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Quebec Natural Resources Minister Martine OuelletJacques Boissinot/The Canadian Press

Quebec's new Natural Resources Minister has signalled she will move to ban hydraulic fracturing even as she ordered a new inquiry into the practice, a position that puts development of the province's rich resources of natural gas in doubt.

"I cannot see the day when the extraction of natural gas by the fracking method can be done in a safe way," said Martine Ouellet, as she walked to her first cabinet meeting in Quebec City.

This former Hydro-Québec engineer and long-time defender of the province's water reserves also reiterated the Parti Québécois's position on the province's nascent shale gas industry. "We will impose a sweeping moratorium, both on exploration and on extraction of shale gas," she said.

Ms. Ouellet's statements dispel hopes the industry had that the PQ government would tone down its electoral rhetoric against the gas and mining industry. "If her decision is taken even before the studies are completed, it sends a very bad message to investors and developers," said Yves-Thomas Dorval, president of the Conseil du Patronat du Québec, the province's lobby for big business.

During the campaign, the PQ promised to reform the mining regime, which would be costlier to the industry, and to cancel the $58-million loan that the Liberals offered to the Jeffrey asbestos mine. It also wants to raise taxes on Quebec's highest income earners. And it will ask the Caisse de dépôt et placement du Québec to invest $10-billion more in the economy.

These promises have created uneasiness in the business community. Decision makers doubt that the province will thrive in such an environment, despite Premier Pauline Marois's stated intentions of creating prosperity.

"At some point, Pauline Marois is going to need revenues, and she is going to realize that she cannot keep on alienating business leaders," Lucien Bouchard, the former PQ premier who now presides over the Petroleum and Gas Association of Quebec, said in an interview on Tuesday.

But Ms. Ouellet sought to reassure the business community, which is preoccupied by the strong green presence within the PQ cabinet. "They shouldn't worry. I worked for 10 years with Quebec's industrial sector. … When the rules will be clear, the business climate will be more favourable to investors."

Faced with fierce public opposition, former premier Jean Charest imposed a partial moratorium on gas exploration in March of 2011, so that a strategic environmental study could be done to evaluate the risks of hydraulic fracturing or "fracking," which uses chemicals and water injected below ground to free natural gas from rock formations. Many Quebeckers fear that these techniques may contaminate ground water with chemical pollutants. This study is not to be completed until 2014. Other areas such as New York and France have also enacted bans to allow for fracking studies.

But the composition of the committee, which had no green member to begin with, stirred controversy. Hence Ms. Ouellet's decision to order another study by the Bureau d'audiences publiques sur l'environnement (BAPE), an independent agency that inquires on any industrial activity that may affect the environment or the health of Quebeckers.

A key player in the shale gas industry in Quebec said he's disappointed the government is taking such a hard line.

"I don't think that's the right attitude," said Jean-Yves Lavoie, the chief executive officer of Quebec City-based Junex Inc. "We'll end up being the only people in the world who decide to not develop their natural resources. And with the debt [the government] has, where are we going to get the money?"

For environmentalist Steven Guilbeault, the PQ government's tough stance is welcome news. "They're following through on their [campaign] promise," said the co-founder and spokesperson for Équiterre.

"We've asked for the shale gas industry to make the case that this can be done soundly, that Quebec will be better off environmentally and economically, but they never responded."

But why have another study if Ms. Ouellet's mind is already made up? According to the new Natural Resource Minister, the BAPE study will serve to "document what the PQ has been saying during the election."

The comment offended Yves-Thomas Dorval. The study that was initiated by the Liberals is to examine not only the environmental and social impacts of the shale gas industry, but also its economic benefits. "It's disappointing," he said.

"For a government that has stated that it aspires to energy self-sufficiency, it is also contradictory," he added.

Quebec said it will also close its only nuclear plant, Gentilly II, located near Trois-Rivières. Ms. Marois said the closing symbolized her government's commitment to the protection of the environment and to a "rigorous management of our finances".

Refurbishing the nuclear plant was supposed to cost $1.9-billion. But the bill has swelled to $3-billion, La Presse newspaper revealed last spring.

However, Hydro-Québec has already spent $850-million on modernizing the plant and the state producer has warned that cancelling the work "will have an important financial impact on the costs that have been already capitalized."

To help soften the blow for Gentilly's Mauricie region, which will lose several hundred high-paying jobs, the Marois government will set aside a $200-million fund to diversify the local economy.

Follow Sophie Cousineau on Twitter: @S_CousineauOpens in a new window
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