A key player in the development of shale gas extraction in Quebec is holding off on two major projects in the province's St. Lawrence lowlands, citing uncertainty over environmental and regulatory issues.
Calgary-based Questerre says it has decided to delay plans for seismic work and construction of a natural gas pipeline in the St-Édouard region southwest of Quebec City until the provincial environmental public review agency releases its report on shale gas and the Quebec government introduces updated oil and gas legislation.
The company said it also wants to assess results of its two horizontal wells.
Questerre president and chief executive officer Michael Binnion said he's disappointed in the postponement - which means delays in the creation of local jobs and payments to landowners - but pointed out that the vast majority of St-Édouard residents back the project.
"We are confident in the benefits of shale gas development for Quebec," he said in a news release issued on Monday.
Release of the report from Quebec's Bureau des audiences publiques sur l'environnement has been delayed several weeks to Feb. 28, while the revised legislation is expected in the spring.
Proposed shale gas development has sparked a storm of opposition in the province, with fears voiced over the controversial extraction technology - known as fracking - involving the fracturing of a thick layer of gas-bearing shale with high-pressure blasts of chemicals and water.
Opponents cite alleged incidents of contaminated drinking water, damage to farmland and other fallout from fracking operations in the U.S. They have called for a moratorium on all activity until the environmental and health consequences are fully studied and known.
"There is just a lot of uncertainty," said Questerre spokeswoman Karen Carle. "We need to wait and see what is going to be in those [the environmental review and the legislation]" she said.
"It's very disappointing to have to wait." But at the same time, the company welcomes the opportunity to have the rules made clear and firmly established, she said.
Questerre's partner in the project is Calgary-based Talisman , which last October deferred drilling work in the region, citing the high cost of importing specialized crews from outside the province.
"We've had very encouraging drilling results so far in Quebec," Talisman spokesman David Vincent said.
Ken Chernin, an analyst with Jennings Capital in Halifax, said he's not surprised by Questerre's decision.
"Pretty well everyone [active in the so-called Utica gas play in Quebec]is taking a wait-and-see approach," he said.
Bertrand Marotte