Natural Resources Committee on Feb. 1st, 2011

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone. It's good to see everybody back.

We are of course doing a study on energy security in Canada. The committee began the study a few months ago. We're looking at what the federal role is in unconventional oil and gas development, such as deepwater offshore drilling, shale gas exploration, and oil sands development. We're also looking at the regional economic impacts of the oil and gas development on conventional oil and gas, and at the National Energy Board's role in the development and export of unconventional resources. Today we are looking at the shale gas component.

We have with us today, on our one panel, three individuals. We have Dr. Gerry Angevine, a senior economist from the Fraser Institute, and Dr. Anthony Ingraffea, Dwight C. Baum Professor of Engineering from Cornell University.

Professor Ingraffea's flight was cancelled this morning, so he will be with us by video conference. If he isn't on...we'll have until the others have presented, so we'll have him last in the group.

As well, we have the Honourable Bruce Northrup, Minister of Natural Resources with the Government of New Brunswick. He's appearing by video conference from Fredericton.

Welcome, everyone. We'll get right to the panel. We have just one panel for the full two hours.

We'll start with Dr. Angevine, please, for up to ten minutes.

[Dr. Gerry Angevine, Senior Economist, Global Resource Centre, Fraser Institute]

Thank you very much, Mr. Chairman.

Good afternoon, ladies and gentlemen. Thank you for the opportunity to speak about the Fraser Institute's research pertaining to energy security and how it relates to the committee's study.

I understand that the study includes reviewing the roles of the federal government and the National Energy Board with respect to the development and export of unconventional oil and gas resources, and this will be part of my focus.

I assume that, in the context of the study, energy security refers to an assured supply of energy for Canadians under normal market conditions. From this perspective, the greater the Canadian oil and gas production is and the more opportunities there are to freely export and import these resources, the less Canadians should be concerned about oil and gas supply difficulties.

Concern that North America's energy resources are not being developed as quickly and extensively as they could be in order to allow the citizens of Canada, the United States, and Mexico to reap the maximum employment income and social benefits led us to initiate a continental energy strategy project two years ago.

As explained in a 2008 Fraser Institute paper by former premiers Klein and Tobin, the envisaged strategy would require North American energy policies at the national, provincial, and state levels to be aligned in support of efficient and as rapid development of the continent's energy resources as possible in light of free market conditions, science-based environmental concerns, competition from oil and gas imports, and petroleum investment opportunities abroad.

Clearly, increased development and production of the continent's energy resources would bolster the security of oil and gas supplies as well as provide economic and social benefits. Because market forces will determine the most efficient allocation of North America's energy resources, development of a continental energy strategy does not encompass identifying energy investment, production, and trade targets. Rather, the focus is on ensuring that government policies and regulations pertaining to energy resource investment, development, and trade are stable, fair, and appropriate.

Governments must avoid intervening in energy investment decisions, as these are best left to those who are motivated by market forces, have an in-depth knowledge of the technologies involved, and are prepared to take risks based on their understanding of how energy requirements are likely to change.

In the continental energy strategy program, at the institute we recently released two papers, which are available on the institute's site, free of charge. One is Towards North American Energy Security: Removing Barriers to Oil Industry Development, and the second is North American Natural Gas: Reducing Investment Barriers.

These studies review the oil and gas supply potential and requirements in Canada, the U.S., and Mexico and prospects for national and continental supply-demand balances for both oil and gas.

One of the conclusions from this research is that, with continued technological improvements, there is potential to significantly increase the volume of oil liquids that is produced in North America relative to domestic demand. Along with continued development of the oil sands, increased offshore production, commercialization of gas to liquids, and coal gasification technologies will contribute to improvement in the continental oil liquids balance.

Eventually, when we get there, the technology that allows us to commercialize oil that's found in shale—the oil in the U.S. that's been indicated to exist in large quantities locked in the kerogen in oil shale—will also contribute.

With regard to natural gas, technological improvements have made the production of gas from shale formations viable. That has transformed the long-term outlook for continental gas supply and demand from one of increasing dependency on LNG imports to near self-sufficiency.

