Shale Gas Development in Canada –       A Federal Perspective             Brussels Forum          John Foran, Energy Secto...
Presentation Summary Canadian Energy Policy/Regulatory/Market Overview    Jurisdiction & Energy Policy    NRCan Mandate...
Understanding Energy Jurisdiction           Provinces own and manage the            resources               Production, ...
Canadian Energy Policy Framework Canada’s energy policy is market oriented – deregulated prices   - Markets determine sup...
NRCan Mandate, Role of Public Servants  Natural Resources Canada (NRCan) Mandate       Federal energy department – respon...
6         Canada is a global energy leader Third largest producer of natural gas (144 Bcm)      4th largest exporter   ...
Large Canadian Natural Gas Resources                                                 Based on conventional natural gas, in...
Canadian Marketable Resource Estimates                            1,400                                                   ...
New Technologies Make Shale Gas Economic                                           Horizontal wells                       ...
Public Concerns
Public Concerns Public concern and opposition to shale gas development  exists, particularly in non-traditional hydrocarb...
Groundwater Schematic              Source: Environment Canada
What’s Under Groundwater              Fresh groundwater is usually in              the first 100-200 m. Brackish or      ...
NRCan Research Groundwater Geoscience Program (2009 – 2014) characterizes regional aquifer  systems and makes the data av...
Risks to Groundwater Environment Canada and Natural Resources Canada have  considerable groundwater expertise and mapping...
Facts on Hydraulic Fracturing in Canada Hydraulic fracturing used in North America since the 1940’s.    Over 175,000 wel...
Greenhouse Gas Emissions Lifecycle greenhouse gas emissions from shale gas being produced in  Canada are on average 4 per...
Induced Seismicity Induced seismicity refers to seismic events caused by human  activities (in comparison with naturally ...
Conclusions The regulation of shale gas development is primarily provincial. New technologies are leading to natural gas...
EXTRAS
2011 WCSB Natural Gas Production          Shale Gas in                                              AB                    ...
Large Canadian Natural Gas Resources                     Western Canada                                             Easter...
Resource Jurisdiction:                   a Shared Responsibility The direct ownership, management and regulation of most ...
Natural Gas Pipelines and Prices                       2012 Canadian Statistics                        Prod’n = 13.8 Bcf/...
LNG Exports and Pipeline Proposals                                        Proposed Liquefaction terminals                 ...
Public Concerns (con’t) NRCan consulted regulators, geoscientists, government  departments, and experts to gather factual...
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Shale Gas Development in Canada - a Federal Perspective

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  • This slide provides a further depiction of how jurisdiction would work in terms of an energy project associated with delivering natural gas to a liquefaction terminal for export. As owners of the resource in th ground, provinces regulate the production, gathering, and processing of the natural gas. Pipelines are either federal or provincial depending on whether they cross a border. Single jurisdiction piplines are provincial, while inter-jurisdictional pipelines are federal. The federal energy regulator (the national Energy Board) is also responsible for authorizing imports and exports of natural gas. The actual LNG facility is generally provincially regulated.
  • examples of natural 'contamination', i.e. rock weathering, that produces groundwaters water that either exceeds aesthetic guidelines or are unsafe for human consumption. Also there is abundant gas in groundwaters as well that are derived from natural sources (biogenic gas produced in the shallow surface). Typical rural operations can often lead to groundwater contamination as well (e.g, poor maintenance of septic systems, keeping livestock too close to the well, poor well maintenance). As an example I visited one farm that had the domestic water well right in the middle of the cow paddock. Some studies have suggested that over 40% of rural wells in the prairies exceed health guidelines, mostly fecal coliform contamination. I would agree that the major risks for contamination are surface activities as petroleum wells are required to case to below the zone of groundwater protection, and in most cases drilling and fracturing is well below the potable groundwater zone. The key issues gets to be be how much separation is required between the base of groundwater protection and fracturing, which is a growing area of research interest.
