HANSARD
Printed and Published by Nova Scotia Hansard Reporting Services
Mr. Sidney Prest (Chairman)
Mr. Howard Epstein
Mr. Jim Boudreau
Mr. Gary Ramey
Ms. Lenore Zann
Mr. Leo Glavine
Mr. Andrew Younger
Mr. Alfie MacLeod
Mr. Chuck Porter
[Mr. Jim Morton replaced Mr. Sidney Prest]
[Mr. Brian Skabar replaced Mr. Gary Ramey]
[Mr. Leonard Preyra replaced Ms. Lenore Zann]
[Mr. Wayne Gaudet replaced Mr. Andrew Younger]
In Attendance:
Ms. Jana Hodgson
Legislative Committee Clerk
WITNESSES
Offshore/Onshore Technologies Association of Nova Scotia
Ms. Barbara Pike, Executive Director
Mr. Joe Fitzharris, Chair of Board of Directors
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HALIFAX, THURSDAY, MARCH 10, 2011
STANDING COMMITTEE ON RESOURCES
1:00 P.M.
CHAIRMAN
Mr. Sidney Prest
MR. CHAIRMAN (Mr. Jim Boudreau): I'd like to call the meeting to order, please. Today we are meeting to discuss some concerns and ideas presented by our witness. In this case, it's the Offshore/Offshore Technologies Association of Nova Scotia and probably we'll use OTANS from this point onward because it is much simpler. We have today before us Ms. Barbara Pike, Executive Director, and Mr. Joe Fitzharris, Chair of the Board of Directors.
What I'd like to do is start with an introduction of the members. What we'll do is start on this side with Mr. Porter.
[The committee members introduced themselves.]
MR. CHAIRMAN: I am chairing for Sid Prest today. Mr. Prest is away, tending to some family funerals. I say "funerals" because unfortunately, he has had two deaths in his family over the last little while so I'll be sitting in for Sid this afternoon.
With that, everyone has the agenda in front of them; on the agenda, we have just one witness. For committee business, there's nothing to report today and at the end of the meeting we will be discussing our next meeting date, so we will be dealing with that.
Are there any additions to the agenda? Is there anything that anyone would like to add to the agenda at this point? Hearing nothing, then we'll move along. We have our two witnesses, I would ask both to give us just a little overview of who they are and then they can move on to their presentation. I know I've indicated your role but you might want to expand a little bit on that.
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MS. BARBARA PIKE: I'm the Executive Director of OTANS and am involved in the community, have met many of you in other aspects of the things that I do in the communities, sitting on the board of governors for university, sitting on the board of Sport Nova Scotia - and I've come looking to you for money for various sporting events that I chaired. (Laughter)
MR. JOE FITZHARRIS: This is my second term as Chairman of OTANS. I work for a company called Mariner Industries that is located at Pier 9. We do marine and offshore fabrication, marine repair, that kind of stuff.
MR. CHAIRMAN: Normally what happens here is we have a presentation and then we move into a question and answer period. At the end of it, you folks are given an opportunity to give a brief summation, sort of some closing statements, if you wish. That's generally the procedure; the process is relatively relaxed, the questions I think in most cases are very reasonable. So I guess we'll proceed with your presentation.
MS. PIKE: Okay, thank you. I normally introduce Joe at this point and tell you what he does for his paying job because what he does with us is very much a non-paying job but as he has explained, he is with Mariner Industries. He is going to take you through a little history of our association first, before we get into some of our go-forward plans.
MR. FITZHARRIS: Thanks for the invitation to appear before this committee. These are exciting and interesting times in the energy sector in eastern Canada and we welcome the opportunity to provide our views.
Briefly, OTANS is a not-for-profit industry association that is around 30 years old. It was formed in 1982 as the Offshore Trades Association of Nova Scotia. There were about 170 members working to tap the promising new opportunities from the offshore petroleum industry. As the industry has evolved, so too has OTANS, changing from trades to technologies, then adding onshore interest to the mandate and name but the mandate has always been to support local participation in the supply of both goods and services to meet the needs of the energy industry.
Its purpose is to identify, promote and support the development of opportunities originally in the hydrocarbons, but now in the complete energy sector and associated industries.
We continue to evolve and are expanding our mandate to embrace both the non-renewables and renewable energy industries, as well as moving beyond Nova Scotia, to support members in other provinces. In a few weeks we will be unveiling our new brand, new bylaws and new mandate but the bottom line remains the same - the support, encouragement and growth of the energy industry in this region.
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As I mentioned, our association is almost 30 years old. Through these three decades we have followed the cyclic nature of the energy sector, particularly offshore oil and gas. We have seen the boom days of the 1980s, the lean years of the early 1990s, back to the boom exploration days of the late 1990s and 2000.
The oil and gas sector is a boom-bust industry; that is just the nature of the beast. We remain committed to the oil and gas sector and continue to work hard to ensure that our members are positioned to exploit this sector, but oil and gas is just one segment of the energy equation. There are the renewables whether it is tidal, wave, biomass, biofield, wind and geothermal. These are emerging and growing technologies and we are on the cutting edge of the technology here as much as anywhere else in the world.
Our members represent the businesses and companies that can supply everything from fabrications to concrete and environmental services, along with the technological support that is required. In the oil and gas sector we have built platforms, laid pipelines, conducted environmental assessments, supplied chemicals and provided thousands of other goods and services.
Thirty years ago, our founding members took their expertise and skills that they developed over generations of supplying the fishing industry and adapted it to the oil and gas industry. We are confident that the skill sets and expertise of our members have developed over the past 30 years of oil and gas experience and that they can be adapted to support and supply the emerging and promising renewable sector.
Our association is working to identify these opportunities to prepare our members to realize them and to identify the best practices and policies for the benefits of our region. So thank you, and Barbara is going to take you through what our path forward is.
MS. BARBARA PIKE: Honourable members thank you very much for the invitation to speak to you today, it really is an honour. As Joe mentioned, these are exciting times for the energy sector. We live in a region that's blessed with both non-renewable energy resources and renewable energy resources, but we are not just rich in the resource assets. We are also rich in human and intellectual assets.
Wind is a promising source of clean energy not only for provinces like Nova Scotia, New Brunswick and Prince Edward Island, but for dozens of remote Canadian communities now dependent on diesel-powered generators. The Bay of Fundy has the highest tides in the world. If our technology works there, it can work anywhere.
Apart from the continued growth and boom of Newfoundland and Labrador's offshore oil industry, the most exciting energy project in this region is the proposed development of Muskrat Falls on the Lower Churchill river. Yes, the Nalcor/Emera deal will benefit Newfoundland and Labrador and it will benefit Nova Scotia, but it also has the
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potential to benefit New Brunswick, as well as Prince Edward Island. Most heartening on this file is the level of regional co-operation, seeking a win for everyone in the region. Our provincial governments are speaking with a united voice and finally and thankfully, we're talking and acting as one region; what is good for one is good for all.
More to the point, the provinces have made it clear that while Ottawa's participation is welcome, it is not a precondition. Premier Dexter has been particularly blunt - the deal will move ahead with or without contribution from Ottawa. Last week before the Senate Standing Committee on Energy, Nalcor President and CEO Ed Martin was very emphatic - he said this deal is going to go ahead and transmission is what enables that.
Without transmission, it doesn't matter how many megawatts we can produce from the Bay of Fundy or how many megawatts we can produce from the wind farm at Nutby Mountain or how many kilowatts we can produce from the waves off our coast, without transmission there is nowhere for this power to go. So it's not just this project on the Lower Churchill that benefits or the possibility of a second lower project at Gull Island that benefits, but it's also the independent producers of renewables in Atlantic Canada. Transmission is key.
Last year Emera, Nova Scotia Power, N.B. Power, the Nova Scotia Government as well as the New Brunswick Government struck a deal to expand the transmission between the two provinces. It, too, is an essential piece to the whole free flow discussion and indeed the question of viable energy security not just on a regional scale, but on a national scale.
