Nova Scotia and the need for energy transformation

Most jurisdictions import energy. In Nova Scotia’s case, between 80 to 85 percent of the energy consumed in the province is imported; most of this energy is oil for transportation and space heating, while the remainder is coal for the generation of electricity.

Until about a decade ago the fact that Nova Scotia was so heavily reliant on external suppliers of energy was not a significant issue. However, times have changed and are about to change even more.

According to the International Energy Agency (IEA), in 1990, member countries of the Organization for Economic Cooperation and Development (OECD) consumed about three times as much energy as all of the non-OECD Asian countries (principally China, India, and Indonesia); by 2030, these countries are expected to consume more energy than the OECD countries. In order to meet this demand, world energy production will need to double from 1990 levels by 2030. And despite the talk of renewables making an impact, in 2030, the major energy sources meeting this demand will have changed little since 1990: oil (meeting 30 percent of world demand), coal (29 percent), and natural gas (22 percent).

The pressure on the world’s energy producers to increase production is immense. This is especially true for oil: as onshore supplies of oil in many countries is being depleted, oil companies are being forced to explore and produce in offshore regions such as ultra-deep waters in the Gulf of Mexico and the west coast of Africa, and soon the Arctic. The IEA expects that by 2030, about 10 percent of the world’s oil production will come from oil fields “yet to be found”. If these fields do not exist or cannot be developed for economic, political, or environmental reasons, there will be supply shortfalls and price instability probably beginning before 2020, especially if demand for oil increases in China, India, and the Middle East.

The prospects of a volatile energy future and the fact that Nova Scotia relies on imported oil from regions where oil production is in decline (Newfoundland and Labrador and the North Sea) or are politically unstable (the Middle East) and has no pipeline connection to western Canada, appears to have been lost on successive Nova Scotian governments, both Conservative and New Democratic.

This lack of understanding has resulted in mismanagement of the province’s few domestic energy sources. In the 1990s, all of Nova Scotia’s offshore oil was exported to Montreal. Throughout the 2000s, most of Nova Scotia’s natural gas (primarily offshore, but some onshore) was shipped to New England; a trend that will continue for the next decade. And for at least a decade, woodchips have been exported to Europe.

Although oil is essential to both transportation and heating, the Dexter government (like the MacDonald before it) has chosen to ignore the energy requirements of these two energy services to focus on the production of electricity from renewable sources, notably wind. This decision comes at a price: in order to address wind’s intermittency, it is necessary to have backup sources of electricity to meet the demand when the wind is not available and to have a way of handling the excess electricity from wind when there is insufficient demand for it.

To solve the intermittency problem, the government wants to bring electricity from the proposed Lower Churchill hydroelectric project in Labrador to Nova Scotia via subsea cable (to act as backup) and to build a new, larger grid-interconnection with New Brunswick to send electricity to New England (to handle excess electricity). The benefits to Nova Scotians will be marginal at best, since electricity from the Lower Churchill will be expensive and Nova Scotians will be expected to pay for the interconnection to New Brunswick. On the other hand, those who stand to benefit include companies generating electricity from the wind as the grid will give them access to the lucrative New England market and NSPI, since it will charge for the transmission of any electricity sent across its grid (both from local wind-electricity producers and the Lower Churchill).

An alternative to the government’s approach is to focus on energy services that can operate with an intermittent source of electricity; for example, both electric batteries (for electric vehicles) and electric thermal storage heaters (for space heating) can be charged intermittently. Using wind-generated electricity this way would not only help meet the province’s energy requirements for transportation and heating, it would also reduce the need for oil imports and reduce greenhouse gas emissions from the combustion of oil products.

Nova Scotia’s present energy policies make it ill-prepared for oil-shocks like the one in the summer of 2008 when gasoline reached $1.45 or more a litre and home heating fuel was over $1.30 a litre. Even the government’s promise of low-cost electricity from the wind is a distant dream that relies on inexpensive electricity for backup.

If Nova Scotia is to limit the economic and social impacts of the inevitable upheaval of world energy markets, it must develop a new energy strategy that will result in its energy services being transformed to use energy sources that are secure and benign. Delays in developing such a strategy will make the transformation more difficult and costly.

Published, 26 August 2010; Chronicle-Herald 28 August 2010