Last week’s column triggered a number of responses on matters of energy and self-sufficiency.


There were two themes

(i) why are we shipping natural gas to the United States instead of using it to lower energy costs in the province; and,

(ii) how does the export of natural gas make us more self-sufficient.


I have no answer to the first question except to suggest that it has to do with recovering exploration costs from the sale of production. In respect to the second theme, one might argue the answer as an oxymoron.


Self-sufficiency refers to the state of not requiring outside help or interaction for survival. The term is usually applied to circumstances in which nothing is consumed outside of what is produced by the self-sufficient entity. New Brunswick’s Task Force on Self-Sufficiency has a different take and defines self-sufficiency as the point at which the Province no longer requires Equalization payments from the Federal Government.

The classic definition of self-sufficiency would suggest that the export of energy is a form of market dependence rather than self-sufficiency because it relies on buyers to purchase the exported product.


If New Brunswick could truly become self-sufficient, it would have to rely on its own energy sources (hydro, wind, wave, tidal, solar, natural gas and Stoneycreek oil), its own food sources, its own transportation and technology, its own trades and its own people. Unless we’re faced with basic survival, that’s not happening soon.


As I see it, we have three roads to self-sufficiency as defined by the Task Force: (i) improve the efficiency and productivity of our traditional industries (ii) grow our IT and technology industries and (iii) commit fully to the notion that we become a major exporter of energy.


Population and wage growth will follow development.


Self-sufficiency requires new revenue to replace equalization-payments. Our tiny manufacturing base isn’t going to bridge the gap. Our fishery is in crisis according to the Fisheries Resource Conservation Council. Our forestry industry has a plethora of challenges including a declining housing market in the United States, a stronger Canadian dollar and the high (according to producers) cost of electricity.


We have a strong agricultural industry but its output is near capacity and dedicated mainly to single item cash crops for commercial export. In the absence of a wealth-creating technology innovation, it’s going to take a combination of energy imports and exports to create a tax and royalty regime that could replace equalization.


As an energy exporter, we would be dependent on other countries for fuel and we would be dependent on the United States for markets. Our role would be largely that of processor and trans-shipper rather than exploiter and exporter of natural resources. We would be the Taiwan of the energy world. Our low cost advantage would be location relative to New England and an energy development strategy that would go where the Americans fear to tread.
Liquefied natural gas from the middle-east would be processed in Saint John and piped to the United States.


Oil would be refined as gasoline and other products for shipment to the United States. Uranium would be imported from Ontario and used to fuel nuclear plants that would generate electricity for transmission to the United States. Electricity would be imported from Newfoundland for trans-shipment to the United States.


The only indigenous energy we would export would be natural gas and maybe some hydro, wind or wave-generated electricity. We would be totally dependent on far-away countries for oil and liquefied natural gas and totally dependent on the United States as a market for our exports. We could become a storage dump for nuclear waste. Do we have a choice? Not if we want to be self-sufficient.


I was inclined to think that financing might be an issue but it shouldn’t be if we have secure sources of fuel, secure markets and long-term contract pricing. The bigger issue may be ownership. The Provincial Government, NB Power, not even the Irvings have the financial capability to finance all of the above. It will likely be financed by some combination of American and European interests and who knows, the Saudis may even want a piece of the action.


While debt financing might be less expensive, logic would suggest that equity financing will be necessary and that a significant transfer of equity could cede control to the equity partners. They could be as varied as EXXON-Mobil, the French power giant Areva or the Atomic Energy Company of Canada. Maybe the Ontario Teachers Fund would flip part of its BCE equity to purchase a piece of NB Power’s nuclear unit.


On the environmental side, there could be issues with underwater cable transmission even over-land transmission. Greenhouse gases will present a challenge for the refinery and potentially for the producer(s) of electricity. These could be mitigated by development of cleaner technology.


In today’s world, we can’t ignore security – security of transportation, security of person, security of facilities and fuels. Realization of New Brunswick’s energy export dream and links to the United States will create new targets for the terrorist movement. We have to guard against them with great tenacity.


If the pieces fit together, we could create thousands of jobs, attract new taxpayers and fashion a long-term tax and royalty stream for the Province. The project needs a formalized business plan and a lead partner to pull it together. So far, it’s been largely talk with exception of the Irving’s LNG plant and the export of natural gas from Sussex.


We need to know the costs of development and who and what will be at risk. We also need to know precisely what’s in it for New Brunswickers - lower taxes, higher incomes or something more.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at bill.bellstrategic@nb.aibn.