HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Mr. Keith Colwell (Chairman)

Hon. Judy Streatch

Mr. Keith Bain

Mr. Chuck Porter

Mr. Clarrie MacKinnon

Ms. Vicki Conrad

Mr. Leonard Preyra

Ms. Diana Whalen

Mr. Harold Theriault

IN ATTENDANCE:

Mrs. Darlene Henry

Legislative Committee Clerk

WITNESSES

Offshore/Onshore Technologies Association of Nova Scotia (OTANS)

Mr. Paul McEachern - Managing Director

Mr. Barry Clouter - Chairman

Mr. Michael O'Mahony - Communications Analyst

HALIFAX, TUESDAY, NOVEMBER 13, 2007

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Mr. Keith Colwell

MR. CHAIRMAN: Good morning, everyone. I'm sorry I'm late this morning, I got tied up in traffic for over an hour getting across the bridge, it's wicked.

I'll bring the meeting to order. I'll start by having our members introduce themselves. I see a couple of members slipped out. I'd like to thank the guests for coming this morning and I'd like you to introduce yourselves, if you would, please.

[ The committee members and witnesses introduced themselves.]

MR. CHAIRMAN: Welcome this morning. Again, sorry for the late start here. We will start off, you can make a presentation and then we'll proceed with questions after that, so the floor is yours.

MR. BARRY CLOUTER: Thank you, Mr. Chairman. Good morning and thank you for the invitation to speak here this morning. My name is Barry Clouter, I'm the Chair of the Association and I'm joined by Paul McEachern and Michael O'Mahony.

OTANS is an association of approximately 400 local businesses involved in the supply and services sector of Nova Scotia's upstream oil and gas industry. Our members do not explore for nor produce petroleum, but they do provide the many supplies and services to large oil companies that do. We are also increasingly involved in the renewable and alternative energy sectors such as tidal, wind, wave, biomass, coal bed methane and shale gas energy sources. We are also involved in other petroleum-related projects, most notably the proposed liquified natural gas and petrochemical facility planned at Goldboro.

The last time OTANS appeared before this committee was in March 2005. Since that time there have been major advances in the industry, not the least of which is the Deep Panuke development project. From the perspective of the local supply and services community the timing of this $700 million project is critical, as the terms of its development will ensure local companies are able to maintain their livelihoods while enhancing their skills and professional reputations in their fields, during a time of otherwise lackluster offshore activity.

The immediate economic benefits of Deep Panuke are undeniable. As negotiated between the Department of Energy and EnCana Corporation and spelled out in the Offshore Strategic Energy Agreement, these benefits include guaranteed minimums of 850,000 Nova Scotia person hours in the development of the project, or the equivalent of over 400 full-time jobs. These work commitments also include guaranteed work in the highly technical engineering components and provides for the construction of a supply ship here in the province as well as for the fabrication of major parts of the petroleum platform. It also looks to develop new local capabilities in land rig construction.

I would like to start by explaining a bit of the overall importance of this industry to Nova Scotia. This province currently has one single offshore project in production. That one project, Sable Offshore Energy, has contributed well over $2 billion to the province's economy since 1998 and has employed an average of over 1,000 Nova Scotians every year since that time. According to the Department of Energy, offshore activity has contributed a total of $4.2 billion to the province's gross domestic product between 2001 and 2004. Deep Panuke will only add to these numbers.

There's no doubt of the economic importance of the industry to Nova Scotia. However, there is a cause for concern. It would be summed up in the fact that there is no other offshore project to follow up where Sable and Deep Panuke will eventually leave off. Neither Sable nor Deep Panuke are able to pump jobs and revenue into this economy indefinitely and in an industry which has very long-time horizons leading up to the next development project, it's only prudent to look ahead and plan years or even decades in advance.

OTANS has been and remains concerned about the lack of exploration activity needed to make new discoveries. Only one exploration well was drilled in 2005, there were no true exploration wells drilled in 2006 and there will most certainly be no wells drilled in 2007. As for exploration licences, there are currently only 16, and up to seven of those may expire at the end of this year. I will talk more about this later.

[9:15 a.m.]

Clearly, something has to change if Nova Scotia wants to continue enjoying the benefits that its offshore petroleum provides.

Fortunately, there is a cause for optimism. To explain why, it's important to understand that Nova Scotia is one of the many jurisdictions throughout the world that competes for the petroleum industry's investment dollars, and we have to constantly improve our region's attractiveness and market ourselves to the global exploration and production community, constantly. Nova Scotia is currently in a very good position to do just that.

First, let's consider Deep Panuke. The OSEA defined both EnCana's and Nova Scotia's expectations towards each other with respect to local benefits. The fact that it was negotiated in a very professional manner between the proponent and the government sends exactly the right signals to the broader industry on Nova Scotia's willingness and ability to deal professionally with multinational oil and gas players.

In addition, Deep Panuke's regulatory review was concluded within 11 months. This demonstrates the regulator's own ability and willingness to work co-operatively with responsible government agencies and project proponents to conduct a review fairly and efficiently, and dispels the myth of an unduly onerous onshore-offshore petroleum review process in Nova Scotia.

Nonetheless, this alone will not draw oil and gas companies to our shores, and other more proactive measures are needed. For example, oil companies cite Nova Scotia's relatively unknown geology as a significant detractor to investment. We are still very much a frontier region and oil companies would rather invest in areas where the geological risks are better understood.

To address this, the Department of Energy has undertaken a number of initiatives, with de-risking our offshore being a key objective. They have commissioned a geoscience gap analysis to determine specifically what geoscientific information is missing from the offshore. They have within the last couple of months developed a comprehensive scoping tool that determines a potential petroleum field's commercial viability, which they make freely available to any investor. They have investigated the need for an infrastructure code of practice for the use of existing offshore pipelines and other facilities, and have also invested in the Canada-Nova Scotia Offshore Petroleum Board's Data Management Centre.

Certainly the CNSOPB, which regulates offshore petroleum activities on behalf of the government, has undertaken other initiatives. For example, next month they are expected to proactively offer offshore blocks for exploration companies to bid. As well, this insuance will include new terms and conditions for exploration licences that will make it easier for smaller, more nimble players to enter the Nova Scotia offshore.

Consistent with its stated policy of flexibility, the board also recently relaxed certain requirements on existing exploration licences to enable rights holders to maintain their interests for up to the entire nine-year legislated limit, provided certain conditions are met.

A major reason for this is to recognize the global shortage of drilling rigs that are capable of operating in our offshore.

Labour supply is increasingly an issue of concern as well and the Department of Energy has been trying to do what they can to address the shortage of trained staff. It has supported world-class training programs at the Nova Scotia Community College, for example, and the Pengrowth-Nova Scotia Energy Scholarship Program is something that cannot be overlooked, as it helps pay for the technical training of young Nova Scotians whose skills can be drawn upon by future petroleum companies looking to operate in the province.

Properly maintaining and improving Nova Scotia as a serious contender for global petroleum investment dollars will require resources, and OTANS is well aware of the enormous pressure on the Nova Scotia treasury. However, it is important to appreciate how much of an economic driver this industry is for the province.

As the members of this committee are aware, royalty payments alone for 2007-08 constitute the third highest source of provincially generated revenue. Fortunately, the province may have options to invest in the future of the offshore without sacrificing any of its existing priorities in other areas.

I had mentioned earlier that up to seven licences may expire at the end of this year. These will probably entail the forfeiture of work deposits to the Nova Scotia Crown, which could potentially be used to invest in the future of this industry.

First, I should explain where this forfeiture money comes from. Companies receive an exploration licence based on the amount of money they commit to invest in exploring the section of the offshore that the licence covers. The companies place 25 per cent of that value with the board as a guarantee that they will do that work and they earn that money back as they submit receipts for the work performed. Whatever remains of the 25 per cent deposit when the licence expires is turned over to the Nova Scotia Crown. This is what is called a forfeiture.

I should stress that neither OTANS nor the business community has any interest in this money for themselves. However, given how lucrative this industry is for Nova Scotia and how much it could continue to be so, a very good case could be made for this money to be used towards funding further exploration attraction initiatives.

Members of this committee should be aware that offshore forfeitures are entirely unbudgeted money, meaning that current spending priorities are in no way contingent on this for funding. This money comes from international oil companies, not the Nova Scotia taxpayers. It represents a portion of the money promised towards offshore research. As well, this particular round of forfeitures may be one of the last such windfalls that could be

available for the offshore for the foreseeable future. After this, funding future offshore initiatives may have to draw on the province's existing operating revenues.

I'll conclude by noting that OTANS is a business association and our first concern is the development of business opportunities for our member companies and their employees. We have encouraged our members to look at exporting their products and services during times of slow local activities.

To that end, this association works closely with the Department of Energy's Business and Technology Division to identify prospects both at home and elsewhere. Department staff, who are well versed in the capabilities of local firms, are able to draw upon their resources to seek out potential new markets. These diversify our members' customer base while keeping Nova Scotians employed, and it is a critical component in maintaining the local capability to help develop projects such as Deep Panuke when they eventually come along.

Without the export market in such places as overseas and western Canada, the ability of Nova Scotia to capitalize on home-grown projects would be greatly diminished. However, exporting is no replacement for local activity. Local activity makes it possible for companies to test the global petroleum market in their own backyard, without taking the enormous risks and expense of trying to do so in a foreign territory. It enables companies to hone the skills that could eventually become globally-sought commodities. Exporting is an important priority for OTANS, as this is one of the most global industries there is. But bringing oil and gas business here offers local industry the best window into the global exploration and production markets. Thank you.

We're able to take questions from the committee. Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you very much. I'm going to start with the NDP and I'm going to divide the time evenly, so you guys decide amongst yourselves who is going to speak and in what order.

Mr. Preyra.

