Tag Archives: hydraulic fracturing

Jun 10 2015
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Business, Economy, Energy, Oil and Gas, Politics

Towards a clean-fracking future

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In a singularly breathtaking review of the facts, the U.S. Environmental Protection Agency – still, the gold standard on all matters ecological – says ‘yes’ to hydraulic fracturing, within limits, of course.

Its long-awaited, durably delayed report on one of the most controversial resource-extraction technologies in 15 years resolves thusly: “From our assessment, we conclude there are above and below ground mechanisms by which hydraulic fracturing activities have the potential to impact drinking water resources. These mechanisms include water withdrawals in times of, or in areas with, low water availability; fracturing directly into underground drinking water resources; below ground migration of liquids and gases; and inadequate treatment and discharge of wastewater.”

Still, it insists in terms that could not be more certain, “We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States. Of the potential mechanisms identified in this report, we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells. The number of identified cases, however, was small compared to the number of hydraulically fractured wells.”

To be clear, it reports, “This finding could reflect a rarity of effects on drinking water resources, but may also be due to other limiting factors. These factors include: insufficient pre- and post-fracturing data on the quality of drinking water resources; the paucity of long-term systematic studies; the presence of other sources of contamination precluding a definitive link between hydraulic fracturing activities and an impact; and the inaccessibility of some information on hydraulic fracturing activities and potential impacts.”

What does all of this mean to New Brunswick, where a potential 73-trillion cubic feet of shale gas nestles below ground, obstructed not so much by drilling technology than by public policy (a moratorium on the stuff is, after all, in effect)?

Well, say the pooh-bahs in Fredericton, ‘we’re just going to have to study the study, because, well, you know, that’s what we do.’

And so they will with all the enjoyable attention the issue deserves, given that New Brunswick currently ‘enjoys’ one of the highest jobless rates in the country, an absurdly high annual, per capita deficit and a long-term debt that would make a reality showrunner bleat for a chance to film the coming fiscal apocalypse for both prime time and Netflix.

The problem, of course, is that the Gallant government has moored itself to an ideological anchor. Its determination to utterly ignore the relevant research paid for by the previous government – for purely partisan and, therefore, spurious, reasons – has, in the light of new and independent findings from its largest international trading partner, forced its feet of clay.

If, as the EPA insinuates, fracking need not ruin the soil, water and air of this naturally pristine province (given proper regulations and industrial protocols), then what prevents the Province from engaging in the hard, indisputably contentious business of charting a ‘clean-fracking’ future? Technically, it now seems, the endeavour is not impossible. Politically, however, it remains untenable, as the gritty Libs try to ford the gulf between campaign rhetoric and pragmatic, responsible governance.

As for the EPA study, “it’s a major report,” a ranking member of the Province’s three-person Commission struck to examine the fracking conundrum here told the Saint John Telegraph-Journal earlier this week. Said Cheryl Robertson, who hadn’t yet perused the document in its entirety before her interview: “It will be an interesting read.”

More interesting, of course, will be hers and her colleagues’ own findings.

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Mar 31 2015
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Energy, Environment, Oil and Gas

On the shale gas merry-go-round

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The on-again, off-again shale gas industry in New Brunswick is less impressive for its estimated 70-trillion cubic feet of exploitable resource than for its verifiably inexhaustible supply of deja-vu moments.

Last week, Energy Minister Donald Arseneault introduced a new “panel” of experts – comprised of New Brunswick former chief justice Guy Richard, former University of New Brunswick President John McLaughlin and former chairwoman of New Brunswick Community College Cheryl Robertson – who will spend the next few months assembling the “true facts” about the practice of hydraulic fracturing, on which the Liberal government has slapped a moratorium.

Said Mr. Arsenault at news conference in Fredericton last Tuesday: “It’s an independent commission. . .They have carte blanche. I don’t want to prejudge how they are going to do their work. Justice Richard, as well as the two commissioners. . .will have the opportunity to consult who they feel can contribute to this process.”

