Gas energizes Nova Scotia

Thanks to bountiful energy troves, Nova Scotia recorded a 5.2 percent economic growth last year.

In this sprawling rural region whose scalloped coastline harbors one sparklingly picturesque fishing village after another, life was anything but idyllic. Almost all men worked the same job: put out to sea in search of cod, haddock, and halibut.

"By Grade 9, [the boys] knew what they would be doing - out on the fishing vessels," says Gordon MacDonald. Staying on to finish high school was less about learning than about not earning, he adds. And many left town.

But things have changed. Fueled by an offshore gas boom, a new optimism is coursing through parts, at least, of this long-depressed Atlantic province. Now Mr. MacDonald hopes Guysborough will get a railroad, that would act as an engine of economic development.

The Guysborough community of Goldboro is the site of the plant that processes output from the Sable Island offshore gas field, Nova Scotia's first, which started pumping last New Year's Eve. Local officials reached an agreement with Exxon-Mobil and its Sable Island partners to buy gas at a "factory discount" - minus the transport charges.

This low-price gas has fired visions of aluminum smelters and petrochemical plants in Guysborough, with the goods rolling in and out by rail. MacDonald also sees an opportunity to convert gas into electricity and supply it to power-hungry neighbors in the United States.

"We spend a lot of time planning for growth, on both the industrial and residential side," says MacDonald, an economic-development official. One project in the works: a $10 million complex to house a school, theater, and recreation center. "This is what you can do when you have a revenue base," he says.

The boom that's letting Guysborough County reinvent itself is part of a general uptrend in Atlantic Canada. The region is experiencing what has been described as the biggest wave of investment since World War II.

The Sable Island project was proceeded by the Hibernia oil project off Newfoundland's coast. More projects are in the works. According to the Nova Scotia Petroleum Directorate, about 50 exploration licenses are either active or pending.

"We think we've got another southern North Sea here, only it's gas, not oil," says Norm Miller, president of Corridor Resources Inc., which is exploring just off Nova Scotia's Cape Breton Island.

"The timing was perfect for Nova Scotia," says MacDonald, noting that the Sable Island project was financed when oil was priced at $10.97 per barrel, about a third of today's price. And with infrastructure now in place, follow-on projects can be developed at much lower additional costs.

The irony of all this is that Atlantic Canada is one of the last regions of North America still unserved by gas. Despite big ideas in Guysborough and elsewhere, the lion's share of Sable Island's production is piped to Dracut, Mass., where it connects to the transcontinental pipeline network.

Indeed, the gas development has reconnected Nova Scotia with New England. "God intended us to trade with those 90 million people next door," a Guysborough official says - referring to New England and beyond.

Up until preferential tariffs in the name of nation-building were introduced in the wake of Confederation, in 1867, and forced Nova Scotia to reorient itself from north-south to east-west, New England was the province's primary trading partner.

A province so tied to the sea that it's even shaped like a fish, Nova Scotia has arguably never quite recovered from the coming of the railroad. Rail literally took the wind out of the sails in Halifax shipyards, and devalued its superbly deep ice-free harbor, as Canada's hub shifted to Ontario.

Opponents of the exploration - especially in Cape Breton Island project - say the fishing industry is responsible for 20,000 jobs in the area, directly and indirectly, and livelhoods would be jeopardized if breeding grounds were disrupted.

Meanwhile, some observers are restrained in their analysis of how much of the current boom is attributable to the energy sector. "It's hard to attribute anything directly to oil and gas," says Michael Holden, research director at the Atlantic Provinces Economic Council, a business-sponsored think tank in Halifax. But he looks out his office window to a waterfront skyline filled with construction cranes on the sites of new condomium and apartment towers. "Halifax has had an incredible year."

Indeed, last year's 5.2 percent economic growth puts Nova Scotia at a respectable No. 3 among the provinces, behind booming Newfoundland and Ontario.

The consensus seems to be that the chief beneficiaries of the gas boom - aside from the oil companies and the provincial-treasury - will be the lawyers, engineers, and other professionals in Halifax. They are certainly making for a lively real estate market, in the upscale neighborhoods, at least. The rest of the employment created is either short-term construction jobs, or relatively small numbers of positions at the gas plants.

One of the continuing controversies is whether jobs are going mainly to people "from away," or whether some of those carpetbaggers are actually native sons and daughters who left in search of opportunity and are now returning.

Both camps can agree, though, on the lifestyle appeal of the area. Driving through the rolling countryside on a golden late afternoon, illumined by reflected light from the sea, which is never far away here, a visitor may begin to feel like some sort of movie-location scout. Part of the appeal is the lack of commercialism. It's a great place to vacation or retire to, but not so great for a place that wants to hold its young people.

And that is why a rail line into Guysborough County is so important to Gordon MacDonald. It almost happened once before: In the 1920s, a railroad was to be built to the little Guysborough community of Country Harbour, a remarkable natural harbor. But political opposition from Halifax, MacDonald says, crushed the project. His father worked as a water boy on the line, and on the back 40 of the family property is a memorial to those who lost their lives during the track's construction.

In August 1998, Richie Burns opened the Venture Cafe in Goldboro, not far from the gas plant. From his vantage point on the main road through the town he has seen it all. Asked how credible he finds the prospect of an industrial boom here, he weighs his words carefully: "Hopefully, it will happen; they say it's a lot of potential. But as far as concrete changes ... I'm the only one as far as I know that has started a business."

Still, over the last two years he's met a lot of energy-industry people in his cafe, people who know what really big developments look like when they're still really small. His conversations with them suggest that there's likely to be more to Nova Scotia gas than just heating houses in New England.

"They assured me it wouldn't stop at this," he says.

(c) Copyright 2000. The Christian Science Publishing Society

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