There will be gas, regardless

I talked with someone not that long ago about Irving Oil’s move into natural gas using CNG (compressed natural gas).  Large manufacturers such as McCain and others are switching from higher cost oil to lower cost and cleaner natural gas in their industrial processes.   Driving back from Halifax yesterday I saw Heritage Gas trucks that looked remarkably similar to the Irving CNG trucks.    It’s an interesting process.  The trucks back up to the factory, plug in and when they are empty leave and another truck is there to plug in.  A large manufacturer would use multiple trucks per day.

The shale gas revolution will not by-pass New Brunswick.  Shale gas exploration and production may by-pass New Brunswick but not shale gas.

Shale gas is the reason why there is limited interest in exploring for anymore gas offshore Nova Scotia.  Shale gas is the reason the business model for Saint John’s LNG terminal has tanked (and the new idea of refurbishing it into an export terminal has emerged).

Within a few years, shale gas will be flowing into the more than 10,000 homes and businesses that use natural gas in New Brunswick.  Whether the gas comes from Albert or Kent County, Pennsylvania, upstate New York or Alberta won’t matter.  We may end up paying more for the gas as we will be at the end of the line once again – but we will be using it nonetheless.

Potash Corp. is lucky because they are tied up with Corridor Resources which has used hydraulic fracturing to drill 38 wells near Sussex.  Potash is a very large user of gas – we don’t know exactly how much -but they are a large user and they get great prices on the gas.

There has been a dramatic decrease in the use of oil in electricity production and in industrial processes across New Brunswick in recent years.   There is some additional opportunity here but because the new demand is off the pipeline it will rely on the economics of CNG.  It would be interesting to hear someone talk about using the Energy East oil pipeline to connect our natural gas system to Central Canada as well.  Maybe there is limited appetite for that, I don’t know.

In the end, you can expect shale gas to be the principal source of natural gas in New Brunswick.

Whether or not that gas and the economic benefits of it flow from New Brunswick sources will depend a) on the will of the people and b) on the willingness of firms to invest in the sector.  Right now I am less sanguine about the latter even than the former.

 

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3 Responses to There will be gas, regardless

  1. mikel says:

    Good comment and quite accurate I think.

    But just to add to it, shale gas is ALREADY supplying the current natural gas customers of New Brunswick. It’s actually quite pathetic to see just how far behind the rest of Canada New Brunswick is. Try to find homes in Ontario that don’t use natural gas. Try to find industrial businesses in Ontario that don’t use natural gas. And have been doing so for, what, over two decades?

    To be melodramatic, its kind of like reading a blog stating “the ’round wheel’ revolution will not bypass New Brunswick, businesses are starting to realize that square wheels just don’t cut it anymore, round is the way to go! We’ve seen mennonites in Ontario and they have these wooden wheels that are really great, they work much better than square ones”.

    And sure, maybe making some wheels IN the province will make some bucks, but it will also wipe out the forests and in the end they will be shipped in cheaper from China anyway.

    So let’s look at what is going on in the world. Walmart’s new distribution centre in Alberta is mainly solar powered, with forklifts that run on….no, not natural gas, but hydrogen. And more importantly, hydrogen that is shipped in from Quebec because the company has done a ‘footprint analysis’ that shows there is less impact in doing it that way, and has even lectured the Alberta government on getting its act together. Imagine, being lectured by Wal Mart!

    French fries are interesting. Right now I can buy a 20 dollar silicon gizmo that cooks potato chips in three minutes in my microwave for one tenth the cost of cooking them with gas on the stove (and in far less time). For french fries, you can buy a machine that cooks fries with no oil whatsoever in half the time a regular cooker does. You may say that thats not an ‘industrial process’, however, I well remember McCains latest ‘technological revolution’ which consisted of packaging their cakes as individual cupcakes (I notice they don’t do that anymore).

    MOST of the industrial world is no longer talking about ‘environmentalism’ as a social movement to save the planet, they are now talking about how it saves money and has tons of monetary opportunities. Even some corporations, like Walmart, gasp, is talking about suppliers who can ‘eliminate their footprint’. Thats the talk from WAL MART- not environmental groups, not left wing crazies, or even the Green Party!

    So yeah, keep on talking about how great ‘the wooden wheel’ is going to be (it really is, the old order mennonites just love them!). I just wish there were more politicians, and even economic developers in Canada (not just NB it should be said) who have the vision to talk about this thing called a ‘rubber wheel’, and join the MODERN economy, not the one of last century. And maybe that way actually be able to cash in, rather than simply hang on.

    PS, please no lectures on how environmentally unfriendly rubber is, if you don’t understand metaphors then just ignore the comment.

    PPS On what you pay for natural gas it should be mentioned that its regulated by the provincial government. If you end up paying more, it won’t be because of the distance from pennsylvania. Heck, you already have an LNG terminal in Saint John and an oil refinery-have you been getting cheaper gas and oil because of them?

  2. Will says:

    I’m pretty sure the aboriginals are protesting either to extort money from the govt (think Kim Jong Il of North Korea and nukes) or to avoid having to work for their welfare cheques (80% of group is on welfare). Another topic but it doesn’t seem welfare gives people an appreciation for the economy and that probably goes from university tenure as well.

  3. mikel says:

    That’s a pretty racist comment dude. It actually wasn’t natives who were the first ones to protest in Kent County, it was environmentalists and people who live IN Kent County. And it wasn’t natives who began the protest even before that in Fredericton. For some reason the media only talks about natives now. Of that group they are quite split. Unfortunately once again the media only focus on the ‘leader’, that Sock guy, who seems like a pretty typical politician in many ways.
    Many natives have said specifically that they want what is demanded in the constitution-consultation. That WOULD include money, because of course its disputed land, and because payments to natives come from natural resource royalties, not, as is so often said, taxpayers.
    Natives are the same as other New Brunswickers, some have complained that the royalty structure is too out of whack, others that New Brunswick doesn’t have the regulatory regime in place, that there isn’t enough monitoring, or that most of the jobs will come ‘from away’.
    Others have said they don’t support fracking under any circumstances. So to say that there is simply ONE reason why people are protesting this is to simply be ignorant of everything about it.

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