MR. LEONARD PREYRA: Thank you very much for your presentation. It was very thorough and it is always such a great education to hear people who are on the front lines talk about their industry. I have just a few questions, some of them technical.

Last time we met we had a witness here who talked about significant discovery licences. Now you seem much more sympathetic to the extension to the nine-year limit for these exploration licences and that there are shortages of rigs and shortages of workers and things like that. He seemed to suggest that the significant discovery licences tend to allow for opportunism, it allows for the delay in the development and production of these new petroleum resources from coming on stream - oil and gas resources from coming on stream.

How do you explain that? I mean where do you see the problem? Given your concern that no offshore project is in the works, what would you do about or what would you recommend in dealing with single discovery licences?

MR. CLOUTER: I'll ask Michael or Paul to speak to that.

MR. PAUL MCEACHERN: To start out on this and just to clarify, I know this is a very complex field. There are two things that you're talking about here. What we are addressing in our presentation is an exploration licence, much like you have as a claim if you're exploring for minerals onshore.

What you're talking about is a significant discovery licence, which is a separate thing altogether. Exploration licences give you the right from the Crown to look for hydrocarbons offshore. A significant discovery licence is an article of law which allows an oil company, once it has, if it is fortunate enough to discover something, to lay claim to it. So I'll ask Michael to explain what we're trying to do on exploration licences, then we'll come back to SDLs.

MR. MICHAEL O'MAHONY: Yes, the exploration licences have a legislated nine-year maximum lifespan. However, it has been previous policy for the Canada-Nova Scotia Offshore Petroleum Board to require a well be drilled on an exploration licence within the first five years or that licence would be returned to the Crown. However, they've just announced a policy to relax this requirement, such that exploration companies can extend their holdings of the exploration licence through to the nine-year maximum.

This is, in our view, a fair policy in that it takes into account the global shortage of rigs and the difficulty in getting equipment into our region to perform the exploration.

MR. PREYRA: Thank you. I wanted to also talk about the precedent or practice that you support of having local companies get a lion's share or a significant share of the business. We seem to hear here in Nova Scotia, at least anecdotally, that a lot of the high-end jobs are being farmed off to offshore - so to speak - companies and countries, in large part because we don't have the base here, the skilled workers here to do the job.

What do we need to do here - I'm also the post-secondary critic responsible for colleges and universities - to meet that challenge of not just getting a certain number of person-hours but also getting certain types of more innovative, more sort of cutting edge work done here?

MR. CLOUTER: I see it as a long-term opportunity, but there's a capability, I guess, in the province that's there today and clearly through the colleges. I think there's an initiative to improve upon that, but I think it would be naive to think that some of the highly - like building of a drilling rig would probably not be something that we could take on today. I see

us working towards getting to where you'd like to be and we encourage that through training programs, through the colleges and through the initiatives by the department and the board. But are we there for all of this? No, we're not but I think you need to be realistic, that what you bid for and are asking for, that you're really able to accomplish. It wouldn't be very wise to go out and say, we want all of this, knowing that you couldn't compete with it anyway.

[9:30 a.m.]

MR. MCEACHERN: Just to follow up on your post-secondary questions, you're right, there is a lot of anecdotal evidence, okay, but it's not necessarily correct. We mentioned it and just to give you an example, regardless of what business you're in in this province, we tend to keep successes under wraps. The Nova Scotia Community College and Cape Breton University, for example, have bid for and won very large training contracts to train oil personnel from elsewhere in the world. It has nothing to do with local content, it is a straight business proposition where they've bid and won contracts with some of the biggest and toughest oil companies in the world.

Nova Scotia's post-secondary institutions are probably punching above their weight scale when it comes to training of people around the world. These two schools, for example, have trained staff from ExxonMobil's operations in Africa; they have done stuff for LNG facilities in Italy; they have done training for people from Russia; and I know that they have bid and won a couple of others that haven't been announced. The funny thing is, there is a great deal of training that's being done and it's quite an accomplishment - and I'm not trying to dismiss the need for more local employment, but this has become a very large exporting opportunity which helps fund these post-secondary institutions in a way that doesn't derive from direct subsidies from the provincial purse. So there is a fair amount of training involved and there is a fair amount of high-end work, too.

There is a difference between high-end and large numbers. Look around your own closet and see what's not made in China these days, for example. A lot of the large structure fabrication around the world is being done in Asia but, for example, with Deep Panuke a lot of the high-end installations of components on top of that platform will be done locally. That's part of the negotiation that was successfully concluded between the Department of Energy and EnCana.

This industry is one that almost is over-scrutinized. If you looked at the pulp and paper business or the automobile business or whatever, I don't think you would be able to derive the amount of local activity in an automobile as well as you can in an offshore production platform, for example.

MR. PREYRA: Is OTANS itself taking any steps to develop skilled workers here or to train or provide apprenticeships or anything to keep people here, especially in rural Nova Scotia? I understand that the colleges are training people from offshore, but we also seem to

be exporting a lot of our young people and a lot of our skilled workers, and those who are here say they're not given the opportunity to compete. I'm wondering if OTANS is doing anything positive in that area.

MR. CLOUTER: Paul can build up on what I'm going to say, but this is a global industry. I work for a helicopter company and we have people who live in Nova Scotia, quite a number of them, who work in Africa or they work in Southeast Asia. The employees of this industry will go where the work is and I don't think that will ever stop. As people talk about all of the Maritimers and Atlantic Canadians who are in Western Canada, I would predict - just my own personal opinion - a lot of these will come back home once things happen here like Deep Panuke, then to follow up in Newfoundland and Labrador with the Hebron project.

Keltic is another example - that's a huge project, that's bigger than the offshore if you look at the economics of it. What we've done internally - and I think we just need to continue to work with the colleges, but we don't have any internal training program. Clearly some of our members of 400 companies have come to us for direction and where to go to get this expertise, and we're clearly available for that and always have been.

MR. PREYRA: One last question before I hand it off to my colleague. You said OTANS is getting more into alternative and renewable energy, but in your presentation I didn't see anything more than that. Could you tell us something about what kinds of challenges and opportunities you've faced there and what direction you expect to go in?

MR. MCEACHERN: I'll give you a quick précis. It's a cliché, but it's true - plagiarism is a high form of flattery. In the offshore business in the U.K., for example, a lot of the offshore suppliers are now looking, and have been for a number of years, at business opportunities in renewables, be they tidal - in particular, tidal is the most apropos around here. Some of our companies are now involved in some of the early exploratory work that the Energy Department is doing on tidal applications.

What will eventually happen is that the same capabilities that are necessary for safe operation offshore are going to be required for such things as installing and maintaining tidal stations, for example - it's basically the same supply chain. So you are starting to see companies get themselves involved and start to learn a little bit more about that. We are in the learning mode as well with this. We think this is an interesting and important development that provides some diversity of the business portfolio and that the tidal, for example, is one area where we expect some of our companies will probably be finding some work in the next number of years.

I don't suggest, I don't want to leave the impression with the committee that we expect that this is a replacement for the size and the magnitude of what's happening - as far as hydrocarbons in a short period of time - but it is something that needs to be paid attention

to. Some of the businesses in our association are particularly involved in that now and I expect that others will in the next number of years, as things start to take off here.

A lot of them are going to places like the U.K. We had a delegation to a trade show and conference there last May, where some of these companies wanted to go, just to get an idea of what they could do. A lot of our companies have joint ventures partnerships over the years with overseas firms, particularly from the U.K. A lot of them are now looking to see whether or not those things can be revived to take advantage not only of offshore, but of any possible developments. I keep mentioning tidal, because that's the biggest one around here in the next number of years.

MR. PREYRA: Thank you.

MR. CHAIRMAN: Mr. MacKinnon.

MR. CLARRIE MACKINNON: Thank you very much, Mr. Chairman. First, I want to apologize for coming in a few minutes late. I did get up at 5:30 a.m. this morning to hopefully get here in time, but I ran into a detour and a very slow Macdonald Bridge this morning.

MR. CLOUTER: I see an opportunity here for helicopter service. (Laughter)

MR. MACKINNON: My humble apologies. Just to continue with the local component aspect - of the 850,000 hours with Deep Panuke or the 400 full-time jobs, do we have any idea, just of a guesstimate of how many of those jobs Nova Scotians could, in fact, fill?

MR. CLOUTER: Oh, 100 per cent of them. That is - you have to understand that when we speak about that number, that's the legally mandated minimum negotiated by the Energy Department and EnCana, so that's a minimum, that's where you start. They were announced in June of last year, so that's where you're starting from, a minimum.

As the operation gets into production, the amount of local people involved actually increases as far as a percentage is concerned. You'll have helicopter bases here, there are things here you have to have here; you have to have helicopter bases here, you're going to have to have a ship supply base here. The Energy Department negotiated the construction of an offshore supply vessel, which will be used on this project. So when we use that number, that's the number that is the minimum legally mandated requirement for EnCana to commit to and they've agreed to that. So anything else on top of that will be cream in the cup.

MR. MACKINNON: I'm wondering, Mr. Chairman, as well in relationship to the fabrication of major parts of the platform - and I say this from a Pictou County perspective with Trenton Works and 198 proposals sent out and closing on December 14^th, and seven

parties having already looked at that facility and so on, and some experience in doing that as well, in one of about nine visits to that plant over the last two years, particularly when the layoffs were occurring. When we had gone from 1,200 down to 600 employees, there were still 333 welders there. The expertise that exists there that hasn't gone West is still in that county.

I'm wondering about the time frame with that fabrication, whether there is any remote possibility even of trying to tie in something in relationship to Trenton.

MR. CLOUTER: That's a pretty good analysis. I think the latest is that EnCana Corporation has awarded the primary contract for this to SBM - Single Buoy Moorings - and that happened last week. The next steps are the awarding of the supply and services contracts that Paul is looking at there. There are - I don't know how many.