All of which feels eerily familiar. A couple of years ago, the pro-shale gas Progressive Conservative government established the New Brunswick Energy Institute (NBEI) to, among other things, conduct research on shale gas development, including hydraulic fracturing, as an “independent” body of experts, beholden to nothing no one but their own findings and consciences.

Its mandate was, and is, “to commission and oversee scientific research in New Brunswick, peer review relevant research from other jurisdictions, and provide access to the information for New Brunswickers in an easily understood format so it can be considered in forming opinions about appropriate courses of action in the energy sector.”

Its mission statement elaborates on this role “to fund and foster research, which will assist with the understanding of, and decision making related to, energy issues and potential development in New Brunswick (including exploration, production, transportation, transmission and utilization.”

It’s also charged with examining “energy-related research and observations in other jurisdictions, to assess their value and relevance to the New Brunswick scene; to communicate the Institute’s findings in a clear, objective and comprehensive fashion to all New Brunswickers, including both the public and decision makers; and, to provide advice to the Government, either unsolicited, or upon request.”

Now that the Grits seemed determined to reinvent the wheel with its own panel of  commissioners, what tidings bode for the Institute? In a brief phone interview last week, David Besner, chair of its Scientific Advisory Council, told me that he is, in effect, waiting and seeing. As for Justice Richard, et. al., and whether or not they will play with the NBEI in the same sandbox, Mr. Besner said, “I haven’t been told anything. . .it’s just what I read (in the newspaper).”

Which, in fact, isn’t very much – though not for lack of sound reporting. Clarity just doesn’t seem to be any government’s forte when it comes to managing natural resources in this province.

When the Tories established the NBEI in 2013, they spent weeks attempting, mostly unsuccessfully, to explain just what the organization was supposed to accomplish. Now, the Grits find themselves with the same rhetorical problem.

To insist that the new panel has “carte blanche” says precisely nothing about its real purpose. Is it to objectively weigh the progress (or lack thereof) on the five conditions the provincial government requires industry to meet before lifting the moratorium on hydraulic fracturing? Or, is it to provide their political masters with a convenient, if respectable, third-party endorsement of its current policies regarding shale gas development?

As Mr. Arseneault says, “It’s a very heated topic. At the same time it’s a very important topic. . .Some people will never change their minds.”

Again, where have we heard that before?

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Mar 17 2015
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Energy, Oil and Gas, Politics

As the fracking world turns stomachs

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To emit or not to emit; that is the question – a reference, of course, not to the the vast amount of shale gas believed to be mercifully trapped in the ground of New Brunswick, but to the hot air issuing unmercifully and daily from Fredericton.

The deceptively simple ban on hydraulic fracturing in this province has become needlessly complicated ever since Brian Gallant sashayed into the premier’s office some months ago.

At the outset of the election campaign last spring, the matter seemed clear enough. Do five things, the surging Grits demanded of the shale gas industry:

Prove that you can make it safe; demonstrate that you won’t wreck roads and sewer systems; consult with First Nations communities before you break ground; ensure that everyone else in your exploration radii agrees with your plans; and adhere to tough, new regulations on your activities. Oh, and by the way, make darn sure that the taxpayers get a nice, juicy piece of the action.

Still, it’s never been clear that development companies want, or are even prepared, to rise to these standards – partly because many measures the provincial government imposes are hopelessly vague. How, for example, does the whole “social license” piece work in a jurisdiction that does not impose the same requirements on any other natural resource industry?

Meanwhile, the Province has just extended the exploration writs granted to SWN Resources Canada (potential fracker extraordinaire) even though that company’s ground-level executives have said – in letters to the Premiers Office and in public – that it would just as soon pull up its tent pegs and move on unless, of course, Premier “Gallanteer” reverses his position on banning the very means it proposes to make its bones in this neck of the woods.

As that’s not going to happen any time soon. Too much is at stake, politically, for a new government that promised to ride herd on industrial carpet-baggers and environmental poachers to recant its most successful election rhetoric.

No, as Energy Minister Donald Arsenault phrased it, quit revealingly, for the Telegraph-Journal earlier this week, “You don’t give an extension to a company who just wants to sit on a valuable piece of land. You still have to be committed to developing that piece of land – that’s usually how the (provincial) evaluation is made.”

