As the debate on shale gas exploration and production
continues in New Brunswick, I am struck by the negativity that pervades the
debate. There have been some very negative pictures painted by anti-shale
movement as to what the province may look like in the future with shale gas.
These pictures assume an unregulated, free for all of exploitation and
trampling of citizens rights.
Does it not make sense to consider the flip side of the
coin; what is the best case scenario? Allow me to paint a more positive picture
of the outcome. This vision assumes strong leadership, a strong revenue model
for natural gas, and a well enforced, adaptive regulatory regime that puts the
protection of the environment and welfare of citizens as top priority.
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A Vision of NB in the year 2025:
Despite having the most rigorous regulatory scheme in North
America, large proven reserves of natural gas have made New Brunswick a hot bed
for natural gas activity. The New Brunswick government has shrewdly insured
that the industry remains one of the safest in the world by reinvesting a
percentage of the revenue created into enforcement procedures and personnel.
Other jurisdictions have mirrored New Brunswick's regulations and as such the
natural gas industry in general has become more environmentally friendly and
more safe. The royalty structure put in
place has ensured that all New Brunswickers benefit from the bounty of natural
gas, and other natural resources. Intelligent investment of this bounty will
ensure that the financial benefits of natural gas development are see in
generations to come in the form of new industries and a better province.
The key to the development of a safe and well regulated
industry was the establishment of an independent monitoring agency which is
free of political and industry influence. This agency monitors the industry and
its effects based on sound scientific practice and research. As the industry
kicked off in 2015-2016, the agency invested in a province wide program of data
collection to establish a baseline for water and health quality which future
industry effects would be compared to.
The pressure placed on exploration and production companies
by the strict regulations has driven innovation in the process of hydro
fracking and has resulted in the development of environmentally neutral
fracking fluids. Several large producers were already in the process of
researching these alternatives to potentially hazardous fluids, and the strict
regulations and shared liability initiatives fast tracked these research and
development projects. 100% of the wells fracked in New Brunswick as of 2020
were being fracked with environmentally neutral fluids. This means the fluids
pumped into the wells is non-toxic and the fluids coming back to the surface
are easier to filter and reuse. The few spills that have happened had little or
no environmental impact.
New Brunswick has
leveraged the University of New Brunswick's reputation as a leading engineering
school to establish a petroleum engineering school that has quickly gained a
reputation for developing some highly
innovative technologies that are being adopted around the world. This work has
attracted investment from large oil and gas service companies and their
sponsorship has helped grow the Universities campus. It is quickly becoming one
of the global centers of sustainable and environmentally conscious resource
development engineering. The strong bioengineering hub that was established in
New Brunswick in the early 2000's has contributed to this work with development
of bioengineered water filtration systems to cleanse the water used in
hydrofracking.
Another key area of study has been in remediation of well
sites. The hydrofracking process produces useable gas for about 10-15 years on
average, so as wells reach the end of their life cycle, the New Bruswick regulations
stipulate that the well site are must be remediated to its pre-production
state. This has lead to a hub of remediation services companies that specialize
in remediating these sites.
The establishment of the research hub on sustainable
development of natural resources at the University of New Brunswick has
resulted in New Brunswick becoming a leader in these sustainable development
technologies.
These academic developments have combined with legislation
that requires oil companies working in New Brunswick to hire locally and invest
locally to establish a highly skilled petroleum industry labor pool that will
be contracted out around the world as natural gas industry in New Brunswick
moves from exploration and establishment phases
to production phases.
The revenue's created by the production of New Brunswick's
natural gas reserves has allowed the government to balance its budget, and this
has resulted in much better services for citizens. The strong emphasis on government
renewal during the years before the natural gas revenue has resulted in a much
less bloated civil service and has helped ensure the new money is spent
efficiently.
In the health care system,
wait times have disappeared and access to innovative diagnosis and
treatment technologies have increased. The ageing population continues to put a
strain on the health care system, but collaborative care clinics and
preventative health programs have made for a healthier population. Balanced
budgets and natural gas revenues have also allowed the government to provide
better funding for recreation facilities such as arenas and free gym access for
low income earners, thus resulting in a more healthy population.
The revenues created by has allowed the government to
subsidize the development of alternative power generation technologies such as
wind power. This has meant that NB Power has been able to decommission the
dirty coal power plants at Coleson Cove and Belledune. The local economic impact to the closing of
these plants has been more than offset in the expansion of the Belledune deep
water port and the Saint John refinery and LNG port.