The new energy source and the associated transmission infrastructure are huge boons for Atlantic Canada and therefore Atlantic Canadian businesses. If Nova Scotia is to be weaned off fossil fuel-generated electricity, it needs hydro electricity, and wave, and tidal, and wind, and biomass. Apart from one generating station at Tufts Cove, the existing plants are really too far from the existing gas pipeline for natural gas to be a viable option.
On tidal energy, we've talked about it for generations and in spite of decades of work at Acadia University, this is still, for the most part, in a research and development phase, but the potential is huge. Work is progressing in the Bay of Fundy, the environment is harsh and the technology progressing, but if we can make it work in the Bay of Fundy, it can work anywhere. That means being world leaders in tidal generation, an industry that can be exported around the globe. Without the free flow of electricity in this region, such development stalls.
Why should we, as a supply and service industry association, be so enthused about these projects? Because our members do have the skills and the expertise to supply this emerging industry and take advantage of the potential and opportunities to grow and expand. It's about business, and markets, and exports, both the supplies and of our expertise.
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Before leaving the renewables file, one also has to look at biofuels. The research being conducted in this province on biofuels, particularly from algae is exciting and innovative. The industry needs the support of governments and industry to help move this technology from research, to development, to production.
We would be remiss if we didn't add something about the non-renewable sector. Oil from offshore Newfoundland and Labrador has been a huge economic driver for this region. Gas production at Sable Offshore Nova Scotia is in its final years, but has pumped millions and millions of dollars into our economy. Deep Panuke is scheduled to come on stream later this year. The plan by the Nova Scotia Government to promote exploration though its Play Fairway Analysis is promising, more so if the federal and provincial governments agree to some tweaking and perhaps on some existing rights issuance regime.
Onshore is a completely different game. The potential for shale gas development in Nova Scotia as well as in New Brunswick is exciting. We just ask that you not get too caught up in the hysteria and misinformation generated by such mockumentaries as Gas Lands. We ask that you support exploration and development with the knowledge that the technologies available today, along with the regulatory and environmental regime in place in our province today, makes for a safe and responsible industry.
In closing, I'm going to again look back at the 30 years to the beginning of our organization when the companies established to support and supply the fishing industry did turn their attention to the offshore oil and gas, they were our founding members. Many succeeded not only in our own backyard, but beyond to compete successfully around the globe. The same expertise they developed for oil and gas can be applied to support and supply the renewable sector, particularly as we've mentioned - tidal, wave and wind. We have the natural assets and the technological expertise to be world leaders in this emerging and competitive sector. But transmission is key, capacity on the grid is essential and the free flow of electricity is a necessity.
The longer we dally, the longer we delay, the longer we put politics ahead of the common good, the more we're going to fall behind and that's going to be to the detriment of our business community. Thank you.
MR. CHAIRMAN: Thank you, Ms. Pike and Mr. Fitzharris. What we'll do right now is open the floor to questions and, as is the normal course, we'll allow each member up to 10 minutes to pursue a line of questioning and after that we'll have what is often referred to as little short snappers. Mr. Preyra.
MR. LEONARD PREYRA: Thank you for your presentation. I really just have a very quick question. I can't help but notice the big difference in your presentation from last year, to this year as another presentation. It seems to me you're in the process of re-branding, you've got another "O" added to your OTANS and you spent most of the presentation today
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talking about onshore and renewable. Does this mean that you have essentially decided to turn the corner from offshore oil and gas exploration to remake the organization, or is this how you see the industry's future evolving?
MS. PIKE: Not at all. The offshore and onshore has been part of the acronym for maybe 10 or 15 years, it has been around for awhile, but everybody has thought of it as offshore oil and gas. No, it doesn't mean that we've turned our back on offshore oil and gas. As I said, right now where the provincial government is in the process of finalizing its play fairway analysis, once it finishes that - and that's a really exciting project and when it was described to me I was thinking, because it hasn't really been done anywhere else, basically they've taken all the seismic that has been acquired offshore Nova Scotia, all the wells that have been drilled. In one of my former lives you'd be able to see and people would go into the lab in Burnside and they'd take a look at one well or another well, but they never really took a look at how they all connected in order to measure the geology across.
So what they've done is taken all of the seismic and all of the information that they've gotten from the wells and meshed it together to provide a look at what the offshore geology looks like in Nova Scotia, where the sands are, where the caps are, where this could probably be. They will be taking that and it's currently, I believe, being peer reviewed and they're going to be marketing it to the players who actually have the money to sink some holes off Nova Scotia. Our members continue to support the offshore industry in Newfoundland and Labrador, and it's not dead, no.
MR. FITZHARRIS: Just to follow on with that, like I said in my part of the presentation, it's a boom-bust cycle. There hasn't been a whole lot of exploration going on over the last couple of years. You don't do the exploration and then start a project the next day. It's eight to 10, 12, 15 years before a project from exploration to when the project will actually take off. As far as an organization, all the events, directives and trade missions that we do now or have done in the past year or past years related to the oil and gas industry, we'll still continue to do. We're just going to add on top of that industry events, all that kind of stuff related to the tidal, the Emera stuff, all that stuff.
MS. PIKE: And onshore, I guess, because unless the companies are out there looking and exploring, then it's . . .
MR. PREYRA: Another question, Mr. Chairman?
MR. CHAIRMAN: Yes, you have seven minutes left, sir.
MR. PREYRA: I don't plan on using all of it. You had alluded to some of the issues relating to onshore shale gas - in particular, I think you're referring to fracking. Could you tell us, to someone who has no clue about what it means, but understanding that it's going
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to be an important public policy issue, could you tell us what it means both in terms of the environmental issues relating to it and also what shale gas means for the economy.
MS. PIKE: Fracking, basically, has been practised for - I think we're probably going back 70 years, there have probably been a million wells drilled onshore in North America that used fracking. The technology continues to evolve, it continues to improve, as does any technology with drilling. Basically what happens is that - somebody asked me the other day about this and I was going - they said every well should be examined independently, and I'm going, well, it is. I'm going, no, every well that's drilled has got a specific well plan that is presented to the regulatory authority and has to be reviewed by people, the experts that we pay for - that the taxpayers pay for - to protect our interests, and an environmental assessment is done on them.
For the most part the well, in this case for most shale gas, the well will come down and then it's called a horizontal drill, so it will come down in a fracture and just break down like that, sort of like in a little dogleg. They get into the shale area, which would be very - as opposed to what most people think when you go into a well, they don't drill down like there's this big pool of oil or a big gap in the geology that holds the gas. It's actually contained in sand, that's normal, and shale is where they're now finding it. What they do is they will send water, chemicals and pressure and it drives the gas out of the shale. This is literally 2,000 - like it's 1,000 metres underground so it's well below.
In addition to that, each well would have a casing that runs down. This all protects the well. Every single day of drilling, the drilling report is sent back to the regulatory authority and it's reviewed so that if there are any issues, any problems, it continues to be monitored all the way along. So that's sort of - I don't know if that gives you any explanation or a better explanation.
MR. PREYRA: The other side was, well, what is the potential for shale gas? You referred to it as an energy source.
MR. FITZHARRIS: New Brunswick is fairly vibrant in shale gas and so is Nova Scotia. It's called the Windsor Block which is up in the Windsor area. Then there's also some work being done up around Springhill. There is also some stuff being done in Cape Breton, or initial exploration also being done there, so it's pretty prevalent throughout the whole province.
MS. PIKE: And natural gas, I mean shale gas is natural gas. To give you an example of where it has shifted, they're anticipating that within the next three to five years the United States will become an exporter of natural gas. So the LNG plants that were built in California as recently as five years ago to take natural gas from Australia in liquid form, and convert it to natural gas to feed California, some of those plants will probably be converted so that
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they will actually be taking natural gas from the shale gas, liquefying it, and sending it to China.