An indication of this is the plan to export gas to overseas destinations from Kitimat instead of importing gas at that location, as originally planned. Because of what's been termed the shale gas revolution, the security of gas supply should not be a matter of concern for Canada in the foreseeable future.

With regard to the impact that shale gas is having on the outlook for U.S. gas supply, the upward revisions contained in the U.S. Energy Information Administration's 2011 long-term forecast are telling.

This is gas production from shale formations reaching almost 8 trillion cubic feet in 2020, compared with 4.5 trillion cubic feet in the administration's previous forecast just 13 months ago. That compares with actual 2009 production of 3.3 trillion cubic feet. More remarkably, the projected volume of U.S. shale gas production in 2035, when total gas production is forecast to reach 26 trillion cubic feet, has been doubled from 6 trillion cubic feet to 12 trillion cubic feet. As a consequence, U.S. gas production from other sources—not all other sources, but some, including coalbed methane—and imports of gas from Canada and abroad are projected to shrink.

The Fraser Institute studies that I referred to and the U.S. Energy Information Administration's most recent long-term outlook underscore the fact that the continent has a strong oil and gas resource position; however, non-market barriers stand in the way of achieving the goals and objectives of a continental oil and natural gas strategy. Because these obstacles prevent oil and gas production from increasing as rapidly as they could, they also impinge upon oil and gas security. There are a number of barriers that Canada is in a position to address because of its jurisdiction over oil and gas exploration in the north and in the Atlantic and west coast offshore regions, and also on account of responsibilities that Canada has with regard to environmental protection.

First, the government needs to ensure that royalties or production taxes on conventional oil and gas in the areas for which it has jurisdiction are competitive, not only with those in the provinces but with those in competing jurisdictions around the globe.

Second, it needs to ensure that royalties in relation to higher costs of production because of deep offshore or remote far north locations or other factors, as with some of the unconventional sources, reflect those higher costs. If royalties don't do this, investment will be allocated to regions promising more attractive returns.

Third, the government needs to remove the cloud of uncertainty overhanging the oil and gas industry in relation to the timing and specifics of environmental policy changes that could significantly impact the capital costs of oil and natural gas projects and energy pipeline construction. Necessary changes to environmental regulations need to be defined and implemented as quickly as possible. If potential investors don't know what changes will be made and can't estimate the cost of compliance with accuracy, major projects will be lost to other regions.

Fourth is the issue of moratoria on offshore exploration, which are standing in the way of development of petroleum resources—offshore British Columbia, for example. Moratoria on exploration and production in offshore areas should be lifted once the authorities are satisfied, having examined the cause of the disastrous oil leak in the U.S. Gulf of Mexico last year, that the environmental risk can be mitigated. This will open new areas for development and in turn contribute to Canada's energy security.

Fifth, regulatory process and procedures that threaten to delay the approval of oil and gas pipeline construction that will be required to transport new supplies of bitumen, shale gas, and other petroleum resources to market hubs need to be made more efficient. The National Energy Board has self-imposed standards regarding time schedules with regard to the release of decisions following the completion of public hearings. But these are arbitrary and serve only as guidelines, not hard and fast rules that must be achieved. Moreover, there are no such standards with respect to the time required from when an application is received until a public hearing commences or with the maximum time to be allowed for public hearings. To ensure a more rapid response to pipeline construction applications, more may be required than simply tightening the NEB's self-imposed service standards. In fact, the National Energy Board Act may need to be revamped to limit the board's involvement in the construction permitting process to non-commercial aspects such as safety, environmental impacts, and other matters of public importance.

Finally, there is the land claims issue. Means for settling aboriginal and other claims expeditiously and in a fair and appropriate manner need to be found to prevent unnecessary delays in the construction of pipelines required to transport oil and gas to markets. A matter that should be of concern to the federal government is that investors regard the Northwest Territories as relatively unattractive for investment in oil and gas exploration and development.

According to the Fraser Institute's global petroleum survey, in 2010 the NWT ranked 74th of 133 jurisdictions worldwide. This was worse than any of the other Canadian jurisdictions that were ranked, other than Quebec. In fact, the NWT appears to be less attractive for investment than almost all of the U.S. states and offshore regions, all of the Australian states and territories, New Zealand, Chile, the United Kingdom, Norway, the Netherlands, and many other jurisdictions around the globe.

