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Friday, January 21, 2011

High Heating Costs Should Fire You Up!




Editor's note: The following post is by Dr. Peter Allen who is a professor of mechanical engineering at Dalhousie University. This article was in the Chronicle Herald on Jan 19, 2011. -Adam Procter.

As we pay our bills for oil and electricity to heat our homes, schools and hospitals, we should be aware that 99 per cent of us are being "ripped off." If you spend $2,000 a year to heat your home with oil or electricity, the bill would be $1,000 if you used natural gas. If it costs $20,000 a year to heat a school using oil, it would be $10,000 using natural gas. If it costs $100,000 to heat a hospital with oil, it would be $50,000 with natural gas.

High heating costs are crippling. An example is the recent bankruptcy of Maritime Steel and Foundries in New Glasgow. A foundry consumes a huge amount of energy for producing metal products. Maritime Steel had no access to natural gas, even though the main gas line passes within miles of New Glasgow, carrying 90 per cent of our gas to New England, where they enjoy inexpensive natural gas while we spend billions on expensive electricity and oil. Pictou County officials pleaded, with no success, with Heritage Gas to distribute gas in Pictou County, as promised years ago.
If Heritage Gas will not honour the promises made to secure the monopoly for natural gas distribution, then the province should take over gas distribution. The governments of Manitoba and Saskatchewan provide their citizens with natural gas. We can do it here also.
The proposed budget cuts for Nova Scotia school boards also highlight the appalling heating costs in Nova Scotia, as noted by the chair of the Chignecto-Central regional school board (Jan. 15 article). Our schools spend $15 million every year on heating, 99 per cent of it for expensive electricity and oil. Of 400 schools, hardly a handful are heated with natural gas. The school boards could save $7 million every year by switching to natural gas — if it were available.
Ten years ago, the government promised that all of Nova Scotia would be supplied with natural gas. Sable gas has been flowing for 11 years, but only 2,500 customers are using it, of a potential 400,000. And if you are a homeowner — forget it. The Utility and Review Board and Heritage Gas have declared it "non-economic" to deliver gas to homes.
It is "non-economic" because it does not yield a 13 per cent return on the investment. If Heritage Gas would be satisfied with a 10 per cent return (which is excellent in 2011!) then it would be "economic." Ironically, the owners of Heritage Gas, AltaGas of Calgary, are happy with the 10 per cent return they earn in Alberta.
We pay $1 billion a year for heat in Nova Scotia. This could be reduced by 50 per cent by using natural gas. The government recognizes that heating is a financial burden and rebates the provincial portion of the HST on heating fuel, but then takes it all back by raising the HST to 15 per cent. If the government is concerned about the welfare of Nova Scotians, it should follow through with the goal established in 1997 of providing natural gas to all of Nova Scotia, not just to the large consumers of Halifax.
This is also a matter of health. We are the asthma capital of Canada. Natural gas is a much cleaner fuel than oil or coal-generated electricity. Switching to natural gas will reduce pollution and respiratory illness.
Pessimists will say that supplying natural gas is too expensive. It will cost $1 billion to convert Nova Scotia to natural gas. But then we will save half of that every year, year after year. Years ago, it was expensive to convert from coal in our homes. Our grandparents took on that financial burden so we can enjoy clean (compared with coal) fuel oil. Now is the time to convert from oil to still cleaner natural gas.
Nova Scotia is planning to spend $2 billion to bring Labrador hydroelectricity to this province. This electricity is a small fraction of the energy that could be supplied by natural gas in the province, and will be twice as expensive as natural gas.
Those who ask "Where is the gas going to come from?" should also ask "Where is the coal and oil going to come from?" The gas, coal and oil are going to come from the reserves of gas, coal and oil around the world. The gas reserves just happen to be 200 kilometres offshore.
We become animated about a five-cent increase in gasoline prices. Now it is time to become animated about our natural gas going to New England. There is something that can be done to save Nova Scotians $500 million every year by using natural gas here.
The entire developed world, where natural gas is available, has converted to natural gas from oil, not only for heating buildings, but for heating water for washing, for drying clothes, for baking, cooking and barbecuing. Nova Scotia is the only region where this is not happening.
This is a cause that should get you heated up. We must not sit by and watch $500 million burned needlessly every year in Nova Scotia because of incompetence and greed. Demand access to your natural gas!

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