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									Issues and Questions for Discussion
Although Newfoundland and Labrador is relatively well-endowed with both renewable and nonrenewable energy resources, it faces significant challenges in maintaining energy as an engine of economic growth. New investment is needed both to develop energy reserves and to deliver energy supplies to domestic and export markets. The purpose of the energy plan consultations is to identify ways the province may use its energy potential to benefit the people of Newfoundland and Labrador. The consultations will focus on the broad policy guidelines set out in Our Blueprint for the Future and presented in Section 2.1. This section provides a set of issues and questions related to the major issues affecting energy users, energy industries and energy policy, in general. While these issues and questions will be the focus of the discussions and presentations for the consultations, we encourage stakeholders and the public to come forward with additional issues and questions. The questions listed below are also posted on the Energy Plan Website ( where your feedback is welcome. Additionally, written submissions may also be forwarded to the Provincial Energy Plan Team at the address provided on Page 12.

Security of Supply Security of supply is the availability of competitively priced energy to meet demand in Newfoundland and Labrador. The supply of competitively priced electricity and other energy products is seen by the Government of Newfoundland and Labrador as an important element of its economic development strategy and fundamental to the Government's efforts in attracting investment and promoting value added activity in the Province's resource economy. Questions: !Ò !Ò !Ò !Ò How can government energy policy contribute to meeting the province's energy needs over the medium to long terms? What impact does our relatively small domestic demand have on the development of new energy supplies? How can our province cooperate with other provinces and the federal government to ensure our energy security? What steps can the provincial and federal governments take to encourage the necessary investments to maintain the security of supply, for example an East-West transmission grid?

!Ò Can, and if so should, the Government take additional measures to ensure competitively priced energy in Newfoundland and Labrador?

Your Comments

Fossil Fuels Supply and Demand Fossil fuels make up two-thirds of total energy demand, and are a key element in the province's economy, especially in the transportation sector. The supply and cost of petroleum products are determined by supply management in major oil producing countries and by demand in major industrial markets. The Government of Newfoundland and Labrador has no control over these factors. Nevertheless, petroleum products occupy such a strategic position in the provincial economy that government must do whatever is reasonable to ensure a secure supply at competitive prices. Questions: !Ò !Ò How can the petroleum industry best provide reliable and competitively priced petroleum products and services? What impact do federal policies in areas such as climate change, inter-provincial trade and international trade have on fossil fuel supply and demand in Newfoundland and Labrador? How can the provincial government influence federal policies?
energy needs in this province over the medium and long terms?


What, if any, contribution should we expect from our own oil and gas production to meet

!Ò Can, and if so should, the provincial government do anything to reduce dependency on petroleum products?

Your Comments

Electricity Supply and Demand Newfoundland and Labrador has 7,427 MW of electrical generating capacity, two-thirds of which is hydroelectricity generated at Churchill Falls that is committed to Hydro-Quebec under a long-term contract that continues until 2041. The total capacity available to meet demand in the province is 2,524 MW, of which 599 MW is in Labrador and 1,925 MW is on the island. Nearly one-third of the electrical generating capacity available to consumers in the Province is thermal power plants that utilize petroleum products. Typically less than one-quarter of the provincial energy supply is from thermal sources each year. Demand for electricity on the island is growing at about 1% a year. At that rate, and barring any unforeseen circumstances, demand will outstrip installed firm capacity by 2009. Any changes in the industrial base will affect electricity use and demand in the province. This means that the Government of Newfoundland and Labrador must ensure that ways are found to maintain adequate levels of electricity supply at all points in time. On the Labrador system, power is available from Churchill Falls, but supplying any new significant development will require new supply. Transmission capacity would also need to be increased to accommodate even small load increases on the Labrador interconnected system. Newfoundland and Labrador still has untapped hydroelectricity capacity, estimated at over 4,000 MW. The Government has requested expressions of interest in two sites on the Lower Churchill River with a total

capacity of over 2,800 MW, but there is no infrastructure in place to supply Island demand from this source. On the island, there is a total capacity of 1,200 MW of undeveloped hydroelectric potential, but there has been a moratorium on development of private small scale hydro sites since 1998. Questions: !Ò !Ò How can the electrical industry best provide reliable and competitively priced electricity? Given the existing limitations of electricity generation options, will adequate electricity supplies be available in sufficient time and quantity to meet new demand over the medium and long terms? What contribution can be expected from undeveloped hydro resources in Labrador and on the Island to meet energy needs in the province? Should the Government continue the moratorium on small hydroelectricity projects on the Island? Can, and if so should, the Province rely on oil generated (thermal) electricity to meet future demand?

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!Ò Can natural gas provide a competitively priced thermal source of electricity, and on what timescale?

Your Comments

Alternative Energy and Energy Conservation Alternative energy, energy conservation and energy efficiency has the potential to be important components of our overall solution to meeting Newfoundland and Labrador's future energy needs. The term alternative energy is defined as power generated from renewable energy sources, such as wind and solar power, tidal and wave energy, geothermal and various forms of biomass. These sources of renewable energy have typically been more expensive than traditional sources, but their use can help protect the environment by reducing the use of fossil fuels. With rising oil prices and technological advances, alternative energy sources are likely to become more cost effective. Questions: !Ò !Ò !Ò !Ò !Ò What types of alternative energy sources could be developed in this province? What contribution can we expect from alternative energy sources (e.g. wind, solar and biomass) to meet the province's energy needs over the medium and long terms? What criteria should the Government use to judge the potential and value of investment in alternative energy sources? What can the federal and provincial governments do to encourage the adoption of alternative energy technologies? What efficiency or conservation measures will or can be implemented by energy consumers, and what impact would they have on energy demands?