On the other hand, he added, “Having said that, there are currently very extraordinary circumstances. . .It’s hard to show a program to develop the land when you’re not allowed to touch it with hydraulic fracturing. You have to be realistic. We know they (SWN) are committed, they would like to continue that work; however, they are not able to because of the conditions we set forth.”

So, then, why “give an extension to a company” who is forced to “sit on a valuable piece of land” only “because of the conditions we set forth?”

Ah, yes. . .so many soap operas in this province to peruse; so little quality downtime to watch.

Now, the official Tory Opposition weighs in with this absurd missive, issued this week: “The Liberal government’s ill-conceived policies have driven a $9-billion company out of New Brunswick, sending with them jobs for New Brunswickers at home and valuable investment dollars. This Liberal government refuses to accept responsibility for this disappointment, and have resorted to concealing the facts from the people of New Brunswick – but we deserve much better.”

We do, indeed.

We deserve clarity, coherence and political collaboration. We deserve solutions to common problems and humour instead of hubris.

To productively start, let’s first cap the gassy emissions from Freddy Beach.

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Mar 13 2015
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Business, Economy, Energy, Oil and Gas, Politics

Just fracking grow up already!

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As former Quebec premier Jean Charest entreats New Brunswickers to step back, take a deep breath and, in an adult fashion, contemplate the shape of things to come in a province increasingly shy of economic options, local legislators are joyriding all the way to the political playground.

SWN Resources Canada’s vice president Jeff Sherrick sent a letter late last year to the premier’s office, advising it that the company was preparing to “suspend drilling plans and re-dedicate resources to projects in other jurisdictions.”

In other words, in the face of a government-enforced moratorium on hydraulic fracturing in the province, it has decided to pick up its toys and go home or, at least, elsewhere.

“Not knowing if or when the moratorium will be lifted makes it difficult for us to dedicate money to a project that may or may not go ahead in a given year,” Sherrick explained in the memo, a copy of which Opposition Tory Leader Bruce Fitch obtained through the right to information act.

In fact, SWN is not above playing its own games. According to a recent Telegraph-Journal story, “The gas company stated its desire to continue exploration in the province. (It) has requested a long-term extension of its licenses to search, which it said (in its letter) would provide ‘the stability needed to effectively plan and lessen the financial risks’.”

So, then, is it staying or going? Only Energy Minister Donald Arsenault, it seems, knows the answer as he alone holds the keys to the playground.

Still, when it comes to a vigorous round to “red rover” – of not, precisely, serious economic development planning – all are welcome.

Here’s Fitch on the subject of moratorium, as reported in the T-J: “The sad reality of the situation is that now, in the sixth month of this government’s mandate, the government members are more confused than ever as to what to do with this gas moratorium. . .They scramble to figure out how they can meet the conditions or excuses that they made up a few months ago while gas supplies dry up and companies pull up stakes and leave the province with their investment dollars and their jobs that would have been created here if the Liberals had not gone forward with their moratorium.”

Here’s Arsenault’s rebuttal: “The Opposition is all over the place. When it comes to shale gas and hydraulic fracturing, we have been very clear for two-and-a-half years. We will impose a moratorium in New Brunswick. Do you know why? It is because we care about what New Brunswickers have said all along. We care because we know that the royalty scheme is not maximizing the benefits for New Brunswick. We also care that the then government did not want to consult with First Nations. It is not only a moral responsibility, but it is also the law.”

Now here’s Charest on the subject at a business gathering in Moncton on Monday: “We want to see development of our natural resources. We want to see it done right, but we also see a lot of projects that are stuck and not moving ahead because we are not encouraging the right debate. Fracking in New Brunswick is an example of that. The challenge for us is to have a fact-based discussion on things like fracking, so that we can make a better decision on whether we want this industry to be part of our economy.”

Yeah, good luck with that. I believe there’s still more mud to sling in the political playground that is New Brunswick.

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Mar 05 2015
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Business, Energy, Oil and Gas, Politics

The Frick and Frack of shale gas in N.B.

