Energy Minister Craig Leonard’s Statement on the future of oil and gas in New Brunswick, read at the New Brunswick Legislature on November 28, 2012, exceeds all expectations of the art of propagandistic deception. So much that it borders the line of being a prank. Here I respond to the most striking parts of Leonard’s statement in a sarcastic tone (the only tone the piece deserves), in their order of appearance.
“New Brunswick has a shale natural gas in-place resource estimate of close to 80 trillion cubic feet (TCF). And of course, further exploration could potentially increase that estimate.” Of course, further exploration could increase estimate reserves but where in the first place did the 80 TCF figure come from, given that there’s been no serious exploration yet? In any case, the estimate will for sure increase, as it has happened in all shale gas plays under production, right? Sorry, nope, the opposite is true. In those plays, the initial estimates were found to be considerably higher than what the production figures tell. For example, this past January, the U.S. Energy Department cut its estimate for natural gas reserves in the Marcellus shale formation by 66 percent! Of course, Leonard will rebut this using his acolyte Dr. LaPierre’s argument that NB is a unique place on Earth and therefore we cannot extrapolate to here the experience from elsewhere.
“Estimates vary but without a domestic source, we will be facing serious supply issues within five to ten years in our province.” I guess I could agree with this if the Canaport LNG facility in Saint John, which has a long-term contract to purchase liquefied natural gas from Qatar, is converted to an export terminal.
“All New Brunswickers rely on natural gas whether directly for energy or indirectly through the goods and services we buy. That is why dealing with this inevitable issue must be a government priority and that is why we on this side of the house have continued to foster responsible natural gas exploration and development in our province.” The above reason, which links to the aforementioned future shortage, could not be more ludicrous, but what about ‘responsible’? How on earth can it be responsible to give green light to an industry without a proven safety record and with no business case? I guess the government of our neighbouring province of Quebec, which has already imposed a moratorium to prevent harm from this industry, has a different concept of the word ‘responsible’. Maybe the French definition is different?
“As much as we as a society intend on moving away from fossil fuels in the future, we must recognize the limitations of current renewable energy sources …”. Wait a minute; is this part of the reasoning for going ahead with shale gas? But if we are aware of the need to switch to renewables and of their current limitations, shouldn’t we then be working hard towards developing them now, and creating good paying jobs along the way, rather than releasing more carbon from unconventional reserves?
“Natural gas can and will play a significant role in reducing GHG emissions today and into the foreseeable future as it displaces oil and coal as energy sources…”. Leonard is obviously not aware of the research by Professor Howarth and colleagues from Cornell University on the greenhouse gas footprint of shale gas, which they conclude is considerably greater than that for coal or diesel oil, when the full life cycle (from extraction to consumption) of the methane emissions from shale gas are considered.
“Both reports [Dr. LaPierre’s and Dr. Cleary’s] came to the same conclusion – a moratorium on shale gas exploration was neither required nor desirable in New Brunswick.” I don’t think so. Dr. LaPierre’s conclusion is a personal opinion derived not from the content of his report but from fallacious arguments he puts forth in the conclusion section itself, like that a moratorium is nothing but “an authorized period of delay or waiting without defining the issues that would be addressed during that period” (but then how can a moratorium finish if the issues that prompted it are not defined?), or that the laws of nature are different in New Brunswick and therefore failures in other places may become successes here (yeah, right). As for Dr. Cleary, we may congratulate her for the incredible deed of reaching a conclusion on something she does not even mention (yep, you got it right: there is no talk of moratorium in her report). Perhaps we should remind Leonard that Dr. Cleary is addressing public health measures under the scenario that the government goes ahead with shale gas, which does not imply that she is for it, in the same way that a woman who carries pepper spray in her bag is not for being raped.
“We as Government believe this [Dr. LaPierre proposal of a phased approach] is a prudent path forward.” Please give me a break. Again, the phased approach is based on a false assumption, namely, that the experience in other jurisdictions cannot be extrapolated to NB and therefore we need to allow the industry to experiment here. On the contrary, what we see through the facts is that different shale plays, even if they have different geology, behave very similarly, both in the economics, which are systematically hyped, and in the environment, where problems are continuously surfacing. It is ludicrous to think that our shale gas play will not follow this pattern. So, how prudent is it to base your decisions on a bogus argument?
