Nova Scotia is one of the few Canadian provinces that imports most of the energy it consumes: crude oil and refined petroleum products are imported to meet the needs of residential and commercial space heating, transportation, agriculture, and some industrial processes. Even electricity, almost all of which is generated in the province, still relies on imported coal and oil. Nova Scotia's much vaunted offshore natural gas industry is in decline and without a major new discovery, the pipeline to New England may be carrying natural gas imported from Russia or North Africa.
The province's dependence on foreign energy supplies, coupled with an ineffective provincial energy policy, means that Nova Scotia is vulnerable to changing world events that cause energy prices to rise. Nova Scotia needs an energy policy that promotes energy security: the supply of reliable, secure, and affordable energy in all sectors of the economy.
For example, in the residential sector, the energy security policy must focus on space heating and domestic hot water, as these are responsible for almost 80 percent of household energy use. Three distinct, but related, goals form the basis of such a policy.
First, the reliance on imported sources of energy for space heating must be reduced by increasing the use of indigenous sources of energy. Reliable indigenous sources of energy such as biomass, geothermal, solar, and wind should all be considered and employed before turning to foreign sources of energy. Indigenous sources of fossil fuels should be used in conjunction with renewables or when there are no other alternatives. Since Nova Scotia has sufficient solar energy to allow properly constructed homes to meet up to 60 percent of their space heating requirements, building codes must be changed to ensure that buildings and subdivisions are aligned on an east-west axis to take advantage of solar energy.
Second, energy requirements for space heating must be reduced by improving the energy efficiency of buildings. All buildings must meet the highest possible standards of construction to reduce energy demand. In new buildings, this can be achieved through the application of stringent building codes, while in existing buildings this will require upgrades to improve their energy efficiency.
Third, when energy is used, it must be used as efficiently as possible. Although space and hot water heating requires relatively low temperatures, most households use high-grade energy sources such as fuel oil, electricity, or natural gas for heating. Since many industrial processes co-generate a high-temperature product (such as electricity) and a low-temperature waste heat (often in the form of water) the waste heat can be used for district heating (that is, piped to communities and used for space heating). Cogeneration systems reduce energy requirements and improve a community's overall energy efficiency.
In addition to these three goals, the provincial energy policy must include components to help those Nova Scotians unable cover the cost of heating throughout the winter months and assist others who lack the financial resources to pay for the upgrades needed to reduce their household energy demand.
Until recently, funds were available to address both of these issues. Nova Scotia's fuel assistance program, Keep the Heat, paid $250 to defray the cost of home heating for those on low-income; this has now been replaced by a reduction in the tax on home heating fuels, averaging about $200 per household. The federal government's home energy upgrade program, EnerGuide for Houses, helped many Canadians improve the energy efficiency in their homes and reduce their energy demand; this program was recently scrapped by the federal Conservative government.
Helping Nova Scotians achieve energy security will mean establishing a provincial low-income fuel assistance program as well as creating the provincial equivalent of the EnerGuide for Houses program. These programs, along with financial support to help implement district heating systems, will need funding from the province.
One source of these funds could be the estimated $75 million which, according to the provincial Department of Finance, is the province's share of the HST in the sale of electricity, home heating fuel, propane, natural gas, wood, and other fuel sources used to heat homes.
In a short-sighted, political move, the provincial Progressive Conservative party has stolen a page from the Nova Scotia New Democratic Party and is proposing to remove the eight-percent provincial component of the HST on the sale of home heating fuel sources, at a cost to the province of $75 million. Not only does removing the residential energy tax cut rob the province of valuable revenues, it also limits what the province can do to address the pressing issue of energy security.
Nova Scotia, like the United States, is addicted to imported non-renewable energy. Breaking this addiction will require an energy policy that ensures all Nova Scotians have access to sources of reliable, secure, and affordable energy. Without such a policy, Nova Scotians will be facing a future of ever-increasing energy costs that will overwhelm any benefits associated with tax reductions.
Published: Chronicle-Herald 25 May 2006