Why a moratorium is bad policy

Contributed to The New Brunswick Telegraph-Journal
Tim McMillan
President and CEO
Canadian Association of Petroleum Producers
November 22, 2014
My first trip as the new president of the Canadian Association of Petroleum Producers included a visit to Fredericton, where I spoke at the Exploration, Mining and Petroleum Conference in early November.

As someone who grew up and worked in Saskatchewan before moving to Calgary, what struck me were the economic similarities between New Brunswick today and my home province in the late 1990s.

Back then, Saskatchewan's economy was depressed and unemployment was high. Our young people had few opportunities at home and were forced to find employment elsewhere. On weekends, the driveways and parking lots would fill up with cars bearing Alberta licence plates, and everyone knew the kids and grandkids were home to see their friends and families. And as sure as they came home Friday evening, they would pack up their cars and head back Sunday night to Alberta where they had found an opportunity. I know many families in New Brunswick can relate to this experience.

Today, young people in Saskatchewan are finding jobs at home. The province's population is growing and the unemployment rate is the lowest in the country.

A big part of this fundamental shift is directly related to the production of Saskatchewan's oil and natural gas resources. More specifically, it is related to the use of hydraulic fracturing and horizontal drilling to develop these resources. Similarly, British Columbia and Manitoba are benefiting from the responsible development of natural gas and oil resources, which creates jobs, contributes to economic growth and generates significant government revenues that help pay for schools, hospitals and roads.

A moratorium on hydraulic fracturing would preclude New Brunswick from benefiting from a similar opportunity, namely the responsible development of its onshore natural gas resources, provided these exist in commercially viable quantities.

A moratorium would stop further exploration and investment in New Brunswick's natural gas industry and be a barrier to economic growth and social benefits. It would deprive natural gas users in the province from secure, reliable and affordable domestic natural gas at a time when demand for this resource is growing and offshore natural gas supplies are projected to decline. Ironically, this means New Brunswick may have to import natural gas from jurisdictions that are benefitting from hydraulic fracturing.

From my perspective and experience with Canada's natural gas industry, proceeding with a moratorium on hydraulic fracturing is unwarranted and may result in a missed generational opportunity for the people of New Brunswick.

I understand people have questions about how natural gas development may impact the environment. It is important these questions are answered, by our industry as well as government, to give people confidence in our industry.

Here's one statistic to demonstrate how natural gas and oil are developed safely and responsibly in jurisdictions that allow hydraulic fracturing: over the past 60 years, more than 175,000 wells in B.C. and Alberta have been hydraulically fractured without impacting drinking water, according to data from the regulators in these provinces.

Our industry is proud of this record. Canada can be proud of world-class, effective regulations, industry's strong technical base and attention to responsible operations, including our operating practices for hydraulic fracturing. Natural gas producers collectively developed these practices to further improve industry's environmental performance across Canada.

Prior to joining CAPP, I was a cabinet minister in the Saskatchewan government. One of my portfolios was energy. In this capacity, I asked myself and my staff two primary questions before deciding whether an energy project should proceed. First, based on the information available and experience with similar projects both at home and elsewhere, could we confidently say this project would be developed in a manner that is safe for the public and the workers operating it? Second, could it be done in an environmentally responsible manner? Before any project went ahead, the answer to both questions had to be "yes."

The demonstrated success of the industry in other provinces, the technical facts and the strong body of scientific evidence all indicate hydraulic fracturing can be done safely and responsibly while providing valuable natural gas, jobs and government revenues to communities in return.

I encourage the province to consider this experience and evidence as it decides the future of hydraulic fracturing in New Brunswick and future opportunities for New Brunswick families.