MR. MCEACHERN: There are over 30 here.

MR. CLOUTER: There are 30 contracts that have been bid on by Nova Scotia companies that will be awarded by SBM, I would suggest, over the next month or so. I would hope that welders would be part of that, and Paul is trying to analyze if any companies are there that you are speaking specifically to.

MR. MCEACHERN: I know the situation with Trenton Works. They are a member of our association and I know they've - you're right, they have gone to the four corners of North America. We helped them when they were trying to obtain contracts in Alberta and we've provided them with some leads.

I can't speak to - I don't have the short list. I know I should have this here, but I can't find it right now - who is on the short list for what contracts is publicly available, but there are fabrication opportunities. I can't tell you if - I don't recall if Trenton Works has actually bid on any of that work, I really don't know.

I do know that speaking to what are undoubtedly some of your constituents in the welding community, now some of them are working at some of the other fabrication facilities connected with the offshore here, including Halifax. I know there are some at Halifax Shipyard, for example; I know there are some at some of the other fabrication facilities in and around Halifax. There is an opportunity to bid on this work.

One of the things that Trenton Works used to do extraordinarily well was ship shafts for props. They were extraordinarily good at that. I remember in the late 1990s and early part of the 2000 decade where the sales manager was doing quite well with that. That's another opportunity but I'm not aware of whether or not Trenton Works has even bid on any of this, because I understand that the facility is essentially shut down. I know that some of its former employees are working, but I don't know if the company itself has bid.

MR. MACKINNON: No, for clarification, of course, the company itself would not be bidding. The entire complex is for sale at this time.

Looking at seven licences that may expire, considering the process involved and how long it takes and so on, these forfeitures, in fact, do take place. You're indicating that it's primarily large oil companies, but in a couple of cases smaller companies were involved off Cape Breton. To go through this huge process and then to look at seven forfeitures, is there any explanation for why such an effort would be made to get the licences and then a willingness to back away? Just some comments, if you would.

MR. O'MAHONY: I think - yes, for the companies to put in these bids and these deposits, only to walk away from them some years later on, I think might suggest something to the effect that they don't have enough confidence that spending the money to actually drill a well is going to pay off. I think it speaks to the uncertainty that does exist about our offshore and the geology, specifically the unknowns about our geology that have yet to be properly figured out.

[9:45 a.m.]

MR. CLOUTER: I think if I can just build - there's also an item at play here, like I'm in the helicopter business, we've never seen the demand as high as we've seen in the past number of years for helicopters. I think it's all driven by oil prices and where these large, multinational oil companies can go to make as much money as they can make. That's what it's all about at the end of the day. So I guess if they leave some money on the table, it's not that significant to them, I guess. It is a tough way to say it, but it's probably . . .

MR. MCEACHERN: Just to wrap up a point of your question, it seems like all three of us are taking a shot at every question. There is a - the amount of money which is available for exploration by these large oil companies is actually quite stagnant as opposed to what you would normally believe based on the price of oil. The amount of money that is available to the exploration branches of multinational oil companies has been stagnant for about five years and it's a function of two things. It is a function, as to what Mr. Preyra was talking about, an extraordinarily worldwide shortage of staff. You can have as much money as you want - you can't explore if you don't have the people to explore. They have a shortage of staff which are skilled.

Now, what's happening is, some of these companies are so large, you have certain plays where you can go and explore and you have to basically decide - as you do in every business - what is the best bang for your buck? Are you going to look for something that will produce essentially 80,000 barrels of oil here in Nova Scotia, or are you going to look for something that explores for 80,000 barrels a day in Angola? They have limited numbers of staff and they have decided for the time being that they will go on their best plays based upon the number of staff and their limited budgets.

I know that doesn't translate very well in the public. They look at these companies and they say they have huge amounts of money. Essentially, the truth is that the exploration budgets of these companies are quite stagnant for the last five to six years. Many of the larger oil companies . . .

MR. CHAIRMAN: I'll have to stop you right there. My honourable colleague's time has expired. I'll turn it over to Mr. Theriault of the Liberal caucus. You have until 10:07 a.m.

MR. HAROLD THERIAULT: Thank you, Mr. Chairman, and thank you for your presentations. It is interesting, every time we hear from the oil industry, it's mind-boggling to see how big the industry is and what it generates. You talked about oil companies not wanting to come here because it's cheaper down in the Gulf and the Far East to get the oil, that's for sure. The bottom line is the dollar and the profit that can be made.

I would like to talk about Georges Bank for a moment and see if any of you know - does OTANS know what is on that bank or under that bank? I know it's shallow water there and probably it would be just as cheap to drill there as it would be down in the Gulf of Mexico, maybe cheaper. We know it's under a moratorium because the fishing industry in 2000 fought against drilling on that lucrative fishing bank. Can you tell the committee what the oil or gas industry knows about what's under that bank and what that could be worth, possibly, if they could set up there and drill for oil or gas?

MR. MCEACHERN: No, there is no real, official estimate. The estimates are back from the late 1980s and the number escapes me right now. It was significant. I would say probably in the range of - I'll have to go back and correct the record later on, but I think it was about 3 to 5 trillion cubic feet of gas that they estimated. You have to understand, that was based upon analysis that was done in the mid 1980s, if not the early 1980s. There has never been any exploration on Georges Bank - it's just a scientific guesstimate based upon the geology of the area.

The area has been under moratorium actually since the late 1980s and the Governments of Canada and Nova Scotia put the moratorium back on in 1999-2000, so the area is under a moratorium until 2012, I believe. So there is no real understanding of what is there.

There are companies that hold inactive licences there, Texaco being one and I believe Chevron is there as well. So what really has to happen is, there are non-invasive ways of having a look or having a better understanding based upon current technology as to what may be there without going to the point of drilling a well, but the area is under moratorium so none of that can essentially be done.

MR. THERIAULT: I believe it has been said that it would be very lucrative for the oil industry to be there. It has certainly been lucrative to the fishing industry too, and that fear

is there that, you know, oil and fish don't mix - that sort of thing. Anyway, thank you for that answer. I think the moratorium is up in 2010 and I believe that you'll probably see companies who want to go there again. I think it's just the matter of whether we can find out whether fish and oil can mix. I believe it can, it does in the North Sea, the Bering Sea.

Anyway, you spoke about renewable energy. Al Gore is certainly running around the world saying we're melting away, burning up, whatever, from pumping oil and gas out of our earth. How is that affecting you and how do you think that will affect you in time to come and - you talk about supporting renewable energies - will renewable energies give us these benefits or royalties that you speak of, $4.2 billion to this province? Will renewable energies ever give us the benefits of our oil and gas industry?

MR. O'MAHONY: First of all, the royalties are $410 million, we're not quite at the billions yet. To charge royalties for these renewable energy sources I don't think can happen, but what can happen is the spinoff benefits from this and a lot of it - as we had mentioned earlier, there is overlap between the supplies and services provided by companies engaged in the offshore petroleum supply and services industry, as well as those who would be looking to get into the renewable energy. This Government of Nova Scotia has committed to greatly increasing its reliance on renewable energy sources in the near future, so we do anticipate that there will be business opportunities from that which are of benefit to the province in a number of ways.

MR. THERIAULT: Do you believe this is going to put a big dent in the oil industry eventually? A crystal ball question again, I guess, but you must be able to see that if we're going to go to renewable energy in the next 50 years or whatever, you must see what it may do to the oil industry of this province, or you must have an idea?

MR. O'MAHONY: Most of our offshore petroleum now is exported to the United States and I think it's anticipated that the demand there will be healthy certainly for a number of years to come. In terms of local use of natural gas from offshore, Nova Scotia Power has been increasing its reliance on it somewhat; as well, there is expansion into certainly the Halifax market for natural gas use in homes and industry as well. That will only increase, I suppose, the demand that's on top of the demand from the northeastern United States, which is the primary market for our natural gas currently.

MR. THERIAULT: What do you think of Al Gore's message? You didn't answer that one.

MR. O'MAHONY: Certainly global warming is something that's an issue for everyone and it's being addressed and looked at by this government; I think the government has taken some rather bold initiatives to decrease our reliance on fossil fuels. Right now we burn a lot of coal, not so much the natural gas and decreasing the reliance on that by taking

advantage of our renewable resources such as tidal and wind energy, I don't think it will affect the demand currently for our offshore petroleum, if that answers it.

MR. THERIAULT: Do you believe that we can build - I mean we're building helicopters here - the equipment that we need? The Bay of Fundy, for example, one of the most powerful bodies of water in this world. Do you believe that we can build the equipment we need to generate hydroelectricity right here in Nova Scotia? If we can build a helicopter, we can build a windmill or a waterwheel under water, I'm sure. Do you think that's possible, that we can manufacture that equipment here in this province?

MR. MCEACHERN: Well, the Energy Department in your discussion document on the energy strategy does highlight that question and says, well, it may be years away. There is a possibility that we could eventually be in the business of building offshore tidal turbine systems here. A lot of people missed that opportunity - certainly not just us, not just Nova Scotia in the wind business. I think if you look at the Energy Department's new energy strategy discussion document, they highlight the need for both business and government and the research community to do exactly what it is you're suggesting, which is don't wait until the thing has passed you by.

So a lot of the new experimental ones that are going to be tested in the Bay of Fundy are actually U.K. technology but there's no reason why, if you have a critical mass of these things needed not just here but elsewhere, that you could have some type of fabrication of these technologies under licence.

