Leadership needed on Quebec energy policy

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Sophie Brochu of Gaz Metropolitan has been raising the issue of the security of natural gas supply for Quebec.  She emphasizes the importance of natural gas for everything from hospitals to industry to the environment.

Whether it’s a hospital, a home in Montreal or a large plant they are all customers of Gaz Metro.  Madame Brochu shows great leadership representing her customers and highlighting the importance of natural gas in Quebec’s energy diet.

As a world super power in hydro and leader in renewables, it must sound strange to a Quebecer’s ears that natural gas supply is essential to its economy and society.  This came only shortly after learning $15 billion per year of foreign oil imports at high prices is another energy supply problem.

After generations of being able to rely on hydro to balance the Quebec energy diet why is natural gas and oil suddenly a problem?

America created a revolution in energy and the world abruptly changed.  This revolution was caused by the mix of two well established technologies.  The combination of the sixty year old technology of hydraulic fracturing and the forty year old technology of horizontal drilling.

The result is America discovered giant natural gas fields and then oil fields too.   Today America has cheap local production and the American economy is the strongest in the world as a result.

Like everyone else, Western Canada took for granted the world wouldn’t change.  The economy and infrastructure was planned on the basis America would need Canadian oil and gas forever.  America has its own gas now and it’s close to markets and cheap to transport.  They don’t need Canadian gas much anymore.

The Canadian natural gas industry went from $50 billion in revenue to $10 billion in revenue in just over five years.  It is a wrenching experience.

Like Western Canada, Quebec is also at the end of the pipeline.  Competing with American industry with secure access to cheap local gas is not easy.  Especially when industrial electricity rates and oil are also cheaper for much of America.

After decades taking for granted that Quebec would always be competitive in energy, things have changed.  How should Quebec adjust to this external reality?  This is a critical question for the economic future of Quebec.

Madame Brochu is right that the lack of communication between large producers and large consumers over the last thirty years is at the root of the problem.  Canadian gas producers are suffering and so are large Quebec industrial consumers.  Talking about our common problems and potential solutions, just makes sense.  Trying to solve energy supply problems without talking to the people who produce it, simply doesn’t make sense.

We transformed the annual oil and gas conference for its 6th annual edition.  It is the only forum in Quebec where consumers, policy makers and other stakeholders can meet and discuss these issues with producers.  Discussions important to a needed strategy on balanced energy supply were held by almost 250 participants a few days ago in Montreal. Much work remains to be done. But we can now say that we are on the right track.