Businesses in Norman Wells, N.W.T are applauding the approval of the first horizontal fracking project in the North.
Yesterday, the National Energy Board approved the drilling and hydraulic fracturing of two horizontal wells 20 kilometres south of the town, on the west side of the Mackenzie River.
The approval means ConocoPhillips will be the first company to horizontally fracture the promising Canol shale formation. Companies that have explored the formation believe it may be the source of oil at Norman Wells, a field that has produced more than 260 million barrels oil. Exploration companies have pledged to spend $534 million exploring the formation.
"I think it's very important that they be allowed to do this exploration out there,” says Gregor McGregor, the mayor of Norman Wells. "The Sahtu desperately needs work and jobs available and all that. I think it's good news."
ConocoPhillips officials said that, at its peak, the project will employ up to 240 people. The company is now collecting resumes from people who want to work on the project. Officials say last year, when the company drilled two vertical wells, about 70 per cent of spending went to local companies.
Before the NEB reviewed the project, local businesses successfully lobbied the Sahtu Land and Water Board to approve it without an environmental assessment.
This summer, Chris Buist, president of the Norman Wells Chamber of Commerce, told the CBC local companies feared another bust if the land and water board ordered an environmental assessment. A year ago, MGM Energy and Shell abandoned a similar project when an assessment was ordered.
Many still worried about pollution, water
ConocoPhillips plans to hydraulically fracture two wells this winter. The equipment needed to drill the holes has already been barged to the area. The new holes will go down 2,000 metres, then horizontally about 1,500 metres.
Hydraulic fracturing, or “fracking,” involves injecting a mixture of water, sand and chemicals into the well at high pressure in order to create small fractures in deep rock, and stimulate the release of oil.
Many are still wary of the environmental impact that fracking could have. A Facebook page called “hydraulic fracking Sahtu discussions” now has over 800 members.
Maude Barlow is the national chairperson of the Council of Canadians and the author of Blue Future: Protecting Water for People and the Planet Forever. Barlow was in Yellowknife Wednesday night to talk about the global water crisis. In her talk, she compared the economic consequences of fracking to the cost of the clean-up at Giant Mine.
"When they started mining the Giant Mine, there were no environmental regulations,” Barlow said. “There are no environmental regulations on fracking in this country and in this territory, so it's really important that we understand that if we want another Giant Mine situation, we should plow ahead with the fracking issue."
Barlow says fracking uses a lot of water, and also contaminates it.
ConocoPhillips estimates it will use a total of 34,000 cubic metres of water — enough to fill a typical community water truck more than 2,000 times. Under the terms of the approval, the company has to ship all fracking fluid that flows back out of the holes out of the territory. They plan to do that by barge.
This summer, the Sahtu Land and Water Board said it was satisfied ConocoPhillips can mitigate any environmental impacts. It's put a number of conditions on the licences. For example, the company must do a risk assessment on any chemicals used for fracking. It's also required the company to set aside nearly a million dollars to clean up the site when it's done the work.
ConocoPhillips has until March 31 each season to complete its drilling and fracking work. It can apply for an extension.