MR. PREYRA: Thank you.
MR. CHAIRMAN: Mr. Porter.
MR. CHUCK PORTER: Thank you, Mr. Chairman, just a few questions from me. One we've already touched on, of course, in my area - the Windsor area, Kennetcook - you talked about this fracking. The explanation you just gave to Mr. Preyra, you used two words, "concerns or issues" was one of them and "problems" was the other. Just expand on what the problems are that we're hearing about, or can exist.
MS. PIKE: This is where - it's one of those issues where you hear people screaming about water, they scream about noise and the evidence is overwhelmingly not in that case. As I said, a million wells have been drilled in North America and the problems they've had with them are very few and far between.
It's a matter of risk. Will I sit here and say that there's 100 per cent, like this is 100 per cent? No, you can't tell me walking down the street that it's 100 per cent safe but what you do is when you're walking down the street, if you want to cross the street, you come to a crosswalk and you look both ways and you mitigate the risk of walking down the street.
MR. PORTER: So what is the risk you're referring to?
MR. FITZHARRIS: The risk is actually contaminating the water table in a specific area.
MR. PORTER: I have had no calls and no issues with regard to it in my area, other than when are we going to get natural gas? (Laughter) I forget what year it was, but a couple of years back when the agreement was signed with Triangle, I believe it was, where are we with that and how much gas is actually there - these are very short, maybe you can do them all together - and when am I going to see gas flowing through downtown Windsor?
MR. FITZHARRIS: Well, I think that's probably more a question for Triangle than it is for us but I do know that there was some - and this is out in the public domain - there were some changes to the corporate structure and stuff with Triangle and I know their interests have shifted a little bit. They still have the interests in Windsor and they are still planning on developing them but over the last little while they've shifted that interest, I think, more to out West.
MS. PIKE: But they haven't actually discovered . . .
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MR. FITZHARRIS: Well, they've done a few exploratory wells and I'm not sure, I don't think they did a drilling program in the last year, I'm just trying to remember.
MR. PORTER: There were some estimations that there could be just a large, large pocket of gas that was available there.
MR. FITZHARRIS: Basically, they'll do exploration wells in certain areas, map it out and then determine that if they find gas in all those areas, then that's what the potential is.
MR. PORTER: I'm going to jump around, I'm going to go to wind now. I remember a couple of years ago there were meetings with people who were against the wind turbines. I'm just wondering, I know we have wind farms obviously in certain places in this province, what about these groups that are claiming the noise and the vibration and whatever the issues are, now that we're actually up and running in some areas successfully? Have there been any issues with these findings or projections of issues? Has it just died off or is there some truth to it?
MR. FITZHARRIS: I think when the initial environmental assessment period goes on, in some areas there's some concern. I think the one in Digby Neck, there were some concerns there. A lot of times, too, it's just the actual physical view of it that people complain about.
MR. PORTER: In Pictou County, I understand - and you can clarify - that natural gas is sort of knocking on the door right there. I met with some municipal officials in Pictou County back a month and a half or so ago and they're kind of curious, why don't we have natural gas in Pictou County? It's right here, it's on the doorstep. What's the holdup, do you guys know? Where are you with that?
MS. PIKE: That's a question for Maritimes & Northeast Pipeline or for ExxonMobil and those guys. I want to know the reason why I don't have it in Halifax. (Laughter) I've got those big propane tanks out there firing my heat pump. It has to do with - I'm sure they'll come back that it has to do with the . . .
MR. FITZHARRIS: The pure economics of it.
MS. PIKE: Yes, I mean like when I call and say, when are you going to bring it up the St. Margarets Bay Road, I was told we don't have enough customers or people signed up yet. Well, that means I'm going to have to go door to door, knocking on doors to say, are you willing to . . .
MR. PORTER: I want to touch on something that you mentioned was a key thing and that's the transmission, it absolutely is. We have one slight problem with transmission in this
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province, that it's owned by a monopoly. One thing we need to be very cautious of is that we're not going to be crippled when it comes to transferring all of these wonderful ideas, whether they be tidal or what have you because those are exciting. R & D is more exciting than it has ever been and there are a lot of options for us, especially in the payoff later on, I think there are a great number of options.
I'm very concerned about the Nova Scotia Power monopoly and how things have gone. I know that my opinion of Nova Scotia Power may vary from some, but when you have a monopoly, you don't want anybody cutting in. I wonder if that's some of the holdup with the development of that, how tough it's going to be to write the contracts for transmission and at what cost. As long as Nova Scotia Power is generating their power and selling it, unless it's going to be very wealthy on the other end for them and they're going to make money on it - because that's what they're in business for, to make money, obviously - how hard is it going to be to actually get the transmission completed?
MR. FITZHARRIS: One of the things is that they've just set the feed-in tariffs, the feed-in tariffs are set now. I know with the - I'm a little bit more familiar with the tidal stuff and FORCE has got that lined up now and the feed-in into Nova Scotia Power's lines, as far as I understand, there are no issues with that whatsoever. So that's what it's going to be, it's going to be the independent producers, and they're mandated to pull in so much power from the independent producers.
MS. PIKE: Also, it has been a very interesting chat that the four Energy Ministers had about having one operator through the region, which is a very interesting conversation to be had.
MR. PORTER: It is and I guess the other concern is, you can sell as much power as you want south, they'll buy it in New York and all over the United States as fast as you can generate it and as much as you can sell them. I remember being down there at conferences and they would take all you can produce, and cost isn't an issue for them, they'll pay whatever it is. Here we are, we're generating all this wonderful electricity in Nova Scotia, but we're not looking after our own first, we're selling it off. Who's the real winner at the end of the day, is there any thought? We keep hearing how green is costly and it's not cost saving, how different is it with generating power? We should be able to generate it.
The Minas Basin, right in my backyard, is an example. The perception, the optic of the world is in my area, oh, we're going to generate power in our backyard, that means we should all be buying it for pennies. I think we know in this room that's not fact, that's not going to happen. All they can generate, feed through the lines, booms out, and our rates just keep going this way, as we've seen, they're not going to go down - at least I can't imagine they are - so the benefit is going to come back where?
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MS. PIKE: There are a couple of things. The thing to remember about renewables, number one, is that when you develop one of the renewables, whether it's a hydro project or a wind farm or whatever it is, that you have a steady capital cost and you know how much it's going to cost, so then you know down the road how much it's going to be. Is hydro from Churchill Falls cheaper than coal-generated electricity? No. Is wind? No. Is tidal going to be? No. But there is stability down the road.
MR. PORTER: Those are interesting words, "stability down the road." Can you tell me what that will be, because when people are calling my office wondering how to pay their power bill, I'd like to be able to tell them there's stability down the road? I'd like to know if you can clarify for me, Barbara, what that might be.
MS. PIKE: With that, as you mentioned, the fact that we can sell it to Boston and New York and they're willing to pay top dollar, then we could - and this is in a perfect world - Hydro-Québec buys very cheap power, sells it extremely high, and they've got the lowest power rates in the country.
MR. PORTER: We seem to have this mentality about selling off all of our valuable resources and suffering as people who own them.
MS. PIKE: One of the advantages of renewable energy is that you're not going to run out of the water, you're not going to run out of the wind, or the tide or the waves, that's one of the huge advantages of renewables as opposed to putting it all on a non-renewable.
MR. PORTER: I understand. I guess the biggest thing people need to understand is that's part of it, but they're looking for that stabilization and then we have to look seriously at how we resolve some of the other issues around government-owned facilities, schools, jails, hospitals, et cetera and reducing the costs of operating necessities like those, just as quick examples, where will the breaks come there?
MS. PIKE: It's interesting because there's a city in Australia - and I can't remember it off the top of my head - that has put out an expression of interest asking that all of their municipal buildings, streetlights, any of their municipal, they are asking for an expression of interest for it to be powered by renewables and that would be wave and tidal. There are places now where, for instance, the lights on walkways, along harbours and rivers are being operated and run by wave, just small generators at the base.