  • GHGenius is the tool NRCan uses to estimate lifecycle GHG emissions from fuels. It considers emissions from all stages of production, processing, transportation, and use of fuels. Provinces, industry, and others use GHGenius to estimate lifecycle GHG emissions from fuels for regulations, policy development, and research. It is similar to lifecycle tools used in the U.S., Europe, and elsewhere, except that it is the only one that contains Canadian data. Natural Resources Canada (NRCan), in collaboration with the Canadian Association of Petroleum Producers, recently completed a lifecycle analysis of greenhouse gas (GHG) emissions from two shale gas production sites in northern British Columbia (B.C.). These two sites make up approximately 45% of the current total estimated shale gas resources and nearly all shale gas production in Canada. The average lifecycle GHG emissions from current Canadian shale gas production and use are approximately 4% higher than from average conventional gas. For comparison, gasoline is 46% higher than average conventional gas, diesel is 57% higher, and coal is 68% higher. The perception exists among some in the general public that shale gas may have a GHG footprint that is much larger than conventional gas and even larger than coal. The study’s findings show that GHG emissions from shale gas are clearly lower than from other fossil fuel options (e.g. gasoline, diesel, and coal). Some have suggested shale gas results in greater methane leakage than conventional gas, and that this is the reason for the larger GHG footprint. Companies in Canada follow procedures to ensure that large amounts of methane are not vented directly to the atmosphere during well completion stages, as this would lead to hazardous working conditions and be economically and environmentally harmful. During gas production, there's no reason to believe that fugitive methane emissions from shale gas would be significantly different than from conventional gas, since they are produced in the same way.
  • Some form of unconventional resource, whether it be shale gas, tight gas or tight oil, can be found in just about every Canadian Province and Territory – a fact which may lead to a federal coordination role. To date, unconventional gas development has been focussed in Northern BC/Alberta, while shale oil development has been focussed on the Bakken formation in SK and MB. QC is the only jurisdiction where shale gas development is officially on hold (e.g. until the environmental review is completed), although (citizen) dissent has been growing in NB and NS.
  • A unique feature of Canada’s energy policy making is the constitutional division of powers between federal and provincial governments. In practice, energy is largely a provincial jurisdiction, as they carry the responsibilities of direct ownership, management and regulation of most natural resources. Of course, there are a number of areas where federal and provincial interests and responsibilities overlap. However, the primary federal role centers around: International and interprovincial issues; Uranium/nuclear power; North, offshore and Crown lands; and Works declared to be for the general benefit of Canada (e.g. science and technology).
  • john foran

    1. 1. Shale Gas Development in Canada – A Federal Perspective Brussels Forum John Foran, Energy Sector Natural Resources Canada (NRCan) January 22, 2013
    2. 2. Presentation Summary Canadian Energy Policy/Regulatory/Market Overview  Jurisdiction & Energy Policy  NRCan Mandate  Resources  Technologies Canadian concerns with shale gas development:  Groundwater use and contamination  Greenhouse gas emissions  Induced seismicity Conclusions
    3. 3. Understanding Energy Jurisdiction  Provinces own and manage the resources  Production, gathering, processing infrastructure and intra-provincial pipelines  Single jurisdiction pipes are provincial  Federal government responsibilities  inter-provincial and international trade (market structure)  Cross jurisdiction pipelines  exports/imports  LNG facilities are generally provincially-regulated
    4. 4. Canadian Energy Policy Framework Canada’s energy policy is market oriented – deregulated prices - Markets determine supply, demand, prices and infrastructure investments Targeted interventions and regulations help achieve specific objectives: - Encourage cleaner energy, efficiency - Human health/safety - Science and technology - Regulated rates on pipelines Both Federal and Provincial gov’ts have jurisdictional powers that are important in energy issues Canada requires aboriginal consultation on decisions that may impact aboriginal rights or title
    5. 5. NRCan Mandate, Role of Public Servants Natural Resources Canada (NRCan) Mandate  Federal energy department – responsible for energy policy 1  Ensure the sustainable development and responsible use of the country’s natural resources; maximize benefits to Canadians; strengthen conditions for Canada’s economic success  Provide sound environmental leadership, and ensure public safety and security Code of Public Service  Assist Ministers, under law, to serve the public interest; give honest and impartial advice; political neutrality.1. And other things – mining, forestry
    6. 6. 6 Canada is a global energy leader Third largest producer of natural gas (144 Bcm)  4th largest exporter Sixth largest producer of oil (~3 million barrels/day) Third largest producer of hydro power Second largest producer of uranium Own nuclear power technology (CANDU) More than 75% of power generation non-emitting Vast renewable and clean energy potential - e.g. wind, biomass, solar, marine and geothermal
    7. 7. Large Canadian Natural Gas Resources Based on conventional natural gas, in 1970s Canada became world’s third largest global gas producer, and fourth largest global gas exporter. Alberta and Saskatchewan > 300 TCF OGIP TOTAL > 1400 TCF OGIP Allowed Canada to develop world-leading natural gas drilling, processing, and Liarddiscoveries pipeline expertise and infrastructure, as well as world-leading regulators and regulations. Technology breakthroughs in shale and tight gas have now doubled Canadian resources. 3 OGIP=Original Gas in Place
    8. 8. Canadian Marketable Resource Estimates 1,400  Technology doubled 1,304 Tcf Canada’s natural gas 1,200 resource base – still risingTrillion Cubic Feet (Tcf) 1,000 Shale  Shift to shale gas - the new & Tight 800 (819) low cost supply of energy in 733 Tcf Shale Canada 600 & Tight  US export market expected (343) 400 CBM CBM to become self-sufficient  Canada pursuing market 200 Conv. Conv. Conv. diversification via LNG 0 exports to Asia 2000 2010 2010 (Low) (High) Source: Cdn.Society for Unconventional Resources
    9. 9. New Technologies Make Shale Gas Economic Horizontal wells + Multi-stage fracs + Pad drilling >1km = Economic Development Source: Alberta Venture
    10. 10. Public Concerns
    11. 11. Public Concerns Public concern and opposition to shale gas development exists, particularly in non-traditional hydrocarbon producing provinces such as Quebec and New Brunswick Concerns include  i) water use and contamination (incl. frac fluid disclosure);  ii) air emissions (incl. GHGs);  iii) induced micro-seismicity Some shales are located under populated or agricultural areas and below key Canadian aquifers, which has increased these concerns.
