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Quebec Political Shift Could Crack the Door to Fracking

Odds increased Monday that drilling and hydraulic fracturing will eventually spread into Quebec's share of eastern shale deposits, when the Liberal party returned to power on a business-friendly campaign platform of encouraging job-creating economic growth.

A year after enacting a ban against even experimental trials of fracking in populated areas, a short-lived Parti Quebecois regime lost a provincial election that turned into a plebiscite on plans for a third referendum on separation from Canada. French Canadians already voted twice against declaring independence in 1980 and 1995, prompting critics to call recurring separatist efforts "the neverendum."

But no easy or swift industry invasion was forecast for Quebec's Utica and Marcellus shale formations, despite geological appraisals holding out hopes of developing oil and gas supplies measured in billions of barrels and trillions of cubic feet.

Premier-elect Philippe Couillard, a neurosurgeon and former provincial health minister, is on record as opposing hasty action based on fear instead of evidence, but not as a promoter of rushing to open politically and environmentally sensitive areas to industry. Couillard was a member of the last Liberal cabinet in 2008-2012, which suspended issuing licenses for horizontal wells with fracking until completion of a provincial environmental review that a popular outcry against the technology prodded the government into calling.

The review has yet to be completed. But a summary report of findings by 73 specialized studies to date, released early this year, told why fracking became a hot-button issue in Quebec while inspiring little drama in British Columbia or Alberta to date.

In the Texas-sized western provinces, much of the shale wealth is in remote regions where sparse agricultural and aboriginal populations support frontier homesteading and hunting lifestyles with cash incomes from the oil and gas industry. In Quebec the shale bounty underlies some of French Canada's oldest communities, settled into traditional rural livelihoods, as well as affluent ex-urbanite colonies of families blending modern technical and professional livelihoods with country lifestyles.

"Shale gas is problematic because of the location of deposits," says the Quebec report, "Strategic Environmental Assessment on Shale Gas: Knowledge Gained and Principal Findings," or the SEA for short.

"To understand why acceptance of this industry is so low in Quebec, one must first understand the territory concerned and the prospective receiving communities," the SEA says, pointing to the target region along the southern shore of the St. Lawrence River. "The shale gas development zone lies in...an area of 34,672 square kilometers [13,175 square miles], composed of 30 regional county municipalities (RCM), 393 municipalities and four areas not in RCMs, the total population being 2.1 million," the SEA says.

"Nearly 75% of the region is in the permanent agricultural zone and is therefore characterized by farming activities -- 43% of the land and 15,878 farm operations -- together with forestry operations."

The SEA points out that, unlike U.S. states where shale development thrives, Quebec follows the Canadian pattern of split land titles: private property owners only have surface rights, while underground minerals including oil and gas are public or Crown resources. As a result, no popular interest groups form as development promoters to offset opponents of industrial activity anywhere near their backyards.

The SEA suggested big changes will be needed to make French Canada welcoming of fracking: "Though it seems unlikely, it cannot be excluded that different economic conditions, new technologies, changes in energy supply and demand, or a change in political leadership, could shift public opinion in Quebec toward a more favorable view of the shale gas industry."

In the election campaign, the Liberals avoided making any move to dismantle a popular Parti Quebecois drilling initiative in a region far from thickly populated areas. In opposition, shortly before winning election as premier, Couillard said he honors formal commitments or agreements of previous governments unless there are compelling reasons to make changes using proper procedures.

Shortly before the election campaign, government agency Ressources Quebec and four oil and gas firms made a deal to form two joint ventures for a projected C$190 million (US$173 million) in exploration drilling and fracking field trials out in the Gulf of St. Lawrence, on remote Anticosti Island.

Corporate participants include Corridor Resources, Petrolia Inc., Maurel & Prom, Junex Inc. and an additional as-yet undisclosed industry partner. In a statement announcing the arrangement, the government catered to French Canadian pride and desire to inject fresh life into the provincial economy and government budget: "Today, Quebec is asserting its rights over the natural resources that belong to it."

The agreement commits the Quebec government to cover C$115 million (US$105 million) or 60% of the joint venture costs. In exchange, the government will emerge with 50% ownership of all previously issued Anticosti exploration permits and more than 60% ownership of any gas and oil discoveries.

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