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Responsible energy development

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Capitalizing on the Benefits of shale gas and tight oil development in Atlantic Canada.

October 8, 2014

Bob Bleaney
VP, External Affairs

Published in: Business
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Responsible energy development

  1. 1. Responsible Energy Development Capitalizing on the Benefits of shale gas and tight oil development in Atlantic Canada Core Energy Conference October 8, 2014 Bob Bleaney VP, External Affairs
  2. 2. Canadian Association of Petroleum Producers (CAPP) ● Represents large and small producers who explore for, develop and produce natural gas, natural gas liquids, crude oil and oil sands throughout Canada ● Produce about 90 per cent of Canada’s natural gas and crude oil ● Members and Associate members generate revenues of about $120 billion per year ● Associate members provide a wide range of services that support the upstream crude oil and natural gas industry ● Key focus areas:  Education  Communications & outreach  Policy & regulatory advocacy  Industry performance 2
  3. 3. The Global Energy Spotlight on Canada World-Class Capability Public Confidence  Performance  Communication World-Class Resource Competitiveness  Market Diversification  Workforce 3
  4. 4. Global Primary Energy Demand • Population growth • Standard of living Energy Demand Growth • Ongoing high reliance on hydrocarbons • Increasing role for renewables • Shift to non-conv. oil & natural gas All Forms of Energy, Developed Responsibly • Production • Cost competitiveness • Environmental performance Technology - Key Lever for Sustainable Growth Source: International Energy Agency – New Policies Scenario World Energy Outlook 2011 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 1990 2011 2020 2025 2030 2035 million tonnes oil equivalent Other Renewables Bioenergy Hydro Nuclear Natural Gas Oil Coal Source: International Energy Agency World Energy Outlook 2013 Ongoing reliance on fossil fuels (share of energy consumption): 2011: 82% 2035: 76% 4
  5. 5. Then  60-year supply and falling  Shale known but uneconomic to develop  Underground gas storage primarily traditional reservoir, operationally not very flexible  Pipeline capacity growing incrementally  Rising prices with several spikes Now  100+ years supply and growing  Flourishing production, vast shale resources now accessible  Storage boom with more flexible salt- cavern facilities and additional market area storage  16,000+ miles of pipeline added since 2000  Plentiful supplies moderate prices and provide supply diversity 2001 – 2011: A Decade Makes a Difference North American Perspective 5
  6. 6. The Shale Gas Opportunity in Atlantic Canada ● Significant resource potential ● Industry has a proven track record of responsible oil and gas development in Canada (including shale)  175,000 wells hydraulically fractured safely ● Significant potential economic benefits for shale gas industry activity  $550 million spent on exploration, development and production to date in NB  NS Review Panel estimate of ‘lower medium case’ potential (e.g., 100 wells per year): • $1 billion in annual investments • 750 – 1,500 FTE direct employees 6
  7. 7. Natural Gas and GHGs ● Natural gas is the cleanest-burning hydrocarbon  Can be used in a variety of ways to help reduce GHG emissions, including in the transportation and electricity generation sectors  Burns 50% cleaner than coal when used in power generation ● More than 20,000 households and businesses in Nova Scotia have been converted to natural gas  Cumulative annual C02 reductions based on these conversations are in excess of 100,000 tonnes (equivalent to removing 20,000 vehicles from the roads) 7
  8. 8. Source: DNR NB Natural Gas Opportunities in Nova Scotia Source: NS Power 8 NS Electricity Generation by Energy Source - 2012● 21% of Nova Scotia’s electrical generation comes from Natural Gas ● Onshore natural gas could provide a safe and cost effective source of energy supply - while reducing GHG emissions.
  9. 9. Challenges for Shale Gas Development ● Onshore natural gas development relatively new in Atlantic Canada:  Industry presence is new  Using established technologies ● Broader public unfamiliar with companies, process and practices ● Misinformation is abundant:  Need to focus on the fact-based and scientific information on hydraulic fracturing ● Vocal opposition  strong lobby effort in play by anti- development groups  Need a more balanced dialogue 9
  10. 10. Concerns have been heard: ● Water  Source, use, treatment, disposal ● Fracture fluid additives  Reporting transparency, type, amount, treatment ● Environment  Land, emissions, noise ● Health & Quality of Life  Public health, socio-economic impacts, road damage … and these can be satisfactorily addressed Our industry has a strong record regarding safety and environmental performance 10
  11. 11. ● CAPP supports the approaches taken by governments in Atlantic Canada to conduct reviews of hydraulic fracturing technology (NB, NS and NL)  Participated actively in the NB and NS reviews and will do the same in NL  Review in NB resulted in strong regulation and “go slow” approach  Review in NS recommended similar “go slow” approach ● The recent Government of Nova Scotia decision to ban hydraulic fracturing should be reconsidered  Does not reflect the Wheeler report recommendations, and is not respecting the scientific evidence and Canadian experience that hydraulic fracturing is being done safely  Will result in lost opportunities for Nova Scotians  Not necessary to ban fracing to address public concerns ● Urge governments to consider experience in Western Canada and the potential economic benefits of responsible development Current Status and Industry Views 11
  12. 12. Building Understanding and Trust ● Performance: • Continuous environmental & social performance improvement (across the value chain)…..including monitoring, timely & transparent reporting • Clear line of sight to economic and social benefits to Canadians • World class policy & regulatory system • Solutions-oriented advocacy for balanced policy and regulation ● Communications & Outreach: • Sustained communications grounded in performance improvement • Strong focus on outreach & engagement ● Requires leadership & collaboration 12 Public ConfidencePerformance Communication & Outreach =+ 12
  13. 13. Communicating Our Approach Guiding Principles for Hydraulic Fracturing 1 2 3 4 5 Safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical. Measure and disclose our water use with the goal of continuing to reduce our effect on the environment. Support the development of fracturing fluid additives with the least environmental risks. Support the disclosure of fracturing fluid additives. Continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing. We will:
  14. 14. CAPP Hydraulic Fracturing Operating Practices 14
  15. 15. Communication Outreach: Processes, Practices & Responsibility 15
  16. 16. 16 The Way Forward: Opportunity, Collaboration & Responsible Development ● Seizing the Opportunity  Developing a competitive and reliable supply to meet market demands  Capture economic benefits and opportunities  Market growth and diversification ● Building Public Trust and Understanding  Industry performance, transparency and communication  Solid performance plus continuous improvement/ technological advances, and strong regulatory framework  Collaborating within sector, with government, stakeholders, and aboriginal communities ● Responsible Development is in everyone’s best interests
  17. 17. For More information CAPP.ca Follow CAPP on Twitter: @OilGasCanada Like CAPP on Facebook: facebook.com/OilGasCanada Become one of Canada’s Energy Citizens www.energycitizens.ca 17
  18. 18. THANK YOU QUESTIONS? Bob Bleaney VP, External Relations Bob.bleaney@capp.ca www.capp.ca 18

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