Windsor Energy gets new shale gas exploration lease
Allows company to continue exploring for 5 years
Posted: Apr 17, 2012 1:17 PM AT
Last Updated: Apr 17, 2012 7:09 PM AT
Windsor Energy Inc. has been granted a five-year lease to continue exploring for oil and gas in southern New Brunswick.
Natural Resources Minister Bruce Northrup made the announcement Tuesday, just five months after he asked the RCMP to investigate the company for allegedly violating the Oil and Natural Gas Act.
"This has not been an easy decision for me but, legally, it is the only one that respects the contract with the former government," he said.
The former Graham government granted the Calgary-based company a three-year licence to carry out exploration for oil and natural gas in the Sussex-Hampton-Quispamsis area in November 2008, Northrup said.
Under the terms of the licence, Windsor Energy has committed to spend $4.5 million on exploratory work during the three years.
'We have all learned from this experience. It has shown us that we need to clarify and strengthen some of the rules related to oil and natural gas exploration and development.'—Natural Resources Minister Bruce Northrup
Last November, when the licence expired, Windsor applied to convert the licence to a five-year lease, which would allow the company to continue exploring for five years and make plans to drill.
"Windsor met and exceeded the monetary commitment made to the previous government," said Northrup. "Therefore, I was advised that Windsor Energy is legally entitled to have its licence converted to a lease."
Not granting a licence could open the province up to legal action, he said.
"We have all learned from this experience," he said. "It has shown us that we need to clarify and strengthen some of the rules related to oil and natural gas exploration and development."
There will be new rules within a month that will include stiff penalties for violations, Northrup said.
Drilling as early as next year
It's unclear where exactly Windsor Energy's test sites would be, but they're expected to be located east of Highway 1.
Drilling could begin next year, with government approval, the company's chief executive officer Khalid Amin told CBC News.
Windsor Energy is still analyzing the seismic data and will be putting together a plan for exploratory drilling, he said during a telephone interview from Calgary.
Earlier this month, Amin said he expected his company would be granted the lease, despite problems with the province last fall.
He said his company had fulfilled all of the legal obligations to get its exploration licence converted to a lease.
Still, he said Tuesday he's pleased with the government's decision.
Renews calls for moratorium
Meanwhile, Opposition Liberal energy critic Brian Kenny said the case illustrates the need for a moratorium on shale gas activities in the province, which his party has been calling for.
"This government talks about tough regulations for shale gas companies, but minister Northrup’s decision to grant Windsor Energy a new five-year lease proves we have little protection from this type of exploration," Kenny said in a statement.
"We need a moratorium on this industry now," he said. "A recent poll shows that’s what more than 80 per cent of New Brunswickers want. This government needs to respect the wishes on New Brunswickers on this file.”
Company raised ire last fallMany people were upset that Windsor Energy went ahead with seismic testing in Sussex before the town gave its approval. (CBC)
Windsor Energy ran into trouble with the provincial government in October when its contractor Seismotion conducted seismic testing within Sussex town limits without written permission from the town council.
At that time, the minister said he wanted the company penalized and forwarded a complaint to the RCMP.
But the police opted not to lay charges because nothing in the existing regulations allowed a company to be punished.
Northrup and Premier David Alward have committed to introducing an environmental protection plan this spring that would cover industrial developments.
Alward has said he wants to impose the continent’s toughest shale gas regulations on companies working in the province.
Pledge to improve communications
On Tuesday, Northrup said he hopes there are no further complications with Windsor Energy.
"I didn't agree with a lot of things they had done in the past. I would like to think that in talking to Windsor Energy we can turn another page here," he said.
"They've made a commitment that they will better communicate with the staff, will better communicate with myself and they'll better communicate with stakeholders that are in the area."
Alward's government has faced mounting criticism in the last year over shale gas exploration and the use of the controversial hydraulic fracturing process.
Hydro-fracking is a process where exploration companies inject a mixture of water, sand and chemicals into the ground, creating cracks in shale rock formations. That process allows companies to extract natural gas from areas that would otherwise go untapped.
Opponents of the process say it could have a negative effect on local water supplies and many of them have held protests across the province.
The premier has said the shale gas industry could provide huge economic benefits for the province, which is struggling with a deficit of $183 million and high unemployment.
Alward has promised those economic benefits won't come at the expense of the environment.
Latest New Brunswick News Headlines
- Liberals, NDP promote party donation transparency
- The provincial Liberal party and the New Democratic Party both say they are on the road to greater transparency in how they raise money after a war of words on party funding. more »
- Spruce budworm outbreak coming, forestry officials warn
- New Brunswick forestry officials are warning the spruce budworm is on the brink of another outbreak, which could cause widespread devastation. more »
- Liberal MLA sent to hospital suffering from chest pains
- Miramichi-Bay du Vin Liberal MLA Bill Fraser is still in the hospital after he was taken from the legislature on Wednesday suffering from chest pains. more »
- New Brunswickers split over shale gas, poll finds
- New Brunswick residents are split on the importance of shale gas development to the province's economic future and many are concerned about its safety, according to a new survey by Corporate Research Associates Inc. more »
Top News Headlines
- Sopranos star James Gandolfini dies in Italy
- James Gandolfini, whose portrayal of a brutal, emotionally delicate mob boss in HBO's 'The Sopranos' helped create one of TV's greatest drama series, dies of an apparent heart attack in Italy. He was 51. more »
- Top court to reveal if it will hear Rob Ford conflict appeal
- The Supreme Court of Canada will reveal today if it will hear an appeal in a conflict of interest challenge that previously threatened to oust Toronto Mayor Rob Ford from office. more »
- Brian Stewart: Forget the cynics, why the Taliban might just want peace
- One big reason, Brian Stewart writes, is the growing strength of the Afghan army. Without the U.S. and its media around to report on the fighting, the next phase in this conflict could get a whole lot bloodier. more »
- Dozens of children seized from Manitoba Mennonite community
- Child welfare authorities have removed all but one child from a small Mennonite community in rural Manitoba. more »
- 14-year-old girl missing in Moncton
- Moncton couple has identity stolen, bank account drained
- Liberals demand Jody Carr fired over Trudeau email
- RCMP probe arson at Moncton’s Old Cosmo nightclub
- New Brunswickers split over shale gas, poll finds
- Dieppe woman arrested after 3 women robbed at knifepoint
- Fredericton SPCA under cat quarantine
- Drunk driving victim shares story to discourage teens
- Fredericton teen attends prom despite serious allergies