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The absurd barn dance the New Brunswick government and the province’s gas exploration companies are performing would be mildly amusing to witness if it wasn’t so stubbornly frustrating to behold.

The Gallant government has been clear about its conditions for lifting its moratorium on hydraulic fracturing:  A “social licence” must be obtained; reliable research about the practice’s environmental effects must be undertaken; a strategy to limit the impacts on infrastructure must be written; an approach for negotiating with First Nations communities must be devised; and a royalty regime must be developed to spread the wealth equitably.

Fair enough. So, let’s get on with it.

But, no. Industry and Government are still curtseying and do-si-doing while New Brunswick’s economy – and all of its pent-up capacity – waits for this maddening hoofing to finally end.

Now, the Province finds itself in the broadly untenable position of pondering license extensions to established exploration companies, who have signed agreements to frack, only to avoid any legal repercussions that may stem from industry’s desire to sue its institutional arse in court for, in effect, revoking those agreements.

But will Government consider reversing its election promise (a moratorium on fracking), a move that would settle the conundrum once and for all, in return for closer public-private sector collaboration on all outstanding issues associated with shale-gas extraction?

Not on your life.

In fact, Energy Minister Donald Arsenault is adamant that he can dance quite well, even with his feet tied together.

To the Telegraph-Journal he declared the other day, “Despite what the (Tory) opposition is saying, SWN is not ready to run away from New Brunswick. I am not saying that they are in total agreement with a moratorium, of course not. . .But the fact that they requested an extension tells me that they are still interested in New Brunswick.”

On the other hand, he demurred, “I am not obligated to extend it (SWN Resources Canada’s license in New Brunswick). I have the authority to do it; it doesn’t mean that I have to do it.”

That’s what Frick says. What sayeth Frack?

Corridor Resources, the other major player in the provinces, is somewhat more loquacious on than subject than its competitor SWN, which refuses to respond to media interview requests.

Says Corridor CEO Steve Moran: “We have made application with government to. . .extend those leases for all the time the moratorium is in effect.”

What’s more, he says, “We pay them (Government) rental payments for our leases, but we also pay them royalties. We’re still paying them royalties on the producing wells. I don’t see why we should be paying them rental for lands that in essence are stymied.”

Frankly, neither do I.

Nor do I think that any of this even remotely serves the principle of informed consent in a province as evidently concerned about its democratic rights as is New Brunswick – let alone the long-term economic stability that necessarily girds such expectations.

Meanwhile, Moran warns darkly of the day when domestic supplies of natural gas will become scarce, forcing up the price charged to business and residential consumers.

In that eventuality, Arsenault counters, we’ll simply pull in more of the stuff from Pennsylvania where (guess what, boys and girls?) fracking is legal.

Huh?

So it’s okay to import gas, fracked from another jurisdiction at a premium; but it’s not to deploy a similar technology to produce a cheaper supply here at home.

Is it any wonder this province’s economy is on the skids.

Then again, we do love to dance with ourselves – in the dark.

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Feb 24 2015
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Economy, Energy, Politics

Dear potash, you may now kiss the bride

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Until recently, Potash and shale gas in New Brunswick have gone together like a horse and carriage if not, precisely, love and marriage.

But are we now witnessing from the sidelines of a new provincial Jobs Board – more concerned with marrying this region’s disparate economic opportunities than allowing their pervasive separations to widen – the opening gambit of some type of betrothal in the natural resources sector?

Politically, Liberal Premier Brian Gallant’s stern insistence on slapping a moratorium on hydraulic fracturing was a smart move. His Tory predecessors had utterly bungled the file with the predictable result of having neutralized any chance of engendering informed debate, let alone winning hearts and minds on either side of the controversial issue.

Those opposed to the practice of exploding rock deep beneath the ground to extract natural gas, potentially poisoning drinking water, relied on Internet research (some compelling good, some stunningly bad) to reinforce their intractability.

Those who supported the practice, believing that it could be safe as long as regulations in this province were tougher and more reliable than any found in the developed world, remained bewildered by the road blocks and burning police cruisers at Rexton, N.B., in the summer and fall of 2013.

And, as usual in these sort of contretemps, never the twain would meet.

