Nova Scotia has opted for a green response to energy issues. The province has announced it is extending the moratorium on oil and gas exploration and drilling on the Georges Bank for three years. In 2015, when that extension ends, the area will have been off-limits to the oil and gas industry for 22 years.

Nova Scotia was joined by the federal government in making the recent announcement. The U.S., which has jurisdiction over part of the offshore area, also has nixed exploration plans until 2017. The reasons? Environmental concerns.

The Georges Bank is a complex ecosystem. It is also a lucrative fishing ground, and no one seems quite sure what would happen if drilling was allowed. The answer is expected over the next three years. One review is looking at the environmental and socioeconomic impacts of offshore petroleum activities. Another study is assessing technologies and practices in offshore exploration, drilling and production that have been developed since the previous review, done in 1999.

The ongoing disaster in the Gulf of Mexico looms large. While the decision to extend the Georges Bank moratorium was expected, the announcement was certainly much easier to justify against a backdrop of front-page headlines about the calamitous BP spill.

What few are saying is that the end appears to be in sight for Nova Scotia’s oil and gas industry. The province entered the potentially lucrative arena with visions of becoming the next Alberta. In fact, prosperity has flowed east to nearby Newfoundland and Labrador, which last year produced approximately 35% of Canada’s light crude oil.

Meanwhile, Nova Scotia is struggling. The New Democratic Party government of Darrell Dexter handed down its first budget earlier this year — and it wasn’t pretty. As the finance minister noted, if left unchecked, the province is facing a projected annual deficit of $1.3 billion by 2012 and a debt load that would hit $16.8 billion. In light of these and other depressing economic realities, the province has become the first in the country to implement a 15% harmonized sales tax.

Now, ExxonMobil Canada says it will not proceed with an expansion of the province’s only offshore natural gas-producing development, the $2-billion Sable project. That project pumps $200 million a year into the local economy, and millions more would have flowed from an expansion.

Such an expansion is simply not feasible at this time, according to ExxonMobil, which had asked earlier this year for approval to explore the possibility of additional fields. That possibility now seems remote. Low prices for natural gas are one reason the firm is silencing whispers of expansion, but certainly it must also have concerns about ever striking it rich in Nova Scotia’s offshore fields.

Provincial Environment Minister Bill Esta-brooks is quick to point out that Exxon-Mobil’s decision was based on recent conditions; as those factors change, so might the company’s decision. But such optimism is fading.

Nova Scotians have been hearing for decades about the boom that awaits them offshore. Two years ago, that promise amounted to roughly $870 million in royalty payments that the feds forked over (after 22 years of squabbling).

But there is little on the offshore horizon to fuel hopes of a future rife with rigs, pipelines and hefty royalty payments. Fact is, production from Sable has peaked; no exploratory wells have been drilled offshore since 2005. And according to a new report from the provincial government, continued growth is ultimately tied to new exploration.

IE