Now, according to survey respondents, the Northwest Territories' poor performance in the global ratings is due to a number of factors, but most important is the land claims dispute issue. On this factor, the NWT was deemed to be the least attractive for petroleum investment of all 133 jurisdictions around the globe that we were able to rank. The Northwest Territories also scored poorly in relation to the availability of infrastructure, regulatory duplication, and uncertainties in relation to protected areas. If the federal and NWT governments wish to attract petroleum investment to the north and thereby advance energy security, these matters need to be addressed.

As I've mentioned, Canadians are fortunate in not having to worry much about the security of oil and gas supplies given our fortunate position as a net exporter of both commodities. However, those parts of the country that are mainly dependent on imported crude oil and refined petroleum products would be disadvantaged by any lengthy interruption in the usual marine supply channels. The government may therefore wish to investigate the extent of the risk exposure of that sort and how it might be lessened.

The Canadian government has a role to play in ensuring that the laws and regulations that define the conditions within which the petroleum industry operates are conducive to free market competition, and also in working to lower non-market barriers to petroleum investment such as those that I've identified, so that development of Canada's oil and gas resources, including oil sands, bitumen, and shale gas, can proceed quickly where production is viable in light of the rigours of competition, free trade, and the costs of compliance with necessary environmental protection policies.

Thank you, Mr. Chairman.

[The Chair, Conservative, Leon Benoit]

Thank you, Dr. Angevine.

We have next Dr. Anthony Ingraffea. His flight was held up due to a snowstorm, and I want to thank our clerk for doing some stellar work to arrange the video conferencing. It just got completed in time. So thank you for that.

Go ahead, please, Dr. Ingraffea.

[Dr. Anthony R. Ingraffea, Dwight C. Baum Professor of Engineering, Cornell University, As an Individual]

Good afternoon, and thank you very much for giving me this opportunity to present testimony to your committee. I do apologize for not being there, and I also compliment your staff for setting up this video conference on short notice.

I want to make it clear that all of my testimony this afternoon is on point, that is, unconventional natural gas development from shale formations. I'm going to limit my time to just a few comments right now, because I understand we have a whole two hours and I would rather spend my time with you answering your questions. But I am going to spend a few moments and suggest some lines of questions based on my reading of all the testimony on the issue of unconventional natural gas from shale formations that your committee has received to date from various speakers over the last few months.

As I've read that testimony, I've noted some inaccuracies and some misleading statements, so I hope today to help to clarify those for you. There are five main comments that I'd like to suggest right now that perhaps we could follow up on during Q and A.

The first is, don't make the same mistake that's been made in the U.S. by framing and naming the issue of unconventional natural gas production from shale fracking. It is not just fracking; it is the entire process, the whole system of producing unconventional gas from shale formations that you should be investigating. So don't develop too narrow a focus.

The second point is that the most important aspect of developing unconventional gas from a resource like shale is the scale of an operation. By that I mean two things. It takes between 50 and 100 times more fluids to develop a shale gas well than to develop a conventional gas well. That implies that a concomitant amount of waste products is produced in the stream. I emphasize 50 to 100 times the amount of fluid necessary over a conventional gas well. That's one aspect of what I refer to as scale. The second aspect is this. The nature of the geology of shale is such that to produce the vast quantities of gas that are being forecast by the industry will require a very high well density compared to conventional gas development. By that I mean on the order of three wells per square kilometre. Those two issues of scale need to be absorbed and digested: the large amounts of fluid necessary, which implies much transportation and much waste disposal; and many more wells per square kilometre than previously experienced.

The third point is that the technology to do this kind of unconventional development is, surprisingly, relatively new. There are four elements of that new technology, and they did not come together in the United States until about eight years ago. So this is not the hydraulic fracturing of the 1950s, 1960s, and 1970s. It's not conventional gas development of that era. It's a relatively new combined technology.

