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.