MR. PORTER: Thanks very much. My 10 minutes is probably up and I appreciate the opportunity . . .
MR. CHAIRMAN: Actually, I was going to say your time is up, but you did very well. Mr. Glavine.
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MR. LEO GLAVINE: Thank you for coming in today and offering us your expertise in a number of areas. I think while my colleague, Chuck, hasn't had many calls on fracking, there's a very different picture that has emerged from Cape Breton. We know there are a lot of exploration permits awaiting from the Department of Energy for Cumberland and Colchester. I'm just wondering, what are the duties that companies have to perform with respect to discussing the exploration with local communities?
MR. FITZHARRIS: You've been involved in that before, haven't you?
MS. PIKE: Yes, I've done that one a bit - well no, actually I did it as a regulator. They should be - well, it all depends on what they're required to do versus what they should be doing. In fact, it was interesting because I talked to a couple of the companies. If you take a look at, for instance, what Southwestern is doing in New Brunswick, they're going around and there have been a number of open houses. It started off with a major open house that the provincial government had in Sussex and called in all of the operators, and had people from their Departments of Environment and Natural Resources, asked a lot of questions.
There were people there who obviously did not agree with anything, but they had a session in the morning that was closed for stakeholders and interested parties, and in the afternoon they opened it up. They probably had about 500 people through in the afternoon and some people, it didn't matter what you said to them, they were not going to agree. Others sat back and said, this is very informative, I like that, and they're continuing to do that. They had a great session last night where it was the same thing - information.
Are they required in an environmental assessment - depending, they should be out talking to the community. What happened in Cape Breton, you don't go in and . . .
MR. GLAVINE: In terms of if a company is going to perform hydraulic fracturing today, what regulatory process, if any, is currently required?
MS. PIKE: They do have to file a well plan and there's an environmental assessment that would be involved with that. So they can't go in and drill wherever they want, whatever they want, they actually have to prepare a plan and the plan includes a number of other options. It's not as stringent as it is for the offshore, but they still do have to show their expertise and make sure that there's a lot of questions, so it's not simply rubber stamped.
MR. GLAVINE: In terms of the concerns that have been raised here so far in the province and I think as this area certainly has the potential to escalate, although we look at the price of gas currently, it may not be as strong for the next few years. That being said, has OTANS had discussions with government around the concerns, the general wonderment about the impact it could have on our water supply?
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MR. FITZHARRIS: Not really. You have to realize our organization is not so much the oil companies or the gas companies, it's more the service and supply side. We're really tapping into ensuring that the local benefits are here, as opposed to the work being done by companies out of the province or in other parts of the country.
MS. PIKE: We've had it in conversations, just to make sure that they understand what our position is on shale gas exploration.
MR. GLAVINE: I ask that because yesterday we saw a story in The ChronicleHerald where Quebec is looking at a moratorium because there are still a number of uncertainties, perhaps, especially in some areas where locations may be favourable to fracking. Do you think we need to do that in Nova Scotia so that we have a full scope to be able to present, as opposed to coming in the back door after we get into some problems?
MR. FITZHARRIS: Our philosophy has always been - and this kind of came out a little bit on the Georges Bank side of the offshore - our stand on it was we're promoting the industry, we want the industry to go forward, but we don't agree with doing it at all costs or at an environmental impact. That's the message that we've kind of taken from our association to government. We've always promoted the sound, scientific testing to ensure that if there is an environmental risk there that the testing is done, the studies are done, and to mitigate it as much as possible.
MR. GLAVINE: Just one last question, Mr. Chairman?
MR. CHAIRMAN: You've got ample time, you have four minutes.
MR. GLAVINE: In terms of moving to the offshore, I know currently interest is pretty low, and of course the Premier also said that not too long ago in one of his speeches. With that being said, one of the big issues a number of years ago was the fact that we had a bureaucratic nightmare for companies to go through that were looking at getting out to explore. Have we made some genuine progress in that regard? If all of a sudden we do have renewal and so forth in the offshore, have we made things a little bit more streamlined and ready to go, if you wish?
Not putting aside any of the real concerns when you're out there in that body of water, and especially offshore Nova Scotia where we have rich fishing grounds and habitat and so forth, I mean all of that has to be kept in place but, at the same time, companies were going to Scotland and they were in the water pretty quick. Have we made progress?
MS. PIKE: For exploration, it was always the development that became an issue, the complaint being that it took them a very long time to go through the process and you had to go through two or three regulatory bodies. They have made progress on that, they've had the energy round tables over the past six years and there has been some streamlining, but it's
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much the same. The companies will complain that you've got too much. I mean the guys at Corridor are saying that when they did try to get their onshore wells in New Brunswick, mapping it out took the whole one side and under again to go through the road map of all of the different people they had to get approvals from.
So it's more that the meshing has taken place to a certain degree. Do the companies think it's enough? They probably don't think so but it's not as - they still have to jump through the hoops but they jump through environmental hoops and it's the provincial and federal government environmental hoop so they're all in . . .
MR. FITZHARRIS: It's my understanding that there - I might be a little off on the numbers but I've heard this before, that there are 13 different government organizations that you have to go through to get a project to development.
MR. GLAVINE: Thank you, Mr. Chairman.
MR. CHAIRMAN: Mr. Skabar.
MR. BRIAN SKABAR: Thanks very much. Now we've been pretty much - well, I wouldn't say fracked-out yet exactly but I have been getting a lot of calls on that - Cumberland North is my constituency - particularly around the Gulf Shore area, there are some concerns around there.
You mentioned sometimes it's like eight or more years from when the test well is drilled to when a project can actually come through. Is this so with . . .
MR. FITZHARRIS: That would be more on the offshore side.
MR. SKABAR: How about on the fracking side? Like how long from when a test well is drilled?
MR. FITZHARRIS: It's a lot quicker on the onshore side. I don't know the actual timelines.
MR. SKABAR: Would it be 18 months, a couple of years?
MS. PIKE: Probably a couple of years.
MR. SKABAR: Like it's really only in the last week and a half, two weeks, since I first heard the term but my gosh, I've heard it considerably since then. What was it that precipitated this? It's like all of a sudden it's from nothing to full-blown frack-fear.
MS. PIKE: Frack-fear. (Laughter)
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MR. FITZHARRIS: She's going to use that now.
MR. SKABAR: Like not one call did I get saying that's great, let's go for it. It's all how nasty it can be.
MS. PIKE: I'm not really sure, it has been percolating for the past year throughout North America. I think that a lot of it has to do with the mockumentary Gasland. Using the offshore as an example, thousands and thousands of kilometres of seismic were acquired offshore Nova Scotia over decades and all of a sudden they're going to acquire seismic off Cape Breton, off Mabou, and I'm getting phone calls from California telling me how dare we do that. I'm just going like, how would you know? And it just happens and with people, it's very difficult. You take a look at it - it's a lot easier to promote fear than it is to promote knowledge and information.
MR. SKABAR: Yes, I certainly concur with that. Okay, if we're going to point at a place where fracking is happening and nothing really nasty took place, where would that be?
MS. PIKE: Tennessee, Arkansas, California, New Brunswick. I mean Corridor has been fracking in New Brunswick for - how long have they been producing them, six years, seven years, eight years?
MR. SKABAR: And likely to keep on for how many more years?
MR. FITZHARRIS: Yes, the one thing with New Brunswick is the gas in New Brunswick is very concentrated, so when you drill a well in New Brunswick you get more out of it than you would in a lot of other places. It's the same as Nova Scotia, the whole province is full of it.
MS. PIKE: B.C., Alberta, Saskatchewan.
MR. FITZHARRIS: Yes, what was the count there a couple of years ago? There were 800 drill rigs in Alberta, land drilling rigs, so they would be working every day.
