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Nova Scotia Extends Fracking Review Until 2014

Nova Scotia plans to extend its review of hydraulic fracturing (fracking) until mid-2014, which basically enacts a drilling moratorium in unconventional resources for another two years. However, conventional drilling would continue, according to the Canadian Association of Petroleum Producers (CAPP).

Energy Minister Charlie Parker said the Hydraulic Fracturing Review Committee, which was formed last year by the province's Energy and Environment departments (see NGI, April 18, 2011), would use the additional time to accommodate technical reviews currently under way in Canada and the United States. A moratorium wasn't put into effect then because there were no applications to stimulate drilling using fracking.

CAPP spokeswoman Angie Leonard told NGI that despite the moratorium, Nova Scotia producers still would be allowed to drill conventional wells and the province would continue to process those applications.

"We respect the government's willingness to review regulation and to try to have best practices put into place in the province," Leonard said. "But it is disappointing with regard to timing and the delay. Fortunately, most of the companies in Nova Scotia are very much in an exploratory phase, so there has not been a lot of hydraulic fracturing done."

Triangle Petroleum Corp. Executive Chairman Peter Hill said after investing more than C$30 million in Nova Scotia over the past five years, the company now plans to target unconventional formations in the Bakken Shale, specifically in Montana and North Dakota. Triangle has about 475,000 gross (413,000 net) acres in Nova Scotia.

"We are disappointed at the continued reluctance of the government to support the industry and lose development momentum at such a delicate time in the economic development of the province," Hill told NGI. "The resource potential for gas resources sits at some 65 Tcf [and] is as much as the offshore."

In 2009 Elmworth Energy, at the time a Canadian subsidiary of Denver-based Triangle, signed the first onshore shale gas development lease in Nova Scotia. Under the terms of a 10-year production agreement, the company and Halifax agreed to phased well and work commitments, a review in 2014 and several renewal options, Hill said. Elmworth planned to target the Windsor Basin's Horton Bluff formation, which contains both tight gas sands and unconventional shale gas. Hill said drilling for both would have required fracked wells with produced water reinjection.

Meanwhile, neighboring New Brunswick granted a request by Windsor Energy Corp. to convert to a five-year lease an expired three-year license to explore for oil and natural gas.

Natural Resources Minister Bruce Northrup said Calgary-based Windsor was given a three-year license to explore in the Sussex, Hampton and Quispamis areas of the province in November 2008. Under the terms of that license, which expired on Nov. 12, Windsor had committed to spend C$4.5 million on exploratory work, which in the end turned out to be more.

Windsor ran afoul of the province's Oil and Natural Gas Act on Oct. 17 when one of its contractors conducted seismic testing in Sussex without the town's consent (see NGI, Nov. 14, 2011). Windsor CEO Khalid Amin apologized to Northrup for the incident, and an investigation was launched by the Royal Canadian Mounted Police. No charges were filed.

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