Here’s a really good article in National Geographic about the efforts to develop the shale gas industry in New Brunswick. It focuses on the partnership between the Southwest Energy and their leading edge environmental efforts in New Brunswick.
The Conservation Council has tweaked their concerns from contaminated water to the “industrialization of our rural landscape”. For me this was the main issue all along. The commentary made by some local people to journalists was they didn’t like the trucks going down the road. The problem that doesn’t sell nearly as well as Gasland and tap water blowing up.
Every time I mention shale gas I get pilloried here and even more so in the comments below my newspaper columns but I continue to believe that this industry could be a very important economic catalyst for this province and we owe it to our citizens and future generations to find a way to develop it responsibly and to the maximum benefit of New Brunswickers. It will cause some disruption – as does forestry, as does fishing, as does mining, as does wind farms, as does tourism.
In the end all economic development is a kind of trade off. I suppose New Brunswick could position itself as one vast forest with no industry at all. People would have to move out even faster than they have in recent years but it is one way to go.
I still think about that guy who told the CBC journalist that “I retired back here and I just want to be left alone”. In many ways that is the battleground that is shaping up in New Brunswick between an older population that just wants to be left alone and a dwindling younger population that wants to have economic opportunity here before they retire. The former is becoming a huge voting block.
The trouble with that theory is when I actually talk to New Brunswickers in their 60s and 70s and even 80s they mostly say “bring on the development”. My own mother (72) told me she would be happy to have gas drilling on her land if it kept her health care system in place. Even at 72, she is troubled by the state of the public finances (I may have primed her a bit….).
Last point before I end this. I get tarred as an anti-Conservation Council, anti-environmentalist guy but the truth is I see an important role for environmentalists in New Brunswick.
Here’s where the rubber meets the road: in the past, particularly with Sussex, we often read here about how natural gas should be used firstly for local economic development efforts. We’ll see whether that policy also applies to rural development.
Will the people who LIVE near the sites get any benefit, or will it be deemed ‘too expensive’. Doesn’t Enbridge have a monopoly on distributing natural gas? So say you live in Kedgewick or St. Quentin. Say that three gas deposits are discovered. Will that gas be used IN those villages, or will the gas simply be trucked out because Enbridge doesn’t think its cost effective to service a rural area?
If the people AROUND where the ‘development’ is going on don’t see any benefit, then you’ll see antagonism-and why wouldn’t you?
And given NB’s history of the Department of Natural Resources, who actually BELIEVES the government line? You can actually read the government’s statements and while they pay lip service to environmental concerns, they state pretty clear that what they are looking for is the development. When D of E standards are as bad as they are, to have Alward make statements like “we think the regulations are tight enough” really tells you something.
And again, it comes back to what kind of industries are meant as ‘targets’. Drilling actually provides VERY few jobs. The article says that EDW or whatever its called, has a monopoly on one seventh of NB crown land. ALL of its development efforts come to a measly 42 million dollars. Heck, royalties from peat moss are twice that.
I mostly agree about the desirability of using cheap gas ourselves, and that extraction doesn’t create a ton of jobs.
But the royalties could be significant once this got going, and heaven knows the NB government could use some resource income.
That’s true, but its worth noting that the liberal government stopped publishing natural gas royalties separately from other resources in their budgets-just in time for the Irving Natural Gas plant to go online.
It’s also worth remembering that way back when Bernard Lord was going to take the feds to court because he felt that NB was getting screwed over in regards to royalties they should have gotten from the gas lines running through the province. Its the feds that set royalty rates, and at the time they rejected Lord’s claim-even while admitting that he had a point. What they said was “we’ll try to do it better”, and then we never heard about it since.
So there COULD be a substancial royalty increase, except of course that you have a province that gave away the potash in exchange for jobs-its royalty free for several more years.
When you add all those factors together, I hope readers will at least admit that when people badmouth the industry-and the government’s collusion with it, that they have a point. And at the very least, when you have people simply saying “yay”, then you are less likely to get the maximum benefits as when people are extremely critical and going over all the issues.
David was championing the idea of using ‘cheap natural gas’ in the province, but that is VERY unlikely given current provincial policies. If it didn’t happen around Sussex where it had at least a little public community support, its outlook in northern rural regions looks bleak.
Today’s New York Times published a comprehensive analysis of the challenges titled “Regulation Lax as Gas Wells’ Tainted Water Hits Rivers” See http://www.nytimes.com/2011/02/27/us/27gas.html?src=me&ref=general. One conclusion of this article is that the industry may have in some important ways outpaced regulators.