MS. PIKE: Some of them are fracking for gas - some of them aren't fracking but others would be, and it's shale gas as well as shale oil. So yes, it's literally all over and there's . . .
MR. SKABAR: Okay, so in New Brunswick there are a number of operations going on that we might be able to just tug . . .
MR. FITZHARRIS: It's Corridor Resources, which is a Halifax company, and that feeds into the Maritimes & Northeast Pipeline.
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MR. SKABAR: Okay, so likely there will be some public consultations going on before anything is happening - I'm thinking anyway, I don't know.
MS. PIKE: If there's anything going to be produced here, yes, that would be part of the process.
MR. SKABAR: Now just skipping over to transmission lines and infrastructure. Is there any kind of dialogue between Quebec power, if they're shipping Newfoundland and Labrador power south, and I recognize that power is worth what it's worth and will go to wherever the - well, whatever the market will bear is what it's worth. Is there any kind of relationship between us and them?
MS. PIKE: With Hydro-Québec?
MR. SKABAR: Are we in direct competition with Quebec power or will we be in direct competition with them?
MR. FITZHARRIS: I don't think it would be direct competition.
MS. PIKE: The whole reason that this particular Maritime link in the transmission through Nova Scotia - which is good for Nova Scotia. I mean they could have bypassed if they got along with Hydro-Québec, then it could have gone through Quebec and then gone straight into the United States. Then that puts us still at the end of the line without any connections.
Moving it through the Maritimes puts us not at the end of the line but in the middle of it, which is a good place to be.
MR. SKABAR: So again, if the power from Muskrat Falls is coming through Nova Scotia to the United States and the power from Upper Churchill is going through Quebec and again to the United States, we're competing for the same market. Will we have roughly the same costs, even though theirs have been capitalized so many years previous?
MS. PIKE: Quebec exports from the Churchill Falls power, which they have a long-term contract with - what used to be CFLCo is now Nalcor - and it actually reduces in cost and there's a rider clause - you and I probably grew up on this - and there's actually a rider that they can extend it and I think that it's like another 30 or 40 years. Really it's Nalcor and Emera that are doing that. It's Nalcor that will sell the excess power into the United States.
MR. SKABAR: And pay us a tariff for travelling through Nova Scotia, if I understand it.
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MS. PIKE: Yes, Emera and Nalcor have worked out a deal as to how much power Nova Scotia will take and I guess they could buy more in the future. New Brunswick will probably end up buying power from that, as well, because they've got fossil fuel-generated plants that need to be replaced, et cetera. It's really those companies that will be taking that kind of a risk.
MR. CHAIRMAN: Mr. Morton.
MR. JIM MORTON: Thank you both for being here, for your presentation and for the interesting responses. To start with, I just wanted to get a sense of your members' experience in the international market. I'm assuming that some of your members are selling services or products in other places in Nova Scotia or Canada, is that correct?
MR. FITZHARRIS: Yes, we actually have companies that have grown out of the offshore industry in Nova Scotia and become international companies through the experiences they have gotten here, like we used to be Jacques Whitford's which is now Stantec. Then there are partnerships within the province of international companies, that kind of thing, so Black and MacDonald with AMEC - international ties that way. Yes, there are quite a few that have gone and are now working like Secunda Marine, Dominion Diving, there are quite a few companies.
MR. MORTON: I'm curious, I don't know if you are able to respond to this, but do you have anything to say about their experience and working in the international market, how comfortable are they with that? What kinds of additional assistance might they need to make that work better?
MR. FITZHARRIS: One thing you need to realize, especially in the offshore industry here, it's one of the harshest environments in the world. The technologies and just the simple way that they do things prepares them for probably pretty much anywhere else in the world. As far as help and that sort of thing, we do get involved a lot with the Department of Energy from the province and ACOA on trade missions and that sort of thing. There are some subsidies that are in place and there are a lot of programs in place right now for international development and international export that really helps companies like mine.
MR. MORTON: So I guess I'm hearing you say the industry is relatively satisfied with the kind of support it's getting to kind of move into international markets or to export products, services or people?
MR. FITZHARRIS: There are opportunities out there, but you can always do more, though. Don't stop.
MS. PIKE: There's going to be a group going to the All-Energy conference in Aberdeen in May. We include as part of that trade mission, we have matchmaking, it's
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matching up companies here with companies there to move forward on that and would be on the All-Energy file. We do that with other international conferences or trade shows that we attend.
MR. MORTON: Maybe this is still in the same area perhaps because there is work happening across the world around tidal power. Barbara, when you named the richness of our assets, you talked about tidal power and I guess I'm interested in the reasons for your enthusiasm about that or how your members are feeling about the work that's being done at this point? I know that research on Fundy Tidal power at Acadia does have a 100-year history, there's a paper I'm aware of that was written in 1910, looking at the possibility. Can you talk a little bit about how your members are involved in and feeling about Fundy Tidal power as an investment?
MR. FITZHARRIS: It's an emerging market. The potential of the Bay of Fundy - it has the highest tides in the world. The one turbine they did have in the water there and tested, what they found out so far is that basically all the blades were missing when they took it out of the water. What they found out is that there is a lot more current there than they originally anticipated. The feedback from the companies is you could see that as a bad thing because it destroyed the turbine, but on the other note, there's more potential there, so they can go with bigger turbines creating more power. The exciting thing about it is that it's so new, it's set up in a few locations across the world, but we have the ability right now to be probably the world leaders in this technology.
MS. PIKE: Then we'd become the experts. We can design the systems, we can do the maintenance, we can do the repairs from here, so that's what is exciting about it because then you're feeding into the global value chain and your companies are exposed to more places around the world and have more opportunities.
MR. FITZHARRIS: Just another note on that. I'm actually on a steering committee with Enercan to develop the in-stream and tidal and wave technologies. The whole idea behind it is to get the industry leaders and to develop a plan, develop a road map on how we can be out in front of the other countries.
MR. MORTON: That kind of leads into the next thought that I was having anyway. From OTANS' perspective, as we move in a direction that will take us, I suppose, increasingly away from carbon-generated energy to renewable energy, what kind of gaps exist at this point in terms of services and knowledge? I guess I'm interested in as we adjust the technologies, to what extent are there the resources and the people available to either service or supply that emerging industry?
MR. FITZHARRIS: Yes, I guess with the initial meetings that we've had on the steering committee so far. One of the things we're looking at is that the technologies and the infrastructure that we have in place here now to service the offshore side fits very well with
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the tidal. The process now is creating a plan and then the feeling is that from the supply boat companies to the tug boat companies - companies like myself that do the steel fabrications, that kind of thing - the basis is there to start with. The knowledge base is there and it's just how do we use that now and how do we bring that all together?
The one gap I guess would be right now we're not developing our own technology, we're looking at technologies that have been developed by companies from the U.K. or other areas of the world, so it's to get on that forefront and actually get some of that early development done and come up with different types of blades, different types of cabling systems, that kind of stuff.
MS. PIKE: The companies that have been here, like the Rolls-Royce and the G.E. and those guys, the big names that are looking at tidal, one of the things that has struck them, or they have mentioned, is the fact that this is one of the few places in the world where within a 100-kilometre radius they can find the technical expertise, they can find the technical support and they can find the natural assets to further develop the industry. That has really excited a lot of them.
MR. CHAIRMAN: MLA Gaudet.
HON. WAYNE GAUDET: Thank you, Mr. Chairman and thank you, Joe and Barb, for your presentation. Joe, you indicated that right now there's not too many explorations for oil and gas in Nova Scotia. I presume with the weak economy, when oil was lower than it is today, there's probably various factors.
I guess my first question, is there any exploration taking place now? I guess my next question is, is anyone considering doing exploration soon, down the road? Let's start off with those.