Fourth, because it's relatively new—in the U.S. certainly, and in the western provinces where it's going hot and heavy in Canada—regulations and the enforcement of the regulations have not kept pace with the technology in the U.S. I'll repeat that. The regulations and the enforcement of those regulations have not kept pace with this new technology. It is unlikely, based on the experience that we're seeing in the eastern part of the United States—Pennsylvania, Ohio, and West Virginia, where shale gas development is under way—that your eastern provinces are ready for similar development. I emphasize that it is unlikely because we have similar geologies, similar surface uses, and similar population densities, and, as I said previously, the regulations and the enforcement of those regulations in that kind of environment. Your eastern provinces, I claim, are not yet ready.

Finally, the fifth point I want to make is to follow the waste streams. If there's one lesson we have learned already in the eastern part of the United States where shale gas development is undergoing tremendously rapid expansion, it is that the ability to note how much waste is being produced in each well is important—and by waste I mean solids, liquids, and gases. It's important to know what's being produced, in what volume and when, and where every waste stream winds up in the environment.

Those are the five points I would like to make in my opening comments. I hope we have ample time during Q and A that you might want to ask me to expand on all of them.

Thank you very much for your attention.

[The Chair, Conservative, Leon Benoit]

Thank you, Dr. Ingraffea.

We go now to our final witness, the Honourable Bruce Northrup, Minister of Natural Resources from the Government of New Brunswick. Welcome, sir. Go ahead with your presentation for up to 10 minutes. Thank you for being with us.

[Bruce Northrup, Minister, Department of Natural Resources, Government of New Brunswick]

Thank you very much, Chairman Benoit.

Good afternoon, everyone.

I want to thank you for the opportunity to appear before the committee today, and I appreciate that you have made it possible to do it via video conferencing.

The Government of New Brunswick is very pleased to present its views on the energy security in Canada and how our province can contribute to our country's energy needs.

I understand I have 10 minutes for my opening remarks, so I'll use this time to share where we are now and where we want to go.

Today we are in the very early stages of what could be a very substantial natural gas industry in our province. This is a very exciting prospect, and we are very optimistic that this could be a major part of the New Brunswick economy if managed in a responsible manner. In just the Sussex area where I live, there is an estimated 60 trillion cubic feet of natural gas trapped in shale formations deep underground. For comparison purposes, just one trillion cubic feet of gas could power 10,000 homes for 1,000 years. So you see there is enormous potential from an economic development and energy security perspective.

Today, 11 companies have rights to explore for oil and natural gas on almost 1.5 million hectares of land in New Brunswick. Two of these are large American companies with extensive experience in shale development in the United States and Canada. Exploration companies have invested $350 million in our province over the past decade, looking for natural gas and oil, and they plan to spend at least another $200 million over the next two years. So the exploration phase alone is creating employment and pumping significant dollars into the New Brunswick economy through the purchase of goods and services.

But it's the next stage that has the potential to substantially change our province's future. If shale gas is discovered in commercial quantities, then we're looking at a game changer for our great province. A large-scale natural gas industry would generate millions of dollars in royalties, create many new direct and indirect jobs, and expand our tax base to help fund services we all count on, such as health, education, and senior care.

Just last week I returned from a fact-finding mission to the State of Arkansas with my colleagues, the Minister of Energy and the Minister of Environment. We were joined on this trip by Stephanie Merrill from the Conservation Council of New Brunswick, who also appeared before this committee. During our visit we met with landowners, environmentalists, regulators, and politicians, including the Governor of Arkansas. It was a very eye-opening experience. What we saw is how the shale gas industry has ignited the economy of Arkansas. As Governor Beebe told us, the shale gas industry has transformed Arkansas from a have-not state to a have state. Thousands of new jobs have been created directly by the shale gas industry, or indirectly as companies have moved to Arkansas to take advantage of the secure and relatively inexpensive energy source.

We believe a significant natural gas industry would have the same positive economic impact in New Brunswick. What our government is determined to do is to realize the benefits of this resource without suffering any negative consequences—and I just want to repeat that: without suffering any negative consequences.

We know there have been environmental problems in some parts of the United States. While the impact sometimes can be exaggerated, we do not take these concerns lightly. That's why our government support is based on the responsible expansion of the natural gas sector. The development of this resource must be done right. It is imperative that the social and environmental fabric of our rural communities continues to be substantial in the future. We won't sacrifice the safety and security of homeowners and their groundwater supply to make this happen.

