Category Archives: Shale Gas

The Global Warming Policymaking Paradox

Published in the Telegraph-Journal 23rd October 2012

There exists a paradox at the center of efforts to deal with global warming that is directly related to how quickly policymakers limit greenhouse gases. If policymakers limit greenhouse gases too quickly, the price of power – electricity and fossil fuels – will rise precipitously, causing competitiveness challenges in industry potentially leading to unemployment and triggering a political backlash from the public. However, if policymakers limit greenhouse gases too slowly, clean energy alternatives cannot become cost-competitive with fossil fuels in time to prevent disastrous global warming.

Remarkably, no country has developed a comprehensive energy policy to prepare for the inevitable global warming crisis. Expressions such as sustainable energy, the “green revolution” and the “green economy” gave the appearance that a global movement to end the reliance on fossil fuels finally was under way. Alternative energy was identified as one of the world’s emerging economic growth engines. Over the last ten years, significant investment has gone into alternative energy including wind power, tidal power, solar power and electric vehicles in an attempt to build a bridge to a fossil-fuel-free future.

What happened to the green economy? The initial optimism has been diluted by a number of factors. Alternative energy has turned out to be more expensive than initially calculated. Developing enough of it to provide widespread power has proven stubbornly difficult. The technologies themselves have not responded to investment in ways that were initially anticipated and breakthrough innovations have been few and far between. We have discovered no Moore’s Law for alternative energy technologies.

The 2007-2009 financial crisis placed many alternative energy projects on hold, especially if they required substantial government funding. Further, the crisis precipitated a global economic recession from which many nations have not yet recovered. Renewable energy has not been exempt from the phenomenon of dampened investment.

This global economic weakening was reflected in the retrenchment of many nations away from an ambitious and expansive consensus solution to global warming. The commitment to renewable energy, especially wind and solar power, as the primary means of cutting carbon emissions began to wane. This decreased commitment occurred at the same time that multilateral treaties and regulatory regimes failed to provide the institutional foundations that the green movement needed.

The 2011 Fukushima nuclear plant disaster instantly altered the discussion on energy policy and suddenly nuclear power was written out of the equation. This was a huge blow to the potential success for the sustainable energy movement which held that nuclear energy was at the forefront of an paradigm shift toward a truly sustainable, low-carbon energy future. There had always been a strong anti-nuclear sentiment that was suspicious of what it considered government and industry mythology about nuclear safety. The Fukushima incident converted this suspicion into widespread anti-nuclear sentiment that quickly spread to Germany, Spain, Italy, Taiwan and the United States.

This shift from exuberant confidence in an easy and effortless bridge from our current reliance on fossil fuels to renewable sustainable energy to a darker and more pessimistic vision for energy has had profound consequences. The United States, after demonstrating initial support and enthusiasm for a paradigmatic shift in the future of energy, now favours a more incremental approach to transitioning from dirty – and foreign – fossil fuels to renewable energy. The most obvious element of this approach has been support for shale gas.

Many Americans stress that because energy innovation takes a long time, the U.S. must keep investing in its energy future. Energy innovation will mean replacements not only for coal, conventional oil and gas but shale gas as well. For these replacements to be successful, they should allow policymakers to limit greenhouse gases quickly enough to have a favourable effect but not so quickly to place excessive stress on an already weakened economy. The chief uncertainty is whether there will be enough public support for these incremental measures to succeed.

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Filed under Environment, Global warming, Shale Gas

Is Government On the Right Track?

By Peter Lindfield, published in the Telegraph-Journal 24th July 2012

With two years left before the next election, some New Brunswickers are asking whether we are headed in the right direction. The provincial government is at the halfway point in its mandate, a useful time to consider the prospect of its achievements and failures. The questions are more than whether government’s policies are working, if taxpayers’ money is being spent wisely, or whether the government is accountable to the public for their results.

The David Alward government has deftly dodged a number of bullets in its first two years. The long-awaited forestry report managed to please neither environmental and conservation groups nor the forestry industry and chose instead a middle-of-the-road course of action.

There is substantial room for negotiation and accommodation in the new set of rules but the role of government in the industry has effectively been placed on a back burner.

The main challenge that faces government is that the likelihood of ongoing negotiations may produce greater uncertainty in the industry to the extent that government will need to revisit the issue in the medium term.

Shale gas continues to smoulder in the background. Oil and gas company executives and industry analysts support the proposition that the extraction of natural gas – both conventional and unconventional – will realize an enormous  economic potential, but opposition to drilling continues. The government sponsored a series of public meetings, held in eight communities across New Brunswick, which provided an opportunity for an in-depth discussion of its proposed shale gas regulations. Low prices for natural gas, coupled with uncertainty about just how much gas can be extracted profitably will keep the shale gas drilling momentum in the background for the foreseeable future. And time is what government needs most to assure the public that a combination of regulations, monitoring and enforcement will make shale gas a viable proposition.