ABSOLUTELY read the above article, a lot of people won’t though, so I should point out that Mr. Lindfield’s final sentence does NOT mean that industry is being MORE proactive than regulators. That’s out of context but thats the impression I got when reading that sentence. What the article points out is that the industry is simply growing too fast for regulators to keep up.
So in case people don’t read it, or for future reference, there are policy decisions here that I’ve not heard from the NB government. A tax on wells is another way to increase short term revenue-even if not much gas can be discovered.
However, given the growth in the US, I think people are RIGHT to have any fears they may have of this industry. It is clearly a substancial danger, yet in the US they have shown the ‘regulators’ simply are not interested in ‘regulating’. Which means NB is engaged in a ‘race to the bottom’ in order to attract interest.
As the number of wells grows, the need for inspection regulators increases. Yet Alward has said NOTHING about new hiring for regulators in preparation for such growth. In other words, the NB government has shown its interest in growing this industry no matter what the cost, and has shown no signs of protecting the public. If anything, the ‘conclusion of this article’ is that the industry does not give a rats ass about the environment OR the public.
The other conclusion is that government regulators are complicit in this industry, and the ONLY efforts at protective measures has been by media exposure. So lets hope CBC is on the ball, because I doubt Irving will be much interested.
For full disclosure, its worth pointing out that Pennsylvania’s former energy minister has quite a series of blogs blasting the NY Times article, claiming that it was misleading. This is important in a couple of areas of public policy.
You can go to shaledaily.com and read the full blog, for some reason I’ve been on the shaledaily mailing list for quite some time, and its pretty good coverage.
The pennsylvania minister points out that the state has MORE than doubled its inspectors, to 208. So its worth asking David Alward how many inspectors they have, and what kind of powers they have.
He also mentions that over the previous two years, the application fee for tapping such a gas well was raised to, I think it was about ten million. Again, its worth asking Alward how much the province gets for each tapped well.
While PE had a rush of new regulations to keep up with numerous problems, its worth pointing out that the NEW governor is looking at scaling back many of those regulations. Like NB, many states are in budget crunches, and environmental regulations are on the ‘how to keep corporations happy’ hit list. Ironic since it was the corporations that caused most of the budget shortfalls in the first place.
Don’t mean to bogart this thread, but I’ve been doing a lot of research, and interestingly enough the CBC doesn’t allow commenting on the story that Alward was in Arkansas and is touting up that state’s gas regulations.
That doesn’t bode well for the province, given that almost all of Alward’s statements were blatant lies. He claims in the article that gas revenues were one of the means by which Arkansas was able to stay in the black.
This is blatantly untrue, in fact, even the states former republican challenger, a guy who works IN the gas industry, wants the state to increase its well tax. While it has a 7% tax, it is only 4% for the first three years of a well’s life.
“Nelson argued that during the last 12 months, the severance tax in
Arkansas had brought in about $54 million to state coffers, but had a 7%
rate been in effect with no loopholes, the state would have netted
$250.1 million.”
Now, if Alward thinks that $54 million is some great boon to the province, its worth pointing out that nominal cuts already created $42 million. That’s hardly an amount to write home about, particularly when you weigh in damages to the environment.
It’s also worth pointing out that that 54 million isn’t exactly a huge part of Arkansas $4.5 billion budget.
People have more reasons to be in a place than economic opportunity. Don’t think NG discussions haven’t been about quality of life because the CCNB put a focus somewhere. At a high level (grande scheme of things), there are roots, love of a place, belonging, sense of community… those are the assets with which to build a resilient economic landscape. Too often the process is to skip over what we’re doing it for, taking for granted a focus wherein may lie a challenge.
In regards to royalties, we shouldn’t look to big revenue from NG with the present regime in place. The regulation provides for 10% of the price at the place of production.(the wellhead) That permits the deduction of $1.46/mmbtu for transportation to Boston, the amortization of processing equipment and the Corridor pipeline. In the first nine months of 2010, our royalties were $350,000 which barely covers the cost of regulation of the industry. Can anyone pronounce “banana republic”? So the question becomes, why do we not have proper standards in place to ensure no cross contamination of water supply, why do we not have an energy policy to ensure that our children and grandchildren have a portion of this resource? And where is our government when an industrial enterprise like PCS damages property in Penobsquis? Is it any wonder that people have some concerns about fracking with a colonial mentality government that we typically have? Yes, there are some jobs for New Brunswickers – hauling fracking water or building roads.