“To that end [give clarity and directions to the stakeholders] our intention is to incorporate the various reports and discussion documents, along with public feedback, and develop an Oil and Gas Blueprint that will be made public in the spring of 2013 in advance of expected exploration activities.” That sounds nice, so nothing to object here. But hold on, “in advance of expected exploration activities,” do you mean expected after the spring of 2013? But doesn’t SWN’s license to search, which is 90% of the potential shale gas area to explore, expire in March 2013? “So what”, you could say, “the license can be renewed; otherwise there would no exploration expected, right?” Well, the NB Oil and Natural Gas Act says that a license to search can only be renewed in case of force majeur, as when a blockade and things of the like happen. “That’s right”, you say; “there was one of these in Stanley in 2011; but hey, it lasted just one day, so they should get a one day extension, no? And then they would lose a big chunk of their $47 million deposit, since they didn’t finish the work they committed, right?” Well, until the spring of this year this could have been the case, but with the recent changes the government made to the Act, the renewal period is now fixed to one year plus another additional year if required. So for one day of blockade you get a one year extension, sweet. And guess when did SWN announce the deferral of their exploration program? Just one day after the amendment to the Act was first read in the Legislature. The irony is that the stated main purpose of the amendment was “to introduce a new system and administrative penalties.”
“Building on those objectives [of the Blueprint, which were identified as priorities for the public] an Action Plan will address recommendations laid out in the LaPierre, Cleary and Natural Gas Steering Committee reports.” I don’t know about the latter, but Dr. LaPierre and Dr. Cleary include recommendations such that major aquifers should be identified and mapped (I guess in 3D) prior to any exploration, or that drinking watersheds and wellfields should be excluded from development (which therefore also need to be delineated beforehand). Would you bet your farm that they are going to address these recommendations for real? What about Dr. LaPierre’s recommendation that a comprehensive business case for the upcoming shale gas industry be developed? Would that be included under objective 5 of the Blueprint (sustainable economic development)? Come on, let’s give these guys a vote of confidence and assume that’s going to be the case. After all, they have always been honest, right?
“With the release of the Blueprint slated for the spring there are certain action items that will have to be developed in the shorter term…”. I cannot agree more, there is a ton of groundwater mapping work to be done before the spring; otherwise exploration cannot start, right? Perhaps this work is also going to help correct the new wetland map that former Environment Minister Margaret Ann Blaney introduced in March 2011, which replaced an existing map that had more than double the area of wetlands. This change allows industry to develop those scratched areas that according to the new map are now dry enough (actually, Blaney could have blamed the change on global warming).
“We will move forward with implementation of these requirements [the famous 116 recommendations of the Natural Gas committee] into a rules and regulatory framework that is strong, robust and which will ensure the integrity of our social and natural environments, as well as the strength of our economy for future generations.” Nice declaration of intentions again. But if I look at what they do instead of what they say, I get a different picture. For example, ex-Minister Blaney notified a network of 19 watershed groups that their 10-year project work to develop a Water Classification Program was dropped because of some technical glitches she never explained. Alas, this would have provided the regulatory framework for watershed protection. More recently, in November this year, the new Environment Minister Bruce Fitch received final public input on their plans to exempt shale gas operations from the provincial Clean Air Act. To me this looks like the government, rather than preparing the trumpeted strongest regulations in North America, is de facto gutting environmental legislation to make way for the shale gas industry.
“Recognizing that the lack of peer-reviewed information in the public domain has created confusion over this issue, discussions will be initiated with New Brunswick universities to determine the best manner in which we can move forward with this recommendation, as we believe that academia can, and must, play a key role in developing our own knowledge base for natural gas right here at home.” As a scientist, I appreciate Leonard’s concern about the paucity of peer-reviewed information, which on the other hand is not surprising, given that the shale gas bubble is just a few years old. But new papers are surfacing steadily, and the pace will no doubt ramp up. Except for those studies funded by industry, the new results all lead to the same conclusion: shale gas industry is a complete folly. New Brunswick universities can indeed contribute to the growing knowledge base, and in fact, they already have a local sandbox to play with: the 30+ natural gas wells from the McCully field sandstones, plus some hydrofracked wells in the shales of the Elgin Area. Shouldn’t we study those thoroughly before going ahead with others?
