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Nova Scotia Enacts Two-Year Fracking Ban

Nova Scotia said it will extend its review of hydraulic fracturing (fracking) until mid-2014, enacting a moratorium on the practice for at least another two years.

Meanwhile, neighboring New Brunswick has granted a request by Windsor Energy Corp. to have its expired three-year license to explore for oil and natural gas converted to a five-year lease for exploration and possible development.

Nova Scotia Energy Minister Charlie Parker said the province's Hydraulic Fracturing Review Committee -- formed last April by the province's Energy and Environment departments (see Shale Daily, April 12, 2011) -- would use the additional time to accommodate technical reviews of fracking currently under way in Canada and the United States.

"I have talked to many Nova Scotians who are concerned about their drinking water and the implications of injecting sand, chemicals and large volumes of water into the earth," Parker said. "They have questions and concerns, and we will take time to learn from jurisdictions with significantly more experience in this area than Nova Scotia."

Environment Department spokeswoman Karen White told NGI's Shale Daily that Halifax did not enact a ban on fracking last April because there weren't applications to perform the practice in the province when the review was launched. "But the government has decided that since the review was going to be extended into 2014, it was in the best interests of the public to enact a moratorium going forward," White said Thursday.

Angie Leonard, spokeswoman for the Canadian Association of Petroleum Producers, told NGI's Shale Daily that despite the moratorium, oil and gas companies would still be allowed to continue their exploration activities in the province. She said Halifax would also continue to process applications for conventional oil and gas drilling.

"We respect the government's willingness to review regulation and to try to have best practices put into place in the province," Leonard said Thursday. "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 told NGI's Shale Daily that after investing more than $30 million in Nova Scotia over the past five years, the company would target oil in Montana and North Dakota's portions of the Bakken Shale.

"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 said Thursday. "The resource potential for gas resources sits at some 65 Tcf [and] is as much as the offshore."

Elmworth Energy, at the time a Canadian subsidiary of Denver-based Triangle, signed the first onshore shale gas development lease in Nova Scotia three years ago (see Daily GPI, April 17, 2009). Hill said that 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. Elmworth, now Triangle, would 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.

Triangle has approximately 475,000 gross (413,000 net) acres in Nova Scotia.

In New Brunswick, Natural Resources Minister Bruce Northrup said Calgary-based Windsor was given a three-year license to explore for oil and natural gas in the Sussex, Hampton and Quispamis areas of the province in November 2008, under the former Liberal government of Premier Shawn Graham.

Northrup said that under the terms of that license, which expired on Nov. 12, Windsor had committed to spend C$4.5 million on exploratory work. He said his staff had determined that the company had actually spent more than that amount. "A lease would allow the company to continue exploration and possibly carry out development on the same area covered by the expired license," Northrup said.

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 Shale Daily, Nov. 15, 2011). Windsor CEO Khalid Amin apologized to Northrup for the incident, and an investigation was launched by the Royal Canadian Mounted Police (RCMP).

Natural Resources spokeswoman Anne Bull told NGI's Shale Daily the RCMP did not file charges in the case.

"This has not been an easy decision for me but, legally, it is the only one that respects the contract with the former government," Northrup said. "We have all learned from this experience. It has shown us that we need to clarify and strengthen some of the rules related to oil and natural gas exploration and development. These have to do with authorizing exploration activities and dealing with violations."

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