I’ve never been happier for Nova Scotia. After several years in an exploration slump, they recently received $2 billion in exploration commitments. Call for Bids NS11-1, announced in January 2012, saw Shell as the sole winner of four offshore parcels at a combined total price of $970 million. Shell was a successful bidder again in November 2012 on Call for Bids NS12-1, committing another $31 million on four more parcels. This time, however, they were joined by BP Exploration which bid an impressive $1.05 billion on four additional parcels.
It was a great example of what happens when you believe in something enough to invest in it as Nova Scotia did with its Play Fairway Analysis. With Play Fairway, the Government of Nova Scotia conducted an analysis of available science and made it accessible, electronically, to potential investors around the world. The Analysis identified “diverse rich hydrocarbon potential” offshore Nova Scotia and “substantial opportunity in shallow water, small-scale traps with potential for both oil and gas.” It was an expensive project that cost the government millions of dollars to implement—but just look at how it is already paying off. Good on you, Nova Scotia, for believing in your resource potential.
There’s a lesson for this in New Brunswick, another resourcerich Maritime province that’s been having a rough economic time over the past number of years. Yes, the debt and the deficit present significant challenges, and the cyclical nature of resource-sector industries can be worrisome for budgeting, but remember this: as long as you have undeveloped resources, you have the potential to grow. New Brunswick is a vast province, geographically as well as in its intellectual capacity, determination and natural resources. Whatever you do to solve your economic woes, don’t sacrifice longterm investment for short-term rewards.
Newfoundland and Labrador is a prime example of a jurisdiction that signed a bad deal of historic proportions when it signed the Upper Churchill deal with Hydro Quebec. Why? Because Quebec believed in the potential of Churchill Falls while Newfoundland lacked the intestinal fortitude to swallow the development costs. It’s a deal the province has regretted ever since as billions of dollars in resource revenue goes to another province every year. It’s only now, decades later, that Newfoundland and Labrador is starting to recover from that misjudgement. We are only able to do so because of our investment in the offshore, our ownership stake in future projects and our determination to move forward with the Lower Churchill.
Undeveloped resources are the same as money in the bank. From my perspective, Atlantic Canada is sitting pretty. We just need to keep believing, and investing, in our own potential.