News release

Progress Report Highlights Energy Sector Growth And Benefits

Energy (June 2002 - July 2018)

ENERGY--Progress Report Highlights Energy Sector Growth And Benefits

NOTE--Following this release is a summary of the progress items featured in the energy strategy progress report.

Training programs, streamlined regulations, new legislation and a focus on exploration are just a few of the initiatives highlighted in a progress report on Nova Scotia's energy strategy.

Fourteen months after the release of the strategy, Energy Minister Ernest Fage released a progress report today, Feb. 25, at a breakfast meeting of the Offshore Onshore Technologies Association of Nova Scotia.

"When we released the energy strategy, we made a commitment to keep in touch with Nova Scotians through regular progress reports and that's what we're doing today," said Mr. Fage. "In just a little over a year, we've established a strong foundation that will support continued growth, development and benefits from our energy sector."

The progress report highlights the government's efforts to encourage exploration, improve the efficiency of regulations and approval processes, promote the oil and gas sector, support local businesses, address climate change issues and protect the environment.

"Today's progress report is a snapshot -- a freeze frame of a dynamic, living document," said the minister. "It will continue to evolve as our energy sector, our economy and our province reap the benefits of our resources, our ingenuity and our drive to succeed."

Released in December 2001, the Nova Scotia energy strategy is an important plan for developing the energy industry's potential to benefit the province. The strategy identifies important elements of a competitive energy market. It ensures that the environment is improved. It provides guidance on how to encourage cross- industry alliances and partnerships among the fishing industry, energy sector and other communities. It also describes the importance of equitable and competitive taxation, royalty and economic incentives. The energy strategy promotes the wise use of energy and confirms the belief that the private sector is the prime engine for developing the province's natural resources and creating economic benefits and long-term growth.

A summary of the progress report is attached to this release. A full copy of the report can be obtained at www.gov.ns.ca/energy .

NOTE: Below is a summary of the progress items featured in the energy strategy progress report. For more detailed information on these items, please refer to the full report, which can be found at www.gov.ns.ca/energy .

Exploration:

  • The Canada/Nova Scotia Offshore Petroleum Board has updated the estimate of the commercial potential for Nova Scotia's offshore. Conservative estimates place our potential at 40 trillion cubic feet of natural gas.

  • Nova Scotia's oil and gas industry is now seeing more activity than ever. In fact, over the next 12-18 months, about eight to 10 exploration wells will be drilled -- that's more than in the last decade.

  • The department participated in the November 2002 Atlantic Energy Roundtable, a Halifax meeting of federal and provincial ministers, departments, and industry representatives to address issues of importance to Atlantic Canada's oil and gas industry. The follow-up process is a full partnership between Nova Scotia, Newfoundland and Labrador, and the federal government. Advice is being sought from regulatory authorities and industries on measures required to make our regulatory processes more efficient and effective. A full report is expected at a second roundtable in fall 2003.

  • The revisions to the Gas Distribution Act improved efficiency through such changes as eliminating ministerial approval of franchise amendments and permitting the use of interim transportation tariffs.

  • The new Underground Hydrocarbon Storage Act, along with a code of practice, provides clear direction on the regulation of development and use of underground reservoirs to help balance the supply and demand for natural gas and gas liquids.

  • Offshore workers will soon have the same kind of occupational health and safety legislation as those working on land with a co- ordinated approach to new legislation with the province of Newfoundland and Labrador and the federal government.

  • Work continues on Nova Scotia's Energy Act, which will contain a series of efficiency improvements.

  • In May 2002, the Government of Canada agreed to Nova Scotia's request to review the objectives of the 1986 Canada-Nova Scotia Offshore Accord, including revenue-sharing and regulatory efficiency. Discussions are currently under way between both levels of government on fulfilling the intent of the accord. The Department of Energy and the Department of Finance are supporting the Office of Intergovernmental Affairs in these discussions with Natural Resources Canada.

  • The department is also working to improve the process for onshore approvals. Staff worked with the province's interdepartmental One Window standing committee to co-ordinate the provincial organizations with responsibility for onshore regulations so that operators have a main point of contact and approval.

  • The department supports the Canada-Nova Scotia Offshore Petroleum Board with access to information and funding necessary to effectively and efficiently carry out its responsibilities.

  • Nova Scotia continues to participate in local and international oil and gas conferences and trade shows that provide an opportunity to promote our resources, our workforce, and our competitive edge. Attendance at shows like the Offshore Technology Conference in Houston, Tex., the Deepwater Technology Conference in New Orleans, La., the CORE conference in Halifax, as well as shows and conferences in Calgary and St. John's are helping us showcase the many opportunities to invest in our growing industry.

