The art of decoupling: NB edition

Some people seem to have a hard time differentiating between national and global issues and New Brunswick-specific issues.

I say we need a moderate level of GDP and population growth to stabilize our fiscal situation and ensure we have the economic base to afford good quality public services and infrastructure over the next 10 years or so.   To this, several people respond with long screeds about the need to consume less and the pounding we are putting on the earth and the environment.

I say we need some more folks generating above average market outcomes and translating that into wealth so we can have the economic base to afford good quality public services and infrastructure over the next 10 years or so.  To this, more than several people respond that I am advocating for a deeply unfair income distribution that favours a few ultrarich at the expense of the poor.  How dare I?

I say if we have natural gas under feet and we can get it out safely – understanding that any industrial process such as mining and distribution of oil and gas comes with risk – we should at least make the attempt.  This, what seems to me reasonable idea, provides me with more verbal abuse than any position I have taken since the ill fated proposed sale of NB Power.  If you have gas locally, why not use it?  It seems more environment friendly than shipping the stuff over thousands of kms of pipe.

Anyway, the point is we have to be able to decouple local issues from global issues.  They are certainly linked but they are different.

I am for more wealthy folks in NB – by that I mean more wealth creation – risk capital and highly valued labour inputs but against an increase in the global gini coefficient.  Eventually, we are going to have to figure out the latter – but in my mind it is not the same thing at all as  the former.

I am for national and international efforts to consume less and reduce our environmental footprint.  I resist the consumer driven society but am caught up in it too.  I am happy to have that debate but in New Brunswick’s specific context our economy needs more activity – not less.  I don’t see a conflict between a global conversation about environmental stewardship and resource usage and the need for a little place like NB to stabilize its economy.

The same goes for natural gas.   Natural gas is going to be a part of our energy mix for the next 50 years or more.  That is an almost certainly.  Why penalize a little place like NB with higher costs and no economic value when the gas will flow anyway?  If there is a national or international agreement to ban all natural gas development – fine – but if not I find it strange that we would not want to use our own resources for our own development.  In case you don’t realize it, New Brunswick has substantial natural gas needs locally – most of our big industries have either converted or are currently converting to gas.    A substantial amount of natural gas will flow in New Brunswick for decades.  The only questions are where the gas will come from and who will get the economic benefits?

Some of you will find this mealymouthed.  You will say change starts at home and we should consume less, get off natural gas, eschew rich people and wealth and be a just and environmentally friendly society.

But people expect certain things in our modern society.  They want good health care.  They want decent schools with well paid teachers.  They want good roads.  They still want nice houses and – many folks – still want to travel and own toys.   In New Brunswick, our economic base does not allow for this without significant cash transfers from other parts of Canada where the economy is stronger.  I don’t think it is unreasonable to want a New Brunswick that has a stable economy, a moderately growing population and communities that people want to live in.

Let’s have that broader conversation about consumption, environmental stewardship and fairness.  Let’s find ways for NB to take a leadership position in certain areas.  But let’s understand and try to address our challenges as a province which will put us in a better place to have those conversations anyway.

 

Afterthought:

We live by examples so here is one:

What would happen to the economy if we all – as a province  -make a collective decision to consume 30 percent less next year?  Answer: It would plunge the province into the worst economic crisis since the Great Depression – it would cut out hundreds of millions in tax revenue and – for those actually able to save the 30 percent (because many would lose their jobs and dramatically reduce their household income) – that money would go into savings and investment put to work in China, Brazil or Toronto.  It would hurt the economy here to the benefit of an economy elsewhere.

 

This entry was posted in Uncategorized. Bookmark the permalink.

10 Responses to The art of decoupling: NB edition

  1. Richard Quigley says:

    Please know that there are those of us who are in complete agreement with your position.
    I’m sure you are well aware of the relevant quote from Heinlein.
    Please keep hammering. I wish I could find some one on line saying the same very necessary things about Nova Scotia.

    Kind Regards
    Richard Quigley

  2. If New Brunswick were insulated from the rest of the world, this would be a good argument. But in fact what this column shows is merely that we’re insular.

    If the rest of the world suffers economically, then New Brunswick suffers, often disproportionately. If the price of natural gas is low all over the world due to worldwide fracking, then it will be low in New Brunswick as well. If the economies of China, Brazil and Toronto are booming, then more opportunities are created for New Brunswick. If the rest of the world goes into runaway global warming, so will New Brunswick. If income inequity is blocking social and economic progress worldwide, then it is doing so in New Brunswick as well.

    You speak as though unregulated gas exploration and the beneficence of rich people will work here even though they work nowhere else. This is just magical thinking. While it is *possible* to think of the needs of New Brunswick in isolation, it is a fallacy to do so. The principles of ecology and economics don’t change just because you’ve crossed the border into Our Special Place.

  3. Johnny Canuck says:

    Well, said.

  4. James says:

    It is very frustrating that passive-aggressive nay-sayers of resource extraction never suggest any realistic, worthwhile alternatives to generate wealth in order to provide us with the standard of living we desire, whatever the consensus may be.
    Any country blessed with natural resources has three choices: 1. Extract and export resources in exchange for other goods; 2. Extract and utilize resources to produce goods for domestic consumption and export; 3. NOT extract resources and focus on other means of wealth generation such as manufacturing.
    Don’t want to generate wealth by resource extraction for whatever reason? No problem. We can imagine ourselves to be resource limited like the Germans, Swiss or Japanese, to name a few, and prosper by putting human capital to productive use. However, the success of these societies are not happenstance. It involves having the insight and discipline to collectively create conditions that are conducive to becoming sophisticated inventors and manufacturers. It takes an adventurous spirit and the willingness to accept failure as a real possibility, and the fortitude to climb back up after falling and journey on. If this is the direction we want to take, great, let’s roll up our sleeves. Navel-gazing and wishful thinking will not get us there.