    12. 12. Groundwater Schematic Source: Environment Canada
    13. 13. What’s Under Groundwater Fresh groundwater is usually in the first 100-200 m. Brackish or saline groundwater is usually below 300 m. Below the deepest freshwater aquifers, porosity is filled with: i) saline water; ii) natural gas; or iii) crude oil.  Technology and regulations must be used to prevent communication of deep fluids or drilling/completion fluids with near surface groundwater.
    14. 14. NRCan Research Groundwater Geoscience Program (2009 – 2014) characterizes regional aquifer systems and makes the data available through the Groundwater Information Network  Program aims to map and assess 30 key aquifers to provide scientific knowledge on GW resources for water management and protection. In 2012, NRCan implemented new shale gas studies including:  the potential impacts of shale gas development on surficial aquifers  induced seismicity related to hydraulic fracturing and/or deep aquifer re-injection of post-frack wastewater. Under the Geoscience for New Energy Program, NRCan is characterizing shale- hosted petroleum reservoirs to better understand the quality and behaviour of these reservoirs, to develop a standardized resource assessment methodology. Council of Canadian Academies  The Sustainable Management of Groundwater in Canada, May 2009  Environmental Impacts of Shale Gas Development - in progress
    15. 15. Risks to Groundwater Environment Canada and Natural Resources Canada have considerable groundwater expertise and mapping and monitoring programs. In Canada, surface activities have been identified as posing the largest risks to groundwater.  E.g. municipal landfills, industrial waste disposal sites, leaking gasoline storage tanks, leaking septic tanks, accidental spills, run off from road salt, fertilizer, pesticides, livestock wastes etc.
    16. 16. Facts on Hydraulic Fracturing in Canada Hydraulic fracturing used in North America since the 1940’s.  Over 175,000 wells fractured in Alberta alone. Regulations govern wellbore construction to ensure steel casing and cement barriers separate the wellbore and nearby water sources. Fracturing of pay zone typically extends less than 300 metres above the stimulated zone (which is typically deeper than 1,000 metres), making it extremely unlikely for fractures to impact potable groundwater.  In Canada, there have been very few incidents, and no proven cases of water well contamination resulting from hydraulic fracturing.  An incident in 2012 contaminated a near surface water-bearing zone, due to improper completion work. The zone is not a source of potable water.
    17. 17. Greenhouse Gas Emissions Lifecycle greenhouse gas emissions from shale gas being produced in Canada are on average 4 percent greater than those from conventional natural gas  29 to 38 percent lower than other fossil fuels such as gasoline, diesel and coal. Procedures to prevent methane releases during well completion.  Fugitive methane emissions from shale gas production are unlikely to vary significantly from conventional gas production. Natural gas is a transition fuel for a low-carbon economy as it is cleaner burning than any other fossil fuel and is in abundant supply.  The increased use of natural gas (incl. from shale), in place of more greenhouse gas-intensive fuels, is consistent with Canada’s climate change mitigation efforts. www.ghgenius.ca
    18. 18. Induced Seismicity Induced seismicity refers to seismic events caused by human activities (in comparison with naturally occurring earthquakes). Hydraulic fracturing activities in British Columbia may have caused seismic events with magnitudes ranging up to 3.8.  Studies are ongoing to increase the understanding of potential linkages between fracking and induced seismicity. In Canada, no damage has been documented as a result of induced seismicity associated with shale gas development sites. NRCan scientists are active in research and speak to public concerns in this area.