“The incremental concept we are advocating is one that industry is receptive to, because it is already the manner in which they operate.” Maybe that’s why you are proposing it? This reminds me of a slogan during last shale gas protest in Fredericton: “industry dictates, government accommodates.”
“Industry will take a methodical approach to exploring and determining the locations that have the highest potential to contain economic petroleum resources.” Really? I thought they would start with the areas with the poorest potential. Anyways, this implicitly acknowledges what we already know from other shale gas plays: that they are not as consistent and uniform as previously thought. Less than half of the wells are profitable in the average shale play, and the rate of production decline is much steeper than what industry claims (on average, 60 to 80% of the total production of a well occurs in the first year, and by the fifth year, most wells are unproductive). Can this really be a stable source of jobs and revenue? Are they going to base their revenue estimates for the entire Frederick Brook on the few sweet spots they might find?
“Equally important is the need for industry to work with communities … We will also ensure that industry engages early with First Nations to ensure their involvement throughout the process.” Oh yes. I’m sure communities within the licensed areas are just waiting with open arms for industry to come and work with them. In any case, before getting to work with industry, shouldn’t you first obtain the consent of First Nations and the other people in the first place? I guess the answer is yes only if we live in a democracy … not really sure if that’s the case.
“The benefits of natural gas production are clear. With transparent and robust regulations, the industrial activity will be safe, and will create jobs for New Brunswickers, increase economic activity for our private sector and increase revenues for government…”. I would dismiss this as sheer wishful thinking, if it wasn’t by the fact, seemingly used by Dr. LaPierre to rule out a moratorium, that the laws of nature are different here than in the rest of the world and thus we are geared toward success where others have miserably failed. Minister Leonard, extraordinary claims need extraordinary evidence. In our case, we would already be happy with a credible scenario-based business case. Will the Blueprint include that?
“When we speak of natural gas development, we have to remember, it is industry at work and industry is the backbone of any successful society.” This industry can only be successful if you measure success by trading short term gain for a few with long term pain for many.
“We have proven that we have this ability [to regulate industry to ensure it acts responsibly] for generations in our traditional industries – and there is no reason why we cannot do the same when it comes to natural gas.” Right on; he surely must be talking of the now gone salmon and forestry industries.
“In closing, Mr. Speaker, this government understands that we need to move forward because New Brunswick must control its own destiny. There is no doubt that if we do not – others will do it for us.” I full heartedly vow for that too. It is New Brunswickers, and not the industry, who have to control our destiny. But if Leonard’s plan is not giving away our destiny and our resources to others, where for example are most of the profits–if there are any–going to go, to New Brunswickers? Who is going to decide when, where, how and how much gas is extracted and sold once a lease is granted to a private company, the government? Maybe I’m misinformed and most shareholders from SWN and the other companies are from New Brunswick.
After reading Leonard’s statement, I would truly like to believe that he had the wrong date in his calendar and he intended to read it on April 1st instead of on Nov. 28th, and say after, “Hey folks, don’t be upset, it’s just April Fools; of course I didn’t write this, it was my sister!” His sister Angie was by the way the spokesperson of the shale gas industry until last month. Her resignation came unannounced the day after my wife confronted her brother the Minister at the entrance of the Progressive Conservative annual meeting of his riding with a placard that read “New Brunswickers do not condone incest between government and industry.” I don’t think both events are related, but I do think he should have been the one resigning.
Sadly, Leonard’s statement is not a prank but a carefully crafted PR piece full of deception. Therefore it is an outright insult to the people of New Brunswick and their democracy. Being so outrageous, shouldn’t it be understood as political suicide? I guess in the end it really doesn’t matter if he resigns or his party loses the next elections, as long as we continue allowing the proverbial revolving door between government and industry to spin endlessly.