There's also Canadian technology which is being worked upon now, a company called Clean Current out of British Columbia has had one in the water. So yes, it is a possibility and I think that people are recognizing that we all, in North America - what a terrible pun, but we missed the boat on wind. So there is a recognition within government, like the Business and Technology Division of the Energy Department is starting to wrap its head around that and their job is to develop businesses and look for niches for businesses here in Nova Scotia and elsewhere, so I think it is a worthy objective.

MR. THERIAULT: Thank you very much.

MR. CHAIRMAN: Ms. Whalen.

MS. DIANA WHALEN: Thank you very much. I'd just like to carry on a little bit with that discussion. The offshore industry I think could be characterized still as being very much in its infancy here, even though we've had 40 years of discussion and some drilling - pretty slow, I think it's 200 wells in total we've had drilled in about 40 years, compared to literally tens of thousands in the Gulf and in the North Sea.

We're pretty small and just fledgling but at the same time our renewable energy industry is also very new and less organized, I would say, than the industry around the offshore. So I'm wondering if you have considered - I was really surprised at the beginning of your comments that you mentioned the fact that you're looking at renewables as one of the opportunities or one of the areas that your members have an interest in and you represent. Has there been any discussion about working with the very fledgling organizations that are trying to represent the renewable energy industry?

MR. MCEACHERN: There is an ocean energy group in Canada that we're working very closely with. It's based in Vancouver, but we work very closely with that particular organization. We also work with similar associations, such as ours, in the U.K. that are trying to do the same thing. There's a group called OREG - Ocean Renewable Energy Group.

[10:00 a.m.]

We've had sessions highlighting this in the last little while, both at the last two CORE conferences. I don't think there's any need to reinvent the wheel here, it's the same supply chain. It's still a very small - I know this is dominating the discussion of this committee today and I don't want to leave you with the impression that we have abandoned oil for turbines, for wind. But it is very new and it is very small, but it does have an opportunity to grow, so that's why this organization, which represents a supply chain, the industrial supply chain in energy, has decided to get itself immersed in details of this type of operation, especially tidal.

So yes, we're trying to work in particular with some of the ocean energy groups, particularly those Canadian ones because we'd like to see Canadian technology.

MS. WHALEN: Oh, I think that's exciting still, to look at it, as you say, there's an overlap of skills and abilities if you're working on the seas, it's going to still be a platform that you have to service, so I think that's important. Frankly, I think the reason we go to the renewable energies is because, as members of the Legislature, that's where we'd like to see a huge boom. Economically we'd like to see our companies involved in it, we'd like to see manufacturing, not just installation of these services. We'd like to see our Nova Scotia companies be front and centre as that goes forward, so it's good for us to see that an organization like yours is talking that way, so just to reflect why I think we want to speak about it as members of the Legislature.

I wanted to go quickly to the significant discovery licences that we talked about. That was a topic that did come up and I know you indicated that you read the transcript from the last meeting of the Economic Development Committee. Dr. Davis was here and spoke about those significant discovery licences as being, I guess you could say an impediment to development. I wonder if you could comment on that, because I know you did discuss the

exploratory licences, but if you could give me a bit of your take on the significant discovery licences.

I understand they're not common in the industry, maybe we're the only place that has them, so if you could just put it in context for us.

MR. CLOUTER: I'll start off, and Paul and Mike will add to it. One of our primary objectives at the board when Tom Hickey was our Chair - and Tom was here in 2005 - was the SDLs, because we as a board had this as a priority because we wanted it to be spoken about outside of our group of member companies. Our objective was, let's get some discussion on SDLs to understand and get it out of the closet, so to speak, because nobody wanted to talk about it in terms of was it an impediment or not. So our objective was just that. I'm happy to say that it worked because there was a lot of discussion on it at the local government levels and we're now saying that there has been movement outside - other than the SDL issue, the initiative that the boards have taken on different areas.

So it's still on the radar screen, but I think basically we've accomplished exactly what we wanted to do, get some discussion on it. There are pros and cons on SDLs, whether you are aggressive on it or let it run its course. You can go on that if you want, Paul.

MR. MCEACHERN: There's one point in Dr. Davis' testimony that I had never heard before, and I've been around this business for 12 years. There was an analogy that significant discovery licences were designed by government so that oil companies would find resources, but not be allowed to produce them until the local economy and the local business community was ready to help support that. I've never heard that before; I've never heard that within the corridors of power of government where I worked. I never heard that within the corridors of business where I work today, so I think that I'd like to correct that for the record.

The second thing about this is that the government, which essentially runs the offshore board to a degree because the offshore board does work on behalf of the Department of Energy and the federal Department of Natural Resources, they have decided that they would start putting rentals on new SDLs, so accelerating rentals. This is starting in Newfoundland and Labrador.

MS. WHALEN: Could you explain what that means?

MR. MCEACHERN: Each year it costs you more to hold onto it, so that eventually you bring it back to a point where it has to go back to the board of the company as to whether or not we should continue to pay this $0.5 million or $1 million or $1.5 million, for example.

I want to bring you around to something that this debate started and where we're moving and where we're suggesting. There are two things that are going on within government, within the bureaucracy within government today. The basic question is, it's like

any other business, if your customers aren't coming in the door you have to look at how you sell your product. The government, being the owner of the resource on behalf of the people, has put an awful lot of work into understanding its customer, or lack thereof, meaning international oil explorers, and worked on improving the information that's available to those oil companies as far as getting geological work available.

I know this sounds incredibly dry, but it's essentially important. The government, the Energy Department in particular, has looked at other jurisdictions around the world that have suffered the similar kinds of dry spells that we have, such as New Zealand. They've looked at Western Australia, they've looked at the United Kingdom, they've looked at Norway, they've looked at some others and they have commissioned an extensive amount of research by some of the best firms in the world, companies that are actually hired to advise oil companies and ask them, what did they do to get out of this rut? A lot of what you're seeing here today is the result of that research.

You hear the government and the Energy Department in particular talk a lot about understanding the geology and improving the knowledge of it. New Zealand did that and Australia did that, they made a lot of the geologic information more freely available to oil companies, and that helped. There have been some changes in the exploration licences. There is going to be something that I call a promote licence because that's the British term. I don't know what the Nova Scotia version is, but there will be a new call for bids later on this year for short-term exploration licences, which is something that worked in the United Kingdom.

There are two research agencies that have been developed by the Department of Energy. One of them, the acronym is OETR and the other escapes me at this time, but their job is basically to do what normally oil companies would do years ago, which is to do the very basic geologic research. Those may eventually work in our favour.

MS. WHALEN: Can I ask a question?

MR. MCEACHERN: Just one last point on this. The importance of this is if you're going to get some kind of activity together, it's not going to happen overnight. We didn't get here overnight and we're not going get back in the game, but a lot of that type of work is being done and it may just germinate into some quick growth.

MS. WHALEN: My quick question . . .

MR. CHAIRMAN: No, that's it, time's up.

MR. MCEACHERN: Sorry, I wasn't trying to talk out the clock.

MR. CHAIRMAN: We're going to have a second round.

Mr. Bain, you have until 10:28 a.m.

MR. KEITH BAIN: Thanks very much, Mr. Chairman, and I'll be sharing my time with my colleague. I just have a few questions. We talked about the training that's taking place in the community colleges and we don't build exploration rigs in Nova Scotia. Is there an area that Nova Scotia could concentrate on as a specialty area in this field?

MR. CLOUTER: I think we have a lot of expertise in the province, basically. As for a drilling rig, I don't know if you would ever get to a point of being able to do that, and I'm just thinking from my own personal experience. We do a lot of work in this province with a lot of highly skilled people like engineers on helicopters and pilots and everything else, but I can't think of any area that we're not moving in, if I understand your question, is there an area we're missing?

MR. BAIN: I guess my point is, is there something that could set us apart? I guess that's where I'm basically going.

MR. CLOUTER: I think we're moving in the right direction with the initiatives that the Department of Energy has taken in conjunction with the board, I think we're trying to grow. Certainly, exploration is the key. You can have a lot of other things but if you don't have exploration out there - and my message is, we have a project and everybody is gung-ho on Deep Panuke, and Sable contributes on an annual basis, but there's a day when Deep Panuke is finished. I think we need to be looking at what's next after Deep Panuke, and I think that's the message I wanted to give today. There is a large amount of money available and whether a lot of that will go to training probably, which is where it should go, but there is also a portion of it that should be put back into the industry if you want to look at your kids and your grandkids, which is what I'm looking at, I guess, from a personal point of view. I can't think of any area that we're not touching on.

MR. BAIN: I guess my point was to see if there was something we could really specialize in, but you're saying it's the broad perspective.

MR. CLOUTER: Yes, but we have 400 companies and they're very vocal and they're very business-oriented. If there is an area of expertise that they need some help in then we hear from all of our members. I have not heard from anybody who says, we need to do this, can we look at it, if we do we clearly are off the mark on it, for sure.

MR. BAIN: The Government of Nova Scotia has invested $1 million in the CNSOPB. Do you think that was a good investment?

MR. CLOUTER: The $1 million in the board?

MR. BAIN: Yes.

MR. CLOUTER: Oh, clearly. I think what has been lacking here, to Paul's point, is that there is seismic or geoscience that multinational oil companies want to see. I don't know if they have the appetite to come in and waste two or three years trying to do seismic. What the province has done with the board is commendable and we have a facility over in Dartmouth that's one of the best in the world and recognized so, so it's a great initiative. Another $1 million, you know, if they have it.

MR. BAIN: I believe this would have leveraged federal money, as well, would it not have?

MR. CLOUTER: Yes, there's provincial and federal.

MR. BAIN: How do you view your relationship with the Department of Energy in this province?

MR. CLOUTER: As a board?

MR. BAIN: Yes.

MR. CLOUTER: I think we work hand in hand with both the board and the Energy Department. I'm from the business community and I think co-operation between the regulatory arm and the government and the industry is the way it should go. I'm very pleased to say that it's working very well, we have a great relationship with both the board and the Energy Department.

