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Mario Lyonnais, mayor of Ste-Francoise poses on the road leading to a site leased out for preliminary drilling for gas in the area around Ste-Francoise, Quebec, December 31, 2014. (Christinne Muschi For The Globe and Mail)
Mario Lyonnais, mayor of Ste-Francoise poses on the road leading to a site leased out for preliminary drilling for gas in the area around Ste-Francoise, Quebec, December 31, 2014. (Christinne Muschi For The Globe and Mail)

The fight to resurrect Quebec’s shale gas industry Add to ...

Sainte-Françoise-de-Lotbinière became a model for all Quebec municipalities 18 years ago when it decided to save its church from financial ruin by tearing the pews out and allowing the building to be used for community as well as religious purposes.

Now, the mayor of the farming village is attempting a different kind of resurrection: Salvaging support for what’s left of Quebec’s shale gas industry.

“I think we have to push forward” with developing the resource, said Mario Lyonnais, who is also prefect of the larger Bécancour regional county government. “Moving fast isn’t good. But not moving at all isn’t good either.”

It’s been nearly five years since oil and gas companies such as Talisman Energy Inc. did exploratory drilling work in Quebec in a bid to confirm its promising shale gas deposits. That work was stopped amid a public outcry. Today, while environmentalists and other citizens push for the province to enact a permanent ban on the shale industry and the hydraulic fracturing techniques it uses, a defiant minority, including Mr. Lyonnais, wants Quebec to move ahead again with development.

Gone are the dreams of achieving province-wide voter support for a commercial shale gas industry. Polls have consistently showed that Quebeckers are largely against fracking. And no matter how many bottles of fracking fluid industry executives drink to show the mixture of water and chemicals can be safe, there is little chance that will change. Industry backers now are focused on what they say are geographical pockets in Quebec that endorse shale gas. And they’re calling for limited development there with proper oversight.

It is generally acknowledged that industry and government botched the early development of shale gas in Quebec by failing to properly regulate the industry and consult residents. As former premier Lucien Bouchard described it: French Canadians with no culture and familiarity with oil and gas literally woke up one morning to find drill rigs in their backyard without warning, manned by workers, some of whom spoke only English.

Mr. Lyonnais says he understands those concerns, as well as those of other mayors who have more densely populated zones close to potential drill sites. But he says his own town – population 500 – has had close experience with oil and gas companies since the 1940s and he says that on balance, it’s been largely positive.

“They’d take us on site, put a plastic hard hat on our heads and explain to us what they were doing,” he said.

Quebec has enough natural gas to meet its own needs for an estimated 100 years or more, most of it concentrated along the southern flank of the St. Lawrence River in the province’s portion of the Utica shale formation. But it remains untapped and exploration companies with acreage licenses don’t yet know if the gas can be profitably extracted. There’s an estimated 155 trillion cubic feet of gas lodged in shale rock alone, of which maybe one-fifth is recoverable.

Companies involved in early drilling in 2010, such as Talisman and Questerre Energy Corp., have since moved onto other resource opportunities. A recovery in North American gas prices would help the case for resuming work in Quebec. But with no drilling infrastructure and widespread public skepticism about the safety of fracking and its impact on water sources, the chances for any sizable activity is remote.

That’s why industry proponents are now focused on getting at least a test project underway, maybe on crown land, while the market recovers.

“The investment community is fixed in its opinion that Quebec is dead for oil and gas,” said Michael Binnion, the Questerre chief executive who also serves as head of the province’s oil and gas trade association. “Just like we need public confidence, we need investor confidence. [And that will be] harder than people think.”

Mr. Binnion is pitching an idea for a natural gas production project that would see about 10 wells drilled to start at a cost of between $100-million and $200-million. Located in a non-urban community that supports the project, the wells would produce gas that’s then transported directly to where it is needed locally.

Quebec’s ruling Liberals have so far been cool to the idea. At the same time, they steadfastly refuse to join New York and other jurisdictions in enacting statewide bans on hydraulic fracturing.

“I want the doors to stay open. [Or at least], that people know how to open the door” if they want to invest, Premier Philippe Couillard said before the legislature suspended work for 2014.

Quebec imports more than five billion cubic metres of natural gas a year and frequently experiences pressure on stocks during the winter. Starting local production, even on a modest scale, is seen as a way to help alleviate that supply-demand crunch.

“If there are forested places where nobody is living and we can develop the resource there, why wouldn’t we?” said Mr. Lyonnais. “The gas is there. Let’s go get it.”

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