MR. FITZHARRIS: The answer to the first question, no. There is some interest and the Play Fairway Analysis that the province is working on right now, hopefully, will start giving companies the opportunity to have an initial look at what's out there and to decide that yes, they should be doing exploration there. The way it was presented to me one time was what that whole program is going to do is take away a lot of the what-ifs and give the oil companies that first foot in, where the province is doing the initial work upfront and they don't have to, so you are already out of the starting blocks with this information already out there.
MR. GAUDET: Okay, I'm trying to understand, who basically tries to get the companies interested in doing exploration? Does OTANS generate interest or do companies just come in by accident and want to do some explorations?
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MR. FITZHARRIS: Right now, going forward, it will end up being the Nova Scotia Government for a certain part of it. We also get other companies that will look at the area, look at the geography and decide that's a good area to go look in and they will do it on their own.
MR. GAUDET: Has there ever been land exploration for oil in Nova Scotia?
MS. PIKE: Onshore?
MR. GAUDET: Yes.
MS. PIKE: Yes, actually in our history we've actually had oil wells and for some reason I've forgotten my history on that.
MR. GAUDET: But in the last recent time, let's say, there's none?
MS. PIKE: None - well, there will be or there is a company interested in oil in Nova Scotia.
MR. FITZHARRIS: Actually in New Brunswick, they actually found oil when they were drilling for gas, so Corridor is now looking at developing that further.
MR. GAUDET: I heard that basically the Sable one is winding down. How much life is there left with Sable, do we know?
MS. PIKE: The initial development plan called for 10 to 15 years. I'm not privy to what the current reserves are looking at but I would suggest that the rate that they are recoverable has been downgraded and another five years.
MR. GAUDET: Okay, then that leads to the next question. What happens to the customers that are being serviced now by the gas industry, when the . . .
MR. FITZHARRIS: Well you have Deep Paunke coming on stream after that, so that will sustain it for a little bit longer. It may just end up being a shutdown of the infrastructure or it may be other opportunities there. Now I do know that Exxon has opened the door also for other developers to come in and use the infrastructure that is here now.
MS. PIKE: So the SDLs that are out there could be - there's - initially when they were found, which would have been pre-board days, which would have been back in the days of COGLA - they were not economically viable, there were small reserves. But with tie-backs and with a production platform out there, it's a lot more economic to develop those small SDLs.
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MR. GAUDET: I just want to touch on wind farms, wind turbines. Right now in Clare we have one wind turbine. Do we know how many wind turbines we have up and running in our province?
MR. FITZHARRIS: I couldn't come up with a number right off the top of my head but there's quite a few.
MR. GAUDET: I guess my next question would be, are there plans for more? And, of course, why not Clare? (Laughter)
MS. PIKE: Well the next time we're talking about wind companies we'll mention to call you. (Laughter) I think when we've got the tariffs in place and things, I think there will probably be a bit more development of that.
MR. GAUDET: Thank you.
MR. CHAIRMAN: Okay, moving along now we have MLA Preyra.
MR. PREYRA: I just had a comment really on Mr. Porter's question relating to stability. Essentially I think what stability means certainly from a government context is, we know that the price of energy is high and that it is going to continue to go high but stability refers more to security of supply and stability of prices down the road. We know that it's more expensive now but at some point, as fossil fuels continue to rise, at some point as we improve our technology, that we're going to be much more efficient and effective.
Once the real environmental costs and social costs are factored in, we may well decide that we have reached an equilibrium, in terms of the costs of renewable energy. It's not as if we're not aware of the fact that coal is a lot cheaper or that oil or gas is cheaper, but we know that down the road this investment will pay off as it relatively gets less expensive.
You're essentially saying the same thing, that that's what stability means. It means security of supply, it means environmental security, it means local energy will be produced and we'll be less reliant on international flows, things like that.
MS. PIKE: And it means that if you build a plant that is coal-fired, generating electricity, you have no control over how much that coal is going to cost, whereas if you have a wind turbine that is powering that plant, then the fixed cost of that wind turbine, you know how much that is and the maintenance over the years, et cetera.
MR. FITZHARRIS: It's a bit of a Catch-22 as well, because there are environmental concerns with coal and with oil and, on the other side of the coin, the natural gas, you've got different environmental concerns. At the end of the day, the cheapest option may not necessarily be the best option.
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MR. PREYRA: Yes, and the regulatory regime itself is changing around these industries and it may well be that at some point we might not be able to use certain types of energy sources.
I had a question about the workforce and the extent to which the offshore technology industry is ready for the shift and what you would recommend, in terms of preparing for this shift down the road? What is our level of readiness, in terms of the skilled workforce or research for the development?
MR. FITZHARRIS: Like I said, one of the benefits, especially on the tidal side - like Barbara said about Rolls-Royce and GE and these companies, they see that the infrastructure is already here. There's a very stable infrastructure here to service the offshore platforms that are here now. You've got the supply boats, you've got the steel fabricators, you've got the engineering, you've got all that stuff in place.
The other thing with it is, we've probably got one of the biggest clumps of universities of anywhere in the world. So that whole research and development side of things, it's prime there to kind of elevate that side of it and feed into that workforce and that stable workforce and supply chain that has been there for years.
MS. PIKE: Are you talking about the demographics and the issues with skilled labour moving forward, or are you talking . . .
MR. PREYRA: Well I was just thinking that down the road the benefits will not just be purely on the energy side of it. There are benefits to be derived from the expertise that we're developing here, the clusters of expertise that we'll be able to export and develop, particularly in tidal. It may well be that this will be the future of our workforce as well - not just cleaner and greener energy but a cleaner and greener economy and workforce.
MR. FITZHARRIS: And that's like I said, the steering committee, the first workshop that we had, that was a big point that was raised, that this is a very good opportunity to look at getting out in front and being able to export this expertise, once things get flowing - no pun intended.
MS. PIKE: You can look at universities as the asset because as Joe mentioned, I mean that's a huge plus for us.
MR. PREYRA: I was at the National Research Council's lab on algae research, for example. It's one of the great things about being an MLA - sometimes you're forced to go to things then you really think wow, this is a lot more interesting than it seemed. It was really fascinating to go to those labs and see what they're doing with algae and the development of alternative energy. I had always thought it was a possible food source but mostly it's an energy that they are mostly optimistic about . . .
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MS. PIKE: Yes, jet fuel.
MR. PREYRA: .We are, especially this research and the whole oceans cluster that is developing around Halifax is really exciting so we're looking forward to that side of this industry as well. Thank you, Mr. Chairman.
MR. CHAIRMAN: You're welcome. Feel free, the last time you saved a couple of minutes from your first time around so a few more and since you behaved well today, I might even give you a few more minutes. (Laughter)
MR. PREYRA: I'm a man of few words, Mr. Chairman, you know that. Thank you.
MR. CHAIRMAN: We'll move on to MLA Glavine.
MR. GLAVINE: Thank you, Mr. Chairman. I'm wondering if gas prices continue to drop, and now it is at $3 and something, 1,000 cubic feet, is that how it is?
MR. FITZHARRIS: Yes.
MR. GLAVINE: Does Encana have to go into production? If gas rates stay extremely low and they pump out the 10 to 18 year production that they are possibly talking about, at this low level, who is to say that it will be a profitable venture for them or for Nova Scotia? I'm just wondering, do they have to go into production?
MS. PIKE: That's a good question.
MR. FITZHARRIS: I know that one of reports I did see, I know they are planning on producing more gas than they had originally estimated and that would be based on the economics of it. Also, they've got $850 million tied up right now. That's a big amount of money to be just walking away from at this stage . . .
MS. PIKE: Or sitting out there.
MR. FITZHARRIS: Yes, or sitting out there. There are no indications that they're not going to carry though with it.
MR. GLAVINE: You've talked about the infrastructure that we've put into place, the expertise, the knowledge and so forth, but I think a lot of people are starting to now have a bit of an analysis or a bit of an armchair look at the first 15 years of the gas industry, realizing that, oh my gosh, we aren't any better off - or what are we left with?
