B4

STEPHEN CAMPBELL
Challenging times

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Rising energy costs will become the largest transportation issue of a generation. As part of its self-sufficiency agenda, the province recently released it's vision of transportation entitled N.B. at the Center. The report outlines a plan for an integrated transportation system to support economic and social development, enabling the province to be self-sufficient by 2026. If that is the goal, this is a disappointing document.

In fact, some argue it perpetuates a vision that is glued to the rear-view mirror. Someone in the department should have breathed the term "peak oil" to the plan's authors.

For those that don't know what peak oil is, it is the point in time when the maximum rate of petroleum production is reached. This, combined with rising global demand for fossil fuels, eventually will lead to significantly higher prices.

Energy demand is distributed amongst four broad sectors: transportation, residential, commercial and industrial. In terms of oil use, transportation is the largest sector and one that has seen the largest growth in demand. This growth has mainly come from personal-use vehicles powered by internal combustion engines. In the U.S., it accounts for approximately 69 per cent of the oil used, and 55 per cent of the oil worldwide. Although there is debate about when we will reach the point of peak oil, there is a substantial body of evidence it has already happened, or is about too.

As important as alternative energy options are, the unfortunate reality is there is nothing that will duplicate the energy output of a barrel of oil. So, as a province, one that is heavily dependent on fossil fuels, having a transportation policy that perpetuates business as usual, will do little to achieve the goal of self-sufficiency. We are in a period when proper planning is going to require courage and a reality check by both government and its citizens.

In New Brunswick, automobile use is the largest component of transportation demand. Nearly 90 per cent of our citizens commute to work in a car. Residents spend 15 per cent of their income on transportation, well above the national average, and second only to P.E.I. Trucks move 90 per cent of consumer goods within the Atlantic Region. This combined with the fact that New Brunswick is the most export dependant province in Canada, with 80.2 per cent of our GDP derived from exports, means higher energy costs is a huge economic threat. These statistics come from the government's own report.

Yet, when I read the government's action plan, I see thinking that is rooted in the past. The key recommendations for funding are almost exclusively on highway development. It proposes $2.2 billion over the next ten years for specific highway projects, and a further $2.2 billion over the next decade for highway rehabilitation. At the same time, it recommends a paltry $50 million over 10 years for short line rail infrastructure.

On the subject of ports and sea transportation, the plan is long on words, and very short on specifics. The report states that "short sea shipping may prove to be the more efficient and cost effective method of the transportation modes," but proposes little in the way of enhancing its use. Quite frankly, there are comments made that show the province was also short on its homework. For example, it states that Canadian Port Authorities are non-profit, (they aren't, returns are needed to build and maintain port infrastructure); and that opportunities exist to develop more container traffic to places like Mexico. If someone had actually consulted those in the logistic chain, they would have found our greatest need is to network with a major port hub like New York.

When dealing with the subject of service challenges, few details are given about how inland rail transport should be improved or funded. On items like the development of better urban and intercity transit, mention is made of the Federal government's contribution of $41 million, but little about initiatives or funding from the province. What strikes me most about the report's recommendations, is the absence of balance among the various inter-model providers, and a lack of investment in transport options with greater energy efficiencies.

New Brunswick is a small province, yet it supports and maintains a road system nearly as big as Alberta's. Our citizens are almost totally dependent on highways for their commercial and personal transportation. The implications of oil at $200 a barrel are absolutely frightening to anyone producing goods, travelling to work or living in a rural setting. Transportation diversification and efficiency is an absolute must if we are ever to live the dream of being economically self-sufficient. Words and intent will not achieve this, funding and planning will.

I am reminded of the decision almost 30 years ago not to build a central airport in Sussex. Self-interest on the part of the three cities made it politically unacceptable, and it has cost business travellers dearly ever since. Instead of having a central hub, one with critical mass providing direct service to major Canadian cities, the U.S. and Europe, we instead support three spokes that commute to Montreal and Toronto. Political courage was lacking then, and it still is.

Highways will always be an important component of our transportation infrastructure, but without proper investment into other modes of transport, it is a one legged stool.

Waiting for a drastic energy crisis to hit, is not the time to re-tool our approach. Lets hope we haven't waited to long.

Stephen Campbell was an investment banker for 28 years. He currently serves as chairman of the Saint John Port Authority. He can be reached at telegraph.campbell@gmail.com. His column appears Tuesdays.