P-10-a[Full Document] Development and Use of Natural Gas: Socio-Economic Impact on the Cape Breton Regional Municipality
18 passages
Lateral and Distribution System Impacts Construction of a CBRM lateral and distribution system are determined to be uneconomic as stand-alone projects, based on projected market size and using a conventional cost of service analysis. If th...
AI summary The construction of a CBRM lateral and distribution system is deemed uneconomic as a standalone project due to projected market size. However, if CBRM is to access gas as per the Gas Distribution Regulations, some form of aid or system-wide cross-subsidization would be necessary. The gas distribution system impacts are expected to be positive and widely distributed across the province with high local content.
1. DEVELOPMENT, TRANSPORTATION & DISTRIBUTION Sable Offshore Energy Project (SOEP) Several discoveries of natural gas have been made on the Scotian Shelf since the early 1970s. Six of these fields are being developed under SOEP, three in P...
AI summary The Sable Offshore Energy Project (SOEP) involves the development of six natural gas fields on the Scotian Shelf, divided into two phases. The project includes offshore wells, production platforms, pipelines, onshore facilities, and project management. Capital costs are estimated at $3.0 billion, with $2.0 billion spent in Phase I and $1.0 billion in Phase II. The project is managed by SOE Inc., owned by several partners including Mobil, Imperial, Shell, and Nova Scotia Resources Limited.
Maritimes and Northeast Pipeline Project (M&NPP) Gas will be transported to markets in the U.S. via a 558 km main transmission pipeline (the M&NPP) across Nova Scotia and southern New Brunswick (Fig. 11-1). Within Nova Scotia (234 km), it...
AI summary The Maritimes and Northeast Pipeline Project (M&NPP) is a 558 km pipeline transporting gas from Nova Scotia to the U.S., with construction scheduled for 1999. It will connect the Goldboro gas plant to the New Brunswick border, with a total capital cost of $570 million, of which $244 million is allocated to Nova Scotia facilities.
Nova Scotia Laterals, Distribution System and Associated Projects Planned and proposed projects directed towards distribution and consumption of natural gas in Nova Scotia fall into three main categories: - )i;,, Laterals for which applica...
AI summary The document outlines planned and proposed natural gas and electrical generation projects in Nova Scotia, including laterals, distribution systems, and a new gas-fired generating station. It details costs, timelines, and the implications of converting to natural gas, noting that savings may be minimal.
Exploration In the over 40 years of exploration in the Nova Scotia offshore area, the petroleum industry has acquired over 300,000 km of seismic data and has drilled 153 wells. This has resulted in 22 significant discoveries containing rec...
AI summary Over 40 years of exploration in Nova Scotia's offshore area have yielded significant natural gas and oil reserves. The SOEP and COPAN projects are highlighted, with SOEP nearing completion and COPAN expected to produce 45-50 million barrels of oil. Future development of other discoveries may depend on SOEP infrastructure and economic viability.
Development What happens during development, and where, is dependent on the nature and extent of offshore activities. Confining our attention to the Sydney and Laurentian Subbasins, what is possible over the next de~ade may be summarized a...
AI summary The development of offshore resources in the Sydney and Laurentian Subbasins would require logistical and service support from the CBRM, including ports, airports, and technical services. Field development would depend on economic factors and could take 5-10 years or longer. Transportation of hydrocarbons would involve pipelines or tankers, with onshore facilities such as processing plants and refineries.
Downstream Projects SOEP gas is composed mainly of methane (88%), but is rich also in ethane (5%) and natural gas liquids (butane, propane and condensate). These are all used as feedstocks for the production of a wide array of primary petr...
AI summary The document discusses the potential use of SOEP gas for petrochemical production, highlighting two primary options: methane-based products like methanol and ammonia, and natural gas liquids (NGLs) for olefins and aromatics. Initial studies concluded that a petrochemical complex is not feasible due to economic challenges, and there is ongoing debate about the viability of an ethylene plant due to concerns over ethane availability and economic impacts on M&NP.
Project Scale Offshore projects are usually divided into four phases: Exploration, Development, Production and Abandonment. The scale and duration of activities, and hence the requirements, vary considerably by phase. They also vary depend...
AI summary Offshore projects are typically divided into four phases: Exploration, Development, Production, and Abandonment. Gas projects, like the SOEP, are generally smaller in scale compared to oil projects. The SOEP may be one of the largest developments, while COPAN is expected to be on the moderate to small end of the scale.
Table III-1 Scale Parameters Associated with Scotian Shelf Gas Projects (1) Large (>500 MMscf/day) Medium (300-500 MMscf/day) Small (<300 MMscf/day) Exploration # wells/fields 4-8 3-5 1-2 Duration 3-5 years 2-4 1-2 > Cost $25-40 million/we...
