Last week, the International Energy Agency released the 2010 edition of the World Energy Outlook. In this year’s edition, the IEA continued to focus upon the two major energy issues it believes that the world must address in the twenty-first century: climate change and energy security. Growing demand for oil in Asia and continuing production challenges are expected to both push up the price of oil and result in tightening supply. The world’s two other major primary energy sources, coal and natural gas, are also expected to experience rising demand and price increases.
The IEA’s World Energy Outlooks should be of concern to any jurisdiction that relies on energy imports from insecure suppliers as it has serious implications for the three basic energy services: on-demand electricity, heating and cooling, and transportation. Regrettably, Nova Scotia is one such jurisdiction where neither the politicians nor policymakers have understood or appreciated the seriousness of the problem the province faces.
As an example, consider the proposed convention center in Halifax that both the province and HRM council have recently approved.
Barring some unexpected change in the regulations regarding electricity suppliers in the province, Nova Scotia Power will be responsible for the convention center’s on-demand electricity. NSP will generate most of the electricity from imported fossil fuels and purchase varying amounts from local wind producers and, if all goes according to plan, from the Lower Churchill project in Labrador. Although none of these sources will be inexpensive, it is reasonable to assume that as long as NSP’s sources of coal and petcoke remain accessible, electricity will be available for the convention center.
The outlook is somewhat less certain when it comes to heating. Ideally, the building would be heated entirely from renewable energy sources such as solar or geothermal as these are potentially expensive, but secure. However, if heated by oil, these costs will be subject to the vagaries of world oil markets as described by the IEA. With Sable in decline, Deep Panuke a minor play, and George’s Bank off limits, supplies of Nova Scotia’s natural gas cannot be relied upon; while natural gas imports from the United States are a possibility, today’s low prices and supply glut are expected to be a short-lived aberration, especially if the production of shale-gas does not live up to expectations.
Although it may seem that discussing transportation (the third energy service) in relation to the energy requirements of the convention center makes little sense, it is important to remember that the people who are to attend conventions at the proposed center are required to come to Halifax; with limited transportation options, anyone from outside the region will be forced to fly. With the cost of flying closely tied to the price of oil, anything that could cause the price of aviation fuel to rise (including increases in the cost of oil, environmental taxes aimed at the aviation industry, and possible oil supply shortages), will be reflected in the cost of airline travel. It is reasonable to assume that in a time of austerity, limited corporate travel budgets, coupled with higher air fares, means that the cost of transportation will have an impact on Halifax’s proposed conference center.
Had the debate over the convention center included an examination of the long-term energy requirements of its energy services, the decision taken by the province’s politicians could have been different. As it now stands, Nova Scotia’s taxpayers will be supporting a facility that, by its very nature, requires access to affordable and acceptable energy sources.
A decade or so ago, energy would not have been seen as an issue in the development of a building such as a convention center. However, as the IEA continues to show in its annual World Energy Outlook reports, jurisdictions must prepare for a time in the not-so-distant future when the cost and availability of energy becomes a major component in all policy decisions. Nova Scotia’s municipal and provincial politicians and policymakers should demonstrate energy leadership by requiring the proponents of any new project requiring taxpayer support to explain where the energy will come from the meet the energy service needs of their project.
Submitted to AllNovaScotia.com and Chronicle-Herald, 15 November 2010. Unpubished.