For the Record….

We would like to set the record straight on recent comments made to the media by Minister Craig Leonard (Energy & Mines).

On several occasions in recent weeks, Minister Leonard has downplayed and diluted the concerns expressed by people in Albert County, saying, “It’s the same kind of development that has taken place in Albert County for decades”,  “the work being done by Contact Exploration in that area is conventional drilling,” and also that “the only activity that there’s been permits and approvals for has been the conventional work.”

(Note: Conventional drilling refers to the older method of vertical drilling to access a pool or reservoir of oil/gas; unconventional is the combination of horizontal/vertical drilling and hydraulic fracturing to create pathways for the release the oil/gas from tighter formations.)

The company’s 2012 Corporate Update is quite clear about the unconventional horizontal drilling and fracing of two Stoney Creek oil wells in 2010 and how ‘modern’ fracing unlocks previously unrecoverable reserves.

It should also be noted that regardless of whether fracing for oil or gas, the process is largely the same. Chemical mix/water requirements change, and geologic formations are typically closer to the surface (800-1000m), but the process brings the same risks from diminished property values, health and social impacts, air emissions, water usage and contamination, accidental spills, wastewater disposal, traffic, noise and possible chemical/gas migration underground.

On February 15, 2013, WEPAC received the following information from Minister Leonard’s own department regarding an approval (EIA-1308): “Contact Exploration Inc. was given permission under the Phased Environmental Impact Assessment (EIA) Review process in December 2012 to proceed with field investigations including drilling and testing of 4 oil wells located on existing well pads within the Stoney Creek Wellfield.

To the question, “Does ‘field exploration, drilling and testing’ include fracing?” we received the response, “Yes, in this case it does include hydraulic fracturing.

Just to be perfectly clear, we asked Contact Exploration’s CEO, Steve Harding, the same question. His response: “Any wells drilled at Stoney Creek would involve fracing, whether they are vertical or horizontal.”

Also, for the record, last fall WEPAC received a copy of Approval I-7507 dated March 2011, issued by Energy & Mines under their former regulatory regime. When asked the difference between the former regulations and the new Phased EIA process, as they applied to safety, we received this answer:

“Under the old process, oil and gas projects were required to undergo an EIA review at the point of commercial extraction (meaning after the well had already been constructed and hydraulically fractured and the proponent was ready to withdraw product from the well for commercial purposes).  Under the new process , a Phased EIA review is required prior to well pad construction.”

In part, Approval I-7507 states the following:

Contact Exploration Inc. will be undertaking upstream oil and gas exploration activities in Albert County. This includes exploratory drilling, completing, testing, producing and related activities of the oil wells known as Contact Stoney Creek A89-2328, Contact Stoney Creek I-88-2328/N-78 and Contact 109-N-78-2328.”

The approval goes on to include ‘testing, producing and related activities’ for another 17 oil wells and 11 gas wells (all previously drilled) and a production facility for oil and natural gas from these wells.  Nine well pads are included under the authority of the approval (at least two of these, that we know of, are for the purpose of gas extraction).

Seven of the well pads mentioned surround the village of Hillsborough on three sides. While developments may be slow to start, we must consider the extent of possible development.  According to Steve Harding, CEO of Contact, “when we establish a well pad with the ability for a commercial well, we will drill as much as possible,” as many as “8-24 wells on a pad.

While Contact Exploration must apply to drill any additional wells over and above the 35 included in the above-mentioned documents, they currently have in hand, enough permits for oil and gas wells to keep them busy for the coming year or two, should they choose.

Until now, the company’s focus has been oil, but it has optimistic gas prospects in Hillsborough, a new partnership with an LNG export company that suggests annual exports of 10 million metric tonnes of natural gas (1/3 of that coming from NB). In a recent newspaper interview, the CEO said they have 35,000 acres in Albert Co. and 12 potential drill sites to explore.

If this was your backyard, what more would you need to connect the dots?

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