Economically, though, Mr. Gallant’s “wait-and-see” policy regarding shale gas development (Is it benign? Can a social license be negotiated with affected communities? What’s the long-term, dollars-and-cents impact on the province’s finances?) is running down the clock.

The debt clock, that is: hundreds-of-millions of dollars in annual deficits; a $12-billion long-term debt that no degree of public-sector austerity will settle without robust, private-sector economic growth.

So, it comes as no surprise that the Grit government is now talking boldly about vastly expanding potash mining in the province.

In an exclusive for Brunswick News Inc., Adam Huras reports this week that the Province “will issue a request for proposals. . .to explore a massive stretch of land in southern New Brunswick it believes could be home to the province’s next potash mine.”

The area in question reportedly incorporates more than 24,000 hectares (240 million square meters) of land less than an hour’s drive north of Saint John.

Question: What do potash mining operations here use to power their facilities? Answer: hydraulically fracked shale gas.

Another question: Why? Another answer: Because it’s reliable, plentiful and, frankly, cheaper than any alternative.

Now, when a provincial government raises the possibility of opening up its public pocketbook to help finance a major expansion of a demonstrably successful resource industry in order to create good, sustainable, long-term jobs, the long bet appreciates that said government must also understand the importance of the fuel supply said resource industry deploys to justify embroidering its business plan.

It also stands to reason that Mr. Gallant’s cabinet and Jobs Board recognize that any move, on government’s part, to so convincingly enlarge a sector that depends on shale gas will goose opinion about the energy supply (for and against) in the public square, regardless of any moratorium.

Inevitably, that means a conversation – one that ended, unproductively, when the Grit team took office last fall.

Naturally, the talking points from the premier’s office, over the next few days, will tow the party line. No, we haven’t changed our minds, they will say. Yes, we believe there exist legitimate questions about the safety of hydraulic fracturing. Of course, until we know the truth, we will not act precipitously.

Still, that’s what every marriage broker says when he or she is conducting their due diligence.

Will the groom behave honorably? Will the bride comport herself in the best interests of her extended family and community?

How deliciously ironic that those who signed the first divorce papers might now officiate at the new wedding?

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Dec 31 2014
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Climate, Politics, Society

The good, the bad and the merely okay of 2014

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To despise, revile and ridicule the year that was is a taunting temptation. So too, is the impulse to celebrate, rejoice and exult. Rarely, do we find, in repose, the clarity to declare that the past 12 months of our brief lives were. . .well, just fine, thank you very much.

They weren’t spectacular; but neither were they calamitous. They weren’t elegiac; but neither were they prosaic. They produced (if we were lucky and studious) just enough to help us keep calm and, as the saying goes, carry on.

In fact, in New Brunswick, there was much to mark merrily in 2014, starting with the orderly transfer of democratic power (a miracle, by every standard, on this vicious orb).

The young and energetic Liberal Leader, Brian Gallant, replaced the slightly older, but equally energetic, David Alward as premier of the province. The latter receded gracefully into the background of politics, after one term in office, as the former rode the crest of a wave of support appropriately reserved for honeymooners.

Premier Gallant promised in his campaign to restore the legal apparatus for a woman’s right to choose her own reproductive options. Within a month of assuming office, he did just that. According to a CBC report in late November, “The premier promised in the election campaign to review Regulation 84-20, which requires women seeking a hospital abortion to have two doctors certify it as medically necessary. The review identified barriers to abortion services, according to Gallant.

“It also requires the procedure to be done only by a specialist, whereas other provinces allow family doctors to perform abortions. The so-called two-doctor rule has been in place for two decades, supported by previous Liberal and Progressive Conservative governments.

“Identifying those barriers was an important step towards eliminating them,” Mr. Gallant stated, adding that the new rules will no longer insist that two doctors guarantee that the surgery is medically warranted. As the CBC reported, “This will put reproductive health procedures in the same category as any insured medical procedure, according to the government.”

Indeed, the premier noted, “We have identified the barriers and are proceeding to eliminate them in order to respect our legal obligations under the Supreme Court of Canada ruling and the Canada Health Act regarding a woman’s right to choose.”

