As many readers are no doubt aware, Irving is in the process of building a liquefied natural gas regasification facility in Saint John. The natural gas, supplied by the Spanish company Repsol, is to be shipped via a pipeline directly to Maine, bypassing the Canadian section of the Maritime & Northeast (M&NE) pipeline. Emera, the parent company of Nova Scotia Power, will be responsible for managing and operating the "Emera Brunswick" pipeline.
In early December, Emera submitted its "Arguments-in-Chief" to the National Energy Board hearings being held in Saint John, outlining its reasons for building the pipeline. In an example of Orwellian doublethink, Emera's principal argument for routing the pipeline to Maine was "Maritime Canada urgently needs the Brunswick Pipeline."
The submission also claimed that "Given the serious supply uncertainty in the Sable offshore, it would appear to be contrary to the Canadian public interest to deny this opportunity to bring a new diverse, long term supply to Maritime Canada by late 2008."
Anyone reading these arguments would be led to believe that natural gas plays a significant role in the energy mix of the Maritimes, and that Emera, in conjunction with Irving and Repsol, is trying to ensure that this remains the case. In truth, natural gas has made little impact on the region's energy mix; for example, natural gas meets less than one percent of Nova Scotia's energy needs.
For any type of energy to contribute to the well-being and security of a society, it is necessary to have both a reliable supply of the energy and an infrastructure to distribute it. Electricity requires some form of generation and an electrical grid, while oil has a lengthy supply chain, from the wellhead to a refinery to the fuel pump.
Natural gas is no different from any other energy source, requiring a supply and a distribution system. In Nova Scotia, there is a supply of natural gas from Sable (albeit in rapid decline, as rightly observed by Emera); however, the infrastructure available to distribute the natural gas is limited to a few places in the province. Despite the availability of a local natural gas franchise licensed to distribute natural gas in limited areas of the province, the uptake has been slow.
The need for infrastructure has not been lost on either the province or HRM, as both are trying to establish a natural gas cogeneration facility on peninsular Halifax, producing electricity (for sale to NSPI) and heat (for the hospitals and universities). The provincial government hopes that once natural gas is available on the peninsula, residential and commercial consumers will want their buildings connected to the natural gas network.
However, for the Halifax peninsula natural gas project to proceed, it is necessary to move the natural gas from the Dartmouth side of the harbour to the Halifax side. A plan to drill a tunnel under the harbour for a natural gas pipe has been proposed, but the necessary federal funding does not appear to be forthcoming. Without a tunnel or some other way of getting natural gas to the peninsula, it will be impossible for the natural gas cogeneration facility to proceed.
The Nova Scotia government and Anadarko (the current owner of the proposed Bear Head LNG site in Cape Breton) are both calling for the NEB to require Emera to connect to the Canadian side of the M&NE pipeline. By routing the natural gas through Canada, the company shipping the natural gas from Saint John would pay tolls for using this section thereby reducing the likelihood of the pipeline becoming uneconomical to operate. Keeping the pipeline open is in Anadarko's best interest as it means anyone purchasing their Bear Head site would have a pipeline for transporting regasified natural gas. From the Nova Scotia government's perspective, as long as the M&NE pipeline remains open, natural gas exploration remains a possibility in the province as there is a pipeline to guaranteed markets in the United States.
The Nova Scotia government's other argument is that the M&NE pipeline could be reversed and natural gas from Saint John could flow to Nova Scotia. This is wishful thinking in the extreme, given the size of Nova Scotia's natural gas market, the province's lack of infrastructure, and the insatiable demand for natural gas in the United States.
To be fair to Emera, natural gas has made more significant inroads into New Brunswick than it has in Nova Scotia, so an additional supply into the region could help consumers in New Brunswick. However, once the natural gas crosses into Maine, the chances of it returning to Canada are almost zero.
If anyone in the Maritimes "urgently needs" the Emera-Brunswick pipeline, it is Emera, as they are building the pipeline to create shareholder value. Very few others, especially those living in Nova Scotia, stand to gain anything from the Emera-Brunswick pipeline or the LNG being shipped into Saint John.
Published Chronicle-Herald 22 December 2006.