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SHELBURNE, N.S. -- The bitter battle over a proposed $2-billion natural gas pipeline and processing plant in southwestern Nova Scotia is on display amid the vivid fall colours on Water Street, the main drag of the town of Shelburne.

A sign in an office window says: "El Paso -- opening soon." On the other side of the street two signs on a front lawn proclaim: "No, no, no, no El Paso."

The divisive debate over the scheme -- known as the Blue Atlantic Transmission System -- is evidence of a growing unrest in Nova Scotia over the potential benefits and risks posed by the province's fledgling offshore energy industry.

There was little opposition -- and a lot of talk of future wealth -- when the first Sable offshore natural gas project was developed in the mid-1990s.

But continuing concerns about the impact of exploration on the fishery prompted a renewal of the moratorium on drilling on Georges Bank of the southwestern coast of the province. As well, a coalition of environmentalists and local residents concerned about the effects of exploration off Cape Breton has stymied attempts by two companies to start seismic tests on the ocean depths in the area.

In the Shelburne area, the conflicting views over the possible advent of North America's largest pipeline company, Houston-based El Paso Corp., to the town of slightly more than 2,000 people are intense and personal.

They have created bitter rifts between fishermen who oppose the project because it could damage lobster grounds, and those who are already working on ocean surveys for El Paso. Long-time residents of the area, eager for economic development, say too many of the opponents of the project are newcomers who bought waterfront homes and are opposed to any kind of industry nearby.

El Paso doesn't plan on filing its official development plan with the National Energy Board until early 2004.

But the preliminary proposal would see the construction of a 750-nautical-mile-long pipeline to carry natural gas from the offshore fields near Sable Island to the northeastern United States. The line would make landfall at Shelburne, where a $400-million processing plant would remove the liquids and then pump the gas to energy-hungry New England.

The company has spent close to $14-million in Canada surveying the ocean floor and designing a pipeline route.

It has received permission from the province to do survey work on a 200-hectare tract of Crown land on the outskirts of Shelburne, where it would like to locate the processing plant.

But opponents of the plan fear it will bring air pollution and industrialization to a rural area where many people recently settled to get away from urban centres. Fishermen fear the underwater pipeline will damage local lobster fisheries worth more than $100-million a year.

Ricky and Dave Hallett, who have hauled lobster traps on the waters of Jordan Bay for more than two decades, shake their heads as they look out on the ocean and see some of their neighbours' boats working on El Paso surveys.

"As a fisherman, I can see my job coming to an end. There's no guarantee of my future," Ricky Hallett said.

"We've fished for all these years and suddenly along comes an outside industry from Houston, Tex., and says, 'you've had a go at it for all those years, and now it's our turn to have a kick at it,' " he added.

The Halletts fear that noise and vibrations from the pipeline and gas pipeline as it makes landfall near Shelburne will chase lobsters away from traditional fishing areas and also prevent reproduction of the valuable crustaceans.

The fishermen have banded together with a determined group of environmentalists who say the gas project will rip apart the rural landscape and leave residents breathing air laced with byproducts of gas processing.

Jocelyn Hagaman, a psychologist who moved to the Shelburne area from the United States several years ago, accuses El Paso of ignoring the concerns of people who came to the area to enjoy clean air.

The municipality of Shelburne has yet to take a stand on the proposal, but one councillor, Paulette Scott, triggered a nasty local controversy by accepting a job as community liaison officer for El Paso. Ms. Scott says she won't participate in debates about El Paso but will stay on as councillor.

Ms. Scott, whose husband Donald leased his lobster boat to the surveyors, said in an interview that El Paso is determined to address the concerns of local residents about everything from the impact of the pipeline on the fishery to the possible emissions from the gas processing plant.

She said many people in the area have not looked at all the employment possibilities that could come from the proposed development. El Paso says as many as 1,200 people could be employed during construction and 40 people would be required to operate the gas plant. Ms. Scott said some of the opponents of the proposed development moved to the scenic rural area in recent years and have a vested interest in blocking industrial development.

"There are also people here who live and work here who want their children to be able to stay here, but there is nothing for them to stay here for," she said. "So it is a two-edged sword. It's a matter of figuring out what is the best for everybody. There are those who are never going to be happy with this. There are others who are going to be able to get jobs."

The only thing the two groups seem to agree on is that there is little information publicly available about the proposal.

El Paso engineering vice-president Jack Lucido said the company has held several meetings with fishermen and hosted a public meeting on the project in Shelburne a month ago. Mr. Lucido said in an interview that El Paso is conducting surveys to determine the best route for the pipeline to minimize any disruption to the lobster fishery or the traditional way of life in southwestern Nova Scotia.

He acknowledged that the pipeline and processing plant has been divisive in the Shelburne area. "We're continuing to try to get information because we don't have all the facts yet," Mr. Lucido said. "We've been working at this for over a year and we're continuing to work with local people on the technical and environmental issues."

While opponents of the project accuse El Paso of buying support with short-term jobs, Mr. Lucido said the project is providing large-scale employment during construction and economic development later by making gas available for distribution in southwestern Nova Scotia.

Premier John Hamm says no decision has been made about selling or leasing Crown land to El Paso, but he added that the pipeline proposal is a positive indication of the potential gas wealth that may be in the deep waters off Nova Scotia.

But there is little positive in the protest signs that have sprouted before the company has even produced its preliminary development plan for a project that wouldn't begin pumping gas for at least five years.

Dave Hallett worries about the damage the underwater line could do to the shrimp, scallop and lobster fisheries, but he insists that the tightly knit fishing community has already been damaged by the El Paso proposal.

"We've got fishermen who've done work out there [for El Paso] who haven't spoken to Ricky or I all summer. Whether this comes or goes, this is going to take a long time to heal," he said.
Toting up the costs and benefits of offshore development

The discovery of major deposits of offshore natural gas has been an economic boon to Nova Scotia, but concerns are being raised about the environmental cost of a pipeline planned by Texas-based El Paso Corp. to bring the gas to the U.S. market.

Nova Scotia offshore development

Expenditures: $2.7-billion*

Employment created: 17.1 million hours*

Natural gas reserve estimate (low): 18 trillion cubic feet

Natural gas reserve estimate (high): 50 trillion cubic feet

-*as of Dec. 21, 2002