Grit Energy Minister: ‘Limited fracking an option’

29 10 2014
Energy minister ‘concerned’ with effect of moratorium on potash operation already using locally produced gas
ADAM HURAS LEGISLATURE BUREAU

Energy Minister Donald Arseneault says he hasn’t ruled out an option that would allow hydraulic fracturing to continue in at least one area of the province, while continuing with plans to suspend it elsewhere.   Arseneault met with top officials from Corridor Resources in Penobsquis on Tuesday afternoon, also touring its Mc-Cully well field – a first major step in shaping a Liberal-promised moratorium on hydraulic fracturing.   But both before and after the meeting, Arseneault told the Telegraph-Journal that he is concerned with what the effect would be if Corridor could no longer supply neighbouring potash mines with needed natural gas.   He has now said that a“regional”moratorium is among the options.   “That and many other things are an option”he said.“That is an option in front of us – that we’ll get to dictate what kind of moratorium we want to put in place in New Brunswick.   “There are many ways we can do that.”   Earlier in the day, he stated: “If you look at various jurisdictions around us, there are various types of moratoriums. What you see in Nova Scotia is very different than what’s in Quebec. Is it only hydraulic fracturing? Is it with propane? Vertical,horizontal? Is it regional? There are all sorts of moratoriums that you can put in place.”   Arseneault entered the meeting with questions as to whether the company leading the development of onshore natural gas in New Brunswick can continue supplying neighbouring potash mines without the use of hydraulic fracturing.   After the meeting, Corridor Resources president and CEO Steve Moran told the Telegraph-Journal that it couldn’t supplyPotashCorp’s need for natural gas without hydraulic fracturing, noting the 30 wells that currently aid in supplying the potash mine roughly two million cubic feet of gas a day were all fracked.   “Over time, the wells that we produce, the production does decline daily,” Moran said.“We wouldn’t be able to keep supplying that potash mine over time without being able to drill more wells in that area.“We were pretty frank with them on that question”   Arseneault, a former natural resources minister, is well aware of PotashCorp’s need for natural gas.   “I was the minister back in 2007 who struck the deal to attract that investment of $2.2 billion to New Brunswick,” Arseneault said.“We do know that Corridor feeds gas to the potash mines,and for me that is a very important component.   “The last thing we want to do is potentially put certain operations in jeopardy.”   Arseneault added: “For me, Potash-Corp is a major player in New Brunswick.   “It is a concern for me. It doesn’t mean that it gives everybody a green light, but it’s definitely in the back of my mind that I have got to be conscious and responsible going forward”   The outgoing president and CEO of Corridor Resources, Phil Knoll, stated in a letter to political parties last month that the company was able to develop its Sussex-area McCully Field resources due to a partnership with nearby PotashCorp that saw its natural gas used to dry potash. He added that the potash company benefits from the cheap natural gas.   “Our natural gas replaced imported oil, resulting in reduced greenhouse gas emissions and significant savings to the potash operation,” Knoll said. “During the drilling of a natural gas well,Corridor discovered a previously unknown potash deposit, which became the resource impetus to develop the recently opened second potash mine.”   A first potash deposit at PotashCorp’s new $2.2-billion Picadilly mine will be reached this week – meaning more natural gas is needed. But how Corridor continues to supply that cheap gas with a moratorium in place remains to be seen.   “That’s a valid point,” Arseneault said. “And those are the questions we are going to be asking the company – if we didn’t impose a moratorium, what is the activity they have planned for the next couple of years? Having a moratorium, how will it impact their operation? Will it impact potash?“We haven’t settled in on a specific menu other then we know there will be a moratorium”   The new energy minister’s comments come as Corridor announced on Tuesday that its $24-million program – that recently fractured five wells multiple times – successfully increased gas production in the McCully Field.   “This summer’s successful fracture program supports Corridor’s belief that properly designed well and fracture programs for the Frederick Brook shale will lead to commercial development,” Moran said.   “The program successfully accomplished its two main objectives which were to increase natural gas production in the McCully Field and provide an opportunity to establish a production profile from multiple intervals within the Frederick Brook shale.”   That profile will aid the company in planning future drilling. The results also point out that, with the exception of one well, all of the wells fractured in the recent program were stimulated with liquefied petroleum gas.   Moran said he didn’t press Arseneault in the meeting about what the Liberals were planning in terms of a moratorium or what it means for its existing development leases.“It was more of an information-gathering meeting from their perspective, “Moran said. “They want to understand our operations much better.”   Arseneault said the Corridor meeting represents his very first visit to any provincial stakeholder as energy minister.   “That shows I understand the importance of the issue, the sensitivity of the issue,”he said.“We went there to gather information, and we did.   “At the end of the day, our principles don’t change – we are going to implement a moratorium, I didn’t lie about it, I made that very clear, but we just need to determine now with the information that we gathered from them and other stakeholders as well what kind of moratorium we want to implement.”   The new energy minister maintains the province, under the former Tory government, has been“too aggressive”in pushing forward with shale gas development.   “As we did that over the last couple years,we really neglected the other components that are so vital in this day and age,” he said, noting a need for social licence and aboriginal consent.   But Arseneault then said Corridor has “done a better job than most other companies in getting that social licence and support from the community. There’s issue, no doubt, but the fact that they have been operating for a while now, I think that shows the company has done a lot of work in that regard”he said.“Those are things that we need to take into consideration.   “In other parts of the province, it was pretty evident to me in the Elsipogtog area there were a lot of concerns that were raised” he said.“It created a lot of emotional tension in those areas, and obviously somebody needs to do a better job.“I think we all have to take responsibility for that – industry, government and the community.”   But Arseneault maintained:“We’re far from having a decision made on exactly what our moratorium is going to look like, but New Brunswickers can expect a moratorium to take place.”   The energy minister said he understands the importance of getting rules in place quickly so that companies know the parameters they must work within, stating that the government should“definitely have an indication of where we want to be by December or the new year. We want to make sure New Brunswick is still attractive for business development,” he said.“The last thing we want to do is to lag too much.   “We have been working on it,so I do expect sooner rather than later.”

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Donald Arseneault, minister of energy and mines Photo: Submitted

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One response

29 10 2014
Douglas Newman

Really??? On Premier Gallant’s recent trip to Calgary to meet with O&G Corp. industry leaders, it was reported that he was in favour of “twinning” the Energy East pipeline with a natural gas component. A disasterous idea, but one that, if completed, would more than adequately supply the NB potash industry’s gas needs *without* drilling any more fracking sites. Might I suggest that *all* available avenues of transport are being feverishly explored to move as much toxic “dilbit” oil and natural gas to the refineries, and then on to foreign countries for the higher prices that they can afford. Bad move for Canada. Bad move for New Brunswick.

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