What actions can the federal and provincial governments take to improve the effectiveness of existing energy sector programs, as well as to assist consumers to use energy more efficiently?

Your Comments

Environment and Sustainable Development A widely used and accepted definition of sustainable development is development that meets present needs without compromising the ability of future generations to meet their own needs. Government is now in the process of drafting a Sustainable Development Act, which will ensure that the principles of sustainable development are considered in all Government decisions. In the energy sector, these principles translate into achieving a sound balance between meeting the energy needs of a growing economy, making wise use of energy resources, preserving environmental quality and enhancing social benefits. On July 13, 2005 this Government released its Climate Change Action Plan. The action plan outlines strategic initiatives to reduce greenhouse gas emissions that cause climate change and ensure that our province is prepared to adapt to the potential impacts of climate change. Questions: !Ò !Ò How should Government incorporate sustainable development and environmental objectives into energy planning, and on what timescale?
use are adequately addressed in energy policy?

How should Government ensure that the environmental impacts of energy development and

!Ò How can we apply technology and the efficient use of energy resources to achieve sustainable development objectives and protect our environment?

Your Comments

Economic and Regional Development The Government of Newfoundland and Labrador believes that the province's energy resources should be used to foster investment and job creation. A dependable supply of reasonably priced energy is a major factor in the location decisions of companies, particularly those involved in resource processing. Access to hydroelectric potential helped bring the pulp and paper mills to Grand Falls (now Grand Falls-Windsor) and Corner Brook and promoted investment in manufacturing, service and technology industries across the province. These value-added industries created thousands of quality jobs and transformed regional economies. The presence of other energy resources such as oil and gas, as well as large reserves of hydroelectricity in Labrador, could lead to the development of other value-added industries and contribute to a more diverse and sustainable economy in all regions of the province. Questions: !Ò !Ò !Ò !Ò How can we use energy resources and energy policy to attract investment and create a more diverse business and industrial sector? What can the Government do to ensure that we achieve the appropriate levels of employment and industrial benefits from our energy industry? How can we increase and capitalize on existing research and development opportunities and knowledge of our energy sector to encourage additional investment and new investors? What can Government policy do to increase employment and business opportunities for women and other groups in the energy sector?

!Ò What are the options for value-added, secondary processing and other activities in the provincial energy sector?

Your Comments

Oil and Gas Exploration and Development Newfoundland and Labrador's economy is highly dependent on offshore oil. It is the largest single contributor to our Gross Domestic Product (GDP) and a significant source of government revenue. The importance of petroleum in the economy presents long-term challenges, as the discovery of new oil reserves has not kept pace with the depletion of reserves in existing fields. Unexplored areas offshore and on land offer the prospect of significant new discoveries, but the province will have to attract much more private investment in exploration to find the reserves needed to sustain our oil and gas industry. Newfoundland and Labrador's discovered oil reserves stand at 2 billion barrels of oil while undiscovered oil potential is estimated at an additional 6 billion barrels. Natural gas reserves stand at 9.6 trillion cubic feet (tcf), and undiscovered reserves are estimated at over 60 tcf. Increasing oil and gas exploration, both onshore and offshore, and advancing the development of these reserves are government priorities and will be an important component of its strategy to retain economic

and fiscal benefits from the oil and gas sector. There has not been a major petroleum discovery in 20 years and to date there have been no formal proposals to develop natural gas reserves. Government and industry must actively pursue and encourage opportunities arising from oil and gas production to attract investment in petrochemical, refining and other secondary processing and value-added industries, as well as in related service industries. This will allow us to build a more diversified, stable economy that can support a high level of economic activity and employment when oil and gas reserves run out. This Government is also committed to pursuing an ownership interest in the oil and gas sector and will vigorously seek out opportunities for investment. As a partner in this industry, we can help shape it for years to come.

Questions: !Ò What are some additional ways the Government of Newfoundland and Labrador can promote greater interest among existing and new operators in exploring the province's oil and gas potential? What can Government do to ensure more timely petroleum developments? What are the options for developing our natural gas resources? How do we encourage investment in commercializing known reserves? What are the options for petrochemicals, refining and other processing / value-added opportunities in the province?

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!Ò How can we facilitate cooperative industry - labour relations?

Your Comments

Energy Exports Newfoundland and Labrador exports many commodities and products. The development and export of energy resources, especially offshore oil, is responsible for most of the growth in the provincial economy in recent years, accounting for over half of the value of total exports and generating millions in revenues that support health care, education, roads, municipal infrastructure and other services. As a resource rich province with a small domestic market, Newfoundland and Labrador will continue to rely on exports to achieve its economic and social goals. Therefore, Government and industry need to consider the best ways of producing and exporting energy resources to get maximum value for the Province, once our own energy needs have been met.

Questions: !Ò !Ò In developing energy policy, how important is it to consider the impact of energy resource exports on the provincial economy and the financing of public services? What are the benefits and limitations of exporting the energy created by renewable resources, and are they different for non-renewable energy resource exports such as oil and gas?

!Ò What role should energy exports play in the development of NL energy resources in the future?

Your Comments

Energy Sector Organization As the provincial energy sector continues to grow and develop, we need to address how we manage this industry. At present, various government departments and agencies have some level of responsibility for managing this sector. For example, the Province jointly manages the offshore petroleum industry with the federal government through the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB), while the Board of Commissioners of Public Utilities (PUB) has responsibility for regulating utilities to ensure fair prices and for setting petroleum prices. How we structure and resource these departments and agencies to best manage the sector, as well as address new developments, will have to be considered as part of this energy planning exercise. Questions: !Ò In light of the issues raised, does anything need to be changed or strengthened in the current structure, organization, and resourcing of government agencies responsible for developing energy policy and delivering energy services?

Your Comments

Final Comments

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