Gas war heats up

Joel Bernard/Tom Adams
National Post
May 27, 2002

Letters to the Editor:

Re: East Coast Gas Wars


New Brunswick’s application to the National Energy Board does not suggest “how to cut off gas shipments to the United States,” as the article East Coast Gas Wars (May 14) states. It recognizes that a certain volume of natural gas is needed to make the Maritimes and Northeast Pipeline viable. It is well known that New Brunswick supports that pipeline; the only purpose of the application is to ensure that Atlantic Canadians have access to new gas supplies at the same price that the Sable producers are getting from U.S. purchasers.

The current rules of the NEB contain a loophole allowing it to approve exports for natural gas for terms less than two years without any other Canadians knowing about it. When those rules were put in place in 1991, over 80% of the gas exports from Canada were for terms longer than two years, and so could not take advantage of these short-term export orders. Longer exports need an NEB licence and Canadians receive public notice and an opportunity to buy that gas. But today, about 80% of all gas exports leave Canada under short-term orders, with no one in Canada except the NEB and the exporters knowing about them.

Without new discoveries, current producible reserves will last only about 12 years. The Deep Panuke (EnCana) reserves, scheduled to come on stream in 2005, will last 10 or 11 years at forecast flow levels. New Brunswick is concerned that the supplies may prove finite all too soon.

New Brunswick is simply asking the NEB to ensure that the public get notice of any proposed short-term export order for Scotian offshore gas, so that anyone in the Maritimes who wants it can match the U.S. price. Under New Brunswick’s proposal, Canadians would have an equal opportunity to acquire natural gas produced from Canadian resources whose developments they themselves helped finance through Petroleum Incentive Program grants in the 1980s.

I might also note that there are no legal obstacles in New Brunswick to cogeneration; in fact, gas is already in use for such projects there.

Again, New Brunswick’s application only seeks to give Canadians equal access to a Canadian resource, Scotian offshore natural gas, rather than having to wait in a queue behind American users.

Joel Bernard, MLA (Nepisiguit)
Legislative Assembly, Fredericton

Tom Adams responds:

What I said was that “New Brunswick demands that the region’s gas exports be subject to regulatory controls, with the National Energy Board in its wisdom deciding how much gas should be turned back at the U.S. border, for the benefit of Eastern Canadians.”

Tying up gas exports in red tape, as New Brunswick’s government wants, will ensure that only a small portion of the gas reserves in the Eastern off-shore get developed.

New Englanders are successfully using Eastern Canadian gas to power their economy, mostly by converting it into electricity through advanced processes that are also extremely clean environmentally. Meanwhile in New Brunswick, opportunities for this technologically advanced, competitive path to economic prosperity – like at the Irving Oil refinery in Saint John – languish. Why? In large part because NB Power, the province’s debt-laden Crown monopoly, has the legal right to block any power generator from being constructed.

Because the gas is not shipped as far, consumers in Nova Scotia and New Brunswick already get gas cheaper than consumers in New England. With sensible policies – starting with the breakup of the province’s electricity monopoly – New Brunswick could begin to share in the prosperity south of the border, instead of attempting to beggar its neighbour.


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