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“The whole of eastern Canada’s potential is very exciting,” said Les Fyffe, director of the geological surveys branch of New Brunswick’s Department of Natural Resources. “But the shale gas potential is the exciting part to New Brunswick.”
It has been exciting too for Miller. But only after he watched shale gas technology evolve south of the border did he decide it was time to take another look at old Willie. When he did, he found the largest concentration of shale gas in North America.
To bring this shale gas to commercial production, Corridor partnered last year with Apache Canada Ltd., a subsidiary of Apache Corp. of Houston. Apache has committed to spend $25-million by June 2011 on land owned by Corridor in southern New Brunswick. If the project is successful, it could mean at least 5,000 wells over several decades, said Miller. No results expected until 2011.
Other companies have tried to get into the local shale gas scene with less success. Triangle Petroleum of Calgary spent $32-million to drill several wells near Kennetcook, 70 kilometres north of Halifax, but failed to find anything of commercial value. It spent months looking unsuccessfully for a partner, and recently switched its focus to a project in North Dakota.
Still, others remain undeterred. Southwest Energy Company of Texas paid $50-million to the Government of New Brunswick in late March for exclusive licences to search and conduct an exploration program covering over 2.5-million acres). Forent Energy of Calgary said recently it is ready to launch a $4-million assault on lands adjacent to the Triangle property in Nova Scotia, and PetroWorth Resources Inc. announced this spring it was selling off its interests in several Alberta natural gas wells to focus on its eastern Canadian properties in Nova Scotia, New Brunswick and Prince Edward Island.
Why has shale gas become so hot so quickly?
It is abundant in supply, it burns more cleanly than coal and with new drilling technologies allowing extraction from more types of rocks, it is cheaper than offshore oil. Boosters suggest it will not only reverse North Americans’ dependence on foreign oil imports, it could reduce the political muscle of energy-producing nations like Russia and Venezuela.
Extraction and processing could create thousands of jobs and its composition might make it easier for electricity generators to switch from coal to gas. Plants that burn coal produce about twice as much carbon dioxide as generators using gas.
“It’s low-carbon, it’s low-cost, and it’s abundant. It is the perfect bridge to a future of alternative fuels,” said Chernin.
Not everyone views shale so optimistically. Shale gas is messy. Millions of gallons of water mixed with sand, hydrochloric acid and a stew of other toxic chemicals are blasted at the shale. Public fears about threats to water sources has prompted the State of New York to impose a moratorium on drilling at the immense multi-million Marcellus shale gas deposit until it ensures the project won’t threaten water sources.
A U.S. congressional committee is investigating several drilling firms, including two Canadian ones, over worries the methods being used to find shale gas are contaminating water supplies and the U.S. Environmental Protection Agency has launched a two-year, $1.9-million study that will shine a spotlight on possible dangers.
Energy consultant, Benjamin Schlesinger, president of Benjamin Schlesinger and Associates, of Bethesda, Md., doubts the U.S. probes will hinder development of new shale gas plays in Atlantic Canada. He told the audience at a recent oil and gas conference in Halifax that the problems with water contamination are highly localized and in areas where fracturing is being done in shallow locations. To date, the shale gas formations in Atlantic Canada that have been explored are much deeper than those in the United States, he said.
Some also worry shale gas might actually slow the transition to renewable energy. It may be harder to convince people to adopt more expensive green technologies when shale gas is cheap and plentiful and cleaner than coal.
Even the low price can present as a double-edged sword. While it means growing demand for natural gas from homeowners and businessmen, the return for the supplier and distributor is lower, making cash-intensive exploration and commercialization more difficult, too.
Nothing is certain, but a 2009 National Energy Board report hints that while Canadian shale gas production is currently in the experimental or early developmental stages, the possibilities for the future are bright. “Shale gas may be a key component of supply that will allow Canada to sustain its own domestic requirements for natural gas far into the 21st century… It is even possible that shale gas could allow Canada to become a net exporter of LNG.”