Lamentably, that’s where the innovation ended.

As for natural resources, the new premier has been equally faithful to his campaign promises (much to the surprise of every scribbling pundit in the province, including Yours Truly). He will not, he says, sanction any form of fracking as long as he remains unconvinced about the technology’s safety and environmental soundness. And, for now, he remains unconvinced.

This decision could cost New Brunswick tens-of-millions of dollars a year from a mature industry that has never polluted the air, spoiled the soil or poisoned the water table. It might even inspire a wholesale exodus of oil and gas industries from this province at a time when the budgetary deficit clings perilously close to $400 million and the long-term debt hovers around $12 billion.

Still, Mr. Gallant is adamant. And, for that, at least, he should be respected. As an elected representative, he is sticking to his guns. How he intends to pay for his multimillion-dollar infrastructure build over the next four years remains an open question – and, for now, a question for another time.

In the end, as New Brunswick’s social contract appears progressive, its economic future looks very much like its present and recent past: unspectacular, uninspired and fundamentally unproductive.

For all the good this province’s new government purports to arrange for its citizens, all who might pay for such noble intentions find cold comfort at the curb to which they’ve been kicked.

For all the bad this province’s new government hopes to avoid, all who might benefit from such principled injunctions obtain higher costs at local fuel depots fed by foreign oil and gas.

As for the rest of us, the merely okay with the status quo, we’ll just keep calm and carry on, hope for the best and imagine that at this point in our brief lives we are, indeed, just fine.

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Dec 30 2014
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Business, Government, Oil and Gas, Politics, Science

Oh, a-fracking we will not go. . .

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You have to hand it to him. If nothing else, New Brunswick Premier Brian Gallant is a man of his word.

He galloped into office with a promise that, he believed, resonated with most voters: No more fracking, of any kind, until proof emerges that the process can be rendered safe and harmless to the environment (by which standard, we might all be wise to follow our children west to Alberta, where fantasies do, indeed, come true).

Then, a week before Christmas, he brought down the hammer.

“We have been clear from Day One that we will impose a moratorium until risks to the environment, health and water are understood,” Mr. Gallant told reporters in Fredericton, after he announced new amendments to the province’s oil and natural gas act that prohibit both water and propane-based fracking in the search for commercially exploitable shale gas.

The premier also made it clear that companies may continue to explore for resources. It’s just that they can no longer frack in their efforts to assess the potential of some 77-trillion cubic feet of onshore shale gas that is estimated to lie beneath the surface – which is a little like telling someone that he may own a car, just not the engine.

Still, Mr. Gallant allowed, “We’ll certainly always listen to businesses that may have concerns and try to mitigate some of the impacts if they (believe) them to be negative on their operations.”

Not surprisingly, the CEO of Corridor Resources had a few choice words to share. “We have always maintained that a moratorium is not necessary for an industry that has operated responsibly and safely in this province,” Steve Moran told the Saint John Telegraph-Journal on December 18. “Here is an industry that wants to create more jobs and they just basically shut it down. . .We expect that the government of New Brunswick should want to fully understand the potential rewards of allowing the industry to proceed, while ensuring the risks are manageable and acceptable.”

What’s more, he said, “The only certainty is that nobody will ever know the economic potential, should hydraulic fracturing no longer be permitted. To not allow the work to continue, would amount to a refusal by the government of New Brunswick to ask the question  of what the reward of pushing this resource might be. We would consider that a wasted opportunity for the people of New Brunswick.”

And, not incidentally, for Corridor, itself, which has over the past several years invested upwards of $500 million on the industry in this province.

Still, it’s not as if Mr. Gallant had left many options for himself. Breaking so fundamental a campaign promise in these early days of his term might have been politically suicidal (though, a strategist might argue that this is precisely when one wants throw one’s pledges under the bus; the public’s memory grows mighty short when economic development flowers from a broken word or two).

Mr. Gallant’s predecessor, Tory Premier David Alward faced a similar Faustian decision: raise the provincial portion of the HST, as every mainstream economist advised, or keep his campaign promise to maintain the status quo (note, of course, how well that worked out for him in the end).

