Oil fantasies

As the planet continues to bleed oil in the Gulf of Mexico, this is a good time to take stock of our local energy strategies. Unfortunately, the province seems stuck in a permanent quest for elusive offshore riches, the idea being we’ll build our economy on exporting oil and natural gas.

As Larry Hughes, of the Dal Energy Group, explains, in 2001 premier “John Hamm presented his vision of the province’s future: a strong, diversified economy built on the wealth from the ‘oil and gas under the seabeds off our coast.’ The government had a ‘clear plan’ to create a ‘world-class oil and gas industry and secure additional jobs and business growth in Nova Scotia’—quite simply to ‘encourage exploration.'”

At the time, politicians and bureaucrats were speaking of billions and even trillions of dollars in offshore royalties coming ashore. In suggesting that the return would be nowhere near as rosy, Hughes was something of a voice in the wilderness, but he’s been entirely vindicated: The Sable Island field, which never produced any oil at all, and not much gas, is drying up quickly and will likely go belly-up in two years. The nearby Deep Panuke field will be dry by 2020, with royalty payments sinking from $400 million this year to next to nothing.

Almost all of the gas that was found offshore—90 percent of it—was piped to the US. Still, Heritage Gas is pulling up our streets to install natural gas lines. “When I questioned where the natural gas will come from once Sable declines, the response has always been ‘the pipeline is reversible,'” explains Hughes—meaning, we can import natural gas from the US. “But one has to ask, why did Nova Scotia export natural gas when it could have been used here?

“Furthermore, if the price of natural gas increases, Heritage Gas customers will be hit twice: covering the cost of the build-out and then by the higher prices. There is something sadly Nova Scotian about this state of affairs.”

Another vindicated naysayers is bulldog online reporter Timothy Gillespie (see shelbournecountytoday.com). Gillespie has long hounded the South West Shore Development Agency (last month, the agency was shut down and a government audit couldn’t find $500,000 in taxpayer money) and MLA Richard Hurlburt (who has resigned and is now the subject of an RCMP investigation).

After months of delay, Gillespie received an accounting of last year’s junket by 14 Department of Energy and SWSDA reps to Norway to “study offshore drilling.” (No surprise, they discovered drilling is wonderful.) I’ve posted the $98,000 itemized bill of the trip here–but fully $48,000 of it fell into the SWSDA black hole and will never be recovered.

But that missing money is a drop in the bucket. It’s impossible to total the subsidies going into the oil and gas industry, although it’s certainly in the hundreds of millions of dollars, ranging from $5.2 million committed in 2006 for offshore scientific research to the annual $2-3 million in property tax relief for the Dartmouth Imperial Oil refinery. Hughes wants to add in the hundred million or so the province allocated last year for new highways. All that money would’ve gone a long way to producing renewable energy sources for our own use, not export.

In the wake of the Deepwater Horizon disaster, Darrell Dexter extended the moratorium on oil drilling on Georges Bank, yet the government continues to pursue offshore drilling options.

Nova Scotia’s offshore workers perform in the “harshest environment in the world,” according to a video on the Department of Energy’s website. But, boasts the accompanying text, the province is “streamlining approval and regulatory processes” for the oil and gas industry. No doubt the regulators will tell us safety will never be compromised, just as assuredly as the US Minerals Management Service, which regulates drilling in the Gulf, was saying the same thing, right up to the day Deepwater Horizon blew.

Regardless, we should recognize that oil and gas is not going to save the province, and might very well destroy it. We’ve got to give up our export mentality, understand that we’ve got to rely on ourselves and start building local economies, local food sources and local sources of energy.

This article appears in Jun 17-23, 2010.