If Alberta fracks, why can't we? Dispelling the myth of resource development

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The Wheeler commission on fracking did its due diligence under difficult circumstances, except for the part where it further warped an already unhinged debate. It did this by toying with scenarios and declaring that even the middling one would provide a billion dollars a year in economic benefits, and royalties in the hundreds of millions a year for decades.

So the hyper-questionable idea will remain afoot, fracking ban or not: we are sitting on a fortune that we are too backward and obtuse to develop.

Over the years I've been watching the argument evolve with increasing disbelief. It's this: Alberta is rich because it "develops its natural resources" and we're poor because we don't. It's all a matter of attitude.

Casually ignored is that Alberta -- and parts of B.C. and Saskatchewan -- are sitting on one of the world's largest hydrocarbon reserves while the evidence is that we're sitting on dribs and drabs. Despite its scenario of riches, the Wheeler report admits that our knowledge of the Maritime subsurface is "very limited." Let's add that the evidence we do have argues that there's hardly anything there -- several fracked wells coming up dry and a couple of dozen conventional probes over the decades doing the same, except for some gas around the Pictou coalfields. In New Brunswick, in what would be roughly the same formation, it's a bit better but not much. There's been a show of natural gas around Sussex, and at Stony Creek, outside Moncton, there was an oil well that produced for several decades -- at the peak, a grand total of some eight barrels a day!

Further, there was the testimony of Duncan Keppie, a Scottish-born geologist with a big international reputation who first described the province's underlying plate tectonics and has declared the notion of untold gas riches under Nova Scotia "rubbish."

The idea that we "don't develop our natural resources" is peculiar in the extreme. It can't refer to forestry. There we've "developed" the resource to ruination, and we're still doing it. It can't refer to the search for offshore hydrocarbons, nor to the fisheries which is now a modern, mostly high-tech industry with a number of international players. It does refer to opposition to open-pen salmon farming -- without acknowledging that it's a corporate welfare operation that's easily mechanized and produces few jobs.

Whether fracking or open-pen fish farming, our search for magic solutions doggedly ignores the wider context. In financial terms, fracking has been a bit of a confidence game to begin with and is now barely profitable, as Keppie pointed out to the commission. The big energy outfits -- the International Energy Agency, the U.S. Energy Information Administration -- have downgraded many overblown estimates and are warning that the best may already have been fracked. Even if fracking were allowed, it's not clear that any oil company would risk laying its own money down with such poor prospects -- unless the ultimate game is to get public subsidies.

And here's a constitutional twist. A few weeks ago, I had a column on federalism and the eroding principle of national equalization. I got blue-in-the-face e-mails telling me Nova Scotia shouldn't get a penny in equalization as long as, you guessed it, we don't develop our natural resources and instead insist on sponging off hard-working Albertans who do.

I had mentioned a book on equalization, Equal as Citizens, by Nova Scotia writer Richard Starr. Among other things, Starr traces out the long argument over provincial territories. In 1912, Ontario, Quebec and Manitoba were given the huge northern territories they have now, and the western provinces already had large land masses when they joined Confederation. That left the Maritimes out. Since Confederation is a partnership, the question simmered as to what the Maritimes should get. It was still an issue in the 1960s. When oil was discovered offshore, the problem was ultimately resolved: the offshore would be the missing hinterland, especially for Nova Scotia and Newfoundland. For Newfoundland it paid off big, but alas, for Nova Scotia not so much.

And so when the weak argument -- to wit, Alberta fracks, no problem, why can't we? -- arises, the answer is: it's a false comparison. Alberta has vast territories and actually has gas. We have very little of either.

That's the luck of the draw and we would do well to keep our feet on the ground, address the real economy and stop fantasizing. When I saw that billion-dollar-a-year figure, and the prospects of untold wealth, the first image that popped in my mind was that of former Premier Gerald Regan in the early 1970s holding up his vial of Sable Island oil in the legislature and this newspaper, hauling out its mega-headline size, declaring: IT'S OIL. Pulp mills, fishing after the 200-mile-limit, Fundy tidal power, even coal, all triggered such irrational exuberances in their day. We're still doing it.

Ralph Surette is a freelance journalist in Yarmouth County. This column was first published in the Chronicle Herald.

Photo: Paul B./flickr

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