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NB Commission on Hydraulic Fracturing, 1 December 2015
Matthew D. Alexander Ph.D., P.Geo., EP
AN HISTORICAL AND MODERN PERSPECTIVE ONNEW BRUNSWICK’S ENVIRONMENTAL REGULATORY REGIME FOR NATURAL GAS EXPLORATION
AN UNCONVENTIONAL INDUSTRY.2
• In 1981, the first Barnett Shale Well (C.W. Slay No. 1) began commercial production – sparked the Shale Gale
• Natural gas production from shale and tight sandstones is the most rapidly expanding trend in the North American onshore oil and gas industry
• Two advances in upstream gas well technologies made shale gas production economically‐viable
Horizontal DrillingHorizontal Drilling
Hydraulic FractureStimulation
Hydraulic FractureStimulation
FIRST HYDRAULIC FRACTURE STIMULATION WAS CONDUCTED ON 29 JUNE 1949 BY HALIBURTON IN STEPHENS COUNTY, OKLAHOMA
DIRECTIONAL DRILLING GOT ITS START ON 12 NOVEMBER 1933 WHEN JOHN EASTMAN STARTED DRILLING A RELIEF WELL IN TEXAS AT THE ALEXANDER NO. 1 BLOW‐OUT
COMBINING THESE TECHNOLOGIES LAUNCHED THE SHALE GALE
NORTH AMERICA.
Horn RiverHorn River
BakkenBakken
West CoastSedimentary
Basin
West CoastSedimentary
Basin
MarcellusMarcellus
FrederickBrook
FrederickBrook
BarnettBarnettFayettevilleFayettevilleHaynesvilleHaynesville
3
AFTER JARVIE 2010
ESTIMATED NA TOTAL OF
3,840 Tcf
ACTIVITY
TIME
RESOURCEIDENTIFICATION
EARLY EXPLORATION
DRILLING
PILOT PROJECTDRILLING
PILOTPRODUCTION
TESTING
COMMERCIALDEVELOPMENT
MATURERESOURCE
PRIOR TO MORATORIUM OF 18 DEC 2014, NEW BRUNSWICK’S UNCONVENTIONAL NATURAL GAS INDUSTRY WAS IN ITS INFANCY
~60 NORTH AMERICAN SHALE BASINS
~24 MAJOR NORTH AMERICAN SHALE PLAYS
NB OIL & GAS EXPLORATION.4
NEW BRUNSWICK ATTRACTIVENESS: M&NP, PROXIMITY TO LARGE US MARKETS, AND PREMIUM HEAT CONTENT OF GAS
NEW BRUNSWICK HAS ONE OF THE OLDEST OIL AND GAS INDUSTRIES IN NORTH AMERICA; OUR FIRST OIL WELL WAS DRILLED IN 1863/1864 AND
COMMERCIAL GAS PRODUCTION AT STONEY CREEK BEGAN IN 1909
IN 2000, MAJOR DISCOVERY OF NATURAL GAS BY CORRIDOR RESOURCES IN THE MONCTON SUBBASIN ‐MCCULLY FIELD
HISTORICAL NB OIL & GAS INDUSTRY.5
1863 to mid‐1990s• November 1863
• Westmoreland Petroleum Company spud the first oil well in New Brunswick
• November 1882• St. Joseph Petroleum Company produced oil
• January 1898• NB Act to Encourage Oil and Gas Discovery and Development
• 1901 to 1906• New Brunswick Petroleum Company drilled wells and produced oil
• 1905• Dover‐St. Joseph Field abandoned
• June 1902• New Brunswick’s first oil well was shot using nitroglycerine
• July 1909• Stoney Creek Oil and Gas Field Discovered by Maritime Oilfields
• December 1911• Natural gas from the Stony Creek Field distributed to Hillsborough and Moncton by pipeline
• 1931• Weldon Refinery opened briefly to manufacture light furnace oil and fuel oil
• June 1976• NB Oil and Natural Gas Act proclaimed
• 1991• Stoney Creek Field depleted of natural gas
22
~355~355
~3 BCF~3 BCF
~800,000 BBLS~800,000 BBLSVOLUMES FROM NEW BRUNSWICK GOVERNMENT DATA
6
Mid‐1990s to 2014• September 2000
• Natural gas was discovered in the PCS/Corridor McCully #1 exploration well
• April 2003• Corridor entered into an agreement with PCS for the production, transportation,
processing, and marketing of natural gas from wells in the McCully Field
• October 2005• First slick water hydraulic fracturing occurred in the McCully Field
• July 2007• First propane fracture treatment within a well of the McCully Field
• 17 May 2008• First unconventional well spud in the McCully Basin
• 15 November 2008• First shale gas appraisal well was spud in the Elgin Basin
• 1 April 2009• McCully Gas began to flow in the Maritimes & Northeast Pipeline
• 15 February 2013• NB Rules for Industry released
• October 2013• Protests regarding seismic testing
• 18 December 2014• Fracking moratorium introduced for all types of fracking in New Brunswick
MODERN NB OIL & GAS INDUSTRY.