    19. 19. Conclusions The regulation of shale gas development is primarily provincial. New technologies are leading to natural gas production from previously non-productive rocks (shale) and from new regions Estimated Canadian natural gas resources have grown dramatically Canada is targetting new markets for natural gas via LNG, particularly as the US becomes more self-sufficient Considerable public concern has been expressed about potential negative environmental and health impacts of hydraulic fracturing. NRCan has observed that hydraulic fracturing, using the technologies employed in Canada, and governed by Canadian regulatory requirements, has not resulted in significant negative environmental impacts.
    20. 20. EXTRAS
    21. 21. 2011 WCSB Natural Gas Production Shale Gas in AB CBM 5.4% Tight 26.6% Shale 0.0% Conv. 39.6% Total 71.7% Canada BC 0.0% 12.9% 3.5% 8.8% 25.1% SK 0.0% 1.5% 0.0% 1.6% 3.1% YK 0.0% 0.0% 0.0% 0.1% 0.1% Total 5.4% 41.0% 3.5% 50.1% 100.0%•BC: Commercial Production •AB: 15 shale gas formations•New Regulatory Framework •850 tcf identified•Enormous Resources •ERCB further evaluating •Qc: Utica Shale –•Targeting LNG exports shale gas resource potential experimental stage •Shale gas development in •BAPE recommendation for early stages environmental review •No shale gas development until Strategic Environmental Review is concluded •Anticosti/NF: shales are being evaluated •ON: active identifying prospective shale units •NB: 5 wells targeting shale •NS: Two gas wells •NG Steering Committee in Horton Bluff Shale •SK/MB: PIRA expects SK/MB •No referendum on issue •3 wells fractured in the shale oil production to grow from •Blueprint for dev’t coming Kennetcook area 75kb/d in 2010 to 700kb/d in 2025 soon •Provincial review by 2014
    22. 22. Large Canadian Natural Gas Resources Western Canada Eastern Canada  Canada has world- leading natural gas drilling, processing, and pipeline expertise, infrastructure, regulators and regulations.  Pursuing LNG exports to Asia and Europewww.Shaleresourcecenter.ca
    23. 23. Resource Jurisdiction: a Shared Responsibility The direct ownership, management and regulation of most natural resources fall under provincial jurisdiction Issues of interprovincial, national, or international concern fall under federal jurisdiction Provincial Jurisdiction Federal Jurisdiction •Resource ownership, •International and interprovincial management and royalties issues e.g. EXPORTS •Land-use planning and •Uranium/nuclear power allocation •Federal lands in North, offshore •Laws regarding the exploration, and Crown lands development, conservation and •Works declared to be for the use of natural resources within general benefit of Canada (e.g. provincial boundaries science and technology)
    24. 24. Natural Gas Pipelines and Prices 2012 Canadian Statistics  Prod’n = 13.8 Bcf/d  Exports = 8.4 Bcf/d  Imports = 2.9 Bcf/d  Alberta price = $2.31 Cdn$/GJ  Current Alberta price = $3.00 Cdn$/GJ  US becoming self sufficient, Canada pursuing export market diversification via LNG export projects
    25. 25. LNG Exports and Pipeline Proposals Proposed Liquefaction terminals Proposed Pipelines Ridley IslandPipeline will provide up to 4.2 Bcf/d In service:2019 Spectra / BG Group Regulatory applications pending Pacific Northwest LNG 18 MT/yr Petronas/Progress LNG Canada Up to 24 MT/yr or 3.2 Bcf/d In service: 2019Shell, Mitsubishi, Kogas, Petrochina cf / d Export licence under review 4.2 b f/d / BG c Spe ctra 3.6 b Ru pert bcf/d ince l 3.4 Pr Shel TC PL /Kitimat LNG Operating Gen. Part. bcf/d Pacific Trails 1.4 Up to 10 MT/yr or 1.3 Bcf/d In service: 2017 Encana, Apache, EOG BC LNG Export Co-operative Export license approved Up to 1.8 MT/yr or 0.25 Bcf/d In service: 2014 Export license approved
    26. 26. Public Concerns (con’t) NRCan consulted regulators, geoscientists, government departments, and experts to gather factual information and shares the IEA view that:  “The technologies and know-how exist for unconventional gas to be produced in a way that satisfactorily meets these challenges but a continuous drive from governments and industry to improve performance is required if public confidence is to be maintained or earned.”

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