Shale gas rules in New Brunswick among 'strictest'

Energy Minister Craig Leonard says the rules governing the oil and gas industry are strong, but reasonable

The New Brunswick government says its new rules governing the oil and gas industry will be the among the strictest in North America.

But critics are already questioning the government's ability to enforce them since they won't be written into legislation.

Industry representatives, on the other hand, are describing the new rules as "onerous overall," and argue the province should follow the model out west.

The new provincial conditions, unveiled on Friday, lay out how the David Alward government plans to protect the environment. They cover areas including:

Protecting surface and groundwater during seismic testing.

Preventing potential contaminants from escaping the well bore.

Managing waste.

Addressing air emissions.

Energy Minister Craig Leonard said New Brunswick's rules are the strictest, requiring setbacks up to three times more than elsewhere.

But he quickly qualified that statement to say the rules are "one of, if not the most strict regulatory systems for natural gas development in North America."

"We have been firm in our commitment to New Brunswickers of putting rules in place that will protect the water, the environment and landowners, and do so in a safe way if the oil and gas industry in our province expands," Leonard said in a statement.

"These new, robust rules will do just that," he said.

They're "balanced," Leonard said, noting industry was consulted. "They're strong, but they're also reasonable."

Environment Minister Bruce Fitch agrees.

"We would stack our rules, taking into consideration our unique geology, against any other jurisdiction in North America," he said.

NDP Leader Dominic Cardy, however, is skeptical.

"We have serious doubts about the government's will and means to enforce them," he said in a statement.

The province has a "sad history" of Conservative and Liberal governments failing to enforce their own conditions, said Cardy.

"The Conservatives broke their own rules on wetlands protection and they joined hands with the Liberals in investing in tobacco companies to fund public pensions," he said.

Cardy is also concerned the new rules may only apply to new oil and gas developments, not the existing 24 wells across the province.

Two or three companies are planning exploratory work this year, with some test wells possible in the next couple of years, according to the environment minister.

The next step for the government will be to release royalty rates — what companies will have to pay to the government for the gas they extract.

Corridor Resources Inc. officials are still reviewing the rules, said Dena Murphy, manager of quality, health, safety and environment for the exploration and development company.

"But Corridor does believe that these rules are onerous overall," she said in an email.

"New Brunswick would be wise to more closely follow Canadian industry best practices in places like British Columbia and Alberta, where thousands of wells have been drilled safely over many decades," said Murphy.

"Doing so will protect the environment and allow the industry to deliver benefits to the province," she said, adding the company will continue to work with the government.

St. Mary's First Nation Chief Candace Paul told reporters she expects an aboriginal court challenge of the new rules over the government's "duty to consult."

But the Assembly of First Nations Chiefs in New Brunswick later tweeted they will not seek a court injunction against further exploration/development of the shale gas industry "at this time."

The group says it wants to take time to "scrutinize" the 106-page document, titled "Responsible Environmental Management of Oil and Natural Gas Activities in New Brunswick."

Meanwhile, Liberal environment critic Chris Collins said he still doesn't see enough public consensus to support developing the industry.

The new rules also require the industry to disclose which chemicals are used in the controversial hydraulic-fracturing process, commonly known as hydro-fracking.

It involves companies injecting a mixture of water, sand and chemicals into the ground, creating cracks in shale rock formations, enabling them to extract natural gas from areas that would otherwise go untapped.

Opponents of the process say it could have a negative effect on local water supplies and many of them have held protests across the province.

Fitch says water protection is the top priority for the provincial government. The rules "will protect" water, he said.

The NDP, however, contends the ratios of chemicals should also have to be disclosed.

"We cannot be comfortable knowing what chemicals are in fracking fluid if we don't know the actual amounts used," said Cardy.

"For instance, chemotherapy works, but only in very precise doses," he said.

Under the new rules, if groundwater comes to the surface, drilling must be discontinued, the hole plugged and government notified.

The conditions apply to oil and gas activities on both private and provincially-owned land from exploration through to abandonment.

They also cover emergency planning.

The rules incorporate public input received during a four month review period of 116 proposed changes to the regulatory framework announced in May.

Among the changes, the government has dropped the idea of reverse onus and will now require companies to prove their activities have not had any impact on landowners.

In landowner-company disputes, the government would act as an advocate for the landowner, said Fitch. However, the government won't necessarily take on all cases, he said.

The rules will be used to manage oil and gas activity for about the next two years, but the related technology is evolving quickly, the report says.

“This will allow the province, industry and citizens to obtain additional information about the size of the oil and gas resources in New Brunswick and the feasibility of its extraction.”

Meanwhile, the Department of Energy and Mines is working with other departments to create a new oil and natural gas "blueprint," slated to be released this spring.

The blueprint will address the longer-term environmental, social, regulatory and economic objectives and will incorporate a phased approach to future resource exploration and development, officials said.

It will focus on five key objectives, including:

Environmental responsibility.

Effective regulation and enforcement.

Community and First Nations engagement.

Stability of supply.

Sustainable economic development.

The new rules released on Friday build upon existing regulations and "for the most part" will be implemented as conditions to approvals and certificates of determination issued under the Oil and Natural Gas Act, Clean Environment Act, the Clean Air Act, and the Clean Water Act, officials said.

Last week, former Liberal premier Frank McKenna said developing the shale gas industry could generate more than $7 billion in royalties and tax revenues, which would end the province's debt and deficit problems.

New Brunswick's "survivability" is at issue, he had said.

The Opposition Liberals have called for a moratorium on shale gas.

The government says the new rules "fit in with many of the recommendations" of two reports issued in October — one from Moncton biologist Louis LaPierre and one from the provincial chief medical officer of health, Dr. Eilish Cleary.

LaPierre had ruled out a moratorium, saying that would stop all research and "would not benefit New Brunswick or its people."

Cleary urged the government to take "targeted and strategic actions" to prevent and mitigate any negative health impacts associated with shale gas.