Letters to the Editor

Friday 14 October 2011

NB Green Party supports Jones's numbers for natural gas royalties in NB



The following was sent to us from Roy MacMullin, Energy Advocate for the Green Party of New Brunswick. MacMullin expands on Jones's numbers to show the repercussions for New Brunswick:


Robert Jones is correct with his figures. If the resource is 78 trillion cubic feet, we divide by 1000 to get mmbtu = 78 billion mmbtu's. We are not sure what % recovery is economically possible. Robert uses a 20% figure. Recent pricing at roughly $4 per mmbtu x 78 billion gives 312 billion. But to put this into context, at present day costs of drilling and transport, it would cost almost twice that ($600 billion) to get the gas out of the ground and to market. In short, without economies of scale, Corridor's costs of supply to Boston is between $7 and $8 per mmbtu.


Alberta, on average got 16% royalties on natural gas in 2009, with a sliding scale of 5 to 36%, depending on conditions. NB got 2% in 2010. We should realize that this resource is not a goldmine at present day prices and if it were, companies would be glad to pay higher royalties. The cost of horizontal drilling and fracking is much higher than conventional natural gas. It's the bottom of the barrel in terms of quality of a resources so we should have a rational energy policy that ensures that we don't sell it for a pittance in Boston, we move into intensive conservation, net zero energy conscious homes, that we retain the resource for our children as well.


All these calculations assume that a natural gas path is the preferred route for New Brunswick. Many New Brunswickers fear the potential for environmental degredation by thousands of wells and remember the response of this government towards similar cases in Penosquis where victims of industrial activity are left to fend for themselves. Can we trust this government? The answer is no at this point. And given the 80% depletion of these wells in the first year of operation, there will be many, many wells. A moratorium would be a preferable first step towards real discussion of our best options and a green energy future in our province. As with the sale of NB Power, we are told that there is only one path to prosperity. The bright future painted by Premier Alward is more likely to look like a painting by Picasso. (no offense to the painter intended)