We've exported the vast majority into the United States, whereas even some small jurisdictions have looked at other associated industries. That is one of your mandates, to
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identify and promote associated industries with it. So can we expect a repeat from Encana, that we'll have to look at maybe shale gas to continue to look after the small supply that we have in the province, but meanwhile we're going to export the vast majority into the U.S. market and really it won't underpin and improve our economy much in the long run?
MR. FITZHARRIS: Well, there are a couple of things there. I guess the big benefit we're getting from the natural gas right now is the royalties: it's going into the provincial coffers, it's paying for roads and schools and all that stuff. As that starts dwindling down we will see a negative effect because of that.
I know one of the other benefits that came out of the whole Encana thing was a contract that a company in Cape Breton - Laurentian - had received to build land rigs that were being built here and then exported out to Alberta. The idea was to give back to the community and to create an industry that could be exportable. So there are community benefits, there are, like I said, royalty benefits. Although we don't have gas going to every house in Nova Scotia right now, there are still major benefits that the province is seeing.
MS. PIKE: Hundreds of millions of dollars in royalties, hundreds of millions of dollars in wages for people who work for, whether it's Joe's company or whether it's Jacques Whitford or . . .
MR. GLAVINE: I realize that's there but we really didn't tap into other manufacturing, you know, other by-product industries and so on associated with gas that are very prominent in other jurisdictions.
MR. FITZHARRIS: I think the big export that we probably got out of it was people. We have people from Nova Scotia right now all around the world who are working in oil platforms and taking that expertise to other parts of the world. That's probably the biggest - you know, you'd like to have everybody stay home but that's probably one of the biggest exports that we've probably had.
MR. GLAVINE: Finally, you've moved from, I guess maybe, a focus on the offshore to broadening your scope with looking at wind and tidal and wave. I don't know if maybe you can comment on whether you've taken a look at solar at all, in terms of the mix. I'm just wondering what your thoughts are around at least trying to stabilize our power rates just a little bit. I see this as an immensely growing concern among Nova Scotians, six increases in nine years, and the next decade looks very grim.
If we start to borrow at Muskrat Falls, it's eight or nine years away - you know, we have some uncertainties, perhaps coal prices could go up fairly significantly. I'm just wondering where you would focus to try to maybe help the picture a little bit for the next decade, until tidal has great potential and, again, no significant amounts for a decade or two, and that's from the best minds in the business there. Where do you think we should place our
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hopes, if you wish, for the average Nova Scotian who saw on their most recent power bills a fairly significant jump?
MS. PIKE: In our respect it would be that some of our businesses use, lots of our members - some of our members use a lot of power, a lot of electricity. When we talk about that - and Leonard mentions it - I think one of the issues that we still have to talk about, or in general - and it's not something really for our association in that respect - is to find ways of using less energy. That may sound trite or whatever but I can remember the president of one of the oil associations coming down and basically his message was, stop burning fuel, stop driving - not to stop completely but cut back, take a look at what it is you do. The reality is energy is not going to decrease in price.
MR. GLAVINE: I see the long term very positively but I see the next decade as a real challenge.
MS. PIKE: That's just the reality of it.
MR. GLAVINE: And companies make decisions, right, whether they stay, whether they come, based on if those margins start to shrink because our power rates - I mean we've tremendously subsidized three of our four pulp mills, how long can you go on doing that? It's a huge question we face as a province, as a people. Anyway, just my final comment there, thank you.
MR. CHAIRMAN: Mr. Morton.
MR. MORTON: Thank you, Mr. Chairman. We've talked a little bit about wind and one of the things that I've observed and I'm mostly familiar with the area that I represent in Kings County, but part of further developing wind energy in Nova Scotia at least partly depends on municipal legislation and regulation. I guess I'm curious about your thoughts about how that's going in Nova Scotia. My observation in Kings County is it's going rather slowly. I'm just sort of curious about what your experience might be in the province with municipal jurisdictions as a whole, across the province.
MS. PIKE: It is going slowly. Actually, to be quite . . .
MR. PREYRA: The winds of change move slowly.
MS. PIKE: Right. I was at a breakfast meeting this morning at the Westin and as I was sitting and looking out and watching those windmills on the market, I'm sitting there thinking it would be so nice if there was more of that around this province, but part of it is the cost. That will be decreasing, as one of the things today is that with the increasing oil prices wind turbines are going to get more and more cost effective. But "not in my backyard" is still an issue.
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MR. MORTON: In Kings County - actually, I probably know far too little about this - there is no legislation or regulations available for sort of larger-scale wind farms. You might know the answer to this but I'm not sure there is - I don't think there's legislation available to support small, kind of home-owned wind turbines to any large extent.
MS. PIKE: It's my understanding that most municipalities will have height restrictions and like how much . . .
MR. YOUNGER: Distance away from a house . . .
MS. PIKE: Yes.
MR. GLAVINE: They've put in a ban in Kings County . . .
MR. MORTON: In any case, it does seem to have been going rather slowly, even though from what I can observe, there's a lot information that has been collected. Is it your general sense that the main reason things go slow is that people are uncomfortable with change, they worry about having something close to their residences, is that the . . .
MS. PIKE: This is way outside our association mandate but I would suggest that the bottom line is cost. How many here have solar panels on their houses? And that will change, the costs will start going down. When you've got something like the DSME generating, building in our own backyard, that's great and that will happen. It will lower in cost - the other thing, too, now they're taking a look at a much larger wind turbine, one of the issues has been that the turbines are - you have to have so many of them in order to produce enough electricity. They've gotten larger turbines now that are more efficient, so they're actually able to generate more electricity. So that again, it will all - you know, it's not going to mean cheaper power, it will mean greener power.
MR. MORTON: Thank you very much.
MR. PREYRA: Just a quick question on that. When you travel elsewhere, you see a lot of offshore wind turbines. Why is Nova Scotia different in that regard? Why do you not see very much of that here?
MR. FITZHARRIS: There are certain areas of the world - and they mapped this out - that have better potential, better wind potential and better wave potential. So if you look at the north of Scotland, they've got real strong, consistent wind and they also have the right amount of wave energy. Along Nova Scotia it's not as - you don't have as good a flow. Up kind of north of Labrador, there would be a good potential there for offshore wind energy.
MS. PIKE: On the northeast coast they've got some mapped off Maine and there's also talk with that, too, of having offshore wind turbines or wind farms that have wave or
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tidal turbines underneath, in the platform. That is an interesting development and innovation too.
MR. PREYRA: Thank you.
MR. CHAIRMAN: We have about 30 minutes left for questioning, questions and answers, so feel free. If anyone else would like to ask some questions, please feel free to do so. Mr. Skabar.
MR. SKABAR: Thank you. Is biomass getting to be sort of less old-fashionable, for lack of a better term? There was a lot of talk about it for a long time, or quite a long time. At one time I thought my gosh, why not, what a really excellent idea - the grass and the woods and whatever else. But as time went on, I heard more reasons why we shouldn't proceed with that than we should. Again, it's almost conspicuous by its absence in dialogue today. Are we moving ahead or is that just sort of in neutral?
MR. FITZHARRIS: I actually attended the All-Energy conference in Scotland last year in Aberdeen. In all the renewable sectors there's a lot of good innovation out there and there was a lot of biofuel, biomass and technologies that are out there. It is still very . . .
MS. PIKE: In fact, there are power plants in Europe, a couple of power plants in one of the Scandinavian countries that actually almost all of their biomass comes from Nova Scotia.
MR. SKABAR: Really? What kind of - we ship, like, grass?
MS. PIKE: No, this would be like scrub and the fast-growing stuff.
MR. SKABAR: Like willows and . . .
MS. PIKE: Yes, but there's a lot of work being done with the crops. It's massive, I mean it's not just corn anymore.
MR. SKABAR: But not too much activity in Nova Scotia on that?
