in decline, being replaced by expensive, hard-to-extract synthetic crude from the tar sands.

Atlantic Canada also contributes to Canada's energy superpower myth.

Newfoundland and Labrador is home to Churchill Falls, Canada's second largest hydroelectric facility. Each year, Churchill Falls generates over 30,000 gigawatt-hours of electricity, almost all of which is sold to Hydro Quebec for about a quarter-of-a-cent per kilowatt-hour.

Canada's supply of conventional crude oil would be declining at a greater rate if it were not for the oil being produced from Newfoundland and Labrador's three offshore oil fields Hibernia, Terra Nova, and White Rose. Over 80 percent of the more than 350,000 barrels a day of production are exported to refineries in the United States and Quebec; most of the remainder is supplied to refineries in Atlantic Canada.

The Sable Offshore Energy Project is a small natural gas field located several hundred kilometres off the coast of Nova Scotia. Monthly production from the field peaked in November 2001 at 512 million cubic metres; today it is around half that. Less than 10 percent of the natural gas produced stays in the region; most is shipped by pipeline to New England.

About 20 percent of New Brunswick's electrical generation is exported to New England. Additional transmission facilities are being built to allow Nova Scotia Power to enter into the lucrative electricity export market.

Atlantic Canada's export of electricity, oil, and natural gas to other provinces and the United States does not make Canada an energy superpower. Focusing solely on exports overlooks an important issue: how does Atlantic Canada meet its own energy needs?

Surprisingly, there are limited energy pathways from western and central Canada to Atlantic Canada: oil and natural gas from western Canada stop in Ontario and Quebec. Coal, petroleum-coke (petcoke), and oil for electrical generation from thermal power stations is supplied almost exclusively from foreign sources. With limited sources of natural gas, most space heating uses heating fuel oil (mostly from imported supplies) and electricity (much of which is generated from imported energy). Similarly, refined petroleum products for transportation (for example, gasoline, diesel, and aviation fuel) are obtained primarily from imported oil stocks.

Despite its contribution to Canada's claim of being an energy superpower, Atlantic Canada relies on imported energy supplies to meet over 70 percent of its energy needs. This reliance is particularly worrisome in a time of rising world energy prices and the status of some of the region's energy suppliers in doubt; for example, part of the region's oil supply is from the United Kingdom's North Sea fields which are in decline. Petcoke is supplied from Venezuela, a country that is in a war-of-words with the United States; should this escalate, supplies may be in jeopardy.

To complicate matters even further, both the federal and provincial governments seem oblivious to the energy problems now facing the region. The federal government's recent decision to axe the EnerGuide for Houses program means that anyone wanting to upgrade the energy efficiency of their house must cover the costs themselves, something that many people in the region are unable to afford. Although removing the provincial component of the tax on home heating fuel, as is being done in New Brunswick and Nova Scotia, may appear to be helpful, it does nothing to address the underlying problems.

With such an overwhelming reliance on imported energy, it is clear that Atlantic Canadians face a precarious future. Provincial and regional energy security policies are needed: to reduce energy consumption in all sectors of the economy, to reduce the reliance on imported energy, and to increase the use of sustainable, indigenous energy sources.

Until such policies are in place, Canada will never be an "energy superpower".

Published: Sunday Herald - 6 August 2006