Setting of Nova Scotia Energy Requirements

Setting of Nova Scotia Energy Requirements

Today, some 60% of electricity generation comes from imported coal, 20% from natural gas, 10% from hydro/tide and 7% from wind. Nova Scotia has five thermal plants, 33 hydro plants, four combustion turbines, several commercial wind farms and one tidal power plant. See map below (Nova Scotia Department of Energy).

The 2009 Climate Change Action Plan put forward absolute caps that will control greenhouse gas emissions in future years, but also sought to increase renewables, improve energy efficiency, improve transmission, encourage emerging technologies and generate more electricity from natural gas. All at an acceptable cost of power to Nova Scotia and an increased security of long term energy supply. From 2015 onwards, the caps apply to limit greenhouse gasses, and from 2020-2030 coal fired thermal stations, will be phased out and decommissioned. While natural gas is not a renewable energy source, it is recognized as a transition fuel to replace coal in the short/medium term. Natural gas generates significanlty less (50-70%) GHG emissions than coal on a combustion basis.

The questions become – what replaces coal (60% today) in the Nova Scotia energy mix of the future? Where will the natural gas that is projected to generate +20% of electricity in 2020 going to come from?

The current supply of natural gas from offshore Nova Scotia is projected to end in 8-13 years ( Atlantica Centre for Energy-Oct. 2012). From being a major source of electricity and export income over the past 10-15 years, in 2012 only 8% was exported, the rest was consumed in the Maritimes, and the export number is falling. The Deep Panuke Field is due on line in mid-2013. But much of the production is contracted to the energy company Repsol and ear-marked for the Boston and New England markets. There is potential for natural gas from deep water offshore Nova Scotia and several majors – Shell and BP have committed to long term exploration, but first gas in the event of success is decades away.

Access to LNG via the Saint John terminal Canaport is limited as shipments are severely curtailed as carriers can achieve far higher landed prices in Europe and Asia rather than North America. It is possible that the existing Maritimes and Northeast Pipeline from Goldboro, Nova Scotia to the eastern US could be reversed and gas made available for an LNG export scheme, as proposed by Pieridae Energy at Goldboro. This could then help Nova Scotia secure its long term gas, however, it will have to pay LNG export price to compete. There was an indication of the future pressure on natural gas prices in Nova Scotia this past winter when prices of +$15 per thousand cubic feet (mscf) were paid to meet a shortfall of gas for electricity generation.

Nova Scotia is sitting at the end of a pipeline needing reversal, with dwindling reserves of offshore gas, and currently an extended hydraulic fracturing review process that prevents evaluation of a known, large onshore gas resource. This does not provide a secure, stable, long term supply of natural gas to meet Nova Scotia’s pressing energy requirements.

So again the question becomes – what replaces offshore natural gas (20% today) in the energy mix of the future?

We contend that to give energy policy makers every option to meet their commitments then Nova Scotia should determine if shale gas development is feasible, commercial and can be socially acceptable. It should answer that question as soon as possible. This requires approving a “proof of concept program” as Triangle has discussed with both Departments of Energy and Environment these past two years. This is the approach being taken by New Brunswick as it progresses its “Responsible Environmental Management of Oil and Gas Activities “initiative issued in May 2012.

Details of a program can be prepared, discussed openly and a way forward developed. It will involve a modest regional seismic program over the area, and a three to five well program of both vertical and horizontal wells that will be hydraulically fractured, tested and produced for some months utilizing proven and effective environmental management control to ascertain sustainability of gas production. Evaluation of re-injection of water will be necessary to determine suitability and practicality. The “proof of concept program” can demonstrate that this development can be undertaken in an environmentally responsible and socially acceptable manner.

Now to the NOFRAC Report – Out of Control, Nova Scotia’s Experience with Fracking for Shale Gas