AI summary The table outlines scale parameters for Scotian Shelf Gas Projects, including exploration, development, and production costs and employment figures for large, medium, and small projects. It also notes that connecting to SOEP facilities is critical for economic viability, as additional costs could make smaller projects uneconomical.
il and Gas Employment a Employment seismic vessel crew support vessel crew drill rig crew shore base staff catering staff • support vessel crew • drill rig crew • shore base staff • catering staff • project mgt staff • engineers/consultant...
AI summary The document outlines employment and service categories in the oil and gas industry, including roles such as seismic vessel crew, drill rig crew, and shore base staff. It also discusses the gradual increase in local content in offshore development, citing historical examples from the UK and highlighting the dependency on sustained offshore development for growth.
Nova Scotia Gas Distribution and Lateral Policies In addition to inter-fuel economics, the extent to which natural gas alters the province's existing energy mix (and the economic impact this generates) also depends on the policy framework...
AI summary The document discusses Nova Scotia's gas distribution policies, emphasizing a single franchise model, wide distribution coverage, and a single toll rate to ensure equitable access and efficient service. The lateral policy for the Halifax and Strait of Canso laterals is also addressed, with M&NP waiving aid to construct due to economic considerations. Some companies have withdrawn from applying for franchises due to the regulatory framework.
RECOMMENDATIONS These recommendations focus on steps to be taken to enhance positive impacts on the CBRM and to mitigate negative ones associated with Sable gas projects as well as ones arising from future natural gas projects and access t...
AI summary The recommendations focus on enhancing positive impacts and mitigating negative ones from Sable gas projects and future natural gas access in Nova Scotia. The closure of CBDC is highlighted as a significant negative impact on the CBRM economy, and early access to natural gas is recommended. The Gas Distribution Act Regulations support natural gas access on public policy grounds, though timing is not strictly defined.
Issues The extent to which natural gas alters the province's existing energy mix, and the economic impact this generates, depend to a large extent on the policy framework governing gas distribution and transportation. Nova Scotia's distrib...
AI summary The document discusses Nova Scotia's natural gas distribution regulations, focusing on the single franchise model, wide gas distribution, and a single toll policy. It highlights uncertainties in implementation, particularly regarding economic feasibility and the application of M&NP's Lateral Policy to proposed laterals like those in Halifax and Strait of Canso.
What this means for the' CBRM Taken at face value, the distribution regulations and lateral policy imply that gas will be delivered to and distributed within the CBRM (and other markets in the province), provided it is economic to do so. T...
AI summary The text discusses the economic feasibility of gas distribution in the CBRM, noting that gas will be provided if the market can generate sufficient revenue to cover costs. It highlights limited impact on coal demand due to the difficulty of substituting gas for electricity in industrial uses and the high cost of converting residential heating systems.
Issues Natural gas prices throughout North America are now determined by marketdriven factors. In this post-decontrol era, governments at all levels in both the United States and Canada no-longer attempt to directly control or influence th...
AI summary Natural gas prices in North America are now determined by market-driven factors, with commodity and transportation services separated. Nova Scotia's regulatory regime allows consumers to choose suppliers for natural gas, while the distributor provides transportation services at rates approved by the Nova Scotia Utilities and Review Board.
SOEP Gas and the North American Market Sable gas entering this North American market will be directly affected and largely determined by the market price for gas set in this broader context. To a degree, it will also influence the price fo...
AI summary Sable gas will be influenced by North American market prices and primarily interface with the Boston market area through the Maritime & Northeast Pipeline system, serving as a price taker rather than a price setter.
Impact of Sable Gas on the Boston market With the advent of Sable gas into the Boston market area, the supply balance into the region will be altered. The degree to which this occurs is dependent upon the volume of Sable gas entering this...
AI summary The introduction of Sable gas into the Boston market is expected to increase supply significantly, but due to market growth and stable economic conditions, it is unlikely to cause major disruptions in prices or supply. The impact of Sable gas will be marginal initially, with full absorption of the additional supply expected by 2003 to 2004.
What this means for the CBRM The key message in this discussion for consumers in the CBRM and elsewhere in Nova Scotia is the price for gas in the province will be set by demand and supply conditions in the dominant market- Boston. More sp...
AI summary The gas price in Nova Scotia, particularly in the CBRM, is determined by the Boston city gate price adjusted for toll discounts and local distribution costs, with a ceiling set by competing fuels. This pricing structure ensures that distribution tolls are consistent across customer classes.