~30~30
~80~80
~5 BCF~5 BCF
~150,000 BBLS~150,000 BBLSVOLUMES FROM NEW BRUNSWICK GOVERNMENT DATA
INDUSTRY BEST‐PRACTICES.KNOWLEDGE POOL ON SHALE GAS IS VAST AND CAN BE TAPPED FOR IMPROVING REGULATIONS
7
PENNSYLVANIANo release of wastewater to surface watersAffected water supplies must be replaced
BRITISH COLUMBIALimits on daily and
cumulative water use
WEST VIRGINIAWaste water quality standards
WYOMINGFull public disclosure of frack fluids
OHIOWaste water management plan that describes quantities and location of disposal
ALBERTANo surface disposal
of frack water
ARKANSASMonitor well‐bore integrity during fracking
NEW YORKFull non‐public disclosure of frack fluids
COLORADOBaseline water
quality sampling
MARYLANDAssess cumulative impacts of wells
TEXASOnly conduct fracking during daylight hours
MANY LESSONS HAVE BEEN AND STILL ARE BEING LEARNED IN OTHER SHALE PLAYS
NB INDUSTRY REGULATIONS.• Clean Environment Act – enacted 1971
• Water Quality Reg. – 1982
• Environmental Impact Assessment Reg. – 1987
• Petroleum Product Storage and Handling Reg. – 1987
• Oil and Natural Gas Act – enacted 1 November 1976• Survey System Reg. – 1986
• Geophysical Exploration Reg. – 1986
• License to Search and Lease Reg. – 2001
• Clean Water Act – enacted 1 July 1990• Watercourse & Wetland Alteration Reg. – 1990
• Wellfield Protected Area Designation Order – 2000
• Watershed Protected Area Designation Order – 2001
• Clean Air Act – enacted 1 July 1998• Ozone Depleting Substances Reg. – 1997
• Air Quality Reg. – 1997
8
ACTS AND REGULATIONS PRE‐DATE THE ON‐SET OF UNCONVENTIONAL NATURAL GAS INDUSTRY IN NEW BRUNSWICK
AIRBORNEELECTROMAGNETIC SURVEY
SEISMIC THUMPER TRUCK
A MODERNIZED REGULATORY REGIME.• Rules for Industry for the Responsible Environmental Management of Oil
and Gas Activities in New Brunswick were introduced on 15 February 2013 address:
• Preventing potential contaminants from escaping the well bore
• Assessing geological containment outside the well bore
• Managing wastes and preventing contaminants from escaping the well pad
• Monitoring to protect water quality
• Providing for the sustainable use of water
• Air emissions, including greenhouse gases
• Public safety and emergency planning
• Protecting communities and the environment
• Reducing financial risks and protecting landowner rights
• Sharing of information
9
GOAL IS TO PROTECT THE ENVIRONMENT, PUBLIC HEALTH, AND WATER RESOURCES
EXISTING ENVIRONMENTAL
PREMITTING PROCESS IS SUFFICIENTLY
ROBUST FOR OUR NATURAL GAS EXPLORATION
10
CONSIDERATIONS FOR NB (1).• Maximize public confidence through enhanced
public consultation
• Approach with caution, education, and discipline (stem the spread of misinformation and fear)
• Develop creative environmental solutions together
• Ensure industry is well‐planned, mitigation is in place, and monitoring is extensive and occurs for the full lifecycle of every well
• Create community liaison committees for openly discussing and reviewing programs
• Adopt a Fracturing Responsibility and Awareness Chemicals Act (FRAC Act)
• Borrow proven and best‐available technology applicable to our geology and environment
• Industry evolution since Barnett introduction in 1981
NEW BRUNSWICK HAS AN OPPORTUNITY TO BECOME A NORTH AMERICAN LEADER IN ALL FACETS OF EXPLORATION AND DEVELOPMENT
11
CONSIDERATIONS FOR NB (2).• Adopt and adapt best‐practices
• Develop this non‐renewable resource in an environmentally and socio‐economically responsible manner that benefits all New Brunswickers
• Encourage a thorough and staged environmental permitting process
• Strict criteria must be met before each phase of work
• Develop stringent environmental monitoring practices
• Employ third‐party environmental compliance officers who conduct routine monitoring
• Post reports online for all to see and review (similar to food establishment inspections)
• Impose fines/penalties where warranted
WE HAVE MANY OTHER RESOURCE BASED INDUSTRIES THAT WE ARE WORLD LEADERS IN
THIS SHOULD BE NO DIFFERENT
12
UNLESS
someone like you cares a whole awfullot, nothing is going to get better.
It’s not.
The Lorax By Dr. Seuss
LET’S DO IT RIGHT!
Educators, Scientists, Technicians, Engineers, Geologists, Politicians, Truck Drivers, General Labourers, Heavy Equipment Operators,
Drillers, Maintenance and Repair Workers, Executives, Security Guards, Lawyers, Electricians,
Pipefitters, Welders, Boilermakers, Plumbers, Machinists, Firefighters, Insurance Agents, Programmers, Inspectors, Public Relations, Human Resources, Journalists,
Compliance Officers, . . .