Today we are confident that our present legislative framework is more than adequate to deal with the current level of activity. This activity is primarily at the exploration stage with very few wells drilled. In addition to our existing legislation, we have introduced a phased environmental impact assessment, an EIA process, as a tool to enable the proper planning for what lies ahead. The phased EIA is unique in Canada, and we feel it will address many of the issues raised by concerned citizen groups and other groups.

We also realize that if this industry moves forward as hoped, we must adapt our legislation and human resources accordingly. We feel this can be done right and that we have the necessary time to ensure this happens.

We are in the fortunate position of being able to learn from other jurisdictions like Arkansas that are a decade or so ahead of us in developing shale gas reserves. In some states, development outpaced the regulatory regimes, and the environment was the big loser. In New Brunswick we believe we have a strong regulatory framework, and we're willing to make it even stronger if that's what it takes. Our objective is to be a leader in this area, and we feel we are in an ideal situation to achieve this goal. Consequently, our government is now re-examining legislation and regulations governing the exploration and extraction of minerals, oil, and natural gas. We see this as part of a continuous improvement process. We also believe in the close collaboration with people, communities, and interest groups to ensure they are engaged in the process.

It is the position of our government that we engage the public and conduct our business in a completely transparent manner. Just this weekend I hosted an open house in my hometown of Sussex, so that anyone with questions on shale gas development could get the answers directly from government officials or industry representatives. This was the first of what I anticipate will be a series of information sessions in different parts of the province as exploration and development activity picks up in other areas.

We are planning at least one additional fact-finding mission. This time we plan to go to northern British Columbia to see first-hand shale gas development there and to meet with residents and regulators. I also believe the hearings this committee is holding will help focus public attention on shale gas development and what it could mean for Canada's energy security.

It is well understood that the natural resources of New Brunswick belong to the people of our province and the responsibility to manage those rests with us. I believe we are up for the task. But New Brunswick is a team player, and I recognize there may be areas where cooperation with the federal government and our sister provinces and territories may prove mutually beneficial. Areas of cooperation that come to mind include the environment, economic development opportunities, research and development, investigation of value-added opportunities, and human resource development. These are all the areas where cooperation may lead to enhancing opportunities this industry brings to New Brunswick and the rest of Canada. This ultimately may lead to a very secure energy future for us all.

Again, I appreciate the opportunity to appear here today, and I look forward to answering questions from committee members.

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister Northrup.

We'll go now directly to questions and comments, starting with Monsieur Coderre from the official opposition.

Go ahead, sir.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you, Mr. Chair. Good afternoon, gentlemen. I will start with you, Mr. Angevine.

The issues of energy security and economic impacts are certainly hot topics. Your comments gave me the impression that there need to be fewer barriers. But I did not sense that you felt the need for some kind of monitoring. Talking about energy security implies making sure that we are working with people because of the environmental situation and climate change.

With respect to balance, the Fraser Institute is talking about monitoring and regulation. What role does a government play when it comes to regulations to ensure that there are, in fact, fewer barriers to better economic functioning? Since there may be downsides, what can we do to protect the public as well?

[Dr. Gerry Angevine]

The position of the Fraser Institute would be that regulation that is needed is important and protection of the environment is important. That's the bottom line. Regulation, however, needs to be as efficient as possible and needs to be changed in accordance with technologies and kept up to date. But in some cases there is a tendency for regulators to add functions to their roles that increase the cost of their organizations.

As I've mentioned, regulations sometimes need to be updated. If you look at the National Energy Board Act and why and when it was put into place, the world is different today, and some of the concerns that were foremost at that time are not something, perhaps, the National Energy Board needs to be concerned about. For example, if we're looking into whether a proposed pipeline project is necessary from a commercial and economic point of view, certainly the proponents wouldn't be applying to construct a pipeline if it wasn't viable, and they're the risk takers, so that's something the National Energy Board likely doesn't need to spend much, if any, time on.

On the other hand, there are new developments and concerns as we get more into unconventional oil and gas recovery. The institute certainly is in support of necessary and continually updated regulation.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Ingraffea, thanks for your five points.

