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Riches face raging debate Shale, siltstone formations across Canada hold untold resources, face intense opposition; ban imposed by Nova Scotia government Gary Park For Petroleum News
The Alberta Energy Regulator has made its case for the use of horizontal drilling and hydraulic fracturing if the province is to derive the full benefit from 15 formations of “shale- and siltstone-hosted hydrocarbons.”
In a series of mind-boggling numbers, an AER appraisal group has estimated that the “immediate” prospects for only five shale deposits includes 3,424 trillion cubic feet of natural gas, 423.6 billion barrels of oil and 58.6 billion barrels of petroleum liquids.
The group then made one even larger step forward by estimating that the total volume of gas in Alberta could exceed 10,000 tcf.
But the agency stopped short of projecting how much of the resources could be economically extracted using available technology.
The AER, along with the National Energy Board, the British Columbia Oil and Gas Commission and the British Columbia Ministry of Natural Gas Development assembled a combined assessment that the Montney formation holds 449 tcf of gas, 14.9 billion barrels of light liquids and 1.1 billion barrels of oil.
The Montney, which covers 50,000 square miles in northeastern British Columbia and northwestern Alberta, has deposits at depths of 330 feet to 1,000 feet, is flagged as the underpinning of any LNG exports from Western Canada.
Fracking yields 1.7 bcf per day Already fracking wells, which are still in their infancy, are yielding 1.7 billion cubic feet per day and almost 26,000 barrels per day of liquids from the Montney.
Mirror-images have been identified in Eastern and Atlantic Canada, where the provincial governments are grappling with the need to craft new regulatory regimes, notably in Quebec where the province has staked C$70 million on an ownership position to explore Anticosti Island, while continuing to work on an acceptable program to develop shale oil and gas.
The former Quebec Premier Pauline Marois estimated the island could be sitting on C$45 billion of oil deposits, which could be a lifeline for a province that currently imports C$14 billion a year of hydrocarbons, while currently producing 500 million cubic feet per day of gas.
A 2013 report by Quebec’s Department of Finance placed the total recoverable reserves in the province at 8.75 tcf, while a new policy is being developed to control oil exploration and development on Anticosti Island and other nearby regions near the Atlantic Ocean.
That pace is likely to quicken under a Liberal Party government elected earlier this year with a clear mandate to set aside Quebec’s debate over separation from Canada and concentrate on economic development.
Ban in Nova Scotia But the debate over the environmental impact of chasing shale resources is raging in Canada, as indicated in August when one of the least likely regions in Canada to expect a wave of high-volume hydraulic fracturing has become the first to impose an outright ban on the technology.
Nova Scotia Energy Minister Andrew Younger caved in to demands from environmentalists and some landowners by announcing legislation will be introduced in the provincial legislature to prohibit the use of fracking to unlock onshore shale gas.
That put him one step ahead of a government-commissioned report in August from a panel of experts which called for more independent research on the health, environmental and economic impacts of fracking.
But he injected a note of confusion by also insisting his decision is “neither a permanent nor a long-term ban.”
Without taking any steps to gather more data, Younger said he believes Nova Scotians are not comfortable with the technology.
In the process, he closed the door on one of Nova Scotia’s few energy resource opportunities, which every recent Nova Scotia government except for the current Liberal party administration has said is critical to the province’s hopes of fiscal recovery.
Two-year moratorium in 2012 A two-year moratorium on fracking was imposed by the previous New Democratic Party government in 2012 as public protests against fracking grew in Nova Scotia and neighboring New Brunswick.
Younger said his government made its decision following input from the public, including aboriginal leaders.
“Our petroleum resources belong to Nova Scotians and we must honor the trust people have put in us to understand their concerns,” he said.
A report commissioned by Environment Canada that was released in the spring found there was no conclusive research to indicate fracking causes the environmental damage that some fear.
The report said more scientific data was needed, which is partly why other provinces have been hesitant about going as far as Nova Scotia.
Quebec has a moratorium in place pending the outcome of its own research and public hearings and Newfoundland/Labrador is in a similar position.
Some 175,000 wells fractured Meanwhile, it is estimated that 175,000 wells have been drilled over recent decades by applying hydraulic fracturing in British Columbia, Alberta and Saskatchewan without yielding any clear-cut negative results.
Paul Barnes, Atlantic Canada manager with the Canadian Association of Petroleum Producers, said the industry’s chief lobby organization was “disappointed (with Nova Scotia’s) announcement as it largely omits the knowledge from Western Canadian regulators and industry experts.”
Barbara Pike, president of the Maritimes Energy Association, based on Nova Scotia, found some hope that the expert panel said fracking “could be conducted safely and the environmental impact is very small. It lays out how to do it.”
The panel, using a lower-medium case scenario” also estimated fracking could create 1,500 direct jobs and secure annual investments of C$1 billion.
The Halifax-based Ecology Action Center, which has urged a 10-year moratorium to allow for a comprehensive study, said it was pleased the government has listened to the voices of concern.
But Pike countered that Nova Scotia could ill afford to turn away job- and wealth-creating opportunities in a province that is underperforming other regions of Canada, with an unemployment rate of 9 percent.
“There is an opportunity lost,” she said. “Nova Scotians will have to decide what they will do about energy, as, right now, we are not producing enough natural gas to meet our needs, which means we could soon be importing more expensive energy.”
The pro-shale Conservative government in New Brunswick is facing a provincial election on Sept. 22. Those results could either reinforce or weaken Nova Scotia’s hard line.
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