Alward government has no public mandate to proceed with shale gas

The government’s release of ‘rules’ for shale gas and its creation of an Energy Institute highlight its continuing exclusive reliance on in-house voices, while ignoring the public’s voice and those of contrary researchers.

Its actions and rhetoric imply that it has a mandate to proceed, and has a ‘social license’ from the public. In fact, it has neither.  Its deceptive campaign plank on ‘natural gas’ excluded the words ‘shale gas’ and  ‘hydraulic fracturing’.  We know the Conservatives are familiar with these words, as Premier Alward used them while eloquently arguing against shale gas as an opposition MLA.

Civic groups representing tens of thousands of citizens sent a letter to Minister Leonard stating that the question of ‘Should we have shale gas?’ has not been sufficiently debated, and thus actions in support of it are unwarranted. This, plus polling data, suggests that no ‘social license’ has been granted.

In a different attempt to justify its actions the government cites Dr. LaPierre’s report.  Dr. LaPierre is introduced as ‘emeritus professor of biology’, suggesting an aura of academic objectivity.  However, introducing him as ‘current board member of NB Power’ might be a more accurate indicator of his views on shale gas.  In a private meeting with Dr. LaPierre, he quoted extensively from a study “we had done at NB Power”.  Evidently, his views are largely based on that report, a fact not revealed to the general public.

During his ‘listening’ tour to gather public comments, he repeated (on the record) that he had no mandate to make recommendations.  Then he issued his own recommendations anyway, effectively diverting media coverage and the government’s ear away from the thoughtful voices and written submissions of the public.

Adding insult to deception, LaPierre called the public’s comments ‘anecdotal, not scientific’.  This self-serving excuse for producing his own report is demonstrably false, as he well knows.  Our group and others engaged LaPierre personally with arguments based on the latest peer-reviewed scientific studies. Our documents are part of the public record.

Our shale gas policy is being influenced by the personal opinions of a single person, who has demonstrated no particular expertise on the issue, and who represents vested interests.  For espousing government-approved conclusions, LaPierre was rewarded with the chairmanship of the very Energy Institute he recommended.  This appointment should not be viewed as fostering objective research, but rather as another example of the unethical patronage linking ruling parties and crown corporations.

LaPierre says the institute will ‘provide credible research … in support of shale gas exploration and production’, and be funded  ‘eventually by shale gas royalties’, indicating his bias that a shale industry is a foregone conclusion.

Also mixing business and government is Frank McKenna, who has become the cheerleader-in-chief for shale gas.  Known as NB’s former premier, he is also a board member of TD Bank, which includes TD Securities’ Global Energy & Power Group.  This group has been the top ranked Canadian energy Merger and Acquisitions advisor. Energy Mergers and Acquisitions are now the new profit centers within banks, earning huge transaction fees, whether the industry is failing or prospering.

Financial analyst Deborah Rogers just published a study entitled, “Shale and Wall Street”, wherein she establishes that banks have manipulated the finances of shale gas in the same manner in which they produced the ‘housing bubble,’ and with the same results: the shale bubble will burst, while the banks get rich.

So, the prominent voices that the government hears on shale gas policy represent Crown corporations and big banks, both with profit motives.  Perhaps, we might all listen to actual researchers with credentials.

Besides following the money trail of banks, Deborah Rogers tracked the economic performance for the 32 counties in the four major shale gas plays in the US, using data from the Bureau of Labor Statistics for 2006 – 2010.  Of the 32 counties, 26 were below their state’s average for retail sales, and 30 were below their state’s average for median income.  Weekly wages in 29 were below the national average.  This is the industry that will rescue our communities?

An even more compelling study was just released by David Hughes, one of Canada’s most respected petroleum analysts.  He is the first to compile industry production figures from 63,000 individual shale wells.  A summary of his conclusions shows that industry has overestimated the amount of recoverable shale gas by as much as several hundred percent, and that shale wells deplete so quickly that thousands of new wells must be drilled each year just to maintain current production volumes.

These reports show that the shale industry will never fulfill the hype surrounding its longevity or its status as a ‘game-changer’.  Currently, shale prices remain far below the cost of production, and there is a glut on the market.  Many in the industry are hanging on by the skin of their teeth, with investments waning and uncertainties looming.

Does this seem a propitious time to move forward with this industry as a cornerstone of our economy?  Perhaps yes, but only if you are a banker or are listening to one.