Natural Resources Committee on Dec. 2nd, 2010

[Stephanie Merrill]

The coalition is newly formed. It is only about two or three weeks old. Basically, the coalition formed out of concern in a number of communities. What we were seeing were very similar things happening in the communities where exploration was coming forth. We saw that municipalities were not sure what to do. They obviously had to make decisions that were in the best interests of their community residents, who didn't like the idea. We had rural communities in New Brunswick that did not have local governance--the province represents these rural communities--so they had no formal mechanism for addressing their concerns.

We were seeing a pattern of things emerging across the landscape in terms of how industry and government were approaching communities. So basically, it was a grassroots movement of different individuals and community groups, such as the Cornhill Residents Association, for example. Those types of groups came together and decided to just start talking to each other so that they could learn from each other what was happening in their communities. So when industry moves to the next place, they will be well informed about what to expect, such as what types of things industry is saying and how things are going to play out.

They just decided that they would be more effective if they joined together to share information. They are not necessarily against any form of shale gas development or other resources. They have a very broad mandate. But they really feel that there needs to be responsible development of that resource in the interest of the public. And if there is economic benefit from the industry, if there is some, it should be for New Brunswickers, and specifically for communities where extraction takes place. Currently, in New Brunswick, the community where our current natural gas field is located cannot themselves hook up to natural gas. They think that is unfair.

In general, the coalition formed so that they could all learn from each other. They felt the government was not informing them as they should have been, so they took it upon themselves to learn from each other.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I see that situations are similar from place to place. That's why the idea of a moratorium is increasingly widespread in Quebec, at least so that we can review our legislation, since this issue is governed by an old Quebec mining act. So it's inadequate. It's time we were able to properly gather information and inform the public, who were already very concerned about drinking water. Thank you.

Ms. Pike, I'd like to tell you I profoundly disagree with you on almost everything you say.

I would remind you that natural resources are a provincial jurisdiction and that, if we had to begin talks, we might perhaps have to reopen the Constitution. I don't think that's really what the members around this table want.

If we have to establish an agreement between the provinces on the free movement of energy, if it's as hazardous as the manpower agreement with regard to recognition and credentials, that may be difficult. Quebec currently agrees more readily with France on labour force credentials. They've reached about 100 agreements on credentials, much more than in Canada. Consequently, if we use this file as an example, yours could be quite hard to manage.

That was a comment.

Thank you.

[The Chair, Conservative, Leon Benoit]

Go ahead, Ms. Pike.

[Barbara Pike]

I didn't hear the question, except for the fact that you disagreed with everything I said.

[The Chair, Conservative, Leon Benoit]

If you would not like to comment, we'll go to the next question.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

That was a comment; I didn't want an answer.

[The Chair, Conservative, Leon Benoit]

Madame Brunelle, do you have any more questions or comments?

Then we'll go to the New Democratic Party and Mr. Harris for up to seven minutes.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair, and thank you to our participants and witnesses today.

First of all, Mr. Coon, I wonder if you could tell us if there is something about the nature of shale gas development that has caused this concern, as you said, about social disruption and it being an issue? Does 1,000 wells seem like a lot? Is it due to the nature of the resource that it is spread out in such a way? Can you elaborate on that?

Would you tell us whether you agree with our position that, as the EPA is doing in the United States, there should be a full review, at the national level, of shale gas, among other things, before we proceed quickly with this?

[David Coon]

Thank you, Mr. Harris.

Yes, absolutely. As in Quebec, the areas being drilled and explored now are very similar to those in the St. Lawrence lowlands. You pretty well can't throw a stone in New Brunswick without hitting someone's house. We have agricultural areas and areas that are full of woodlots and communities. We're very spread out. So what people are concerned about is essentially the industrialization of their rural communities.

Certainly, in some parts of the United States, that's been the experience with the intensive development of shale gas. I say so because it's not just the pumping of the gas out of the ground that happens, but there's all of this ancillary equipment—the compressors, the condensers, and the pipelines, and so on and so forth—and the trucking, which is huge, to bring the water in and to take the waste out, all of which can really, truly industrialize communities. That's the issue there.

On an inquiry, we absolutely support having one, and in fact we think it's essential, because, as Madame Brunelle said, the issues are very similar across jurisdictions. We think an inquiry would help shine the light of day on the issue for all Canadians, so we can all work from a common set of information and ideas about how this can move forward in a way that, first, would be in the public interest of Canada in the regions where it's being developed, and, second, in a way that's safe for people and their environment.