The management of the economy or more specifically the management of the deficit and public debt is simultaneously the government’s most prominent achievement and its greatest disappointment. For those concerned about the prospect that public expenditures were no longer viable, the gradual but sustained reductions in the budget deficit have provided relief. But there is a contingent of fiscal conservatives that believe the reductions have been too gradual and that government has significant latitude to reduce the cost of government even further.

There is pressure to achieve significant change in a very short time frame. At the same time, the public increasingly is cynical about the implications of any significant social, political or economic change. As with all governments, the New Brunswick government faces challenges in coming decades in health care, education, energy, the environment and public safety. For New Brunswick, one important key concern is the affordability of services in the face of fiscal pressures. At the same time, the size of government and its role in the economy means that the contribution of government to economic growth is of real significance.

Many of those who think that government has not done enough to reduce public expenditures also are of the view that it has not done enough to grow the economy. But government has not been helped by the private sector. With notable exceptions, New Brunswick industries are laggards in productivity, research and development investment, export orientation and competitiveness.

The provincial government has the responsibility not merely to ensure financial stability and create efficiencies, but to safeguard the environment, further the aspirations of its citizens and improve lives. Fulfilling these aspirations takes time and it cannot be only government holding any responsibility. It also requires the recognition in the public that not all things are achievable at once. Patience and discipline are needed in equal measure.

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Filed under Job creation, New Brunswick, Shale Gas

Public Still Sceptical About Shale Gas

By Peter Lindfield, published in the Telegraph-Journal 8th June 2012

The Irving Grand Lake Timber sawmill sprawls on the banks of the Salmon River in the centre of the village of Chipman. It employs up to 260 skilled employees and hundreds more in its woodlands operations. Recent upgrades, including a biomass boiler, have reduced the mill’s production costs while making the huge facility more energy efficient and environmentally friendly.

The town appears in many ways locked in an earlier time when many more sawmills across New Brunswick meant good jobs and prosperity for thousands of workers. Except for a small number of modern buildings, such as the sleek new high school, the year could be 1952. Today the Chipman mill is one of the last of its kind.

Chipman was the site of the provincial government’s first in a series of public meetings to discuss its proposed shale gas regulations. Natural Resources Minister Bruce Northrup said that the meetings, to be held in eight communities across New Brunswick until June 25, will provide an opportunity for an in-depth discussion of the proposed measures.

The meeting was held in Chipman’s Community Heritage Centre, a simple two-story brick commercial building constructed as a movie theatre in 1939.

More than an hour before the meeting was scheduled to begin, two RCMP officers had arrived and sat conspicuously in their cruiser across the street. A few people were managing protest signs at the side of the building.

By the time the meeting began, the Heritage Centre had filled to capacity. Two large screens at the front of the room flanked a long desk where Universite de Moncton biologist Louis LaPierre sat facing the crowd. In May, LaPierre had been designated by the provincial government to lead the meetings. More than 100 people had come to hear what the speakers had to say about the regulations that would protect them from the practices of seismic testing and drilling in their neighborhood.

People entering the building were given five documents prepared by the provincial government’s Natural Gas Group. The government had established a Natural Gas Steering Committee in early 2011, directing it to prepare an “Action Plan to ensure that any expansion of the natural gas industry in the Province will take place in a careful and responsible manner.” The Natural Gas Group was composed of experts taken from within government and given the responsibility of developing the Action Plan.

The key discussion documents presented principles for environmental management of shale gas activities and described recommendations for putting the principles into operation. A total of 116 recommendations include 104 short-term recommendations that the Natural Gas Group considers “relevant to the current and anticipated short-term future level of oil and gas activity”.

The meeting presenters focused on a number of potential environmental concerns using nineteen busy PowerPoint slides that drove down to details of the recommendations. The presentation was very measured and appeared calculated to demonstrate that the government group had undertaken an exhaustive review of the risks and challenges associated with the life cycle of shale gas drilling. The government experts who sat with LaPierre at the long table were earnest and knowledgeable in their respective fields.

When the presentation was completed, questions from the floor revealed just how far government and industry will need to go to win the confidence of the public. While each question was posed courteously, it was clear that few were buying the government’s messages. Each remark expressing skepticism about the trustworthiness of the shale gas industry was met by loud applause. One question after another cast doubt on government’s ability to safeguard the environment. The loudest applause was reserved for a questioner’s appeal for a referendum to settle the issue.

