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Hydraulic Fracturing Ban Would Shut Down Industry, CEO Says

Rebecca Penty
August 24th, 2010

A ban on hydraulic fracturing in New Brunswick would end oil and gas exploration and development, an industry executive says.

'We understand how precious water supplies are. There is just no way it would make good business sense to do anything that's going to denigrate those resources,' says Norm Miller, president and CEO of Corridor Resources Inc.

Responding to a Green Party of New Brunswick press release issued Monday indicating that if elected, the party would put a moratorium on the industry practice, PetroWorth Resources Inc. (CNSX:PTW) president Neal Mednick said the province has seen a host of successful fractures, one of them done by his company south of Moncton.

"Most of the wells encounter what is called tight gas. That's gas that doesn't flow very well naturally, so it requires what is called fracture stimulation," Mednick said in an interview from Toronto.

"If hydraulic fracturing were to be banned, then essentially you'd just be shutting the industry down in New Brunswick."

The Green Party would impose its moratorium "until proper regulations and safeguards are put in place."

The party believes the Department of Environment has no regulations specific to the industry.

Oil and natural gas exploration is overseen by several provincial departments, with the Department of Environment accountable under the Clean Environment Act, Clean Water Act, Clean Air Act and Community Planning Act.

Earlier this summer, a department spokeswoman said there was a review underway of the rules as they pertain to shale gas exploration and development - prompted by the Conservation Council of New Brunswick.

Green Party leader Jack MacDougall said in the release that hydraulic fracturing is "the suspected cause" of more than 1,000 cases of groundwater contamination in North America.

The current Liberal government has allowed hydraulic fracturing to take place, as did the previous Progressive Conservative government; of the 65 oil and natural gas wells drilled since 2000, two-thirds have involved hydraulic fracturing.

In May, the Tories said they support the natural gas industry, but that the government should ensure protection of drinking water supplies.

Mednick said there have not been any documented cases of contamination from hydraulic fracturing and that opposition comes from a lack of education.
Hydraulic fracturing sees companies create fractures in rock formations to enhance oil and natural gas recovery; it's a process increasingly employed to get at the gas resource in shale rock, which exists in New Brunswick thousands of metres underground.

Firms pump fluid - usually a mix of water, sand and chemical additives - down the well bore under high pressure to prop open the fractures and force the gas out.
PetroWorth Resources was recently denied the right to conduct seismic testing for oil and gas resources on about 18 kilometres of land in the Town of Sackville over fears later development could damage the town's water supply.

On Monday, Sackville Mayor Pat Estabrooks published a newsletter to town residents informing them council reversed its decision to block the company's exploration on Aug. 17, to put in particular conditions including: baseline testing of all private wells within 200 metres of any seismic testing, exploration and drilling; baseline testing of the municipal water system as a whole, including the creation of a monitoring well; an independent biophysical assessment of the whole municipality; and that the company be open to negotiating other benefits or considerations with the town.

Councillor Margaret Tusz-King, also the Green Party candidate in the fall election for the Tantramar riding, said councillors realized PetroWorth would later be able to access town property underground through horizontal drilling, without town approval.

"This was our only opportunity to have a voice as a municipality in this project," she said of the conditions imposed in the approval, which passed by a 7-1 vote.
Mednick said his company won't access town lands due to the opposition encountered, instead focusing on the other 72 kilometres of the seismic program.
Norm Miller, CEO of Halifax-based Corridor Resources Inc. (TSX:CDH) - the only company producing gas in New Brunswick - said the industry is "on the cusp" of getting some interesting results in New Brunswick and that he believes industry processes can be developed with government and community input.

"We understand how precious water supplies are. There is just no way it would make good business sense to do anything that's going to denigrate those resources," Miller said.