MR. FITZHARRIS: There's a bit, a few companies are involved in it. There is some new technology there that is being initiated by - originally it was initiated in Europe but there's a company in Nova Scotia that's promoting it for North America. I think they have - what did he say, 25 units sold? I don't know if they've actually got any in production yet but throughout Canada they've got 25 units sold.
MS. PIKE: They call it bioflow, is that what - yes.
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MR. FITZHARRIS: Basically what it is, it's a unit that they take to an area and they burn the biofuel and it produces energy right there.
MS. PIKE: Like a prefab.
MR. SKABAR: Like for, I don't know, a hospital, an office building or something like that, or for larger . . .
MR. FITZHARRIS: Well, you go to an area where you had the source and you'd set it up and it's truckable, the same as what they do with oil rigs, with the land-drilling rigs, everything is truckable. So you'd burn in that area and feed into the power grid.
MR. SKABAR: So it's still a growing concern?
MR. FITZHARRIS: Yes. No pun intended? (Laughter)
MR. CHAIRMAN: Are there any other questions? Mr. Morton.
MR. MORTON: Thank you, Mr. Chairman. Barbara, a few minutes ago you alluded to, when I was asking questions to this, solar power, and we haven't talked very much about that. What do you think stands in the way to making some form of solar cost effective or interesting to many more Nova Scotians? I know a few people are experimenting with it and certainly we've been doing some things here in HRM to help that process along a little bit, but what's wrong with the economics of it at this point? What makes it less viable?
MR. FITZHARRIS: It's probably the volume of - and I mean I'm just not 100 per cent sure but it's probably just the volume of energy that you can produce from it. It's more of a residential, you know, office building where you can offset some of the costs, as opposed to creating a wind farm that will create two or three megawatts of power.
MS. PIKE: I've thought about solar. I have a heat pump but the house that I bought had the heat pump. Would I have paid the extra money for the heat pump now that I've had one? Probably. The guy who built the new house below me, he's heated geothermal. Well, that's pretty costly stuff, but in the long term it's much better.
I think that really it is an upfront cost thing because people still don't think about the fact that this house is 30, you'll be living there for 30 years, well, let's take a look at it over 30 years. It's looking at an upfront cost of the extra $5,000, as opposed to just putting in some electrical heaters. And that's on the small scale, but as Joe says, on the big scale, it's not - but solar is not seen in it, we don't have that kind of development here. There are other places that are a lot sunnier that have got massive solar farms.
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There's also some interesting work being done in P.E.I. on wind which, much the same as solar, what do you do? Is there any storage? They're doing some interesting things in Summerside with the storage of the power so that when the wind doesn't blow they can flip the switch and still get power.
MR. MORTON: Certainly, I guess there are some people who are still hopeful that solar might develop as something. I was talking to a plumber the other day who has actually hired a technician who can install solar panels and service them, I guess believing that there is some future market.
MS. PIKE: Well, I think as Joe said, for houses, that's a - but if you're looking at, you know, there's not going to be a solar farm here as opposed to in Nevada.
MR. MORTON: Right. Thank you.
MR. CHAIRMAN: Thank you. Any more questions from the Liberal caucus? Are we okay? Hearing no more questions then, we'll proceed and we'll give you folks the opportunity to sort of give a summation or some closing statements, perhaps, is the best way of putting it.
MR. FITZHARRIS: Do you want to start and I'll just finish.
MS. PIKE: Okay, sounds good. Again, thank you very much for the opportunity to speak to you. As we have said, these are really exciting times and I know that we probably heard that before, when people keep concentrating on the offshore oil and gas sector. It's not to say that we've abandoned offshore oil and gas but we need to keep our minds open. This province was founded by a lot of people who were innovators, inventors, the industrialization of much of North America came through Nova Scotia before Confederation. We are sitting on an opportunity now to agin be innovators and world leaders in a growing and competitive energy sector. We have the membership, and our membership has the expertise and the experience to be able to grasp those opportunities and move forward.
That's not to say that we've turned our backs on oil and gas, it's not to say that we don't support shale gas development, because we need it all. If we're going to have a secure energy future we have to take a little bit of everything in order to do that.
MR. FITZHARRIS: I guess I'd just like to say, once again, thank you for having us. There's not many of our member companies that actually only deal in the offshore oil and gas industry. Our company deals in offshore marine, we're looking at the tidal stuff, and the majority of the companies deal in multiple disciplines and multiple markets. In reality, our organization was based in the oil and gas industry. It has grown from there a little bit to be more on the onshore side. Now we're just evolving a little bit more to match what our member base is.
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On the other side of that, the wind is fairly new, the tidal is just developing, stuff like biomass. Our perspective forward is we want to help those companies to be in the forefront and the world leaders in those industries.
MR. CHAIRMAN: Thank you very much. On behalf of myself, as acting chairman here today, and my colleagues around the table, I would like to thank you for your presentation and for your insights and for your candid comments when you were answering some of the questions and for looking into your crystal ball a little bit, too, in some of the questions.
I want to thank you again for coming here. It's always good for us to talk to companies and ordinary Nova Scotians who are dealing with issues out there and it's very much appreciated.
I guess what we'll do now for the committee is to take a five-minute recess and return here to just attend to the business of deciding when our next meeting is. So we'll take a five-minute recess and I'll expect you all back in your seats in five minutes, please. This is the school teacher, see? (Laughter)
[2:31 p.m. The committee recessed.]
[2:34 p.m. The committee reconvened.]
MR. CHAIRMAN: I call the meeting back to order. The only item of business we have right now is to look at our next meeting date and the witnesses - do we have to deal with that or has that been dealt with?
MS. JANA HODGSON (Legislative Committee Clerk): That has been dealt with.
MR. CHAIRMAN: Okay, very good. As we all know, the House will be in session in April so April is definitely out. This morning at the other committee - Veterans Affairs - we discussed the option of not having a meeting in May. The consensus of the group there was not to have a meeting in May, so I'm throwing this out on the table for discussion. What is the preference of the committee?
MR. SKABAR: Well, I'm sitting in for Gary but I don't know what his preference would be.
MR. CHAIRMAN: Listen, you have all the rights and privileges so you can . . .
MR. PREYRA: You're the only one who's not filling in. (Laughter)
MR. CHAIRMAN: Mr. Glavine.
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MR. GLAVINE: Mr. Chairman, I would just like to have a little bit of information on what stakeholders we have been looking at to fill the last two or three meetings. Maybe if I could have some information on that, decide whether to have - certainly not in April but perhaps in May and June.
MS. HODGSON: The two witnesses that the committee approved which we could call in: one was mink farming and the other was the Churchill Falls project. We talked about the Department of Energy and they are coming in for that one.
MR. GLAVINE: Thank you. I'd like to see us do the mink farmers. That's probably going to be - the legislation could possibly be there in the Spring. At the very least, a fur farm Act is in development and it may be good to hear from them. We've got eight years to talk about the Churchill project.
I know there's a lot, there are some outstanding issues there, I'm not being facetious, really. I think in the Fall we could start maybe with that as a project and see how the hearings and so on go that are currently in progress in Newfoundland and Labrador. I think the mink farmers having a voice right now may be very good for this committee - for June.
MR. CHAIRMAN: For June you're looking at? Okay, for June.
MR. SKABAR: Gary thinks that's fine.
MR. CHAIRMAN: Okay, Gary thinks that's fine.
MR. PREYRA: What you're saying is that we have the meeting in June.
MR. GLAVINE: Yes, that's right, depending on how late the session goes.
MR. CHAIRMAN: Okay, hearing no further discussion, do you want to make that in the form of a motion?
MR. GLAVINE: I so move that the mink producers of Nova Scotia be our witnesses for the month of June.
MR. CHAIRMAN: Okay, thank you. Do we have a seconder? Seconded by Mr. Gaudet.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
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The next item then, I guess, is to adjourn. Thank you very much, the meeting is adjourned.
[The committee adjourned at 2:38 p.m.]