I come from the province of Quebec. We are living right now with a situation with shale gas. Of course, I'm a federal politician, so I know that everything is a matter of jurisdiction there. It's a Quebec provincial issue, but I'm sensitive anyway to the situation in the field, and I believe the NEB has a role to play at a certain level, specifically on environmental assessment.

Because of the uncertainty, which you've been talking about in your five points, would you suggest to the Government of Quebec that they implement a moratorium first before going ahead on the situation of the shale gas?

[Dr. Anthony R. Ingraffea]

My direct answer is yes, emphatically.

Let me support that by saying a few things about a moratorium that exists in my home state of New York. At the same time that Pennsylvania, a sister state, and Ohio, a sister state, and West Virginia, a near sister state, began full-scale development of their shale gas resources four or five years ago, New York State had the wisdom to stop and say, wait a minute, this is substantially different technology than has been used in the past, it's relatively new technology, and we do not have in place adequate environmental regulations, we do not have in place adequate numbers of regulators, and we do not have in place an adequate number of inspectors; therefore we need to study the problem some more, and not just in an academic sense, but we need to learn from the mistakes that are being made today in our sister states, and we would really like to wait until the federal government completes its study under the Environmental Protection Agency to determine, hopefully once and for all, what really are the risks.

No one is saying this is risk-free. No one is saying it's accident-free. No one is saying that one cannot develop an acceptable level of risk in the technologies. What New York State is saying with its moratorium is that we do not have adequate scientific information on which to base adequate regulation and enforcement.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you.

Minister Northrop, the reason I asked the first two questions of the other witnesses is because of course you're the politician and you're stuck with the decision-making process.

There is, I believe, the necessity in Canada to have a national energy strategy, because it seems that you have some problems at the regulation level on what the role of the NEB should be. For the sake of the people of New Brunswick, do you believe it is more appropriate, before taking a stand, to say to the enterprise, well, take a break, we'll go through all the processes first because of the technology issues and all that? Are you putting in place a kind of moratorium?

There is an issue with people, of course--the fear of the unknown, with all the information coming from everywhere. How do you manage your own decision-making process?

[Bruce Northrup]

We have been very clear since we took government in October that the moratorium was not in place for the Province of New Brunswick. We felt, and we know and we have had time to explore and come up with.... We have good regulations in place now. Since taking over as government, we have phased in the EIA process, the environmental impact assessment process. There were a couple of wells that had been drilled by Apache in the Elgin area in New Brunswick. They've drilled the wells. They're finished, and they've taken all their criteria back to Calgary. They won't be drilling any wells for quite a while. Our other major one here, Southwestern Energy from Arkansas, is just in the preliminary stages.

That's why we went to Arkansas, to get the positives and negatives from that state. That's why we're going to Alberta and B.C., especially Horn River. They've been in operation there for quite a few years, so we want to go talk to the regulators there, the environmental people. Actually, when we went to Arkansas, we took a lady with us who was part of the Conservation Council of New Brunswick. She went to every meeting we went to with landowners, with regulators, and with environmental groups.

We feel we're in the early stages here right now, and as a minister and with my staff, we don't feel, working with the Department of Environment, that we have time to enforce our regulations more. In New Brunswick, that's the position we are in as of today.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you.

[The Chair, Conservative, Leon Benoit]

Merci, monsieur Coderre.

Madam Brunelle, you have up to seven minutes. Go ahead, please.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you, Mr. Northrup. I'll continue with you.

I am from Quebec. I find it interesting that you spoke about consulting the public. It is clear that natural resource development is the responsibility of the Government of Quebec, and Mr. Coderre was perfectly correct in saying so. The Government of Quebec made a huge blunder by forgetting to inform the public and establishing with the public what could be called a social contract before starting any type of extraction or exploration. We are now in a situation where water use is a major issue.

When you said that you are going to consult people elsewhere in Canada and the United States, I wondered whether things would really compare. The scenarios are completely different. In Quebec, we want to extract shale gas in densely populated agricultural regions. This has a great impact on people's quality of life. It seems to me that an agricultural region is not the same as the northern reaches of a province where there are fewer inhabitants.