Politics aside, it’s not clear, in any of this, what will constitute “safe” and environmentally benign fracking procedures. According to the premier, “Any decision on hydraulic fracturing will be based on peer-reviewed scientific evidence and follow recommendation of the Chief Medical Officer of Health.”

If the approach now involves reviewing the evidence of natural degradation from fracking in jurisdictions other than New Brunswick, how relevant is one state’s or province’s experiences to our own?

According to a New York Times investigation, published last month, in North Dakota “as the boom (in shale gas) really exploded, the number of reported spills, leaks, fires and blowouts has soared with an increase in spillage that outpaces the increase in oil production,” partly because “forgiveness remains embedded in the (state’s) Industrial Commission’s approach to an industry that has given North Dakota the fastest-growing economy and lowest jobless rate in the country.”

Four our part, the tolerances of New Brunswick’s own regulatory regime are not something we’re likely to test any time soon.

On that, we have Mr. Gallant’s word; and, so far, his word is good.

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Nov 11 2014
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Business, Energy, Environment, Government, Oil and Gas

A moratorium that’s missing in action

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Something has put the swagger back into Steve Moran’s step. The CEO of Corridor Resources is pulling his best impression of Mad Magazine’s mascot, Alfred E. Neuman, these days. What, him fret?

“We’re a little bit worried about the short term, but over the long term, no, we’re not as concerned,” he told the Telegraph-Journal last week, regarding the New Brunswick government’s decision to slap a moratorium on hydraulic fracturing in shale gas development.

“We think government officials understand the potential of the resource here and we think that once they feel they have addressed their issues in terms of health and safety that they will come around and that we’ll be back to work. . .We are confident that, over time, we will work our way through this moratorium.”

All of which raises an interesting question: What moratorium would that be?

The new Liberal government of Brian Gallant has been threatening to level a temporary ban on fracking since long before their election win.

Indeed, it’s not too hyperbolic to say that more words have been expended on the potential perils to human health of hydraulic fracturing than there has been gas extracted from the ground.

Here’s the new premier on the subject two weeks ago: “We believe there should be a moratorium on hydraulic fracturing due to the lack of information concerning the risks to our environment, our health, and our water. I think it’s important for people to know what we’re concerned about – it’s the process of extraction called hydraulic fracturing.”

Now, here’s Energy Minister Donald Arseneault just last week at the New Brunswick Exploration, Mining and Petroleum conference: “We have a clear mandate from the people and a very consistent message over the last two years that we want a moratorium on the shale gas industry. We had a clear mandate on election day to move forward on that and that’s what we are going to bring forward in the near future.”

Again, when, exactly, would that be?

In reality, it is not at all clear that the Liberals have received a “clear mandate from the people” on this issue. Some surveys conducted before, during and after the election campaign indicated that the public in this province is deeply divided on hydraulic fracturing. If anything, the edge seems to go to the pro-gas lobby as long as the industry can provide credible, verifiable assurances about its safety practices and environmental stewardship.

Neither is it clear that Messrs. Gallant and Arseneault are singing the same tune, let alone from the same song sheet.

There’s a big difference between slapping a ban on the shale gas industry, as Mr. Arseneault is mumbling about doing, and carefully parsing the distinction between hydraulic fracturing and other methods of resource extraction, as Premier Gallant is wont to do.

One definitively slams the door; the other leaves it open just a crack.

Of course, in this parade of mixed messages, Mr. Aresneault has been a marvelous band leader.

On the tricky position into which any sort of moratorium would put Corridor Resources and its gas customer Potash Corp., the minister weaved for the Telegraph-Journal earlier this month:

“The last thing we want to do is potentially put certain operations in jeopardy. For me, PotashCorp is a major player in New Brunswick. It’s a concern for me. It doesn’t mean that it gives everybody a green light, but it’s definitely in the back of my mind that I’ve got to be conscious and responsible going forward.”

