Balance will ensure natural gas industry developed safely

Contributed to The New Brunswick Telegraph-Journal
Sheri Somerville
Natural Gas Advisor
Canadian Association of Petroleum Producers
May 26, 2014

The Council of Canadian Academies report on natural gas development from shale has received widespread attention across the country, especially in New Brunswick.

While the report does a good job characterizing the potential risks associated with developing natural gas from shale, it falls short in describing the regulatory measures and industry operating practices that exist in jurisdictions where natural gas has been developed for many years.

For example, the five elements the report lists as required for "an effective framework for managing the risks posed by shale gas development" are already in place in Alberta and British Columbia, Canada's top natural gas producers. These proven regulatory frameworks are solid examples of regulatory excellence for jurisdictions seeking to establish their own natural gas industry.

That's what the New Brunswick government did as it developed rules for the province's natural gas industry: it took the time to learn from jurisdictions with a proven regulatory framework. This prudent approach resulted in a set of rules for natural gas development that address the report's five elements.

As a result of effective regulations, industry operating practices and continuous performance improvements, our industry is highly confident the natural gas development processes we use are effectively managed to protect the environment and the public.

We welcome scientific research to inform policy and regulations, industry operating practices and technological innovation. However, in addition to sound science regarding potential environmental impacts, good public policy must consider economic growth, energy security and reliability, and recognize the market realities shaping supply and demand across North America.

Demand in New Brunswick is increasing as natural gas distributors are consistently adding customers and as the province seeks to attract businesses and industries that require natural gas to fuel operations. A recent poll of Saint John businesses indicates about 70 per cent support natural gas development for a number of reasons, such as the value of developing a reliable, long-term domestic source of supply.

Today, New Brunswick's 12,000 natural gas consumers and industrial users get their supply from offshore natural gas fields. Natural gas from New Brunswick's McCully field also contributes a small portion to that supply.

As production from offshore gas fields is declining, however, new sources of supply may be required.

So it's likely the potential supply gap in New Brunswick will be met by onshore natural gas from within North America, mostly from nearby unconventional fields that use hydraulic fracturing to unlock deep reservoirs.

New Brunswick now has the opportunity to develop its own secure, reliable source of supply, provided the province's natural gas resource is proven to be commercially viable.

As demonstrated in Canadian jurisdictions where natural gas is produced, the economic benefits are significant: natural gas development creates jobs, contributes to economic growth and generates government revenues. Also as demonstrated, our industry develops resources safely and reliably as a result of industry operating practices and comprehensive government regulations that ensure public safety and protection of the environment.

We agree with the Council of Canadian Academies report's main focus area - the need for sound wellbore construction to prevent methane or fluids from leaking into groundwater.

Wellbore design is strictly controlled by provincial regulators. In New Brunswick, as well as in Alberta and B.C., several layers of steel and cement are required to prevent anything travelling through the wellbore from coming into contact with drinking water aquifers. Companies also pressure-test wells to ensure wells can withstand the maximum pressures exerted during hydraulic fracturing, and they monitor pressure during hydraulic fracturing.

In addition, natural gas producers use voluntary operating practices for hydraulic fracturing that apply nationally. They complement regulations and identify sound wellbore construction as fundamental to protecting groundwater and responsible oil and natural gas development. The operating practices include requirements for companies to design, install and maintain wellbores to prevent any fluids from migrating into groundwater.

This is not to say industry should not seek ways to improve. When areas for improvement are identified, industry changes operating practices, and we expect governments to modify policies and / or regulations. Our industry's focus on continuous performance improvement remains the mainstay of responsible development.

Excellence in environmental and social performance, and a competitive fiscal and regulatory framework are vital to assessment and development of New Brunswick's natural gas resource potential.

Balancing these vital elements will ensure New Brunswick's natural gas resource is developed safely, reliably and in an environmentally responsible manner, bringing benefits in the form of jobs, economic prosperity, and a secure and reliable energy supply to the people of New Brunswick.