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Varcoe: 'We have the resources in Canada' - Nova Scotia premier touts development during pivotal moment for global oil and gas

Tim Houston met with Danielle Smith and Energy Minister Brian Jean, along with oil and gas executives this week

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It’s been more than seven years since Nova Scotia stopped producing offshore natural gas and Premier Tim Houston is determined to break the drought.  

While in Calgary this week, Houston sat down with leaders of the oil and gas sector to draw attention to the province’s energy opportunities.

It included a 90-minute session Thursday afternoon with Alberta Premier Danielle Smith and Energy Minister Brian Jean, along with corporate executives representing petroleum producers and drillers.

The two-term premier has vocally backed energy development in the country, previously speaking out  in favour of the long-defunct Energy East oil project. He says there’s a business case for LNG development on Canada’s East Coast – something the former Trudeau government dismissed.   

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Houston, who is also the province’s energy minister, is optimistic the Atlantic province will again produce oil and gas. But it will take a concerted effort.  

“We have bids open on our offshore oil and gas. We have an onshore program that we’re trying to get started,” Houston said in an interview. 

“There’s been a big effort over the last few months to really just increase the awareness of the opportunities in Nova Scotia (and) make sure Nova Scotia is on the radar of people.”  

Plans to attract the oil and gas industry’s attention arrive at a pivotal moment, with the world in the midst of the largest supply disruption in the history of global oil markets. 

Prices for oil have recently soared above US$100 a barrel due to the war in the Middle East, although benchmark U.S. crude closed Friday at US$96.57 a barrel, while the effective blockage of energy exports out of the Strait of Hormuz continues.

Meanwhile, Canada has massive reserves of oil and gas to tap, while Ottawa wants the country to become an energy superpower.  

“Imagine that a small strait of water is kind of crippling the whole world in so many ways,” Houston said.  

“We have the resources in Canada; we have the opportunity, and we should be developing them, and we should be that partner that the world needs.” 

Given mounting concerns about global energy security and the rising prices for oil and gas, it’s likely to draw producer interest to Nova Scotia, said Richard Masson, former CEO of the Alberta Petroleum Marketing Commission. 

“Just because it wasn’t attractive five or seven years ago, doesn’t mean it isn’t going to be quite attractive going forward, because the world has changed,” he said.

Houston is aware of these changes. Energy security has barged its way onto the global agenda as countries look for safe, reliable suppliers. 

Gas production from offshore Nova Scotia developments ended in 2018 with the shutdown of Encana’s Deep Panuke field and the Sable Offshore Energy Project.

“As Nova Scotians, we use natural gas but we produce zero of it, even though we have so much potential underfoot. It’s all imported. And it all flows through the United States,” he added.

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“For our energy security, it’s really important for Nova Scotia; it’s really important for Canada, that we develop more of these things.”  

A tangible sign of what the future may hold could arrive in the coming months.

The Canada-Nova Scotia Offshore Energy Regulator’s latest call for bids on offshore exploration parcels is due on April 28. As for onshore opportunities, Houston wants to attract new exploration activity. The provincial government has estimated Nova Scotia has about seven trillion cubic feet of onshore natural gas.  

“They’re going to have to make a strong case,” said Gitane De Silva, former CEO of the Canada Energy Regulator and the principal of consultancy GDStrategic. 

“The challenge in North America is there’s not a shortage of investment opportunities.” 

Industry experts say gaining public support for developing the sector in Nova Scotia will also be important.

Mark Oberstoetter, head of North American upstream research at energy consultancy Wood Mackenzie, said that there are known discoveries offshore of Nova Scotia that weren’t developed in the past, and it would require “hefty” investment to get such projects producing.

Developing onshore shale gas was sidetracked by a previous government’s moratorium on fracking that was adopted last decade, which was removed by Houston’s Progressive Conservative government last year. 

“I think Nova Scotia has got some good geology,” Oberstoetter said. “How you get the local populace behind these, I think, could be a challenge.” 

It would also require interest from producers, and service firms to move drilling rigs and other equipment to the province.

“This is an opportunity to raise the Canadian flag, use Canadian workers and Canadian equipment,” said Canadian Association of Energy Contractors president Mark Scholz, who attended Thursday’s meeting with Houston.

“What needs to be built and shown, prior to any of that happening, is that you have the social licence to move forward.”

Tim McMillan, former CEO of the Canadian Association of Petroleum Producers, said previous government policies drove industry investment away from the province, but Houston is putting political capital on the line to bring it back.

“It looks like his timing might be very good, as the world is realizing the importance of domestic production – and production in safe, stable jurisdictions like Canada,” said McMillan, now a partner at Garrison Strategy.

The premier indicated it was clear that under the former federal government, Nova Scotia would not get Ottawa’s support for an offshore wind proposal while also pursuing oil and gas development, but that attitude has changed with Natural Resources Minister Tim Hodgson.

The other reality is the province wants to expand its economy – and it has energy resources that can be developed and are needed.

“We’re just making sure that people are aware of the opportunity. The basins are there, the resource is there, the rock is good, and that they know that the provincial government is committed to developing these resources,” Houston said.

“I’m personally committed.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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