New Brunswick should create a new independent regulator and rebuild its relationship with aboriginal people and other citizens if it lifts a moratorium on hydraulic fracturing, a new report says.

The three-volume document by the New Brunswick Commission on Hydraulic Fracturing avoids urging the Gallant government to come down on one side of the issue or the other.

It says that's a decision best left to elected officials.

But it lays out a long and detailed list of steps the provincial government should take if it does allow shale gas development to go ahead.

They include:

  • A single, independent regulator to eliminate the problem of government departments that both promote and regulate resources industries.
  • A new "environment and energy strategy" to shift the province to a knowledge economy that depends less on carbon energy, a shift the private sector should embrace, according to the commission.
  • A new relationship with aboriginal people, which the commission says is essential if the government is going to meet its constitutional duty to consult them.
  • A plan to deal with fracking wastewater, which should be in place before any commercial production begins.
  • A royalty structure that doesn't fluctuate to accommodate ups and downs in volatile world gas prices.

The report paints a bleak picture of how New Brunswick governments deal with battles over resource development, calling it "a well-trodden path that is leading us in circles."

There's a lack of trust among the various supporters and opponents of shale gas development, it says, which leaves those in the middle unwilling to join the debate for fear of being ridiculed.

The report also points out that the global collapse in gas prices may mean that a shale gas industry in the province isn't commercially viable.

'Fact-finding' report

Leading into Friday's report, Energy Minister Donald Arseneault said the commission would not be taking sides in the shale gas debate.

hi-arsenault-canaport

Energy minister Donald Arseneault says the government will make a decision on whether or not to lift the moratorium on shale gas development based partly on the panel's fact-finding mission, but the panel itself won't make a recommendation. (CBC)

"It was fact finding," Arseneault said during a political panel on Information Morning in Fredericton.

"They have to look at those five conditions and proceed on that. But it's not their job to make a recommendation to the government. … It's the government's job to make a decision."

Green Party Leader David Coon told the CBC panel that he doesn't expect a green light or a red light for development, but an amber light.

"And you know with amber lights, yellow lights, what you do?" he said.

"It's either be cautious and stop, or you run it."

The previous PC government of David Alward staked its 2014 re-election bid on shale gas, launching the campaign at a shale wellhead in Penobsquis and building its message around the slogan "Say Yes," a reference to resource development.

Gallant's Liberals imposed the moratorium shortly after winning the election.

Prices have dropped sharply

In the year and a half since the Tories positioned fracking as an economic boon for the province, gas prices have dropped worldwide, in part because of a glut created by shale gas extraction in the United States.

Bruce Fitch

Opposition Leader Bruce Fitch says the Liberal government has probably missed the boat on shale gas development already, thanks to changing markets. (CBC)

The interim PC leader, Bruce Fitch, says that may render today's report pointless.

"The whole market has changed," Fitch says.

"So they probably missed the opportunity anyway. It's kind of a moot point at this point in time."

But Arseneault points out some companies have held on to their New Brunswick leases in case the price rebounds.

The three commissioners are former University of New Brunswick president John McLaughlin, former New Brunswick Community College chair Cheryl Robertson and former clerk of the executive council Marc Leger.

Hydraulic fracturing, also known as hydro-fracking or fracking, is a process that involves pumping a mixture of water, sand and chemicals into the ground at high pressure, which creates cracks in shale rock formations and allows companies to extract natural gas from areas that would otherwise go untapped.

Opponents of the shale gas industry have long argued the fracking process can contaminate groundwater.