Cooke-ing with gas: Firm size and ambition

Long before natural gas started to be used in New Brunswick as an energy source (at least in its current incarnation), my father used the expression “now you are cooking with gas” when he was talking about something gaining momentum.  I asked him recently what he meant by that and he replied it was an old expression he had heard from his father.

It turns out that most folks with a natural gas oven/stove tend to prefer it much more than the electric alternative.  Again, a rarity in New Brunswick, in many places around the world, natural gas is the dominant source of residential energy.

I digress.  I was trying to explain my title to this blog and suggest that Cooke Aquaculture is now “cooking with gas” as it now says global sales are approaching $1 billion per year.  in the finfish aquaculture industry, that makes them a major global player.

I started my column in the TJ this week with this:

I have observed over the years the bigger a firm gets in New Brunswick, the more of a target for criticism it becomes. This is not just a problem in our province, but it does seem to have even greater resonance here.  For the most part, we romanticize small business. The small firms are helmed by altruistic, hard-working, roll-up-the-sleeves entrepreneurial New Brunswickers who live alongside us in our local communities, drive trucks and drink Tim Hortons’ coffee. By contrast, the big firms are headed by rapacious, “one per cent” millionaires always using their power to put it over on the rest of us.

I was on News 91.9 this morning explaining myself.

In fact, I did receive two emails after the publishing of this column suggesting that Cooke was a bully, an abuser of the environment and a purveyor of low wage, low skilled jobs.

I’m not here to defend Cooke’s business practices.   I have been told by folks that should know that the firm is well respected in its industry and has been doing a lot to ensure it limits the impact of its environmental footprint.   But that is not my point.

My point is that New Brunswick’s economy is roughly $28 billion per year (GDP in real terms).   It is not strong enough to support the population here in terms of providing enough jobs nor is it strong enough to generate enough tax revenue to pay for public services and infrastructure.  Therefore, we lose young people every year to outward migration and we rely heavily on the federal government to help pay for public services and infrastructure.

We need to grow the $28 billion.  In a perfect world, we would have an economy large enough to pay for public services without equalization and give young people the opportunity to stay at home and build their careers if they prefer.

The lesson of Cooke is that we need more of them.   If we had 100 more firms bringing in $250 million or so each in export revenue each year that would boost the GDP by roughly 60 percent and we would be living in a different province.

So we need to think about the 100.  Where will they come from? IT firms?  Services?  Natural resources? Manufacturing?  Imports? Home grown?

Small businesses, as I have said ad nauseum,  are critical to the health and vibrancy of local economies but if you want to grow your economy you have to bring more money/investment in and that doesn’t happen by recycling more of the existing business activity.

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10 Responses to Cooke-ing with gas: Firm size and ambition

  1. mikel says:

    Sorry, PS, I forgot this: “Gas cookers began to replace wood-burners around 1915, and the actual phrase was used by Hollywood radio comedians around December 1939, and then appropriated by gas companies to promote gas cooking from around 1941 onwards.

    The phrase has been attributed to Deke Houlgate, who after working in the gas industry, wrote the line for Bob Hope.”

    And I definitely agree, its very sad that gas stoves and furnaces are such a rarity in NB. The only bad thing about a gas stove is you have an actual burning flame if you forget your element, but apart from that, there’s no doubt that its head and shoulders above electricity-depending of course on where you get your electricity and how you get your gas.

  2. mikel says:

    Part one seems to be missing. Well, in a nutshell, Cooke Aquaculture was fined $500,000 for using the infamous ‘lobster killing chemicals’, and fish farming is pretty hard on the environment at the BEST of times.

    Just because a company is larger doesn’t necessarily mean large additions to GDP. Without knowing how much income tax is being paid to the government and how many products are sourced locally, its hard to judge (at least jobs are quantifiable but since they are buying a company elsewhere, it may actually mean FEWER jobs in New Brunswick). Heck they may close down NB altogether if its not as profitable as other sectors of their now much larger business.

    But there’s a gap in your logic, since Cooke Aquaculture at one point was a ‘small business’ which has now grown into a large international player, it makes perfect sense to ‘romanticize’ and use economic tools in order to build small business-for precisely this reason. You are basically admitting that what you are arguing against is GOOD thing.

