Tuesday, October 1, 2002 Back The Halifax Herald Limited

Linking Deep Panuke to Kyoto an unfair proposition

By Roger Taylor

NOVA SCOTIANS have to wonder when people from Calgary or Saint John or wherever will stop using the Scotia Shelf as a pawn to help them achieve a political agenda.

One of the latest to do this is Gwyn Morgan, the head of Canada's second-largest oil company EnCana. He says the $1-billion Deep Panuke natural gas project would be shut down if Ottawa signed the Kyoto protocol before the end of the year.

In a visit to Halifax last week, he said that Deep Panuke, of all the EnCana projects in the world, would likely be shut down if the company were forced to cut greenhouse gas emissions.

If Canada signed the Kyoto protocol to the United Nations framework convention on climate change, Morgan said it would push the Deep Panuke project beyond feasibility.

The Kyoto protocol calls on signatory nations to cut their overall emissions of carbon dioxide gases, which cause global warming, by at least five per cent below 1990 levels in the commitment period of 2008 to 2012.

To many, Morgan's linking Kyoto to Deep Panuke was just another example of someone trying to use an issue that's sensitive in Nova Scotia as a political lever to change minds in Ottawa.

Injecting the Nova Scotia offshore into the Kyoto debate might be viewed as a low blow.

There are already questions about whether Deep Panuke will go ahead. It is costing many millions of dollars to drill, with still no accurate natural-gas reserve estimate. Some analysts have speculated that Deep Panuke is too costly as a stand-alone entity and must link with other gas finds in the area to make its development viable.

With that background, Morgan's statements seem only to demonstrate how little he knows or cares about this region.

EnCana was recently created from the merger of Alberta Energy and PanCanadian Petroleum. The Deep Panuke project was brought to this point by PanCanadian.

Perhaps he doesn't know that the oil-and-gas industry has been a political football for years in Nova Scotia and that many Nova Scotians are of the mistaken opinion that they are not benefiting from offshore development.

A lot of Nova Scotians, rightly or wrongly, don't care. For many, EnCana's threat to pull the plug unless it gets what it wants is business as usual.

Linking Kyoto to Deep Panuke made front page news, but to what end? It likely turned off more Nova Scotians from the energy sector rather than motivating them to fight against Kyoto.

EnCana is not alone in using this tactic. I've read that the developers of the giant oil-sands project in Alberta say that project will also be adversely affected by Kyoto. But others in the energy sector seem to believe cutting emissions is not that big a task.

One reader pointed out in an e-mail that in March, British Petroleum CEO John Browne announced his company had met its self-imposed target for reducing greenhouse gas emissions - nearly eight years ahead of schedule - at no net cost to the company.

BP cut pollution by improving efficiency, by doing things like plugging gas pipeline leaks and by cutting back on gas flaring.

If one believes we must address the issue of global warming, perhaps we should encourage EnCana to be more progressive in trying to save the Deep Panuke project while meeting reduced green house emissions.

Roger Taylor is business editor of The Chronicle-Herald, The Mail-Star and The Sunday Herald.

Copyright 2002 The Halifax Herald Limited