Blame Al Gore. No sooner had the former-U.S.-vice-president-turned-enviro-evangelist praised a beaming Philippe Couillard's "incroyable" efforts to combat climate change than the Quebec Premier lost it when a reporter confronted him with an inconvenient truth: His government is putting up most of the cash to explore for oil and natural gas on pristine Anticosti Island.
Mr. Couillard, who usually keeps his emotions in check, unleashed a searing bolt of anger at the Paris climate summit last week when he was compelled to square his promotion of all things green and hydroelectric with his government's plan to drill for fossil fuels on Anticosti in partnership with Petrolia Inc., Corridor Resources Inc. and France's Maurel & Prom S.A.
"I have no enthusiasm for hydrocarbons," Mr. Couillard shot back. The oil and gas industry, he added, "should decode [from that comment] that I have no enthusiasm for developing hydrocarbons in Quebec. The future of Quebec does not rest on hydrocarbons, absolutely not."
No industry gets less love in Quebec than its fledgling oil and gas sector. That hasn't deterred the unflashy geologists and engineers behind a handful of junior mining companies, keen as they are to slash the province's dependence on imported oil and gas. It remains a tough sell in a province that likes to think of itself as a leader in the transition toward a postcarbon economy, even if fossil fuels still account for more than half of the energy it consumes and likely will for decades to come.
The province's net imports of hydrocarbons totalled $15-billion in 2012. Lower oil prices and Enbridge Inc.'s Line 9B pipeline, which recently began sending Alberta crude to refineries in Quebec, will help to cut the energy trade deficit. But experts agree that tapping into the province's sizeable oil and gas reserves would boost both its energy independence and its slow-growing economy.
Even the former Parti Québécois government of Pauline Marois, which pretended that Quebeckers would all be driving electric vehicles within a few years (there are still fewer than 10,000 EVs among the province's five million cars), conceded it would be irresponsible not to investigate the potential for oil and gas development on Anticosti. To sell that idea to the PQ base, however, it slapped a moratorium on shale-gas development in the more populated St. Lawrence Valley.
Just before its 2014 defeat, the Marois government took a 35-per-cent stake in Hydrocarbures Anticosti, leaving its three private partners each with 21.67 per cent. The province agreed to put up $56.7-million of the first $100-million in exploration costs. Petrolia plans to begin fracking exploratory wells on Anticosti in 2016 with commercial production slated for as soon as 2020.
That is, however, if the Couillard government gives the green light to proceed. After Mr. Couillard's unexpected outburst in Paris, that condition is far from assured, leaving Petrolia and its partners to twist in the wind.
A preliminary environmental and economic evaluation released by the government in October stated that shale gas accounts for three-quarters of the fossil fuel reserves on Anticosti, a sparsely populated 8,000-square-kilometre island in the Gulf of St. Lawrence between the Gaspé peninsula and Quebec's north shore. Shale oil accounts for the rest.
The study concluded that in an "optimal scenario" there was a "potential for commercial profitability" on Anticosti with a break-even price of about $80 (U.S.) a barrel of oil in constant 2020 dollars. The break-even price for gas would be either $3.18 or $3.62 per thousand cubic feet, depending on whether the resource is transported by tanker or by pipeline.
Tapping Anticosti's oil and gas reserves would add $2-billion (Canadian), or 0.4 per cent, to Quebec's gross domestic product annually, create or maintain 2,000 jobs and generate at least $46-billion in direct profits and royalties for the provincial government over 75 years, according to the study.
After the release of that study, and years of preaching in the desert, the province's oil and gas industry had been sounding optimistic. The global oil slump has slashed exploration costs, and with production still a few years off, oil prices have time to recover to further boost the economic case for Anticosti.
Mr. Couillard just threw a barrel of cold water on the industry's optimism. While he criticized the PQ's state-led plan to substitute the government for the private sector, the Premier had initially been supportive of exploration on Anticosti. Now he complains that he's "stuck" with an agreement his predecessor signed, since the government would incur undisclosed penalties to break it.
In Quebec, it's not easy being gasoline.
Konrad Yakabuski