[Jack Harris, NDP, St. John's East, NL]

Would that require support from governments, say, to allow intervenors to have technical information to be able to participate?

[David Coon]

Well, sure. Under CEAA now, it's a well-established approach that there's the potential for intervenor funding under the Canadian Environmental Assessment Act. That principle should be in place for this kind of an inquiry, so you can bring expert evidence forward.

Not too long ago, we were intervenors on a proposal to build a large new oil refinery in Saint John, around the marine side of the proposal or the harbour they were going to build. We had opportunities to access that information and to bring in expertise that really added considerable value to the discussions.

So, yes, I agree.

[Jack Harris, NDP, St. John's East, NL]

Thank you.

Ms. Pike, if I can ask you a couple of questions, being a Newfoundland and Labradorian, I, too, am pretty excited about the agreement announced last week between Emera and Nalcor Energy and the Newfoundland and Nova Scotia governments, which will, as you say, bring 98% renewable energy to Newfoundland and Labrador. I think there's a small number, maybe in the twenties, of remote, isolated diesel stations that will probably remain, but that's a remarkable achievement. And the 300-megawatt bunker sea-burning outfit in Seal Cove, which we've been criticizing for many years, will be taken out of the system as well, as well as some of the coal in New Brunswick.

This is an interprovincial project, perhaps eventually involving all four provinces using the electricity and making these agreements to make this project happen.

You indicated it may go ahead without federal support, because the drive is there for it, but this is a project of national significance. But do you support the federal government providing some assistance for that through the PPP program, or perhaps through a loan guarantee of some kind that would reduce the cost?

And can you comment on the energy security side of things with respect to what Newfoundland is doing by using some of its revenues from the offshore oil, the fossil fuel, to actually invest in renewable energy? Does that contribute to energy security, in your mind, and do you see that as a goal?

[The Chair, Conservative, Leon Benoit]

Ms. Pike, go ahead.

[Barbara Pike]

Thank you.

Hello, Jack. I have couple of points.

One, as I mentioned to Scott earlier, if you're handing out money in P3, then this is the project and this money should go that way.

As far as the loan guarantees are concerned, the business plan is in place. It may come as a surprise, but these companies and this project will be making money. It's not as though the government is going to be on the hook for that money.

When you talk about security, it is about getting rid of the Holyrood plant or the Seal Cove plant. Again, that is absolutely significant and important, and we only wish it could happen in the rest of Atlantic Canada. It's going to be a while before that happens. We still have a lot of coal power here in Nova Scotia. One of the things, in talking with P.E.I., is that they'd like to get their wind power on the grid, and then they would be able to use wind power. And when the wind doesn't blow, they can use hydro.

Sorry, I don't remember your last question.

[Jack Harris, NDP, St. John's East, NL]

The use of the green energy income stream from fossil fuel to invest in renewable energy and the effect of that. Of course, the other thing about Holyrood is that not only does it provide cleaner energy, but it reduces dependence on imported oil—in this case, probably Middle East or South American—to burn there. It's bunker C, so it's polluting, but it also increases energy security.

[Barbara Pike]

When we talk about the use of our non-renewable resource revenues, they should be used to pay down debt. But in this particular case, by investing it in a renewable resource--one that you're going to have a return for decades and generations to come--that is a smart use of that money.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Harris.

We go finally to Mr. Allen for up to seven minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Chair.

Thank you to our witnesses for being here today. It's especially nice to see fellow New Brunswickers here at committee. We might not always agree, but I do appreciate the debate, and I do appreciate the perspectives that the Conservation Council does bring to the debate on development.

Mr. Coon, going back in some of the local press, you have really not said anything about being against the development of the shale gas, and I don't think the Conservation Council has taken that position at all. It's more about making sure the proper regulations are in place. I think that's the position you've taken. Is that correct?

[David Coon]

I can clarify a little bit. That has been our position, but because of the lack of progress--even on having the province establish a trigger under environmental assessment regulation to capture this kind of exploration in hydro-fracking--our board passed a resolution two weeks ago or so to instruct staff to work towards a moratorium until we get our ducks lined up well. That needs to happen.

So it's just a bit of a broadening of that position to one that says, look, we'd better have a moratorium--as they've done in New York--until we get our ducks in line, because clearly the discussions over the past eight to 12 months haven't really led very far.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

You obviously sent the letter to me wanting to appear before committee. I'm assuming you've had a chance to read some of the previous testimony at the committee from the witnesses who were in. There's been some pretty compelling testimony in the use of water being a significantly small percentage of even what's used for agricultural use.

