McKenna's shale gas speech under scrutiny
Frank McKenna's call for New Brunswick to dream big about an economy built on petroleum riches created a buzz among many this week, although it's still far from certain whether the province has significant enough resources to warrant the excitement.
"Grab the rope," McKenna urged a sold-out business audience in Saint John repeatedly on Monday as he painted shale gas development and a crude oil pipeline from Alberta as multi-billion dollar lifelines that could rescue New Brunswick's struggling economy.
"From doom and gloom to hope and prosperity," tweeted Fusion Saint John's Eric Savoie immediately following the optimistic address.
"Bravo Mr. McKenna," added public relations consultant Terri Riedle.
But while many hope McKenna's vision can be realized, the former premier's self-described "back of the envelope" calculations of what the province stands to gain, particularly from its own shale gas resources, are based on highly uncertain figures that even shale backers won't fully endorse.
Late last year New Brunswick Energy Minister Craig Leonard repeatedly said the province is unsure if a shale gas industry can be developed because details on what is in the ground remain too vague.
"We have to dig to see if it can be extracted economically and if it's there at all," he told reporters in November, a point he repeated again in December.
"It's so hard to put a finger on it because you get one study that says that there [are] astronomical [amounts], you get another that it shows it could be relatively small."
But there was little of that kind of equivocation in McKenna's speech as he openly speculated on the economical extraction and marketing of eight trillion cubic feet of gas from New Brunswick shale and sidestepped the complex issue of how New Brunswick could keep money significant development like that might bring.
"This could generate over $7 billion in royalties and tax revenue to the province of New Brunswick over its lifetime. This would take care of the finance minister's problems, all his problems," said McKenna.
"This would virtually wipe out the provincial debt, part of the provincial debt not associated with NB Power."
That scenario appealed to many, including Saint John Mayor Mel Norton who immediately sent out a "debt free" Twitter message, although the whole idea mostly ignored New Brunswick's status as an equalization-receiving province.
Provinces enjoying good fortune normally suffer substantial clawbacks from Ottawa, or reduced transfer payments as their own finances improve.
That can make debt repayment impossible, although McKenna said New Brunswick should fight to keep billions of dollars in equalization payments flowing from Ottawa even as it prospers from natural gas, calling it a "bridge to die on.”
Still, few were concerned with scrutinizing those details, instead choosing to enjoy the idea that something good might be around the corner.
"Part facts, part amazing speaker, can't help feeling hopeful walking out of here," tweeted Lara Wood.
