If you were to go looking for the place in North America furthest from natural gas production you might end up in Goldboro, Nova Scotia. They say the country rock star Conway Twitty got his name by jabbing his finger twice on a map of the USA. It’s as if Pieridae Energy basically did the same thing. “Hey, let’s choose the most random place in North America to build an LNG export terminal” and, then, actually built it.
I have yet to meet a single person in the industry that says a Goldboro LNG export terminal is economically viable (and, yes, I have talked to nearly a dozen people who should know including the author of a report out of Houston that concluded the economics didn’t make sense). The folks at Repsol told me they looked at it for Saint John and the economics made no sense even though capital costs would be substantially lower because of existing infrastructure (although one would think that property taxes would be much higher in Saint John, of course).
There are thousands of kilometres between Goldboro and natural gas production in North America (it’s only dozens of kilometres from actual natural gas deposits, but that’s a story you know all too well). Yet the plan is to pipe natural gas from western Canada, through Canada and then into the United States, up the Maritimes and Northeast Pipeline, all the way to the coast of Nova Scotia, convert it to liquefied natural gas and then ship it all the way to Europe. All to make sure that Comrade Putin doesn’t monopolize natural gas markets in Europe over the next 30-40 years.
Crazy, huh?
Well, in October 2018, Pieridae Energy received its provincial permit to construct an LNG facility in Goldboro. Also in 2018, the firm received US$1.5 billion in additional conditional loan support from the German Government. The firm also purchased Ikkuma Resources Corp., a producer of natural gas in western Canada, to obtain a portion of the supply of natural gas for Goldboro’s first LNG facility. The firm also announced it had signed a sale and purchase agreement to supply Europe with additional LNG from Goldboro’s second facility.
Finally, from the firm’s website: “The company expects to start construction activities in 2019 and ship first gas overseas to meet the expected global LNG shortfall in 2023/2024.”
Like Doubting Thomas of old, I won’t believe it until I see the shovels in the ground and the steel being deployed, but as the story goes the most recalcitrant of Jesus’s disciples was ultimately proved wrong.
I’ve always thought that tenacity is an underrated economic development driver. If you have no entrepreneurs willing to take risks, if you have no business and government leaders willing to go out on a limb, if your post-secondary education sector isn’t willing to take risks, if the public is opposed to change – whether it be the inflow of gas or people, it will be really, really hard to turn a jurisdiction’s economic fortunes around.
Now, the Goldboro LNG facility isn’t going to transform the economy of rural Guysborough County. But it’s a place to start.
Are there any knock-on effects for the rest of the region? What does it mean for shale gas or offshore development?
One might presume that if the most proactive jurisdiction trying to address global warming – Europe – realizes it will need natural gas for the next 30-40 years, there might be some impetus to develop Nova Scotia and New Brunswick’s reserves to meet a small part of that need (and the large demand within the Maritimes itself). In fact, many of the European governments that are pushing for new LNG and pipeline capacity have Green parties in the governing coalitions.
But don’t hold your breath that anyone even a slight shade of green in this region will ever support natural gas development here – even if it was tied directly to an aggressive plan to reduce our carbon footprint – such as phasing out coal-fired electricity by 2030 or 2035. They would rather keep burning the coal than drilling any new holes in the ground.