The public may not have been supportive in Chipman on this day, but patience, discipline and listening to their concerns will pay sizable dividends. Confidence-building will take time.

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Filed under New Brunswick, Shale Gas, Uncategorized

Patience and Discipline Necessary for Shale Gas Industry Development

By Peter Lindfield, published in the Telegraph-Journal 5th June 2012

The views of oil and gas company executives and industry analysts have converged to support the proposition that the extraction of natural gas – both conventional and unconventional – will soon realize an enormous potential. There is also a dawning realization in the industry that this potential will require that a key condition be met – that a significant proportion of the vast resources of unconventional gas can only be developed profitably in a way that is environmentally acceptable. Technological advances have led to an increase in the production of unconventional gas in North America in recent years and these advances hold out the prospect of further increases in production in the U.S. and Canada.

A bright future for unconventional gas is far from certain. Industry needs to do more to project the benefits without minimizing or ignoring the liabilities. Industry needs to face up to the fact that it has been the major obstacle to the acceptance of shale gas drilling. Many hurdles need to be overcome, especially the social and environmental concerns associated with the extraction of shale gas which is the most prominent of unconventional gas resources. Shale gas extraction imposes a significantly more expansive environmental footprint than conventional gas development. Industry admits that a larger number of wells are often needed for extraction to be financially viable for the drilling companies.

Hydraulic fracturing techniques themselves, necessary to boost the flow of gas from the well, remain controversial and opposition to shale gas drilling has not declined. The scale of development has major implications for local communities, land use and water resources. More serious hazards including the potential for air pollution, the contamination of surface and groundwater and the management of greenhouse gas emissions are of major concern to the public. If these concerns are not properly addressed, the development of unconventional resources could be restricted.

Industry experts consistently claim that the technologies and knowledge exist for shale gas to be extracted and processed in a way that meets these challenges. However, there is gathering evidence that both governments and industry will need to dramatically improve their performance if public confidence is to be earned. This will require that governments and industry take two important steps.

First, industry must publicly commit to applying the highest reasonable environmental and social standards at all stages of the development process. The key word that will cause most irritation among concerned parties is “reasonable”. Governments across North America are in the process of creating appropriate regulatory structures based on a foundation of high-integrity science and its corresponding data. Experts are useful at this juncture – the public will want to know the facts and what is possible. But ultimately, the public will make its own decisions about what constitutes what is reasonable. This is something that some industry supporters have had difficulty grasping.

Second, governments will need to hire and train compliance staff in sufficient numbers with authority to provide enforcement based on accepted regulations. Public and ubiquitous access to information will need to be provided.

Full transparency, the measuring and monitoring of environmental impacts and engagement with local communities will be critical to addressing public concerns. Patience and discipline on the part of industry will be necessary even if drilling companies are driven to exasperation by their critics. Governments and industry will need to adopt consistent but flexible responses to social and environmental challenges. Industry will be evaluated based on its actions against agreed-upon environmental and social standards but there will be little tolerance among the public for failing to measure up to those standards.

Confidence building measures will be most critical in those early days as a record is being created and where industry and a skeptical or even cynical public will need to reach an accommodation.  Here, the facts will be less important than the actions of individuals. Industry has an unprecedented opportunity not only to develop confidence but to wield this as an investment to build trust in its communities.

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Filed under Business strategy, Shale Gas

Two Universities and the Province’s Shale Gas Outrage

By Peter Lindfield, published in the Telegraph-Journal 1st May 2012

The Université de Moncton and the University of New Brunswick are planning to hold a two-day, science-based forum in June with the objective of discussing the future of the province’s natural resources economy and the positive and negative elements of shale gas development. The event organizers are targeting the participation and involvement of 200 stakeholders from government, opposition, industry, environmental groups, citizens and owners of agricultural property.

The forum will bring a much needed perspective to the shale gas development issue. What it will not do is address the key attribute of the shale gas development phenomenon in New Brunswick. The assumption heading into this event is that science or data will address the fundamental opposition to shale gas drilling. The opposition to shale gas is not only focused on the hazards of drilling. The opposition to drilling today is centered on the outrage expressed by many who no longer trust industry or government to operate in their best interests. And now, the universities are in jeopardy of falling into this black hole.

Shale gas drilling is a prime example of locally unwanted land use that arouses not irrational outrage but quite rational sentiments of not-in-my-back-yard (NIMBY) opposition. From a national, and regional perspective, the product of shale gas wells may indeed be a good thing. Natural gas is a relatively clean source of energy and is environmentally superior to dirty fossil fuels such as coal and oil. But gas wells are not great neighbors. Instead, they are ugly, they are noisy and they are intrusions into people’s lives. While everyone across society may be better off with more shale gas in our future energy portfolio, there is no denying that everyone would better with those gas wells in someone else’s back yard.