MR. BAIN: Could I expand on that and just ask what you see as the Department of Energy's role in working with your board to help you fulfill your mandate?

MR. CLOUTER: I think there's a dialogue. We meet with senior people from the Department of Energy three or four times a year and more if need be. We talk about their energy strategy plan with them and they get advice from us in terms of what their initiatives are and export opportunities - if things are slow in Nova Scotia, what we can do for your members to find work elsewhere.

MR. BAIN: So you'd say there is good co-operation between the department and your board?

MR. CLOUTER: No question about it. I have been two years as Chair and I can tell you that I couldn't see where we could do any more at this point.

MR. BAIN: That's it for me at this time, Mr. Chairman. I'll turn it over to my colleague.

MR. CHAIRMAN: Mr. Porter.

MR. CHUCK PORTER: Thank you, Mr. Chairman. Thank you, gentlemen, for being here as well today, just a couple of questions. In the second paragraph of your presentation I was reading through - and you talk about alternative energy sectors. There was one there, wave. Can you elaborate on wave? I've heard of all the others, maybe I'm not paying close enough attention, but I didn't understand what wave was. I just envision this big wave of energy splashing, is that something you can tell me about?

MR. CLOUTER: Lawrencetown Beach-type wave.

MR. MCEACHERN: Wave energy is an experimental technology that's being worked upon a great deal in the United Kingdom, it really is. There are two areas: one is in the Orkney Islands and one is in Cornwall, where there are large flexible booms. The large flexible boom is anchored in the ocean, the wave will move the hydraulics within the boom to generate electricity. The British are experimenting with that and it's further down the road than tidal, but in the United Kingdom this is considered their biggest technological advance since the Concord. It's still experimental, but they are working on it.

They have one wave station now in Cornwall and I believe they're installing another one off Portugal. It's still down the road a bit, but it's a way of doing the creation of electricity with zero emissions. It's pretty constant. I haven't seen the Atlantic calm very often and it's pretty well non-invasive.

MR. PORTER: You could actually piggyback on tidal, if you had tidal out there you could get extra with waves?

MR. MCEACHERN: Probably, I'm not that familiar with the technology. I've seen it and I've been briefed on it.

MR. PORTER: That's very interesting.

MR. MCEACHERN: When you start talking about electricity, I'm beyond my skills when you talk about a three-pronged plug.

[10:15 p.m.]

MR. PORTER: I appreciate that, thank you. Very interesting technology, indeed. I lived in Alberta for a while a number of years ago, I went out there as a young man like a lot of others did in the early 1980s to find work, and we see that again today. We saw a lot of

those folks come back and I think you mentioned, Barry, that's always a possibility. How is what we do in Nova Scotia - other than the fact that we're surrounded by a huge body of water - different than what they're doing on land? Are the rigs the same and the derricks, I've seen many of these things set up in my time in the West, but without a lot of understanding of them, I didn't work on them, but I know it's a very skilled environment.

MR. CLOUTER: Clearly, the first thing that comes to my mind is the accessibility of moving around drilling rigs. In the helicopter business you move these around by helicopter, and when they're drilled they move them and pick them up to drill somewhere else. An offshore operation is so long term in terms of its planning and all of the things that go along with it. I think the time frame in getting these things established, I guess . . .

MR. MCEACHERN: Are you talking about the land or are you talking about just energy in . . .

MR. PORTER: No, land in general, I understand that, I guess. I'm sorry if I didn't maybe articulate the question very well. Other than the movability of the rig, are the rigs the same? I'm going to get to why I'm asking the question in a moment, but are the rigs the same, is it the same technology?

MR. CLOUTER: I don't know much about it, Michael would, probably.

MR. O'MAHONY: There are two things in Alberta, which is why that place has such high levels of activity. First of all it's the number of conventional wells that they do have for both oil and gas. They drill thousands of wells a year for the conventional oil and gas and they're the same rigs, it's the same sort of thing that they would use over here. The other thing driving Alberta, of course, is the huge labour requirements in their unconventional oil sands which require a great deal of processing and work involved, and that creates the high demand - the combination of those, the high number of conventional oil and gas wells and the non-conventional oil sands production technology. But to answer your question, yes, they are the same as onshore rigs.

MR. PORTER: So there's nothing to say then, I guess, as you had mentioned earlier, there would be no reason why Nova Scotians who went out there - and I might add untrained - went to work and worked their way up to a variety of different levels of employment within the oil industry and are now, a lot of them working - whatever the names of the riggers are called there - but working on the actual rig producing. There wouldn't be a lot of reason why they wouldn't come home for probably what would be very good paying jobs as well here. That potential would exist.

MR. CLOUTER: I'm a Newf by birth, so I can tell you that they would all be back in Newfoundland, any that I've talked to anyway.

MR. PORTER: Yes, for sure, as well as Nova Scotians. Back to your point, Mr. Clouter, is that the movability then would be a reason why we wouldn't have, you talked about thousands being done, but you pick it up, you move it with a helicopter or truck or something. Do you think that has a great impact on the number of wells?

MR. CLOUTER: Clearly I think the shortage of the drilling rigs in the offshore environment today is one of the reasons why we don't have more exploration, but you have to lead up to it and show them some attraction to come here and explore. I'm told now that unless you have a year or two contracts on some of these large drilling rigs that they won't even talk to you anyway.

Five years ago or probably less than that, you could get a drilling rig to come and drill one well, which is a 60- or 90-day well, and then go somewhere else. You would never do that today unless you were prepared to pay huge amounts of money for the drilling rig to the oil company.

MR. MCEACHERN: On land in your area of the province there is exploration underway now on coal shale gas. In Springhill last week there was an announcement that they would begin exploring for methane gas and considering commercial possibilities for taking methane out of the coal fields of Springhill. There have actually been small gas deposits, I believe, found north of the airport in the last couple of months - small, very small - but there is exploration here.

You're right about people being trained, the West is full of Maritimers and Newfoundlanders who have gone West to find fame and fortune, or at least fortune. If you go down and you look at the complement of staff in the EnCana office or in the ExxonMobil office here you'll find many of those middle-rank people are Maritimers who left here, got their resumés padded up and fixed up, with the accomplishment to move back home.

I had a dozen phone call messages the day after Panuke from people who want to come home, and essentially to get that you have to get exploration underway. In the meantime what we're trying to do, and we're having some success, we work on, instead of exporting people, we're trying to export the skills of companies. The development of Deep Panuke was essential to maintain a critical mass of industrial capability within the province to be able to capitalize on development like Panuke. If Panuke had been delayed for three or four years, many of these companies would have just moved. Our local companies would have moved lock, stock and barrel to other areas. So that's one thing.

The second thing about it is that we are trying to diversify our capabilities and diversity our portfolio of interest by working with the Department of Energy on export markets. It has worked, not for everybody but it has worked considerably. They have some pretty skilled, knowledgeable people within that division who will go and have a look - very much on the q.t. - into another market, and see whether or not it's worthwhile.

The most tangible example I've had in the last number of years was in Trinidad and Tobago - there's no sense going where everybody else is going, we're still small. So what they looked at was secondary markets where the skill sets of Nova Scotia companies coincided with a need or a shortage in those markets. We've had some breakthrough contracts in Trinidad and Tobago, between supply ships, engineering and the like.

It's an important insurance policy to make sure that your local capability is still here when you get Sable or you get Sable Tier 2 or you get Panuke because if we didn't have that kind of two-tiered approach, you would have what happened here when Sable first developed; we had a collapse in exploration in the late 1980s, and where very few firms remained. We had a few engineering firms, we had some specialist diving firms and some supply boat companies and that was it, everybody else folded and moved west.

So there was a decision made between business and the Department of Energy a long time ago, this decision was made during the time of Sable. We knew that Sable's construction was going to wind down, how do we make sure that we don't go through that trough again of a dearth of local expertise because it has all moved away.

MR. PORTER: You talked about the onshore activity and I was going to ask you about that. How much production is that accounting for? How many years? Are we looking at a time frame here for what could take place in the onshore?

MR. MCEACHERN: Stealth Ventures has a 10-year licence to explore and commercially produce coalbed methane out of Springhill. They just got that last week, so they'll still have to drill wells.

The geologists within the Department of Energy would be the best people to give you an accurate assessment, but for example, just across the border, Corridor Resources - which is a Halifax-based company - has assets around Moncton which are approaching the reserve size of Deep Panuke. It's just across the border, so you're starting to see exploration. That success has begat success elsewhere. I think that's one of the reasons you're getting a spread of exploration into Cumberland County, because right next door they're finding these gas deposits and then know that methane gas comes off coal.

It could be a sizeable number. I think that Stealth's estimates - the coalbed methane estimates are about 1 trillion cubic feet of gas. Now it doesn't mean anything to you, but ExxonMobil's Sable project probably has 1.7 trillion cubic feet of gas left. So it's a big chunk of gas.

MR. PORTER: Are we looking around the province, in a whole variety of places, or are we just focused on that corridor over there toward Cumberland County and that side of the province? Have we done that?

MR. MCEACHERN: There have been exploration licences - Mr. Bain, I don't know if you represent - I know what parts of the Bras d'Or Lakes you have, but there has been exploration around the Bras d'Or Lakes. You're not allowed to drill under the Bras d'Or Lakes, there's a moratorium there, but you're allowed to - near Malagash there have been small quantities of oil discovered over the years. There has been exploration in your area with Triangle, in Cumberland County. Pictou County has had a few gas wells. There was an inadvertent discovery a long time ago south of Truro, where the Department of Natural Resources was actually doing a core sample. I think they were looking for barite and they found natural gas, which was not a happy circumstance because they didn't know how to stop it, so they had to pour cement down the hole and stop it. That was in the 1980s.