As to the fate of PotashCorp’s new Picadilly mine without ready supplies of fracked natural gas, Mr. Arseneault said, “Those are the questions we are going to be asking the company. If we didn’t impose a moratorium, what is the activity they have planned for the next couple of years? Having a moratorium, how will it impact their operation? Will it impact potash? We haven’t settled on a specific menu other than we know there will be a moratorium.”

But, I wonder if that’s even certain anymore.

Indeed, Steve Moran, is there something you’re not telling us?

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Nov 04 2014
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Business, Economy, Energy, Oil and Gas, Politics

It’s time to get clear on natural gas

Welcome to the energy big leagues, Mr. Premier.

Wheels upon wheels, gears upon gears, the squeeze play against Brian Gallant’s determination to impose a moratorium on hydraulic fracturing in New Brunswick – the preferred industry method for extracting natural gas, with water, sand and a proprietary soup of chemicals,  from sedimentary rock – has officially commenced.

Not that there’s anything especially surprising about Corridor Resources’ public insistence that 30 of its fracked gas wells supplies PotashCorp’s operations in the Sussex area of the province – to no ill effect on the water, soil and air – with a competitively priced, comparatively clean source of fuel with which to dry the fertilizer for market readiness.

Nor is their anything particularly shocking about PotashCorp’s addendum last week.

“Access to a secure, stable and sustainable gas supply is critical to our. . .longterm success,” New Brunswick General Manager Jean-Guy Leclair told the Telegraph-Journal. “While there are alternate fuel sources for our facility, they would have profound implications on our current and future operational costs.”

Read between the lines, Mr. Premier. That’s a palpable threat. By now, you must know this. What’s mystifying is why you apparently didn’t see it coming.

Or, perhaps, you did, and your hard line in the sand during the election campaign was merely a political gambit to win over some voters.

Maybe your strategists advised you to hold that line for as long as you could and then capitulate only when major industrial players left you no choice.

If I had been one of your back-room boys, I would not have counselled this: Stay true to your principles until such time as the oil and gas lobby intimates major job losses; then reverse course in the broader interests of economic development.

And, in the process, blame the big, bad bogey man of corporate Canada for forcing your hand. “The devil made me do it, folks,” you might plead. “What can I say?”

Whatever is the case, all of it has been poor politics, poorer public policy and a fundamentally bad start for a new government.

And it’s getting worse.

Cabinet solidarity is one of the rocks that grounds leadership in a parliamentary democracy. It tells the electorate that the men and women the premier has chosen has his or her back, and, in the process assures the great, voting unwashed that they haven’t made a colossal mistake at the ballot box.

So, under these circumstances, what are we to make of Mines and Energy Minister Donald Arseneault’s freelance, off-playbook commentary last week?

“I was the minister back in 2007 who struck the deal to attract that investment of $2.2 billion (PotashCorp’s expansion) to New Brunswick,” he told the Telegraph-Journal last week. “We do know that Corridor feeds gas to the potash mines, and for me that is a very important component. . .For me, PotashCorp is a major player in New Brunswick. . .The last thing we want to do is potentially put certain operations in jeopardy.”

Now, we cut to a Page 3 story in the same organ on the same day.

“No,” declared Premier Gallant, “for us, it is a hydraulic fracturing moratorium, and we’re certainly willing to meet with different operations, different businesses, all stakeholders and New Brunswickers to understand the best way to implement this moratorium.”

None of which actually clarifies anything, except that the young premier of this province understands practically nothing about energy politics and, far more troubling, he seems oblivious to the worries of at least one of his important lieutenants – the one in charge of, arguably, the most important economic portfolio.

What now shall we expect? Will a great muzzling commence?

There is a way, of course, to safely and responsibly frack for gas in New Brunswick. We’ve been doing it for years. As long as we adhere to the tightest regulations our democracy provides — with the most comprehensive environmental oversight common sense produces — we have an even chance to reduce our reliance on far dirtier forms of fossil fuel and maybe, just maybe, generate the economic incentive to fully transition into a renewable, sustainable society. There is nothing new in any of this.

What is new is that we, in this fine, elegant, innocent part of the world must face the fact that we need the hard, tough, clear leadership to get us where we need to be.

Welcome to the energy big leagues, New Brunswick.

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