  5. mikel says:

    The natural gas issue is a trade off. The wind turbines in bathurst ran into some trouble and because the wind didn’t blow quite as much as expected, all the fossil fuel freaks are saying that renewables are garbage.

    So the trade off for natural gas seems to be renewables, and yet these haven’t even been seriously considered. Germany has gone from renewables supplying 4% of its energy mix to over 20% in eight years.

    As for the consumer society, it is not OPPOSED to the creative society, in fact it works in harmony. Look at the issue of high efficiency wood stoves. They are far more effective than the current stoves most NBers use, yet for a province heavily reliant on wood, there isn’t even a manufacturer in the province-people have to buy from Maine or Scandinavia. But of course to make that switch over, people have to junk their old stoves, which can be recycled, and buy new stoves-thats the ‘consumer society’, but buying new stoves lets you conserve more wood. Thats the trade off. You need to BUY solar panels in order to get off the grid, you need to buy the electronics to manage them as well.

    In fact, when people argue about the consumer society, virtually NONE of it is located in New Brunswick, it all goes to China anyway, so what are you talking about? Because WalMart doesn’t have as much junk from China its going to turn into another recession? (which we just had by the way, even with our consumer society).

    Getting rid of the consumer society means STOPPING buying cheap crap from china and making and purchasing closer to home. It doesn’t mean STOPPING consuming, but consuming differently, and better. You can’t even buy a decent power tool anymore, even ones costing hundreds still have mainly plastic parts and only one year warranties. I’ve gone through about four Hitachi drills while my dad still happily uses his craftsman drill from forty years ago!

    And I think your ideology is slipping. Before you used to talk about companies with WORKERS earning above average incomes, and now you are talking about OWNERS who earn that. Did you just get back from Davos or something? NB needs more Irvings and McCains? Given their consumptive levels the province can’t even HANDLE more companies like them or there would literally be no province left.

    So frankly, I don’t see what you are talking about, how are those issues different in New Brunswick than anywhere else? Do you really think energy production issues, income inequality, and the environment are different between New Brunswick and the rest of the world? I certainly see your point of view with all those issues, but your defense of it is clearly wanting.

    Natural gas would be great, but again you are confusing things. Because some companies switch to natural gas doesn’t meant it helps the economy. And NBers themselves aren’t even benefitting from the gas that is there. But long ago I was arguing that NBPower should be managing the gas industry the same way that Saskatchewan and Manitoba utilities handle gas. NBPower seems to be banking everything on nuclear, which only helps the nuclear engineers at Lepreau, and everybody else pays. Had NBPower developed the gas industry and used it for NBers, then I’d certainly be arguing differently. But you weren’t blogging that back then, and now the horse has left the gate.

  6. Mark says:

    Well said! The folks that are on the fence about this issue really need to educate themselves on what this means for the future of our province because right now the direction we are on is unsustainable.

  7. James Lane says:

    It’s that type of reasoning in corporate and political circles that steers NB away from pursuing renewable resources, use and manufacturing. To turn this province into the industrial zone you envision would be nothing less than criminal. Been there, seen it, lived it, witnessed the devastation and the maladies. PLEASE, GO WEST! In my opinion, you and your ilk are not welcomed in NB.

  8. James Lane says:

    P.S.
    It’s just the economy, stupid.

  9. Mikel says:

    Just have to point out a couple of things. Did Mr. Downes REALLY say “If the price of natural gas is low all over the world due to worldwide fracking, then it will be low in New Brunswick as well”. Uh, compare your gas prices with ontario, and now I hear they are going even higher.

    The nastiness isn’t necessary, there needs to be more people debating-over at Charles Leblanc’s website all the commenters are getting together to tell a new canadian to ‘go home’ because she’s complaining that at a daytime music concert with little kids around, the DJ is playing music calling women whores! The more people get vocal, the better it is.

    I would agree with Mr. Campbell’s comments IF the province were actually regulating these industries, but its clear that they aren’t, and have no inclination to do so. Their new royalty structure is actually WORSE than it was before, so its nonsense to argue against people as if they are ‘against natural resource extraction’. In NB, it really is a case of people simply defending against the rape of the environment.

  10. > Did Mr. Downes REALLY say “If the price of natural gas is low all over the world due to worldwide fracking, then it will be low in New Brunswick as well”.

    Yes I did.

    I was referring to prices paid to natural gas producers, and producers in NB aren’t going to be paid any more than producers are paid worldwide, and with the coming glut in natural gas, these prices will be depressed and will put pressure on the already minimal royalties the NB government can collect.

    With respect to the price NB consumers pay for gas (natural and otherwise) there is of course always the Maritime premium to pay. The price of almost everything is more in the Maritimes, partially because of shipping costs, and partially because local merchants can get away with it. This is true in every smaller, remote and under-served region around the world. So again, NB is not the exception to a global trend, it is the affirmation of one.

Comments are closed.