So there is some tantalizing stuff out there, but I think the two that will tell the tale are probably this coalbed methane proposal, which is in Cumberland County, and possibly some of the stuff that's being done in your area. So there's a little bit of exploration going on. What you need is Corridor starting - Corridor's success in New Brunswick is starting to entice people to have a look nearby. So I think the next domino to go will probably be the coalbed methane in Cumberland County. If that acts out as the proponents expect it will, I think that will probably boost a bit of exploration as well and that's pure royalty money to the government.

MR. PORTER: You talked about measurements there a few minutes ago, cubic metres or whatever you measure this. What makes it valuable? I mean there must be a certain amount - I guess for lack of a better term - that says, hey, this might be something.

MR. MCEACHERN: In the offshore?

MR. PORTER: Either one.

MR. MCEACHERN: I can't talk about the onshore - you'll have comparisons between Alberta and Nova Scotia. The scale of investment that's required to take the same amount of gas offshore - Deep Panuke is a small offshore field, it's a little less than a trillion cubic feet of gas. If they found a trillion feet of gas in a hole in Alberta, they'd have a holiday, because it would cost dozens of times less to extract that from the ground than it does for offshore. It's essentially about a Tcf, or a trillion cubic feet of gas seems to constitute a commercial find in the offshore as of today based on the price.

I don't know what the threshold is on the onshore, there's been so very little that there hasn't really been any commercial production.

MR. PORTER: You expressed a little bit of concern in your presentation, as well, with regard to where we're going next and continuing on. How long for Deep Panuke, do you think? Number of years?

MR. CLOUTER: Well, I was just saying to Michael, because these companies naturally - Deep Panuke, I think, is saying from eight to 17 years. So they give themselves until they get there and get established, to say how big it really is. They give themselves some wiggle room.

MR. PORTER: There's a lot of guesswork, is that a fair statement?

MR. CLOUTER: Well, I don't know if it's guesswork. They know, I think, the minimums they have and I guess you look at it from there - you know there are others. But yes, from an association again - if I can just reiterate - we've got to look beyond Deep Panuke, on an offshore basis.

Now clearly there's lots of work with onshore and renewable energies, no question about it, but from an offshore point of view, we clearly need someone to look at this and say, okay, what's next? There's an amount of money and we're not saying how much of it should go back in - that's not our decision - but we think it's money that's not money that the taxpayers of Nova Scotia have put forward. We think a fair amount of that should be put back into the industry to develop exploration to continue on with this fabulous industry that gives us so much money. That's my message, I guess.

MR. PORTER: Thank you. I think my time is up.

MR. CHAIRMAN: Yes it is, thank you, Mr. Porter.

Before we go further, we've started a bit late, are our guests willing to stay a little bit longer, maybe until 11:10 a.m., is that a problem?

MR. CLOUTER: I'm okay, we're not flying offshore so we're making some money, I'm okay here. (Laughter)

MR. CHAIRMAN: Okay, the next round of questioning will be for 10 minutes and it's the NDP - Mr. Preyra.

MR. PREYRA: I have just a quick question. Mr. McEachern, in talking about constituencies where they have discovered significant oil and gas resources, you didn't include mine and, of course, I'm the MLA for Sable Island.

MR. CLOUTER: I don't think you get a cut, though. (Laughter)

MR. PREYRA: I had a question for you about that, somewhat off topic. It seems to me that these 400 companies that you represent, or that you're involved with, probably have a pool of data, a pool of knowledge, innovations that they've developed in this fledgling industry. I'm wondering how you transmit some of that knowledge or how you share that

data, because the last witness we had also talked about the lack of data, the lack of information that was holding back the development of the industry itself. I'm wondering how your companies, in fact, work in bringing some of that knowledge forward.

[10:30 a.m.]

MR. MCEACHERN: I'm going to hand that over to Michael. Just to one point - I think that he's talking about geologic knowledge. There are advances that have been made by these companies to work in very harsh weather environments, be it our supply boats or be it our environmental engineering firms or the like. I think what you're talking about is what Jerome Davis is talking about, how do we get that information out to a wider audience, the scientific knowledge? I'm going to hand that over to Michael because that's his expertise.

MR. O'MAHONY: To clarify, are you talking about the data based on industrial capacity or are you talking about data based on the offshore geology?

MR. PREYRA: Well, these 400 companies have been involved in supplying and servicing the industry. They've now got a base of experience about challenges and opportunities, innovations that we've introduced, things that we can apply here. I'm wondering how you can transmit that body of knowledge to the post-secondary sector, to our colleges and universities, to others who are interested in exploring and developing the industry.

I understand that there is some kind of protection, too, of the information that you have. It seems to me that we have this body that can be used for future economic development and also, in particular, in terms of my constituency, to look at the impact on Sable Island, for example - how Sable Island itself can be involved in promoting research and development and developing what is a very small research and development base station there. There doesn't seem to be any linkage between these 400 companies and research and development and innovation and just the general sharing of knowledge, other than just going after contracts and getting big bucks. Is there not an obligation here to do more?

MR. O'MAHONY: First of all, I'll say that you're right in that a lot of our companies have developed niche expertise. The entire petroleum industry is very technology-dependent and some of our companies have become experts in specialized services and the provision of it. How to cross-train that into young people today, there are some initiatives that the Government of Nova Scotia supports such as the Pengrowth one that we mentioned in our presentation. Others include Techsploration, which OTANS actively supports. As well, we are backed up by the Offshore Accord legislation which does require - certainly for offshore development projects - that there be education and training components built into the benefits plan such that will require that students and young people be able to learn from the companies as they develop these projects.

MR. PREYRA: Thank you, I'll pass on to my colleague for Pictou.

MR. CHAIRMAN: Mr. MacKinnon.

MR. MACKINNON: Thank you very much, Mr. Chairman. You mentioned in your presentation that there was a myth of unduly, onerous regulatory reviews. If it were, in fact, a myth rather than a reality, why would it have taken years to debunk that myth or what changes have, in fact, taken place?

MR. CLOUTER: As I've said, I've been Chair for two years with OTANS and I've lived in Nova Scotia for 25 years. Historically, before I got involved with the board, it was always concluded that the regulatory process in Nova Scotia was a long process. You hear stories of, we can get an approval licence in some other part of the world in six months and it takes you two or three years in Nova Scotia, so you've made the companies say, we haven't got time to deal with that. They believe in due diligence and environmental issues which we should never relinquish, that we do that properly.

I can say in the past two years - in this present term, my second term - the chair of the board made commitments to our association and to the government that she would see processes basically cut in half and she would try to conclude it within a year. I can tell you now that she's done that with her board, in conjunction with the Energy Department - they worked together. So it is something that's behind us now and I think we can stand up and say, we're not going to impede any opportunity for you to come here and explore off our shores, that we have a regulatory process that lines up well with other jurisdictions in the world. So I guess that's my answer.

MR. MACKINNON: To move beyond the frontier region which you talk of us being, the Department of Energy and the board have been talking about an escalating rent for future exploration licences which, in fact, would promote follow-through. The other thing is, there was talk in your remarks about an infrastructure code of practice. Can you perhaps respond quickly to both of those in relation to the escalating fees involved, and also what you mean by the code of practice?

MR. O'MAHONY: A couple of things. The exploration licences - in order for companies to get their extension to the full nine-year maximum, they do have to pay the equivalent of a rental per hectare. I think they had to pay $2.50 per hectare, per year in order to extend beyond the fifth year. This option is available right to the ninth year. The offshore board has said that they will charge rentals on new significant discovery licences - what they will be I'm not sure, but they have said that they will be escalating. I imagine the primary object will be to deter companies from sitting on them indefinitely.

Newfoundland just recently announced the same policy a year and a half ago and their rental rates, after 20 years of an SDL, is $800 a hectare. When you multiply that by the thousands of hectares that potentially could be for an SDL, it makes for a significant deterrent to not do anything with it. That's the rentals. I don't know what Nova Scotia's rates will be, they haven't been announced or anything like that, but they will be along the same objective.

For the infrastructure access, yes, this is always an issue for any companies that might be looking to develop offshore. Sure, if there's gas there, great, but how do we get it to market? Right now there is currently one pipeline, the Sable pipeline, and the other infrastructure and facilities that bring Sable gas to shore. Now the government is looking at if there's a need for a policy with respect to allowing other companies to tie into that. Is there a need for a policy, first of all, on tying into this infrastructure and then I imagine it will be, what will that policy be?

MR. CHAIRMAN: Thank you very much. The time has expired. The Liberal caucus, Mr. Theriault.

MR. THERIAULT: Mr. Chairman, I guess I have just one more question and it has to be a question from a lot of people who I represent in Digby-Annapolis. These people are mostly elderly people on fixed incomes and if I hear it once a day, I hear it 50 times a day: I see that big oil companies are saying they're not reaping all of these profits from a $95 barrel of oil. I have people who are sitting home today, I guarantee you, sitting in 60 degrees Fahrenheit in their rooms wondering whether they should fill their barrel full of oil or have something to eat. There are a lot of them, I know a lot of them. Big oil says, we're not reaping these profits with this oil going up and going up - here it's $95 or $100 a barrel range, whatever, and God only knows where it's going.

Where are the profits from this oil going? Is it from investors around the world speculating that this is going to get better and better and we're going to reap and reap from it? How high do you see the oil going? There are a lot of people asking me that question, because they're thinking of getting rid of their old oil furnaces and putting something down there to burn alders, because there are lots of them. They're growing up - western Nova Scotia is growing full of them. That's what they're doing down there, wondering that today. So maybe you could answer those two questions, where are the profits going from this rising oil and how high do you see the price of oil going?

