Nova Scotia and Feds kill offshore gas for good

From the Frontier Centre for Public Policy

Nova Scotia and the feds kill an offshore gas project, while their bills are paid by Alberta and Saskatchewan oil and gas

Well, isn’t that just peachy? Nova Scotia’s Progressive Conservative government teamed up with the federal Liberal government to put a bullet in the head of the province’s natural gas industry, whose body was apparently still twitching, despite having been thought dead since 2018.

On December 4, Tory Rushton, Nova Scotia Minister of Natural Resources and Renewables, and Jonathan Wilkinson, federal Minister of Energy and Natural Resources issued a joint statement overruling approval of the offshore regulator, Canada-Nova Scotia Offshore Petroleum Board.

The dollar figure, so far, wasn’t much, just $1.5 million work expenditure bid for the now dead exploration license. But if successful, the company in question, Inceptio Limited, could have maybe, just maybe, revived the offshore gas industry in Nova Scotia.

According to the regulator, there were two bids for eight parcels in the Sable Island area, only one of which was satisfactory. To be clear – the Canada-Nova Scotia Offshore Petroleum Board was apparently seeking bids for development. As in, they actually wanted companies to come and develop these natural gas resources.

But I’ll bet my reporter’s fedora someone realized it didn’t look good for Minister of Environment and Climate Change Steven Guilbeault speaking at COP28 in Dubai about how Canada would be eliminating venting and flaring, while his partner in crime Wilkinson had it in his power to kill off a new methane (natural gas) project in an area that had been purged of the demon gas industry.

No sir. That could not stand. Thus, the announcement killing the Nova Scotia exploration project on the same day as the announcement of the venting and flaring ban. (Saskatchewan calls that a “production cap by default”)

The message is clear to industry – no more new projects if the feds can stop them.

It was very clear in the joint ministerial statement that no more gas projects will be approved, so stop trying.

The ministers overrode the board, saying, “We recognize the expertise of the board and want to reiterate our confidence in the regulatory process that it undertook. However, we both agree that this decision must also account for broader policy considerations, including our shared commitments to advance clean energy and pursue economic opportunities in the clean energy sector, which are beyond the scope of the board’s regulatory purview. This decision will enable us to research and understand the interactions between the two industries as we transition to our clean energy future.

“Leveraging the experience of the Canada-Nova Scotia Offshore Petroleum Board as a world class regulator, Canada and Nova Scotia are actively pursuing the establishment of a joint regulatory regime for offshore renewable energy by amending the Atlantic Accord Acts to expand the board’s mandate so that it can regulate and enable the development of an offshore wind sector in Nova Scotia.

“This will ensure that Nova Scotians can seize the economic benefits associated with the energy transition, including the projected $1-trillion global market opportunity for offshore wind.”

In other words, there’s no future in oil or gas for you, so now you’re going to regulate offshore wind.

Never mind that just a little further down the coast, offshore wind projects are dying off. Never mind that offshore developers are in dire fiscal straits, with billions in losses. Expect the “Offshore Petroleum Board” to get a new name in the coming days.

And shame on the Conservative government of Nova Scotia for going along with this. While the governments of Saskatchewan and Alberta are standing their ground, reasserting control over natural resources, the Nova Scotia Conservatives went along with this travesty.

It’s pretty easy to do, if you don’t have to pay your own bills with your own resources. After all, Nova Scotia gets a huge chunk of its budget from the federal equalization program.

Here’s what Deputy Prime Minister and Minister of Finance Chrystia Freeland wrote to Saskatchewan Deputy Premier and Finance Minister Donna Harpauer in the most recent round of equalization payments:

“In accordance with the legislated formula under the Act and its regulations, your province does not qualify for an Equalization payment for 2023-24.”

Alberta, which has a massive oil and natural gas industry, was similarly stiffed.

And here’s what Freeland wrote to Nova Scotia Minister of Finance Allan MacMaster:

“In accordance with the legislated formula under the Act and its regulations, your province’s Equalization payment for 2023-24 will be $2,802.8 million.”

Alberta and Saskatchewan pay into equalization, largely with money from oil and gas, but Nova Scotia will continue to draw $2.8 billion from it, bit not develop their own natural gas resources.

Nova Scotia’s hospitals are still being paid for by natural gas, except that it’s Alberta and Saskatchewan’s gas, not their own.

Pretty peachy, indeed.

Brian Zinchuk is editor and owner of Pipeline Online, and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

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