Certainly we are talking about energy security. That being said, in Quebec, where hydroelectricity is abundant, do we really need shale gas? That's why Quebeckers are now agreeing to issue a moratorium while we are taking a closer look at the environmental consequences.

Do you think that you can draw from Quebec's experience and mistakes in this situation? Do you think that things in the United States, Quebec and elsewhere in Canada can be equally compared?

[The Chair, Conservative, Leon Benoit]

Go ahead.

[Bruce Northrup]

What we are doing here in the province of New Brunswick is putting the best practices and standards in place.

You mentioned consulting with the public. We've done that since day one. I mentioned in my brief 10-minute spiel that we had an open house in my backyard in Sussex last weekend. We had over 400 people who came in and talked to three different industries. We had the Department of Environment there. We had the Department of Natural Resources there, with all the people who were experts in different fields, just to explain to them how the process works from A to Z.

We were quite happy with the outcome. At the very first part, we had the mayors and council people in, along with LSDs. In the next hour, we had concerned citizens groups come in for an hour to express their views. What we heard loud and clear was that while we accomplished what we did that last Saturday, they want a public forum so that they and the general public can come and make their views known to us. That's exactly what we'll do within the next month or so. We'll have industry there, we'll have government there, and people will be coming in, probably with a facilitator to make sure everything runs well.

We've been very up front with the people of New Brunswick. We've been very up front with the industry here. Just last week, the environmental impact assessment that we phased in was explained to industry. We met for over three hours. The environment people explained the EIA process. That's how we're being up front with industry, so that if this does go through, they know 100% where the Province of New Brunswick stands.

We feel that we have ample time to do that with industry and ample time to do that with the concerned citizens groups and the citizens. That's basically why we did not put a moratorium on here.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you.

I want to move on to Professor Ingraffea.

[Dr. Anthony R. Ingraffea]

Yes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon.

You talked to us about the importance of water use. The use of water on shale gas production sites has become a major environmental issue.

The city of Trois-Rivières, which is my constituency, had to treat water from shale gas generation at its water treatment plant. Now, the ministère de l'Environnement is giving a conflicting opinion, saying that it can no longer do this.

Has enough research been done to determine all the appropriate environmental measures that should be adopted? Are we not playing sorcerer's apprentice a little by trying to produce shale gas without really knowing all the ins and outs of producing it?

[The Chair, Conservative, Leon Benoit]

Go ahead, Dr. Ingraffea.

[Dr. Anthony R. Ingraffea]

My answer is yes. I wouldn't exactly call it magic. I'd call it black magic, not in the sense that more scientific investigation needs to be done, but that more technology needs to be developed.

Let me be very specific. In regard to the liquid waste stream, the fluids, the flowback fluids and so-called brines and produced waters, which the industry uses interchangeably to describe the liquid waste--flowback water, brine, produced water--it is different from what is produced from an oil well or from a conventional well. It cannot be taken to a public waste water treatment plant and then dumped into a river. It contains something more than salt. It contains heavy metals. It contains some amount of naturally occurring radioactive materials, which are signatures of shale gas. Public waste water treatment plants are not equipped to remove those materials from the waste stream. There are no facilities in the State of New York currently licensed to remove such materials from the waste stream from an unconventional shale gas well. That is one of the reasons why we have a moratorium in New York.

New York will not issue a permit for the development using high-volume slick-water hydraulic fracturing of gas from shale in New York until the permit holder can show where the waste stream will be disposed of properly. So until the technologies are developed--and they are developing--where high volumes of this waste stream can be treated correctly for what's in it, we stand by our moratorium.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Brunelle.

Mr. Cullen, go ahead, please, for up to seven minutes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Chair.

Thank you to our panellists today.

Mr. Ingraffea, I'll stay with you.

We've heard from industry people involved with this technology, and they tell us essentially to relax; they've been at it for years, and there should be no concerns over the fracking or the waste waters. I'm wondering why that assuages some within the industry. You say in New York it wasn't...but in Pennsylvania, West Virginia, and the western part of Canada, that seems to have worked.

What is so fundamentally different about what the industry is up to with this non-conventional source of natural gas compared with its other drilling operations in the oil and gas sector?