MR. CLOUTER: I'll take that one. I know what an alder is, too, I'm from Newfoundland, we burned them for years. I wish I knew where oil was going, but you know the experts and depending on the day, I guess, there will be an opinion on that, but $100 oil is not out of the question, I don't think, personally. The profits - I guess without mentioning any names, you can look at the profits of these companies and it's pretty staggering, no

question about it. We don't do too bad as a province ourselves for what goes on out there, so I think you have to put it into perspective. I think we all gain.

Now the person down in your constituency, I sympathize and I know a lot of people in Newfoundland in the same predicament and it's not nice at all.

I don't have an answer to that, other than I think it's a $100 possibility. I think you'd have to determine what is a marginal project from these major companies. A marginal project - I guess I have different perspectives on it than they probably would.

MR. CHAIRMAN: Ms. Whalen.

MS. WHALEN: Thank you very much. We don't have too much time, so I'm going to go right in with a few more questions. The EnCana project, we had a really good-news announcement that they appear to be going forward. I understand there may still be a couple of steps to go, to ensure it happens. I'm seeing that the board still has to approve it, I believe.

I'm just wondering if you could say, are there any more steps to see this project actually happen?

MR. CLOUTER: None that I'm aware of, as the Chair of . . .

MS. WHALEN: I wanted to be sure. I don't know this industry really well.

MR. MCEACHERN: It was passed by the Board of Directors of EnCana on October 24^th or 25^th.

MS. WHALEN: So that was then the announcement was made, at that point?

MR. MCEACHERN: And then they awarded on Friday or Thursday their major subcontract to SBM - Single Buoy Moorings - and that company will actually oversee the development of the project and is the company that will probably be hiring most of the OTANS companies.

MS. WHALEN: Okay, very good. So there are no other hurdles, it will be happening.

MR. MCEACHERN: There's paperwork to do, but I mean that's . . .

MS. WHALEN: Yes, okay, but nothing sort of in terms of the company approving it or anything like that. So that's very good, we're happy on that one.

On the forfeitures, now I took your point in your opening statements about the need to take that money and perhaps invest it wisely so that we encourage the industry. I'm the Finance Critic for our Party and I know a couple of years ago $40 million or $50 million came back to the province, which actually that year brought us into a positive position. We would otherwise have had a deficit - that money kind of bailed out the government that particular year. It's unexpected, unbudgeted money, as you say, when it comes back.

So if we see more of it coming in, what are your suggestions that it should be spent on by the Department of Energy or the government?

MR. CLOUTER: Yes, that's a very good question. Certainly Deep Panuke - let me just answer that. The next step you'll see, a lot of Nova Scotia companies being awarded work by SBM, so that should line up very well over the next month or so.

On the forfeiture money, OTANS' position is quite clear and we've talked to the Energy Department about this and the board, that a portion - and at this point we don't have a magic number - a portion of that money, I think we'd be pretty naive and ill-advised if we weren't to take a portion of that and reinvest it back into the industry, for two reasons: (1) there's nothing outside of Deep Panuke that we know of - there's no exploration planned that we know of; and (2) there are steps taken now with the geoscience and seismic that will help major companies come in here and look at the opportunity of exploring.

I guess you can always find somewhere to spend the money to the betterment of the province, we would never argue that. I go through the potholes the same as does everybody in this room, but we think there's a portion of it that needs to go back to the industry because it was derived from the industry. So we think it would be ill-informed not to do that. I guess that's basically our statement.

MS. WHALEN: And one of your biggest things, then, would be to build on that base of research and geoscience, really, the knowledge that's missing right now?

MR. CLOUTER: And training, you know there are all kinds of opportunities for it. The game, at the end of it, is what's it going to look like in 20 years in the offshore when EnCana says, we're finished next year and someone says, oh, we didn't do anything about this? So I think . . .

[10:45 a.m.]

MS. WHALEN: Exactly, no, we haven't invested anything back in, I would agree with you there. I do think what we see with no drilling last year or this year, it has come to a halt in terms of new exploration and if we can't find a way to kick-start that, then certainly it's not going to look bright in seven to 15 years.

MR. CLOUTER: Well, at the end of the day we'll have it. Look at Alberta, they're doing very well. That's the end result of not being proactive, in my opinion anyway.

MS. WHALEN: Well, they're very proactive; they're also investing heavily in wind farms, so you see them just not being very comfortable which they could be, resting on petroleum products, right? So that's another point.

With your membership of about 400 companies, can you give me some indication of how many of them would be doing research and development - more knowledge-based and less maybe hands on?

MR. MCEACHERN: Well, some of our members are universities. There's a company called Martec, for example. I'd say a handful, probably maybe 10. Martec is an engineering company with very specialized engineering research. They do a great deal of - they have an expertise in - I don't know the term, but it's basically to design stress joints to protect offshore platforms from collapsing in extraordinarily harsh weather. They do it a lot in the North Sea.

The universities do some; there's probably only about a dozen. InNOVAcorp - not InNOVAcorp, they're not members of ours, but there are two separate associations, sort of hands-off organizations within government now that have been seated to do this type of research. OETR is one of the acronyms and I'll get you the other one, once we come out of here. They are going to be sort of the good shepherd of this type of R&D.

Most of the money would have to be done - if I follow your point, I think what we're looking for is trying to get - the forfeiture money, we think, should be invested in research, not towards our companies but in order to make sure that we don't really care whether it's done, as long as it's done property, to define the geology, so you have something following Panuke so that we have a steady stream of jobs and people have a steady stream of royalties, because both come to an end after Panuke.

MS. WHALEN: I think Dr. Davis - when he was here last month - had spoken about the need to have a shift towards knowledge-based industries. I think we're talking about the design and perhaps the engineering and those sort of firms away from some of the, say, metal fabrication and electronics - perhaps the more skilled trades area - that he felt there was a better future for our industry if we got more knowledge-based. That was one of his points, so I was sort of looking to see whether we were encouraging your companies to do that or you have companies in your midst doing that.

I just wanted to ask you, when we broke off in my first line of questioning, we were talking about some of the things the government is trying to do right now. They've hired some consultants, done some studies, to see what are suggestions to get this industry going again, in terms of exploration. I wanted to know whether you saw any champion for our

industry right now for Nova Scotia - whether internationally or nationally - if we have a champion or a group that represents the industry, to help be the voice to kick-start it as well.

MR. CLOUTER: Certainly EnCana. EnCana obviously believes in offshore Nova Scotia. This is a significant investment. They are a large company but you can't minimize the investment, so the champion certainly would be in EnCana.

MS. WHALEN: As the big company right now moving in.

MR. CLOUTER: Oh, no question. And ExxonMobil, they've been here since 1998, I guess, or before.

MS. WHALEN: Is there a role for government to be the champion for our minister or our Premier to be promoting this industry across the country and around the world?

MR. CLOUTER: Oh, I think so and they do that. I've gone to numerous conferences, in offshore Europe. Minister Dooks was there and did a masterful job in presenting the benefits of Nova Scotia, and the Premier. The Premier has been open to our invitation to any event we had and has always supported OTANS, yes.

MS. WHALEN: Well, that's important. I think we need somebody who really can go around the world, and I think OTANS does it as well. Perhaps you are champions, you go to all the international meetings and petroleum gatherings.

MR. MCEACHERN: We do. The Business and Technology Division of Energy does; it just seems to coordinate that a lot with us. We consult them about what's realistic, what we should be looking at and where we should be looking for work. But there's a two-pronged approach: we want to go somewhere and get contracts, but there's just as big an objective within government to get stuff back.

MR. CHAIRMAN: Thank you. Your time has expired. Mr. Bain.

MR. BAIN: Thanks, Mr. Chairman. In your presentation, you talk about no other offshore projects following Deep Panuke. Am I correct when I make the statement that Bass Brothers - I hope I have the name right . . .

MR. CLOUTER: Bass Brothers, yes.

MR. BAIN: They're trying to find a drill ship now. What stage would that be in and what developments would come about as a result of that?

MR. CLOUTER: Well, I guess from my knowledge on Bass Brothers and yes, we know them very well, they're members of our association and they're in a position where they're trying to drill one well. Whether that takes 90 days or whatever - 120 days - trying to find a drilling rig is their problem for deep-water drilling. So they're still optimistic, they're out in the marketplace looking. That's the only knowledge I have on them, unless Michael has more.

MR. BAIN: So this is like a - I'm assuming there's a worldwide problem, a shortage of . . .

MR. CLOUTER: A huge problem. If I had enough money, I'd build a drilling rig and rent it out. There's a huge shortage of drilling rigs in the world, a huge shortage.

MR. BAIN: Would it be correct to assume there are other companies out there waiting to do the same thing, except for these shortages?

MR. MCEACHERN: Not in our region, but there are around the world.

MR. BAIN: But Deep Panuke could increase the interest?

MR. CLOUTER: Hopefully what would happen - and this is just crystal balling in our group - EnCana has one year of drilling Deep Panuke to get ready for the hookup to the gas. They have, I think, six wells to drill, which should start the first quarter of 2009. So they now have a drilling rig, I'm sure lined up - that's my opinion, anyway - and that will come here for at least a year. That's established under the agreement.

Hopefully after they finish with that drilling rig, somebody else will want to keep it in the region, which is the ideal scenario. Now whether that becomes the present operator or somebody else remains to be seen, but I think just getting a drilling rig offshore Nova Scotia is a big plus.

MR. O'MAHONY: If I could just add, you mentioned Bass Brothers, or BEPCo. They are quietly, but nonetheless very optimistic about their exploration licence off the Scotian Shelf. Theirs was one of the licences that was set to expire at the end of this year, under the old Offshore Petroleum Board's policy of, if you hadn't drilled a well within five or possibly six years, you have to return your exploration licence to the Crown. Although recognizing the global shortage of rigs and the fact that BEPCo. has been diligently seeking one and was unsuccessful in those attempts, BEPCo. has taken advantage of the opportunity now to be able to extend this licence for at least one more year, so I think they are reasonably confident they can get a drill rig for 2008 and they were willing.