Shale gas drilling is not a Frank Gehry-designed factory operation nestled in a corner of the province. Instead, it is a forest of well-head structures, fleets of trucks and other drilling infrastructure dominating the landscape. This approach of downplaying the negative side effects of drilling by appealing to the importance of shale gas to New Brunswick economic development prospects has added insult to injury. Instead of mollifying protestors, it has added the outrage of dishonest disrespect to what are considered to be the substantive downsides of drilling itself.

The gas drilling companies have been aware from the outset that they never stood a chance of persuading opponents that their opposition was irrational, and that shale gas drilling would be a good thing for their neighborhoods. According to this view, protestors in the community are irrational economic development-potential destroying ideologues instead of average citizens attempting to protect their community’s lifestyle and property values.

In the face of this, industry, government and academics have been feigning surprise at the opposition to shale gas in New Brunswick. For some time, proponents have stated that they could not understand how anyone could object to making progress in this critical and desperately needed opportunity of economic development. The forum’s chair, the Université de Moncton’s Roger Ouellette has stated that shale gas is an important question for New Brunswick, which has traditionally relied on a natural resource-based economy and faces fiscal challenges going forward. Some have gone so far as to tie shale gas economic development to the ability of the province to afford entitlements such as health care, education and social assistance. This view, which completely ignores the seething outrage that figures so prominently in this issue, and baldly states that shale gas drilling is necessary to pay for the economic and social entitlements of this province’s citizens, may come back to haunt its proponents.

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Filed under New Brunswick, Shale Gas, Universities

The Risk Communications Dynamics of Shale Gas

Published in the Telegraph-Journal 24th April 2012

For some time now, gas companies have explored the development of natural gas trapped within shale deposits across parts of New Brunswick. It is a process that brings with it uncertain environmental risks but certain lifestyle annoyances including noise, truck traffic, and the visual disfigurement of the countryside. For some people in the local community, gas drilling has more downside than upside. For these people, local opposition is justified.

However, there is a case to be made for shale gas projects which are undeniably positive for the organizations proposing them. Gas projects are arguably good for other reasons. Natural gas would be welcomed if it could substitute for less environmentally friendly fossil fuels. And there is no question that gas projects will be good for some people in the affected local communities in New Brunswick. The winners will be those who will gain access to employment or business opportunities, royalties or other economic benefits.

In his iconic book, Responding to Community Outrage: Strategies for Effective Risk Communication, pre-eminent risk communications consultant and former Rutgers University professor Dr. Peter M. Sandman states that the distinction between hazard (implying not only a threat to life, health, safety, or the environment but everything substantive, including noise and property value) and outrage (implying anger, fear, worry and concern) is not a distinction between data and emotions or between data and values. “Outrage and its elements are as real, measurable, tangible and controllable as hazard and we have better data on outrage than on hazard in many cases,” said Sandman. The dissemination of data may have an impact on the perception of hazard (more safe, less unhealthy, less pollution). Outrage is not simply a distraction from hazard. While both are legitimate and important, outraged people tend not to pay much attention to hazard data.

This exposes an obvious challenge. A project that does more harm than good for most local stakeholders can still meet with approval if the opponents are less passionate. Reducing the passion of opponents can assist a committed minority of activists to gain approval for a project that the majority weakly opposes.

However, a project that achieves greater good than harm for the majority of local stakeholders can still fail to gain approval if those who oppose it are more passionate. Increasing the passion of opponents can assist committed activists who are in the minority to prevent approval of a project that the majority supports but only weakly.

This is not subversive radicalism. This is how democracy functions. “In elections we count noses and while people need enough passion to make it to the polls, any additional passion doesn’t mean additional votes. In issue controversies, the impact that people can have is proportional to their passion,” said Sandman. The most important factor in whether that project is approved or rejected by decision-makers is often how many local stakeholders passionately and actively oppose a project. So activists who oppose shale gas drilling will attempt to increase the passion of shale gas opponents, while shale gas sponsors will attempt to decrease the passion of their opponents. Both sides are making rational decisions. Despite the exasperation of shale gas project proponents, this is not a distortion of democracy any more than legislative lobbying is. Some technical experts have resisted the pressure to consider outrage when making risk management decisions. They insist instead that data, rather than the emotional public, should determine the foundation of policy. But outrage factors are not misperception of risk. They are instead intrinsic elements of what to us constitutes risk. This recognition needs to be the starting point to a respectful treatment of an issue that will have historic implications for the people of this province.

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Filed under New Brunswick, Risk Management, Shale Gas