Quebec’s backing of Anticosti oil drilling has changed the game, says industry spokesperson by Nicolas van Praet, February 18, 2014, Calgary Herald
The Quebec government had to put some money in the game if it was to have any hope of stoking a domestic oil industry, says the head of the province’s oil sector lobby group. Political difficulties for oil and gas companies in Quebec in recent years have made it difficult to raise money for exploration projects, Michael Binnion said in an interview Tuesday. But the decision announced last week by Premier Pauline Marois’s government to move forward with early-stage drilling on Anticosti Island with the province pledging $115-million of the estimated $190-million drilling cost as an equity partner in two separate projects changed the equation, he said. “For us in industry, we have to look to the endorsement value of it – and I think the endorsement value is very, very positive,” Mr. Binnion said of the government’s role. “If in Quebec we had a well-established system, and had established social acceptability here for the industry, there would be no need for public money in exploration projects. I don’t think there would be any need. But I think under the circumstances, probably government support was needed.”
Defending the government’s announcement last week against tough questioning by a Radio Canada host, Quebec natural resources minister Martine Ouellet compared Quebec to Norway. The Scandinavian country, which has one of the most admired economies and social welfare systems in the world, decided early on to invest in its oil industry to benefit from the returns. … “If we want the government to have an ownership position [in oil development], the government has to invest,” Ms. Ouellet told Radio Canada. “That’s how it works.” The minister said now is the right time to invest because if Anticosti’s potential is eventually confirmed, it will cost more to buy in at that point. Preliminary drilling is to begin this summer.
The island’s Macasty shale play harbours an estimated 30 billion to 50 billion barrels of oil initially-in-place, of which maybe 5% could be recoverable. The oil is lodged in rock, which must be stimulated by hydraulic fracturing to get it out. Natural gas is also likely present, which presents an added challenge. Industry sources have confirmed that if commercialization is proven, the oil will likely be shipped out by tanker. [Emphasis added]
2012: Quebec to seek ban on shale gas fracking: Minister
Quebec’s new Natural Resources Minister, Martine Ouellet, has made up her mind. Even though she is ordering a new independent inquiry into shale gas exploration and exploitation, she would ban the industry and its controversial hydraulic fracturing outright.
“I don’t see the day when these technologies can be used in a safe way,” said Ms. Ouellet, as she walked to her first cabinet meeting Thursday in Quebec City.
PQs hunt for fossil fuels putting taxpayers at risk, critics say, as Marois strikes $115M deal with oil companies by Andy Blatchford, Canadian Press
February 16, 2014, National Post
A plan launched by the Quebec government to help fund oil exploration on a remote Gulf of St. Lawrence island is raising concerns the province is
taking too big a risk with taxpayer cash. Premier Pauline Marois announced Thursday her government would finance up to $115 million in joint ventures with several oil companies to drill on Anticosti Island, an endeavour she says could bring $45 billion in benefits to Quebecers over the next 30 years. Marois unveiled the project at a time when her minority Parti Quebecois government is facing attacks over its economic record. It also came amid the expectation she will call an election in the coming weeks.
But one critic of the project says the amount of recoverable unconventional oil locked underneath Anticosti has been exaggerated, insisting no more than 1.5% of its estimated 30-billion-plus barrels can actually be extracted. Marc Durand, a retired geological engineer, says the governments plan has the potential to bring in around $40 billion. But he added it would cost roughly three times that amount $120 billion to employ the technology needed to get it out of the ground and to market.
Durand urged the PQ to exercise more caution when it comes to the taxpayers dime. We are so far from any possible profitability in Anticosti that investing Public money is like saying, I will fix my budgetary problems by buying a lottery ticket, Durand, a former professor at Universite du Quebec in Montreal, said Friday. Theres much less than a one-in-1,000 chance of recouping this investment and these are public funds.
Quebec Liberal Leader Philippe Couillard said Friday his party supports exploiting fossil fuels in a responsible manner, but he criticized the PQ plan for putting most of the risk on the publics back, rather than on the Private sector. What we have in front of us is a hastily concocted project, where we dont know enough about the nature of the resource [and] the profitability, said Couillard, who added the initiative appears to signal that an election call is imminent. I think the electoral result was much more important for that government than the financial result.
At Thursdays announcement, Marois herself acknowledged the Anticosti ventures have their risks.
Meanwhile, the Quebec governments announcement also caught the attention of the oil industry in Western Canada, where the long-dismissed Anticosti reserve jumped onto investors radar screens, says one Calgary-based analyst. David Popowich of Macquarie Securities said the PQs allocation of public funds to drill for unconventional oil is unique in North America. He added the move is even more unusual because, unlike most unconventional plays, the sparsely populated island, known for its flora and fauna, has no existing infrastructure. Popowich described Quebecs decision as a gamble, since no one knows how much of the oil is recoverable. Oil and gas exploration is just inherently risky, so it is kind of unusual that theyre participating in it, but every business has its risks, I guess, said Popowich. There have been lots of examples of unconventional oil plays where they havent worked out Its not a negligible possibility that this could be a non-economic play. Popowich, however, said the project could renew the industrys interest in Quebec. He thinks many companies were spooked last year when the government introduced a moratorium on shale-gas exploration and drilling activities in the St. Lawrence River valley. [Emphasis added]
Une manifestation contre les politiques favorables au pétrole
by ici.radio-canada.ca, February 16, 2014