News release

Nova Scotia Energy Strategy: Seizing the Opportunity

PETROLEUM DIRECTORATE--Nova Scotia Energy Strategy: Seizing the Opportunity


The provincial government has released its new energy strategy, which will enable Nova Scotians to gain maximum benefits from energy industry development. The strategy includes putting a portion of future offshore petroleum royalties into a Nova Scotia Offshore Heritage Trust fund. It also introduces limited competition for some electric power customers, as well as setting new standards to help reduce air pollution. To implement the strategy, the government will create a new Department of Energy.

"We are determined to seize the opportunity presented by a growing offshore energy sector," said Premier John Hamm. "We see many benefits flowing to the people of our province in the years ahead. We want to use our non-renewable resources to make permanent changes in our economic and financial future."
"This strategy comes as a result of extensive consultations over the past nine months," said Natural Resources Minister Ernest Fage. "The actions being taken are the result of recommendations from many people, including Nova Scotians, energy interest groups and experts."
"We are looking for a broad range of benefits from offshore developments," said Gordon Balser, minister responsible for the Petroleum Directorate. "A vibrant energy sector needs to invest in research and development and training. It must support Nova Scotia-based businesses that can grow into world-class competitors."

The minister also noted that before this can happen, new discoveries must be made. To this end, one of the strategy's prime objectives is to encourage all aspects of exploration.

The energy strategy covers a broad range of issues and energy sectors in a 52-page report and in a second volume of detailed energy-sector background papers.

In electric power generation, competition will be gradually introduced. This will enable the province to develop new sources of renewable energy and create opportunities to export power. Municipal utilities will gain access to the transmission system so they can buy power from any generator. There will be open competition for new power generation. Renewable energy standards will be set. New clean-coal technology development will be encouraged and conservation efforts supported.

Air pollution standards are being tightened to reduce the emissions that cause acid rain, smog and other potential health hazards. In particular the province will work with Nova Scotia Power Inc. and other industrial companies to reduce sulphur dioxide emissions by 25 per cent by the middle of the decade and by a cumulative 50 per cent by the end of the decade.

In order to enhance the opportunity for both the fishing and the energy industry to prosper, the energy strategy takes steps to improve consultation with the fishing industry on offshore exploration and development. Coastal communities will be consulted before any future exploration licences are offered for bid within sight of a shoreline of Cape Breton or mainland Nova Scotia (within 18 km offshore).

The energy strategy sees major future benefits from the use of a new fuel source -- natural gas. Barriers to local gas distribution are being removed, allowing the new system to operate on a firm commercial basis.

"The former system of setting targets for pipelines to be built without consideration for markets and economics has clearly failed," said Mr. Balser. "The new policies are designed to ensure that natural gas will be available as markets and new sources of natural gas develop."

The strategy recognizes that coal will continue to play a major role in electrical generation in the province for many years to come. It encourages the development of local coal resources where it is economically and environmentally feasible. Opportunities for surface mining as part of land reclamation are expected to be identified in Cape Breton. Other mine developments may also be possible with advances in clean-coal technology.

Research and development are strongly supported by the strategy. The province will encourage increased energy research and development in the public and private sectors and will examine possible incentives.

The province intends to secure additional industry support for research and development, training and expanded opportunities for economic development in Nova Scotia. It will accomplish these ends through Offshore Strategic Energy Agreements. Agreements with new project developers are designed to ensure that future project developments help the province achieve the strategy objectives.

The province plans to use a portion of offshore oil and gas royalties for long-term, provincewide economic and financial benefit. When the higher net-revenue royalties begin, a portion will be placed into a Nova Scotia Offshore Heritage Trust. The trust will ensure the benefits of today continue on for future generations. Income from the trust will be used for initiatives that improve the province's long-term economic future.

The current offshore regulatory system is a joint responsibility of the federal and provincial governments. Efforts will be made to make the system more efficient and effective. The federal government has agreed to work with the province and industry to discuss key issues to avoid duplication and overlap.

FOR BROADCAST USE:

The provincial government has released a new energy strategy that will enable Nova Scotians to gain maximum benefits from energy industry development.

The strategy includes putting a portion of future offshore petroleum royalties into a Nova Scotia Offshore Heritage Trust fund.

It also introduces limited competition for some electric power customers, as well as setting new standards to help reduce air pollution.

To implement the strategy, the government will create a new Department of Energy.

Premier John Hamm says the government is determined to seize the opportunity presented by a growing offshore energy sector and to use the non-renewable resources to make permanent changes in Nova Scotia's financial future.

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Contact:

Bruce Cameron
Petroleum Directorate 902-424-2288 Cell: 902-499-8849 E-mail: