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Canada's Canol Shale Open for Fracking

A fresh frontier for shale drilling is opening up in Canada's Northwest Territories, a new well approval by the National Energy Board (NEB) has confirmed.

The decision awarded federal ratification to a territorial breakthrough that ConocoPhillips Canada scored during the summer with an aboriginal authority over the industry's prime target, the oil-saturated Canol Shale deposit.

The Sahtu Land and Water Board, which holds the environmental keys to the central Mackenzie Valley, triggered the NEB ruling by granting the Calgary producer a permit for trials of horizontal drilling and hydraulic fracturing.

The approvals let the controversial technology into a sub-arctic landscape of forests, muskeg swamps and permafrost 2,000 kilometers (1,200 miles) north of the border between western Canada and the United States.

The authorizations enable a field trial lasting up to five years. The Sahtu approval (see Shale Daily, July 2, 2012) reversed a regulatory decision that froze the controversial technology out of the Mackenzie Valley during previous winter drilling seasons. The discarded restriction demanded a full environmental impact assessment for exploration wells using horizontal drilling and hydraulic fracturing, a requirement that takes up to three years in northern Canada.

At northern business conferences and in private lobbying, the industry insisted the assessment requirement should only be invoked after initial wells prove the technology performs strongly enough in sub-arctic conditions to embark on large-scale shale production with multiple development wells.

In awarding approval to the ConocoPhillips technology trials, the Sahtu agency settled for a screening procedure of reviewing the landscape and wildlife, consulting residents and devising permit conditions briskly without public hearings.

The Sahtu permits, valid from this June through October of 2017, allow full trials of the advanced technology, including production tests, at two sites on Aboriginal territory southwest of Norman Wells.

Plans disclosed by ConocoPhillips to the native authority call for drilling down as deep as 1,800 meters (5,900 feet) and horizontally for up to 1,500 meters (4,920 feet). Each horizontal leg will be used to blow flow channels into the dense but brittle geological layer with up to 10 hydraulic fracturing injections at a pressure of 60 MPa (8,700 pounds per square inch). Each frack will use liquid mixtures of water and chemicals at rates of 8,000 to 10,000 liters (2,160 to 2,700 U.S. gallons) per minute, and pump about 100 tons of clean sand into the rock as proppant.

The target is a liquids- and especially oil-rich shale formation known as the Canol, which is named after a pipeline built from Norman Wells west to the Yukon as a U.S. and Canadian defense collaboration during the Second World War.

Production halted after VJ Day, then resumed in the mid-1980s at a rate of up to about 35,000 b/d, pumped up by artificial islands built in the Mackenzie River and delivered through a new pipeline that Enbridge Inc. installed to northwestern Alberta.

Output from the old wells has fallen off. The pipeline is only about two-thirds full. Calgary geology, engineering and production firms predict a shale reincarnation could eventually refill the pipeline -- and require construction of another one in its right-of-way -- by producing 100,000 b/d or more.

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