TAYLOR: Province still in search of cheaper natural gas sources4/8/2013
The price of natural gas isnít as low as it once was, but that isnít scaring off big customers from signing up.
Since the start of the year, the price has been on the rise, especially in Nova Scotia, where a lack of offshore production has turned off the local supply for an extended period.
As a result, the gas supply has been imported at higher prices from the United States. That higher-priced gas, and the cost of sending it here, is being passed on to the Nova Scotia consumer.
That explanation doesnít stop some residential customers in Halifax from complaining about their March bill from Heritage Gas. Heritage has the franchise to operate an in-ground natural gas network in the province.
One customer emailed to tell me her gas bill had climbed to $11.79 per gigajoule, or about three times the price commodity traders were paying in New York, which she didnít think was reasonable.
Another complained his gas bill this winter was $700 more than he had expected.
Despite the climb in price, some organizations, such as the administration at Acadia University in Wolfville, believe a switch to natural gas has the potential of providing savings over the long term.
Acadia reportedly spends about $2 million annually to burn heavy Bunker C oil at its steam plant. If an estimated saving of 30 per cent can be achieved, switching to natural gas will cut Acadiaís fuel bill to $1.4 million.
The only trouble is there arenít any immediate plans to extend the natural gas pipeline to the Annapolis Valley. In order to get the gas there, it must to be trucked in condensed form and unloaded into a storage facility the university plans to build this summer.
Scott Roberts, who speaks on behalf of the university, says the supplier has not been determined, but the conversion to the cleaner energy will be carried out over the summer while the majority of students are away.
Heritage and Irving Oil are competitors in the compressed natural gas business in Nova Scotia, but Irving is believed to have a leg up on the competition for the Acadia business, considering the famous family of New Brunswick industrialists has close ties to the university.
Acadia also has a rezoning request before town officials. It wants to rezone some Acadia-owned property that is designated as agricultural dike land to allow for construction of a storage facility.
As part of the project, Roberts says the familiar smokestack that has been used to filter some of the pollutants coming from the burning of oil will be taken down.
There has been some concern among property owners about the amount of truck traffic that will result from conversion to condensed natural gas, but Roberts says it shouldnít be much more than the number of tanker trucks that currently deliver Bunker C to the steam plant.
Last week, the provincial government announced it would be contributing almost $3 million toward the conversion project. The government has promoted the energy switch as a money saver and environmentally friendly, although natural gas is still a greenhouse gas.
The government says it is also helping to fund improvements to the institutionís steam distribution system, which should improve the efficiency of the network of underground steam pipes that delivers heat to the buildings on campus.
The two projects have a combined cost of about $3.4 million, according to the government. It is supposed to be an important step in Acadiaís long-term financial stability plan.
Meanwhile, in Pictou County, the provincial government is helping Heritage Gas to expand its gas pipeline to that county. Northern Pulp has signed up as the first anchor customer, and the government is providing funding for upgrades to the pulp millís equipment.
Heritage says it is the first phase of the plan for Pictou County, which, obviously, includes hooking up other major customers, including the Michelin tire plant in Granton.
But price is important.
Natural gas is only good for local companies if it can make them more efficient and, therefore, more competitive. Instead of paying for high-priced imported gas, security of the supply at the local level is essential.
Continue to encourage offshore exploration, but the provincial government must find a way to regulate the safe development of onshore shale gas too. A consistent source of low-cost natural gas, which shale gas has the potential to provide, will go toward improving the viability of Nova Scotia businesses over the long term.
(The Chronicle Herald)