Friday, July 7, 2017

Global Shale Law Compendium: Shale Governance in Canada (Newfoundland and Labrador, Ontario, and Prince Edward Island)

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will highlight governance actions taken by the Provinces of Newfoundland and Labrador, Ontario, and Prince Edward Island to develop policies specific to shale gas development. In our previous post, we addressed shale gas development in the Provinces of New Brunswick, Québec, and Nova Scotia. Another article will address shale gas development in western Canadian provinces.

Newfoundland and Labrador

The province of Newfoundland and Labrador holds abundant onshore and offshore oil and natural gas resources. According to the Canadian Association of Petroleum Producers (CAPP), “three billion barrels of oil and 11 trillion cubic feet of natural gas have been discovered in Newfoundland and Labrador to date.” Around September 2012, Shoal Point Energy declared it might have found significant shale oil prospects in the West Coast Newfoundland region, within the Green Point Shale formation, requiring the use of hydraulic fracturing. The company’s CEO George Langdon further stated that “just the sheer number of what could be in place there makes it, to me, one of the significant resources in North America, right up there with the big ones.”

In November 2013, however, the provincial Department of Natural Resources (DNR) announced that approvals for exploration or production activities relating to hydraulic fracturing would not be granted pending a jurisdictional review, a geological review, and an opportunity for public engagement.

In the meantime, the provincial government of Newfoundland and Labrador commissioned two experts to prepare a jurisdictional review of current legislation and regulatory initiatives relating to hydrocarbon as well as hydraulic fracturing best practices. The purpose of this review was to help prepare and develop a practical guidance tool for the government throughout all stages of hydraulic fracturing operations. A series of three reports were released entitled Newfoundland & Labrador Basis for Development of Guidance Related to Hydraulic Fracturing Part 1, Part 2 and Part 3.

On October 10, 2014, the provincial DNR announced that it had appointed an independent panel of five experts in order to carry out a review of the socio-economic and environmental implications of hydraulic fracturing in Western Newfoundland. The question addressed by this review was whether or not hydraulic fracturing should be allowed in Western Newfoundland. On May 31, 2016, the Newfoundland and Labrador Hydraulic Fracturing Review Panel released its Final Report on the implications of hydraulic fracturing operations in the province. The Independent Panel “unanimously recommend[ed] that a number of gaps and deficiencies must be addressed before the necessary conditions could exist that would allow hydraulic fracturing, as an all-inclusive industrial process, to proceed reasonably and responsibly in Western Newfoundland.” The Panel also added that, “at this point, the ‘pause’ in accepting applications involving hydraulic fracturing in Western Newfoundland should remain in effect while the fundamental gaps and deficiencies are addressed.”

Interestingly, the Independent Panel stated in the final report that they believe that “the Green Point shale resource, and other oil and gas resources that may be present in Western Newfoundland, represent unconventional opportunities and challenges for industrial development and economic growth in the region.”


Ontario is a central-eastern province of Canada, located along the Great Lakes bordering the United States. Shale gas development in Ontario has not yet happened despite the fact that southern Ontario may possess significant shale gas resources, according to the Ontario Geological Survey (OGS).

OGS established its first drilling program in 2010, which was intended to determine the potential for shale gas resources. This drilling program revealed that the Kettle Point Formation as well as the Rouge River Member of the Blue Mountain Formation and the Collingwood Member of the Cobourg Formation might have “the best potential for shale gas productive units,” in a 2012 Summary of Field Work and Other Activities.

As part of its second drilling program, OGS drilled exploratory wells in St. Joseph, Little Current, Wiarton, Bruce, Clatham, Port Stanley, Halton, Mount Forest, Imperial Lincoln, Pickering and Russell. These exploratory activities, however, encountered opposition from the public due to concerns that such development of shale gas resource could impair the quality and ecological integrity of the Great Lakes.

Interestingly, in March 2015, the provincial government rejected a bill intended to prohibit the development of shale gas resources in Ontario using hydraulic fracturing. The Minister of Natural Resources Bill Mauro explained that the government is currently reviewing its plans for the development of potential shale gas projects in the province.

Prince Edward Island

Prince Edward Island is a maritime Canadian province located in the Gulf of St. Lawrence, on the eastern side of the country. Exploration for hydrocarbon resources in the province of Prince Edward Island is still at a relatively early stage. According to the government of Prince Edward Island, the potential of the island for hydrocarbon development has not yet been fully assessed and only twenty exploratory wells and one re-entry well have been drilled on and around the island.

No comments:

Post a Comment