99% of the space in the public square allocated for debate about shale gas development in New Brunswick has been used up by debate about the environmental concerns raised by the extraction technology. As I have said before, if this industry is to go ahead (as it is across North America – shale gas is dominating all new extraction in recent years – it’s now 50% in BC), the people will have to support it – or at least tolerate it A vast majority against shale gas – no matter how it develops elsewhere – will bring it down here as a development opportunity.
But public concerns are only one of the problems. The other is the lack of markets for new gas. With the rapid expansion in the USA – they are now looking at LNG terminals for exporting US gas. In BC, the new energy plan calls for a dramatic increase in shale gas development – but the markets are Asia. As discussed in The Economist, in February Mitsubishi struck its biggest energy deal yet, with Encana, agreeing to pay C$2.9 billion to develop shale gas in British Columbia. The reserves, it said, may be enough to satisfy Japanese demand for nine years.
I’d like to see a little more of horsepower dedicated to thinking about potential markets for NB shale gas. This is not a 12-24 month issue. This is about 10-20 years out. No energy firm makes huge investments without a long term time horizon and right now the market outlook for NB gas seems murky.
It is true that Sable gas is running out but the NS government is putting significant efforts into developing its offshore gas industry – the challenge, of course, is the price of extraction compared to onshore shale gas. However, offshore gas doesn’t have the same NIMBY worries – with the exception of fishermen.
I don’t know a lot about it but the LNG infrastructure in Saint John complicates matters as that facility can serve local markets with imports of LNG. The economics are complicated.
In the end, it would be nice to have a medium term plan to build local market demand for our own gas.