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New Brunswick's Shale Opportunities Strong, but Support Slipping

New Brunswick could see C$13 million in development for every shale gas well drilled in the province, opening up opportunities for the province to prosper, according to an analysis by Deloitte. However, a recent poll found that critics of development are gaining support.

The Deloitte report, which was commissioned by Future NB and the New Brunswick Business Council (NBBC), also found that each well would require 206 people to develop.

Deloitte, which spent four months on the research, found that the companies with the best opportunities for new business were in the equipment rental, transportation and professional services sectors, including those involved in environmental approvals, surveying and permitting. Companies that perform casing, cementing and pipeline installation would also benefit.

In a recent blog post, NBBC Chairman Francis McGuire said his organization has been studying shale gas development for nearly two years. "During this time there hasn't been clear information about the opportunity for businesses in New Brunswick, should the industry move ahead. We wanted to improve our own understanding and share it with New Brunswickers to help advance our collective knowledge on this important subject."

Deloitte said companies in the province should consider preparing for the arrival of shale gas development by obtaining certifications and becoming familiar with the contracting process. The report said New Brunswick businesses should build relationships and acquire experience, as shale gas development would be extremely competitive. The provincial government was also encouraged to partner with industry and post-secondary educators to evaluate New Brunswick's workforce, and to make adjustments and preparations where necessary.

"I was encouraged to see that there are clear opportunities for New Brunswick businesses in the shale gas supply chain," said Future NB Chair Andrea Feunekes. "It's also helpful to learn that while some New Brunswick businesses have started planning for this industry's development, most businesses surveyed have not yet taken steps to learn about it."

New Brunswick is home to the prospective Frederick Brook Shale. The emerging play lies beneath the Hiram Brook tight gas sands in both the Sussex and Elgin sub-basins (see Shale Daily, Dec. 7, 2010).

Meanwhile, a recent poll found growing support for the opposition Liberal party, which has been critical of shale gas development. The poll also showed that support for Premier David Alward, an advocate for shale gas development, has eroded in one year's time, and more than half of respondents are dissatisfied with the governing Progressive Conservative (PC) party.

According to a Corporate Research Associates poll published last week, a combined 51% were either completely or mostly dissatisfied with the PC government's overall performance in May, up slightly from the 49% disapproval marks recorded last February and in November. Respondents also said that if an election were held today, 41% would vote for the Liberals, while the PC party drew 29% support and the New Democratic Party polled at 27%.

The poll also showed that Liberal Party interim leader Victor Boudreau and Liberal Brian Gallant were each preferred by 31% of respondents for election as premier; support for Alward was 20%. By comparison, Boudreau and Gallant were polling at 17% in May 2012, while Alward was at 37%.

Boudreau and Alward have sparred over shale gas development in the past, and at least one expert has warned that Alward and his government could be turned out of office over the issue (see Shale Daily, Dec. 6, 2011; Nov. 29, 2011; Sept. 2, 2011). Alward and Natural Resources Minister Bruce Northrup have blocked efforts to enact a shale drilling moratorium.

Last February, New Brunswick unveiled new rules for oil and gas development in the province, including a requirement that operators disclose all of the chemicals used in hydraulic fracturing (see Shale Daily, Feb. 20).

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