New Brunswick is now considered one of the leaders of
sustainable power generation with much of its power generation coming from wind
and hydro. The refurbishing of the province's hydro power generation plants,
and building of wind power development in Tantramar Marsh, northern parts of
the province and some off shore areas have been bankrolled by natural gas revenues and legislated local
investment by oil companies, and have allowed NB Power to phase out the ageing
Point Lepreau nuclear power station.
One of the key beneficiaries of development has been the
First Nations communities. Before natural gas development, these communities
often struggled to survive and saw some of the worst living conditions in New
Brunswick. Inclusion in the robust royalty schema in New Brunswick has allowed
these communities to turn around this trend. The First Nations traditional role
as guardians of the natural environment has lead them to be the key drivers of
the new sustainable economy in New Brunswick. They have benefited from development
of wind energy on their lands, and a government program encouraging First
Nations members to learn more about these technologies have lead to a good
ratio of new sustainable technology graduates coming from these communities.
The roads and transportation infrastructure in the province have
been upgraded and refurbished and have resulted in more efficient
transportation of goods and services. Admittedly, some roads had to be upgraded to handle
increased traffic loads during initial commissioning of natural gas wells, but
those upgraded roadways remain after the commissioning is complete.
A high speed rail line connecting Toronto, Montreal and
Halifax making stops in Fredericton and Moncton is being considered, and could
make travelling by efficient rail a more attractive alternative, thus taking
some automobiles off the road, reducing fossil fuel emissions.
The now vibrant New Brunswick economy is resulting in
increases in population growth and economic development, which has helped add
to the provinces tax rolls. This results in more money to pay for innovative
and efficient service delivery to citizens, including a much more inclusive and
effective public education system, and subsidized
post secondary education.
The population growth
and economic development has also meant an increase in air traffic, and this,
combined with the new revenues, has made a centralized provincial airport in
Sussex a viable option. This consolidation of the air traffic from the provinces
largest centers will result in much better flight options and will eliminate
the monopoly of the market by one carrier. Better air access will then create
more population growth and economic development, further increasing the living
standards of New Brunswick citizens.
The increased living standard in New Brunswick has continued
to attract high technology and IT start ups, and trends such as the increase in
the quality of health services and improvement of the transportation
infrastructure , has allowed New Brunswick to attract technology companies,
without having to offer tax breaks.
As a result of the new opportunities in New Brunswick, more
and more immigrants are opting to immigrate here instead of Toronto or
Montreal, bringing an influx of investment capital and expertise to the
province.
A better transportation infrastructure, collaborative care
clinics, provincial spending on recreational facilities, increased spending on
tourism industries, availability of jobs and the all round betterment of the economy
has lead to a revival of rural communities. The trend to have rural citizens
move to larger centers or other provinces to make a living has reversed, with
many rural citizens returning to their small hometown communities. Many of the
aging citizens stay in their lifelong homes.
A balanced government budget has also allowed for more
support of traditional industries such as forestry and fisheries by allowing
the government to better subsidize the industry when market pressures make it
hard to make a living, and provide investment services for value added
industries.
The responsible development of the natural gas resource has
allowed New Brunswick to reverse many of the dire trends seen in the early 2000's
and has allowed the province to develop modern industries such as sustainable
energy and technology innovation. Rather than turn the province into an
industrial wasteland, the well regulated and sustainably developed natural gas
industry has led to a more environmentally friendly province with a more
diverse economy. The strategic investment of the revenues created by the
industry has lead to the development of sectors and economic engines that far
exceed the life cycle of the natural gas industry.
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A very positive focused vision, I will admit, but most of it
is well within the realm of possibility. It all hinges on the having the best
regulation scheme possible, enforcing those regulations, a robust royalty schema
and putting pressure on the private
sector to develop the industry responsibly. I know from personal experience
that the environmentally neutral fracking fluids is in development, and when
these are produced they will change this debate drastically.
I see this industry and its potential revenue to the
province as a catalyst for change. I have attended information sessions put on
by anti-shale gas proponents, and amid the fervor over environmental concerns,
mistrust of government and large companies, there are some nuggets of insight.
The idea of investing in the "new economy" and developing resources
in a way that focuses on job creation and benefit to citizens, the idea of
investing in universities to provide innovation in the green economy; these are
good ideas that can be seeded and accelerated by the revenue created by natural
gas development.
As I said at the start, strong leadership in government and
intelligent choices will be required to make even part of the positive vision
presented here a reality; but it can be done.
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