The drilling and cementing technologies, and the safety of the groundwater, the reduction in chemical use.... As you've said, this might not be the natural gas of before, but it's certainly not the fracking of before either. I think we have to reflect that, and the footprint is actually quite small on some of these things now.

Having said that, I encourage everybody, and I encourage the citizens of New Brunswick, to read the testimony on this, because it is compelling, and it does go way down below the aquifers as well.

I want to go specifically to a couple of points. You've talked about the regulatory framework. Can you comment about what regulatory frameworks, in your view, have worked and stimulated responsible shale gas development?

Do you have any provincial jurisdictions that have regulations in place that you think could be models for New Brunswick?

[David Coon]

Well, we're actually just undertaking a review now of regulation in the U.S. There are three states that have developed some pretty impressive regulation on different aspects of this that we're looking at, that we want to be able to bring forward to regulators in our province and share with others across the country.

So there's that, and I guess that's what got me thinking that there would be a useful role here for the federal government to actually put together a model legislative framework for provinces to look at in discussion with the provinces. We do that with the National Building Code. It has no legal implication, but provinces can go to the National Building Code and use that to create their own provincial building codes. On something like this, it seems like quite an appropriate initiative for Natural Resources Canada, for example, to undertake in conjunction with Environment Canada. To do just that kind of thing, it would be a tremendous help. Not all provinces are created equal, and ours, in particular, is lacking in a lot of capacity by way of resources. We don't have the money to do some of the kinds of work and research and baseline work that should happen to do this safely, and the federal government has a role to play there as well.

So there are good examples of regulations. That's why New York has brought in its moratorium. The State of New York is saying they want to come forward with the very best regulations and to know whether there are areas that they should establish as no-go zones just because the risks are too high. We think that's a responsible approach. There's no rush here to get this gas out; the gas isn't going anywhere. It will be a strategic resource, and should be, for us for a long time. There's no reason that we can't get it right and ensure that we get it right environmentally, socially, and economically, so that we don't end up with a situation where the companies win and everyone else loses. We don't want that.

So we want the public to win, we want our provinces to win, and we want Canada to win here.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I guess I support Minister Northrup and not the moratorium. At the same time, there's a school of thought that says we can miss the train as we go here too.

Barbara Pike, I'd like to ask you a question with respect to AIMS. I know a lot of the others have focused on the electricity side, but I want to take on the gas development side. Has AIMS done any research or any type of development work on the economic benefits of the potential shale gas in eastern Canada, and specifically the deposits that are in New Brunswick, which actually extend right through P.E.I.?

[Barbara Pike]

Unfortunately, we haven't, and if we'd had more time in this preparation, we would have been able to do more.

Having said that, one of the things to remember, whether we're talking about shale gas or in fact the oil sands, is that the technology for this continues to improve dramatically in very short periods of time. I keep hearing the scary stories about the oil sands from when they first started 20, 30 years ago, and that's the same with shale gas, when we're talking about fracking and other things. We are very much in the infancy here. Yes, our geology looks really great for it, but they said that about offshore Nova Scotia too.

So there's still a lot of work that has to be done, but as I say, the technology is improving dramatically, so it is not the same industry as it was even five years ago.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Based on the deal that has been signed between Newfoundland and Nova Scotia, with the development of 800 or so megawatts in Newfoundland...about 40% of that I think will be used in Newfoundland and then potentially come into Nova Scotia, which is a much higher fossil fuel burner than even New Brunswick. We have about 1,500 megawatts right off the top with Coleson Cove and Belledune that are fossil generation.

Has AIMS done any work with respect to the long-term energy projections in Atlantic Canada? And how would a mixture of shale gas as well as electricity play a role in our economy?

[Barbara Pike]

No, we haven't. Sorry about that. We took quite a look at NB Power when the NB Power MOU with Hydro-Québec went in, and New Brunswick itself has a huge issue because the plants in New Brunswick that are currently producing fossil-fuel-generated electricity are old. They need to be replaced; they need to be taken offline, and that is going to be a cost to New Brunswick taxpayers. So the fact remains that they can be and probably will be the big customer for now for the extra Muskrat Falls hydroelectricity.

We hear it will be another year before Point Lepreau is back online, and it's another billion dollars. So New Brunswick does have some issue with its generation. Even with shale gas, with natural gas, there is still going to be an issue, much like in Nova Scotia. Most of the plants that are currently generating fuel in New Brunswick from fossil fuels are not close enough to the pipeline.