  • In November 2002, Nova Scotia was officially inducted as the newest international member and affiliate of the Energy Council, an organization of 10 oil-producing states ranging from the Gulf of Mexico to the Arctic Ocean. Nova Scotia joins Newfoundland and Labrador and Alberta as members of the Energy Council, which includes states such as Texas, Louisiana, and Alaska and the country of Venezuela. Membership in the Energy Council gives Nova Scotia another opportunity to promote our resources and learn from other energy-producing regions.

Development and Production:

  • The November 22, 2002 Atlantic Energy Roundtable also addressed economic benefits and how Nova Scotia can be better positioned to gain the benefits from new jobs and business opportunities that are associated with offshore projects. The department will be an active participant in the follow-up process that is being established. A full report to the next roundtable, in the fall of 2003, is expected on industrial opportunities.

  • The energy strategy identified the need to increase Nova Scotia's capabilities and capacity in the area of engineering and metal fabrication. The department is working with the private sector and other government agencies to identify opportunities to increase capabilities, including the possible expansion and enhancement of publicly owned assets.

  • The department continues to work with regional development authorities, the Offshore/Onshore Technologies Association of Nova Scotia and local operators on contracting strategies and joint ventures that help promote local products and services and attract new business.

Transportation and Distribution:

  • With the recent Nova Scotia Utility and Review Board approval of a gas distribution franchise to Heritage Gas, and a conditional franchise for Strait Area Gas, Nova Scotians in franchise areas will soon have access to natural gas for use in their homes and businesses. This is a positive and important first step in providing as many Nova Scotians as possible with access to natural gas as markets grow. The department will be a full participant in the Nova Scotia Utility and Review Board procedures to establish tolls and construction approvals.

  • To assist with the transition to natural gas, the Nova Scotia government allocated $14 million from the Gas Market Development Fund to help individual Nova Scotians, small businesses, and institutions use natural gas. The remaining $6 million of the $20-million fund, which is financed by gas producers in Nova Scotia, will be used to extend the pipeline system beyond franchise areas approved by the Nova Scotia Utility and Review Board and for customers already using natural gas in Nova Scotia.

  • The department continues to represent the interests of Nova Scotians before regulatory proceedings with the National Energy Board, the Canada-Nova Scotia Offshore Petroleum Board, and the Nova Scotia Utility and Review Board on issues that impact energy development, production, and use in Nova Scotia.

Training:

  • Our training program for students this past year brought 70 post-secondary students together with 40 employers, providing invaluable on-the-job work experience for co-op work terms and summer positions in the oil and gas industry.

  • The Province of Nova Scotia, Encana, and the Nova Scotia Community College have helped establish the offshore operations program at the Marconi Campus in Sydney. Students are now gaining a wide range of technical skills to prepare them for the job opportunities that exist offshore.

  • World-class training, taking place at the Nova Scotia Community College and the University College of Cape Breton, is also providing opportunities to export our knowledge. In partnership with ExxonMobil Canada, these institutions have established a training program that will provide workers from Angola with the skills they need to work on discoveries being developed by Exxon Angola while Nova Scotia continues to build a reputation for expertise in offshore training.

  • The department is working with Skills Nova Scotia on a series of seminars to promote the energy sector as a career choice for high school students.

  • Local businesses interested in serving the oil and gas industry are being provided information seminars on adopting quality assurance and quality control standards that will help them compete for new contracts.

Economic Impact:

  • The Department of Energy is working with industry representatives to build on this study and provide regular reporting on economic impacts of offshore exploration, development, and production.

  • An important part of the economic impact of Nova Scotia's oil and gas industry is the royalties collected through the production of the resources. Royalties from the Sable Offshore Energy Project are estimated at between $1.6 billion and $2.3 billion over the life of the project.

  • The department regularly reports on projected royalty revenues and has developed a generic royalty regime for future projects, a regime that has been compared favourably to those in other regions as providing a "fair return to the provinces and citizens while not in themselves discouraging further development of the industry." (Atlantic Petroleum Royalties: Fair Deal or Raw Deal?, G.C. Watkins, The AIMS Oil and Gas Papers (Paper #2), Brian Lee Crowley, Series Editor.)

Electricity:

  • In May 2002, the Electricity Marketplace Governance Committee (EMGC) was formed to make recommendations on how competition can be cautiously and gradually introduced into Nova Scotia's electricity market. The EMGC is made up of representatives from Nova Scotia Power, municipal utilities and consumer and renewable energy groups.

  • The committee has released its first interim report addressing issues of access to Nova Scotia Power's transmission infrastructure and expects to release a second interim report in the near future dealing with competition in the market. The EMGC's final report is expected in spring 2003, and the department will review the committee's recommendations as part of the development of the province's new Energy Act.

