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.