While Canada’s unconventional gas development is not yet as robust as production in the United States, the potential is huge. The Canadian Society of Unconventional Gas has estimated that “at current consumption rates, including exports to the United States,” Canada now has “enough gas to supply our needs for the next 100 years or more.”
In places like the Bakken formation in southern Saskatchewan (and North Dakota and Montana), in the Horn River basin straddling British Columbia and Alberta and across the Marcellus Shale formation in Appalachia, which extends into Eastern Canada, unconventional gas development is either well under way or it’s being studied by provincial and territorial governments.
Here is the snapshot of Canada today:
Production and development are centred on three river basins – the Horn, Liard and Montney – in northeastern B.C., where there’s an estimated 1,000 trillion cubic feet of unconventional gas (about 500 times the total gas, conventional and unconventional, that Alberta exports every year). Last year, the B.C. government set up a registry to list the locations of fracking activity, along with details about industry practices and chemical additives. The registry’s information is generally aligned with the details released under the Canadian Association of Petroleum Producers’ voluntary disclosure program.
Alberta and Saskatchewan
Both provinces are considered to have huge potential unconventional gas reserves, and there is lots of activity. Alberta remains Canada’s powerhouse of conventional energy development (producing 70 per cent of conventional and unconventional gas). The province actually has considerable experience with fracking – an estimated 167,000 wells have been hydraulically fractured since the technology was developed more than five decades ago. Saskatchewan’s government has been providing financial incentives to encourage unconventional gas development.
Most of the bedrock formation in southern Ontario is similar to that of the gas-producing northeastern United States, but so far there is no indication that there are major gas reserves in the province. In any case, with a third of Canada’s population in southern Ontario, approval to extract unconventional gas would require companies to go through environmental regulation hoops that at this point would make production prohibitively expensive and a public-relations nightmare.
More than 400 exploration licences were granted between Montreal and Quebec City in 2010, but then the previous provincial government slapped a moratorium on this activity because of the “complex and fragile” environment. The Parti Québécois government has continued the ban.
Companies have shown interest in unconventional gas in New Brunswick, amid concern from environmentalists about protecting the province’s water. In 2011 the provincial government announced plans for regulations requiring baseline water testing prior to exploring or drilling, compensation to landowners in cases of contamination, and, in line with CAPP’s voluntary program, a requirement for full disclosure of chemical additives.
Also important to consider is the legal duty to consult with First Nations before developing unconventional gas. In 2010, for example, the Dene Tha’ First Nation in northeastern B.C. challenged the provincial government in the B.C. Supreme Court over a decision to licence oil and gas development.
Sources: Alberta Energy, Canadian Society of Unconventional Gas, Willms & Shier Environmental Lawyers LLP