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Deep Panuke Blog

Day Four, Thursday, March 8, 2007

Half Day, No Fireworks, Time Off to Write Up Final Arguments

Day Four of the Deep Panuke hearings in Halifax was something of a yawn, and getting the afternoon off was the big topic of conversation early on. Our time up at the plate would involve cross-examining a couple of intervenor panels.  The Chronicle Herald coverage focused on how some of the financial outfall might best be used:

Targeted gas fund sought

OTANS: Use Panuke money to find next major offshore project

By JUDY MYRDEN Business Reporter

There should be strict rules about doling out money from a potential multimillion-dollar offshore fund, says an energy industry group.

A portion of revenues from the proposed $700-million Deep Panuke project should be directed toward finding more oil and gas riches under the ocean floor, the Offshore/Onshore Technologies Association of Nova Scotia urged government regulators Thursday.

"Unfortunately, at present there is no other immediate, foreseeable petroleum development to follow Deep Panuke," Paul McEachern, managing director of the lobby group that represents almost 400 Nova Scotia companies working in the oil and gas industry, told a panel reviewing the project.

"When Deep Panuke’s gas resources are finally exhausted, so will end the royalty, tax and employment revenues currently enjoyed by the province."

EnCana Corp. of Calgary, developers of Deep Panuke, and the Nova Scotia government signed an agreement last June to kick-start the stalled development. Part of the deal called for the creation of the Deep Panuke Gross Revenue Fund that EnCana has agreed to set aside for research, development and training.

Mr. McEachern said the agreement sets aside 0.5 per cent of annual gross revenues from Deep Panuke to the fund, which could amount to $14 million to $47 million over the lifetime of the project, depending on production and the price of natural gas.

The offshore group is recommending this fund be "strictly mandated and exclusively targeted to include only whatever activity, technology or information can most likely contribute to discovering the next commercially viable offshore petroleum field," he said.

Roger Hunka of the Native Council of Nova Scotia questioned whether the offshore group would object to natives taking advantage of the fund.

The description of the fund states the purposes "research and development, education and training and disadvantaged groups as may be required by the CNSOPB (Canada-Nova Scotia Offshore Petroleum Board)," said Mr. Hunka.

Mr. McEachern said the association would have no objections to natives getting money from the fund, as long as it would "increase that group’s capacity to participate" in the energy industry.

The hearing before the petroleum board and the National Energy Board marks the second time EnCana has sought approval for the project, located about 250 kilometres east of Halifax.

EnCana, Canada’s biggest energy company, put the project on hold four years ago to review its economics and look for additional gas reserves offshore.

The hearing is expected to wrap up today, even though two weeks had been set aside. A decision on the project is expected by summer.

If Deep Panuke is approved by the two-member panel, it would be Nova Scotia’s second offshore gas project. The Sable project began production in late 1999.

The Finance Department has indicated if the project goes ahead, the province’s bottom line will be increased by a total of $450 million in royalties collected from the sale of natural gas.

EnCana plans to deliver natural gas to markets in the U.S. and Atlantic Canada starting in 2010. The development would include a mobile offshore production unit and potentially a 176-kilometre subsea pipeline moving gas ashore to link with an existing pipeline.

When our opportunity to pose questions to individual intervenor panels came up, we chose to question the Nova Scotia Department of Energy on several topics, chief among them a concern about the GHG emissions from the project. When Bruno attempted to question NSDOE (Nova Scotia Department of Energy) on the impact of the project on Climate Change, the agency’s council hopped to his feet, opining  that  such questions were outside the scope of these hearings. Bruno didn’t agree:

MR. MARCOCCHIO: We feel that an environmental assessment…must be part of a larger examination of the impacts of a given proposal. No examination of where this proposal fits into Nova Scotia’s plans, with respect to dealing with greenhouse gases and with respect to efforts to reduce our greenhouse gas emissions generally with our demand-side management are directly related to the development of this project, both with respect to how if -- in what way this project may facilitate the goals of the Department of Energy to meet its commitments in the medium term to, for instance, comply with Kyoto targets or not; how the demand-side management measures in this province will aid in those efforts. And, most importantly, we have here before us a process that is new and unique in that we have rolled together the regulatory functions and the environmental assessment functions and I think that there needs to be a sensitivity and an understanding that a good regulatory process does not necessarily make a good environmental assessment process and that, to comply with a reasonable environmental assessment, there needs to be the latitude outlined by the NEB, briefly, that we do have the mandate to extend the issue to questions of policy.

The NEB (National Energy Board) member of the hearing panel responded:

MEMBER BATEMAN: I’m prepared to permit two questions. One is a direct question with respect to: “Does the Nova Scotia Department of Energy have a formal policy with benchmarks in the area of greenhouse gas?” And, if so, the second question: “Have they a view or a position that they are able to articulate of the impact of the proposed project in relation to that policy?” Beyond that, the view that you are expressing is one that you could appropriately bring into your final argument.

That, if you can believe it, was a significant victory for us.

So, Bruno asked the panel-proscribed questions, attempting to broaden the scope a little with only moderate success.  One revelation to come out of it was an admission on the part of NSDEL that even agreements the province had signed onto, such as the 2001 Climate Change Action Plan of the Conference of New England Governors/Eastern Canadian Premiers, have not resulted in any meaningful legislation with respect to Climate Change or commitments to any real emissions reduction targets in Nova Scotia. Holding Deep Panuke to any sort of GHG targets was clearly not a provincial concern.

The morning, and only, session ended early and Sierra Club Canada team once again retired to the Lower Deck Pub in Historic Properties to begin work on fashioning our final arguments, the last phase of the hearings. We all then went off to work on separate sections and then met at Dalhousie’s Weldon Law Library for an evening spent assembling our final arguments document. Harkening back to his questioning of NSDOE earlier in the day, Bruno added the following comment:

“Despite the latitude given the in section 36.5 of the NEB Act to extend the mandate of the NEB to permit discussion of the policy implications of the proposal, the joint chairs chose to deny the request to ask NS Department of Energy questions pertaining to climate change policy or accept into evidence a February 2007 report by the Intergovernmental Panel on Climate Change (IPCC) entitled “Climate Change 2007: The Physical Science Basis, Summary for Policymakers. These procedural limitations have narrowed the EA function of this process to the point where the intent of the Canadian Environmental Assessment Act has been undermined. Furthermore the lack of any formal involvement by the Canadian Environmental Assessment Agency (CEAA) in this hearing is troubling.”

Too bad it’s coming down to the wire when we’re just now hitting our stride.


Offshore Oil and Gas Links

Deep Panuke Coordinated Public Review

SCC protecting marine areas from offshore oil and gas page

Atlantic Canada Chapter's Oil and Gas campaign page

Sierra Club of Canada National Office