Last week saw the price of crude oil-already rising because of increasing world demand-approach $100 because of the crisis in Libya. Many low-income Canadians, already beginning to feel the effects of rising food prices, are now facing the prospect of paying more for gasoline. Escalating oil prices will have an additional impact in provinces where households still heat with fuel oil. One such province is Nova Scotia, where oil meets about 70 percent of end-use energy demand, notably transportation and space heating.
Despite Nova Scotia’s overwhelming reliance on crude oil, most of which is imported, the province’s premier, Darryl Dexter, stated in a Globe and Mail interview last Friday that electricity from the Lower Churchill will “create a stable, secure, energy future for the region”.
Mr. Dexter went on to explain that the development of the Lower Churchill will ensure that the region is not “hostage” to the cost of fossil-fuels, stating that “right now, the money that we spend to buy carbon-based fuels goes to the U.S. and South America”.
After reading the report of his interview, one would be forgiven in thinking that Nova Scotia was about to undergo a seismic shift in how it meets its end-use energy demand. However, a careful examination of the numbers tells a different story.
Electricity, as important as it is, meets only about 20 percent of Nova Scotia&rsqo;s end-use demand. If the Lower Churchill is completed, Nova Scotia is expected to receive one terawatt-hour of electricity each year, which is about eight percent of the province’s current, annual electricity demand or less than two percent of the province’s present, overall end-use energy demand.
Mr. Dexter also fails to mention that the money spent by Nova Scotia on carbon-based fuels going to the U.S. and South America is for coal. The money spent on oil goes to any number of countries; in 2008, Atlantic Canada imported oil from producers whose production was in decline (Norway, the United Kingdom) or are facing internal or external political pressures (Nigeria, Iraq, Saudi Arabia, Venezuela, Russia). (For privacy reasons, Statistics Canada gives only crude oil import data for Atlantic Canada, not Nova Scotia.)
The absence of a comprehensive provincial energy policy to address Nova Scotia’s reliance on oil for transportation and heating would suggest that the provincial government expects Nova Scotians to continue meeting the majority of their end-use demands from oil products. In fact, this is quite a reasonable interpretation, given the extensive road-building program that the provincial government has supported since it came to power.
Nova Scotia’s limited endowment of energy sources that could help it now have not been managed for the benefit of the province. Offshore oil was shipped to refineries outside the province; the fields were abandoned in the late 1990s. Almost all of the natural gas from the Sable Offshore Energy Project has been exported to New England and with Sable now in decline, production is expected to cease entirely within the next few years. Even wood chips that could be used for heating are being exported to markets in Europe.
Mr. Dexter also spoke of Nova Scotia becoming “the center of a significant energy hub” with planned grid upgrades for the export of Lower Churchill electricity to the lucrative New England market. At a time when the province needs all the energy it can find, many of Nova Scotia&rsqo;s wind energy producers are looking forward to this grid upgrade as it will open an export market for them.
Without a long-term energy policy to address the province’s continued reliance on oil products and the export of its limited energy resources, there is no reason to believe that Nova Scotia’s energy future will be stable or secure, whatever Mr. Dexter may claim.
Published AllNovaScotia.com and Chronicle-Herald, 3 March 2011