Just recently they announced that they will pay the rental fee, which I think for them is a little over $0.5 million, to be able to hold onto this licence for the extra year. They have

taken advantage of it and we're waiting to hear if any of the other companies will do so as well, but certainly that BEPCo. has done so is moderately encouraging.

MR. BAIN: Thanks, Mr. Chairman. I'm going to turn it over . . .

MR. CHAIRMAN: Mr. Porter.

MR. PORTER: Thank you. I just want to touch on Goldboro for a minute - what are we doing in Goldboro these days?

MR. CLOUTER: We've got Tom Hickey on the road trying to drum up . . .

MR. MCEACHERN: The former chairman of our board is the CEO of Keltic, Mr. Hickey. The Department of Environment of Nova Scotia has provided environmental permits. I understand that the federal government is in the process of finally getting around to giving its permits. It has a few loose chads that it has to go through yet. He would be an interesting witness here sometime. I guess Mr. Hickey has said in public at the CORE Conference that they are trying very hard to get a supply of gas for themselves and the Maple LNG facility, and we're waiting to see what happens as far as that.

They need gas; they'll need a supply of gas. It is a virtual pipeline. What you need is you have to have a supply of gas coming from, say, Russia or the Mideast, or wherever, and you have to have dedicated ships which will take it back and forth to a terminal, which would be here in Goldboro.

I understand the proponents of the Maple LNG facility - for example, one of them is the Carlyle Group. This is a very well-respected investment agency around the world. These people don't invest their money willy-nilly - they think that there's an option on this thing.

The second thing, and this is something that we - often government and business interact in a way where there is a news release about government grants and payrolls. This is one industry that doesn't ask for that and doesn't get them. So this Keltic proposal is entirely private sector, so we're optimistic that something will transpire, but they need a supply of gas. I know they're actively looking for it because they tell us that they're actively looking for it, but I'm not privy to the details of just how close they are to that.

MR. CLOUTER: The size of that project is staggering. The size of that project is $4 billion. It's bigger than Hibernia. It's huge.

MR. PORTER: I know I'm pressed for time, but just a quick question - back to the offshore for a moment. What does it cost, coming in, setting up until you get to production, from start to finish . . .

MR. MCEACHERN: Offshore?

MR. PORTER: Yes.

MR. MCEACHERN: If you have $400,000, you can rent a drill ship for a day.

MR. PORTER: That's what they're charging a day?

MR. MCEACHERN: A day. It will cost you closer to $1 million to outfit it, because you need divers and you need helicopters, which I hear go for very good rates. But you're getting close to - for a deep-water operation, it would be about $400,000 to $500,000 a day to develop it. I've heard estimates, let's see, in shallow water where EnCana is - it's in about 200 feet of water - EnCana has probably spent $250 to $300 million so far to get where they are today, which includes their exploration wells and two to three years of engineering work. Panuke is a $1 billion project; it's a billion bucks. You see numbers in the paper, $500 million to $700 million - it will be $1 billion by the time it's done for everything.

To do something in the offshore has a magnitude of 10 beyond what's done onshore. That's why the onshore exploration - if it ever did take off, your return on investment would be higher and your royalties would be higher, because it just costs so much more. I'll give you an example. There is an unsuccessful well in the Orphan Basin off Newfoundland. It is reliably estimated by journals such as the Petroleum Economist - which is one of the most respected organizations in the world - that well cost $250 million and they didn't find anything. So it's high risk and high reward. Right now, if BEPCo. was lucky enough to get a rig it would cost them $400,000 a day, easy.

MR. PORTER: So investment on this particular well, potentially, $1 billion.

MR. MCEACHERN: Yes, Panuke will be a $1 billion project from start to finish, easy.

MR. PORTER: The return on investment?

MR. MCEACHERN: I'd love to know the answer to that - they don't share that data with us.

MR. PORTER: Wouldn't we all.

MR. MCEACHERN: I don't know what the return on investment is on that, I really don't. It's a question that you are not the first one to ask it, we've asked it for many years, but we're not privy to the details on their return on investment. A year ago, the return on investment on Panuke was zero because it was a dead project.

MR. CHAIRMAN: Thank you very much. Would our panel like to make some wrap-up comments?

MR. CLOUTER: The only comments I have is thank you very much for the opportunity. I'm a volunteer and these two gentlemen work in the association. Clearly, offshore got most of the priority today, but there are renewables that are going to take going forward - it's going to make another opportunity. I think today we just need to keep our eye on the ball and I guess not get greedy and look at what's out there for our children and our grandchildren. There is an end to this - after awhile, it's all gone. We have to reinvest back into an industry that is very, very profitable for this province. I want to thank you for the opportunity here.

MR. CHAIRMAN: Thank you again very much for coming, it was very informative. We have a couple of committee things we have to attend to. The first one is, we have our annual report - has everyone had a chance to look at that and if there are any concerns or issues about that? If there isn't, I would ask everyone to sign it off or if you would like more time to review it, whatever the case might be. Mr. Preyra.

[11:00 a.m.]

MR. PREYRA: Mr. Chairman, I would like some more time to have a look at it.

MR. CHAIRMAN: Okay.

MR. PORTER: Perhaps we could bring it back next month. They all came out the same time pretty much, so we're still looking over a couple of others still.

MR. CHAIRMAN: Okay, we'll delay it until the next meeting. I had better say the next meeting until we go through the next item on the list. The next item on the list is our next meeting date. Are we going to meet on December 11^th? The House will be in session undoubtedly, and I'm not sure what this committee had decided because I wasn't on the committee before when those discussions were held. What is the wish of the committee, do you want to meet then or not? Mr. Bain.

MR. BAIN: Mr. Chairman, personally I would rather not meet when the House is in session. I think a majority of other committees have agreed to the same thing. There are certain committees that have to.

MR. CHAIRMAN: Mr. Preyra.

MR. PREYRA: I think we would like to meet on December 11^th, if it's not inconvenient. We'll have some questions for Nova Scotia Business Inc., who will be the witness at that time.

MR. CHAIRMAN: Any other comments? Mr. Theriault.

MR. THERIAULT: I believe we agreed that if it's a pressing issue, maybe something going on in the House about this issue, whatever, if it's a pressing issue at the time, we agreed to sit. That's how we ended up.

MR. CHAIRMAN: Okay, our next witness is Nova Scotia Business Inc., is that a pressing issue?

MR. THERIAULT: It could be at the time, it could be at the moment.

MR. CHAIRMAN: So what is the wish of the committee?

MR. THERIAULT: We agreed, I believe, to leave it up to the Chair. If something is going on in economic development on the 11^th that we believe should be in this committee, I believe we said we would leave it up to the Chair to call this committee back.

MR. CHAIRMAN: Okay. Could we have a motion as to whatever your wishes are from somebody, what you want to do? Mr. Porter.

MR. PORTER: I would so move that just to quicken the discussion, I believe Mr. Theriault is correct, that was the discussion that was held in this committee and I would move that we stand by that. If there's a need to come back for the 11^th based on the Chair's call, we'll do just that.

MR. CHAIRMAN: Any discussion on that? I would like to have some discussion, if it's approved, before we go.

MS. WHALEN: Could I just clarify? Does that mean that you, as Chair, would be making that decision in the next week or two?

MR. CHAIRMAN: No. I would like to discuss that after you make your decision here of how we're going to proceed. I think I would prefer to go back to the committee members and say, is this a pressing issue, or have something come from the committee members. I do not want to make that decision on my own, although I would.

MR. PORTER: It is at the call of the Chair and that would be, I guess, what we would have determined before, that you would contact the three caucuses to make sure that was a pressing issue. Two of the three might say no, it's not pressing, but you would have to manage that.

MR. CHAIRMAN: Ms. Whalen.

MS. WHALEN: Mr. Chairman, if I could. I would like to just mention that perhaps with NSBI, I know we've had a recent visit with them at our caucus and I'm sure the other caucuses have as well, but there may be a connection between their activities on behalf of Economic Development and the immigration issue that is currently before the Public Accounts Committee. So it might be useful to see them in December, possibly, so I just throw that out as a possible connection. Otherwise, in terms of their business plan and their five-year analysis of where they've come from and so on, I think we're all up to date on that, but there may be something else there. So I just throw that out for thought.

MR. CHAIRMAN: Mr. MacKinnon.

MR. MACKINNON: Mr. Chairman, I appreciate that possible tie-in as well and I think we should be vigilant of that. I guess if this motion does, in fact, go through, then each one of us has the opportunity to lobby you as Chair to see if, in fact, there should be a meeting if we feel strongly enough about it. Certainly, I'm prepared to hit you up in the House and I'm sure other members feel quite comfortable doing that as well. I guess I could support that motion, though I would like to see a meeting worked in as my colleague has suggested.

MR. CHAIRMAN: Any other discussion? Would all those in favour of the motion please say Aye . . .

MS. WHALEN: Is the motion to postpone?

MR. CHAIRMAN: Yes, to postpone and be at the call of the Chair after consultation with the committee members. I've added that.

MS. WHALEN: Okay, so that leaves the door open for calling it?

MR. CHAIRMAN: Yes. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Just on that issue, if there's anyone who feels that Nova Scotia Business Inc. is a priority, please let me know. Contact me probably by e-mail or by phone - it doesn't matter. If there's another issue that comes up, please do the same thing, and I'll provide notice to all the members and make sure everybody is in favour of a meeting. Thank you very much.

The meeting is adjourned.

[The committee adjourned at 11:05 a.m.]