  3. mikel says:

    PS, its also a bad thing because essentially this larger company now has a lot more leverage over the provincial government for concessions and subsidies. When the company was located ONLY in New Brunswick, they were dependant on the government because they used public resources. Now that they’ve expanded globally, they can easily blackmail the government with “well guys, you know you aren’t as profitable as our operations in Chile, so if these new regulations go through, or if we don’t get X, then we’ll just have to look at shutting down in NB”. Anybody that thinks thats a conspiracy theory doesn’t know much about business.

  4. Andrew says:

    ” in many places around the world, natural gas is the dominant source of residential energy.”

    I’m in total disagreement with the statement. Please name a few populated places on planet earth where this is true.

  5. How about Canada? Statistics Canada data from 2009:
    Principal heating fuel, piped gas (natural gas)
    Percent of households reporting
    Ontario 71.9%
    Manitoba 53.4%
    Saskatchewan 86.5%
    Alberta 92.9%
    British Columbia 56%

  6. mikel says:

    That’s bad that people would be that much in disbelief. I know that when you are so hooked to electricity then its hard to see any other way, but in this there’s no doubt that NB is 20 years behind everybody-because of failed public policies I might add. The nuclear lobby is extremely powerful in New Brunswick, which is no doubt why NBPower has so many lousy policies.

    Here in Ontario virtually NOBODY heats with electricity, so when you read about our electricity rates going up because of green energy, its certainly true, but electricity is such a small component that its no big deal unless you live in an old apartment.

    Most of europe are heavily reliant on natural gas, although that presents some problems as people may have noticed that Russia is a huge supplier and suddenly, well, you know. Gas is SO much better than electricity, in Africa and south america people often have one or two animals because you can simply run a pipe from a stall and cook a small dinner with it on the other end of the pipe.

    And farmers in Vermont are using small turbines powered by the methane that is completely natural. In Quebec, the moratorium against fracking came about in large part because it was found there was ‘leakage’ or ‘venting’ from abandoned gas wells. This was true, but I did some research and it turns out that the leakage was about the equivalant of 20 cows. So if people are that mortified then they better start offing the livestock.

  7. Andrew says:

    Heating fuel does not equal ‘residential energy’ – that’s like comparing disco to pineapples.

    The spin is making me dizzy David.

  8. Andrew says:

    @mikel
    What kind of Natural Gas Kool-Aid are you drinking Mike ?

    Ontario’s Independent Electricity System Operator recently reported that nuclear represented 56.4 per cent of total electricity generation in 2012, slightly more than the previous year. Hydroelectricity represented 22.3 per cent and natural gas was 14.6 per cent. Wind production increased to three per cent, up from 2.6 per cent in 2011, exceeding coal-generated electricity of 2.8 per cent and the other sources amounted to .8 per cent of electricity generated. – See more at: http://blog.powerstream.ca/2013/02/ontarios-electricity-supply-diverse-mix-sources/#sthash.BjUEjx5X.dpuf

    Seriously – blogs like this are great – but everyone just keeps making up stats that suit their needs w/ no sourcing of their ‘facts’ – it’s frustrating to hear smart people make dumb comments.

  9. mikel says:

    Uh, natural gas powers our furnace, which provides our heat. We use it to cook with on our stove. How is that NOT ‘residential energy’ as opposed to your heat and cooking appliance being provided by electricity?

  10. mikel says:

    Gas is used for TWO purposes, for direct heat, and for creating electricity. In ontario gas is only used to create electricity when other sources aren’t available, which used to be done by coal power. That is the 14% referred to above.

    Most of the gas used as HEAT, has absolutely nothing to do with the hydro system at all. That’s why we get two bills-a hydro bill from our local utility and a heating bill from Union Gas. The gas is ignited in the furnace and the flames provide the heat. The only significant electricity used is to power the fans, and fans in a furnace are pretty efficient. Thats why you can get gas furnaces now that are up to 90% efficiency.

    THAT is how most ontario homes are heated. Our hydro bill is negligible because all it does is power the fans of our furnace, our washer, our fridge, and our lights and things plugged into outlets. Heat is by far the most ‘energy’ used, but like I said, its not connected to our hydro bill AT ALL. Think of it this way, just compare a gas stove to a wood stove. It still produces heat energy, but doesn’t draw on hydro to do so. You can even cook on it, and run a fan off it, but it has nothing to do with ‘electricity’. If you had some animals you wouldn’t even need a gas line.

    So the two may be like apples and oranges in composition (although both ARE fruit), but because they are interchangeable as heat sources, they most definitely can be compared.

    PS: pineapples and disco CAN be compared-they both suck:)

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