The Future Of Oil And Gas In Nova Scotia
Guest editorial by Brad J. Hayes, P.Geol, President, Petrel Robertson Consulting Ltd.
Hydraulic fracturing has been a headline topic in Nova Scotia during the past few months, and particularly this past week. The latest surge of news occurred as David Wheeler’s Expert Panel released their comprehensive report on the environmental, socio-economic and health impacts of hydraulic fracturing, followed a few days later by Energy Minister Andrew Younger announcing his intention to introduce legislation banning “high-volume” hydraulic fracturing in the province.
As a member of the Wheeler’s Expert Panel, I see several problems with this chain of events.
Ten Panel members and the Chair, representing high-level expertise in technical, social, legal, medical and economic disciplines, put in a huge amount of work over several months to produce a comprehensive, well thought-out report tailored to the petroleum exploration potential and the communities of Nova Scotia. Yet Minister Younger saw fit to impose a ban on fracturing, which was not recommended in the report, without spending even a week to carefully consider the findings and recommendations presented to him.
In an op-ed article, and in response to questions on his decision, we heard a number of erroneous and/or out-of-context statements, indicating clearly that the Minister had not heeded the advice of the report he had commissioned:
- He referred to “examples of things going wrong,” and talked about “duelling documentaries” on the safety and merits of hydraulic fracturing — implying that there is very little understanding about risks associated with fracturing and unconventional hydrocarbon development. He did not reference the carefully-constructed Risk Matrix in the Wheeler report, which quantified risks in the context of Nova Scotia, and recommended mitigation measures where required.
- The Panel clearly and carefully constructed a realistic scenario of unconventional gas development in Nova Scotia to test potential economic benefits. The Minister “suggested the Wheeler report looked at the onshore oil and gas industry as a whole and not shale gas fracking in particular.” This statement is absolutely false.
- The Panel went on to analyze the potential economic benefits arising from the development scenario, concluding that such a development could generate up to $1 billion annually to the economy, billions of dollars in royalties to the government over time, and as many as 1,500 direct jobs during development. Younger said: “It’s speculation what the net revenue would be.... Only a small portion of that is actually related to hydraulic fracturing.” Again, absolutely incorrect. The government did not read and understand the report it commissioned. The scenario and economic analysis are clearly laid out and documented, and were generated in consultation with Department of Energy staff.
- Minister Younger makes repeated references to the “discomfort” of Nova Scotians as justification for his decision to paralyze an industry — and ignores the Panel’s discussions of rigorous and effective regulatory regimes governing hydraulic fracturing in Western Canada. He also does not reference the Panel’s recommendations to undertake consultation and education in communities to help them understand the industry and how operations are being conducted safely elsewhere.
Minister Younger downplays the unconventional oil and gas potential of his province, noting that 125 wells have been drilled with no commercial production, and that there are no applications for hydraulic fracturing currently before the province. He ignores the scientifically-generated resource projections for Nova Scotia, he doesn’t see that similar prospectivity is now being tested and developed in analogous basins in New Brunswick, and he doesn’t understand that exploration in new basins generally takes a lot of drilling (remember how many dry holes were drilled in Alberta before Leduc?).
And why would any company apply to frac a well when fracturing is under a moratorium? Why would any company want to explore in a province where the government arbitrarily shuts down a process that is powering the economies of Western Canada and turning gas markets in North America upside down? Minister Younger calls Nova Scotia an “energy leader,” yet homes and utilities are still burning coal and fuel oil, and substantial sources of renewable energy like tidal power are years away from producing commercially.
The Minister’s ban on hydraulic fracturing guarantees that no company will explore for oil and gas in Nova Scotia, conventional or unconventional. There will be no research to move the science forward, as recommended in the Report, because no data can be gathered. And take no solace in the Minister’s references to “high-volume” fracs; there are no recognized subdivisions between “low” and “high” volume fracs, and the amount of fluid required to successfully stimulate a reservoir is dictated by the rocks, not by the government.
So what is the future of oil and gas in Nova Scotia?
Nova Scotians will continue to buy oil and gas from other places — places with jobs and vibrant economies arising from unconventional oil and gas production — because their government doesn’t want them to produce it themselves.