Renewable Energy:

  • New wind turbines began producing electricity in Little Brook, Digby Co., and Grand Etang, Cape Breton, in October 2002.

  • Nova Scotia Power purchased these two 670-kW units to generate electricity for their voluntary residential green power purchase program, which allows residential consumers to choose wind power by purchasing blocks of green power.

  • Nova Scotia Power is also in the final stages of selecting an independent power producer to supply 100 GWh of wind-generated green power each year. It is expected that much of this electricity will be sold under a green power agreement with the federal government for use in federal facilities in Nova Scotia.

  • Our Department of Natural Resources has released Canada's first policy for access to provincial Crown land for wind energy projects. We're providing up to four years of low-cost access for monitoring and development, predetermined lease rates, and sublease arrangements to allow land to be used for other compatible activities.

Marine Environment:

  • In 2002, the Cape Breton review commissioner concluded hearings into public concerns over exploration plans offshore Cape Breton. The review had been ordered as a joint directive by the ministers responsible for energy in Nova Scotia and Ottawa. The Department of Energy supported both processes. It helped non- governmental organizations (NGOs), including environmental groups, participate fully in the science review process by providing a total of $5,000 in honorariums to three NGO participants. The department also actively participated on the ad hoc working group.

  • The Department of Energy is also an active participant in the Canada-Nova Scotia Offshore Petroleum Board Fisheries and Environment Advisory Committee and in the Department of Fisheries and Oceans initiative in ocean management planning called the Eastern Scotian Shelf Integrated Management initiative.

  • In 2003, the department also committed $50,000 toward a scientific research program that will help us understand the impact of seismic activities on marine mammals. This basic research will help reduce the scientific uncertainty that currently exists in this area and help scientists design programs to mitigate any potential negative impacts. In this fashion, responsible oil and gas exploration activities can proceed.

  • The Department of Energy is also a participant in the Canadian Environmental Assessment Agency's Oil and Gas Issues Regulatory Subcommittee, which is looking at the requirements for environmental assessments in the offshore. The results of this process are expected to be reported to the federal government in the fall of 2003.

Conservation and Efficiency:

  • Working with Clean Nova Scotia, the department supports home audit programs that help Nova Scotians find ways to improve the energy efficiency in their homes and save money.

  • The department and Clean Nova Scotia also work together with other partners to support Destination Conservation, a program teaching students to find ways to help their schools save energy, become more efficient and reduce costs.

  • The TRAX program, delivered by the Ecology Action Centre and supported by the department, among other partners, promotes transportation alternatives such as public transportation, carpooling, cycling, walking, and workplace trip reduction.

  • Nova Scotia currently builds more R-2000 homes per capita than any other region in the country and the Department of Energy was recently recognized by the Nova Scotia Homebuilders' Association for its continued support of building energy efficient homes through the R-2000 program.

Climate Change:

  • Nova Scotia continues to be a leader in building a partnership to implement a national climate change plan, an approach that delivers reductions in emissions while ensuring that no one region or industry bears an unreasonable burden for this national issue.

  • Department of Energy staff represent the province at federal, provincial, and territorial working groups and deputy ministers' meetings, while the minister serves as co-chair of the Joint Ministers' Meetings of Energy and the Environment.

  • Discussions with the federal government involve issues such as targeted measures, emission trading, and voluntary covenants for large industrial emitters as well as a partnership process to assist in implementing climate change efforts in Nova Scotia.

Air Quality:

  • Government is implementing the energy strategy's goals to improve air quality for Nova Scotians. The Department of Environment and Labour is working with the Department of Energy, the Office of Economic Development, Nova Scotia Power, Nova Scotia Business Inc., and other industries to focus on reducing the emissions of mercury, sulphur, nitrogen, and ozone.

Taxation:

  • The Nova Scotia energy strategy identified the need for Nova Scotia to provide competitive taxation regimes. Analysis undertaken in preparing the energy strategy indicated that Nova Scotia is competitive with respect to fiscal matters including royalties and taxation. The department is continuing to work with Service Nova Scotia and Municipal Relations and the Department of Finance to advise on taxation matters that affect the energy sector.

Research and Development:

  • Work has already begun in this area by bringing together representatives from research institutions, government, and the private sector to review current energy-related research and development activities and identify areas of discussion for an Energy R&D Forum to be held in late spring or early fall. Together, the representatives will identify opportunities and gaps in the current research and find ways to work in partnership to conduct research that will provide us with a better understanding of the challenges and opportunities in Nova Scotia's energy sector. A project to identify energy research capabilities and areas of specialty in a database and Web site is also under way.

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