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New Brunswick Weighs Shale Wealth, Consequences

Natural gas supplies from Nova Scotia are dwindling, but the province of New Brunswick could join the shale gas renaissance sweeping much of North America, provided its shales can be exploited without harming the environment, New Brunswick Energy and Mines Minister Craig Leonard said Wednesday.

The provincial government is to develop an oil and gas blueprint and release it this spring, which would look at the framework required for the oil and gas industry, keeping in mind that Nova Scotia can't be counted upon for supply forever.

"Natural gas extraction from shale formations has transformed the energy marketplace around the world," said Leonard. "New Brunswick has the potential to take part in that transformation through its own natural gas reserves. We are investigating the opportunity, but we will only permit the expansion of the natural gas industry in New Brunswick if we are convinced it can be done in an environmentally responsible manner."

On Tuesday New Brunswick Premier Premier David Alward's Speech from the Throne 2012 called for expanded research in the arena of shale gas development.

"If the estimates for the potential amount of natural gas are accurate, it has the potential to heat every home in our province for several hundred years, and to provide a significant competitive advantage for our economy," Lt. Gov. Graydon Nicholas said in delivering the speech. "Not to mention the potential for reducing green house gas emissions by displacing imported oil products that we currently use to generate electricity."

Fueling power plants with cleaner-burning natural gas instead of overseas oil is one option to be examined, Leonard said. "Natural gas will play a significant role in reducing greenhouse gas emissions today and into the foreseeable future as it displaces oil and coal as energy sources in our region and provides efficient backup to renewable sources such as wind and solar power," he said.

The New Brunswick blueprint is to focus on five objectives identified as priorities by the public during the past 18 months: environmental responsibility, effective regulation and enforcement, community engagement stability of supply and sustainable economic development. To be addressed in this context are standards of water usage in well operations, well construction, monitoring standards for gas development sites, as well as a human resource plan to ensure inspection and environmental oversight of projects. Further, the provincial government will examine the idea of establishing regulatory bodies such as an oil and gas commission and an oil and gas secretariat.

The provincial government will address the royalty regime and the regulatory model early in 2013 to provide clarity to the public and stakeholders before activities resume on an incremental approach in the spring, Leonard said.

The regulatory framework is to consist of a combination of legislation, regulation and policy administered primarily by the Department of Energy and Mines and the Department of Environment and Local Government. Existing legislation such as the Oil and Natural Gas Act and the Clean Environment Act have the necessary authorities and mechanisms to administer and enforce the bulk of these requirements, Leonard said.

The province's Department of Energy and Mines will work with New Brunswick universities to establish an energy institute that would ensure credible research and monitoring in support of natural gas exploration and production, Leonard said. "The government strongly believes that academia must play a key role in developing our own knowledge base for natural gas right here at home."

The potential for a shale development moratorium in the province has stirred controversy in recent months. Louis LaPierre, a professor emeritus in biology at the University of Moncton, said in a recent report that New Brunswick should require a portion of any natural gas found in its shale plays be set aside for use in the province and should put in place a water use strategy for the industry, but it should not place a moratorium on shale exploitation (see NGI, Oct. 22).

Nicholas said during last week's Speech from the Throne that through the work of LaPierre as well as Eilish Cleary, the New Brunswick government has engaged New Brunswickers on the issue of natural gas exploration and development. "This and other analyses will help lay out the foundation for developing our province's natural gas resources in a safe and responsible manner," he said. "Your government will translate this knowledge into action by developing an Oil and Natural Gas Blueprint, which will shape a vision for our natural resource sector."

Meanwhile in neighboring Nova Scotia, last spring regulators enacted a two-year ban on hydraulic fracturing (see NGI, April 23). Energy Minister Charlie Parker said the province's hydraulic fracturing review committee would use the additional time to accommodate technical reviews under way in Canada and the United States.

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