New Brunswick

Balancing risk versus reward

Shawn Rouse describes his views on how to balance risk versus reward when it comes to the shale gas industry.

Shawn Rouse grew up in Sussex but now lives in Quispamsis with his wife and three children.

He studied political science at St. Thomas University and now works as an IT project manager at a firm in Saint John.

When not working or keeping up with his busy children, he's usually tweeting or blogging about his two passions: technology and politics."

Quick question for you: where is the "Dairy Capital of the Maritimes"?

If you didn’t know it was Sussex, N.B., you easily could be excused. 

These days, there’s not much talk about dairy farms and cattle sales in Sussex like there was when I was a kid in the 1970s-80s. 

I grew up running around my grandfathers’ farms from dawn to dusk; the agricultural lifestyle was as much a part of my daily routine as Star Wars and riding bikes. 

If you look at the new murals that adorn the buildings in Sussex, it’s easy to see that farming has been the lifeblood of the town and the surrounding area for most of its history.

I remember clearly how that started to change in the 1980s when one of the largest known potash deposits was discovered just outside of the town limits in Penobsquis. 

The town where everyone knew your name suddenly had an influx of new faces. 

The idea that the "Dairy Town" was some sort of beacon of prosperity was amazing to teenage me. In the town where tractors regularly drove down Main Street, things began to change – new stores, new activities, new cars, new attitude. 

There were many who believed that the potash mines were the best thing that ever happened to Sussex and area. But when natural gas was discovered in McCully Field in 2000, it seemed as though lightning had struck twice.

How lucky could Sussex get? Sussex was now poised to become one of the major economic engines of southern New Brunswick.

Penobsquis water problems

It was around the same time though that after 20 years of nearby mining, residents of Penobsquis started having trouble with their well water. One after the other, wells started to dry up. 

Some were redrilled only to dry up again weeks later. Over 60 homes lost their water over a seven-year period, some on farmland that had been in the family for several generations.

What happened to the wells is the subject of much debate. 

People began to focus on the millions of gallons of water that pour into the potash mine every day. This water is emptied continuously out of the mine using a pipeline and several dozen tanker trucks. 

PotashCorp and the provincial government started delivering water to the affected residents until a jointly-built municipal water system came online. To use the new water infrastructure, the residents must agree to pay $400 per year in service fees.

The affected residents of Penobsquis are still uncompensated for their loss because no one can conclusively say that the millions of gallons of water flowing into the mine daily resulted in their well issues. 

After racking up their limit in legal bills, they are now left to defend themselves in proceedings in front of the provincial Mining Commissioner (who has the power to award damages). 

They have shelled out thousands of dollars for expert witnesses, appraisals, transcripts and countless other costs. 

At one point the group was expected to pay government officials just to show up at the hearings, but the province has since backed down on that requirement. It’s a deplorable situation and my heart goes out to those families as they continue their fight.

Now we sit at the outset of another new opportunity – natural gas from shale. 

The experience of Penobsquis residents serves as a useful case study as we judge how well the provincial government will protect citizens. 

The premier tells us that we will have the toughest regulations in North America to ensure that the resource can be extracted safely. 

However, I sincerely doubt that citizens of Penobsquis feel that the government is standing up for them in their conflict with industry. Can we truly count on government to protect us if something goes wrong at one or more of the well pads?

Determining risk

I should clarify at this point that I’m neither pro nor anti-shale gas.

I have been doing my homework like a great many people trying to determine the risks and potential rewards of moving forward with development of the resource. When given the opportunity, I asked my questions about fracking to government, and I was pleased to get answers directly from the minister and other top bureaucrats

The government team advocating for shale gas seems to be a straightforward and earnest group who have the best interests of the province at heart. 

I have no doubt at all that the people overseeing the shale gas file on our behalf are sincerely interested in the well-being of the province and its environment. I’m also convinced that they believe that shale gas extraction is completely safe and sustainable, and it won’t damage the environment in the short or long term.

However, the public remains unconvinced.  A recent poll showed that 45 per cent and 41 per cent of people in Moncton and Saint John respectively oppose shale gas exploration including fracking.  But, 27-29 per cent support it and 28-30 per cent say they just don't know. 

I'm guessing the latter group is like me where they've seen and heard a lot, but aren't completely sure this is the right thing to do. In other words, the "don't know" group may be open to it, but admit that they just don't have enough information to pass judgment.

Unhelpful politics

The politics of the situation are completely unhelpful. 

After working with the shale gas industry while in power, the Liberals now are promoting a moratorium until stronger regulations can be put into place.

This is a change from their 2010 platform where there was no mention of such a thing. The NDP has decided to advocate for a moratorium as well when just last year on page 37 of their election platform, they stated the "NDP supports mining operations in the province… for the extraction of natural gas." 

It seems to me that both opposition parties are using an unpopular issue to fan the flames of controversy for their own benefit. 

And of course, Premier David Alward was pontificating about the dangers of shale gas not that long ago, but now he has become its chief advocate. These political games are understandable, but they are completely unconstructive contributions to the fracking debate. 

Question of risk

For me, the key consideration around fracking boils down to a question of risk. I was chatting about fracking on Twitter with a friend a few weeks ago.

While I was weighing the pros and cons of the technology, he was completely opposed to taking any risk at all. Why bother, he posited, if there’s a risk that even one water source could be contaminated? 

The approach that he advocated was one of zero risk, arguing we don’t need the cash or jobs badly enough to take a chance with our fragile ecosystem. 

This exchange was an eye-opening conversation for me. 

It’s not that the opponents don’t understand the technology or the risks (although that may be true in some cases). 

Opponents do not seem to want to take any environmental risks for the purposes of gaining new revenue for the provincial coffers, creating employment and fostering prosperity. If the resource just remained buried in the Carboniferous Maritimes Basin in perpetuity, they wouldn’t be fussed at all. 

Anti-fracking advocates don’t yearn for the kinds of change brought about by oil that transformed Newfoundland into a "have" province, or the profits from oil sands that has fuelled Alberta’s economy in recent years. 

Or, for the kind of positive changes that potash brought to Sussex. I was struck by the scene in Rob Turgeon’s advocacy film, "Be... Without Water" where a Cornhill resident told the industry spokesperson in plain words, "We do not want a gas well! We don't want it!" It doesn’t get much clearer than that.

Manageable risk

Is the risk truly manageable as the Department of Natural Resources believes? 

Are regulations sufficient enough to protect us from the potential pitfalls of the technology? 

If we look to Penobsquis for answers, one has to question whether the assurances of government are adequate enough to protect New Brunswickers in case something goes wrong 10 or 15 years down the road. Will the landowners near well pads end up like those 60 homeowners above the potash mineshafts, spending thousands to attempt to prove damages to a government commissioner?

That said, the easy choice is to not take a risk. I professionally manage risk as a project manager, and almost every day I run into someone who would prefer to do nothing rather than take a risk to gain a benefit.  John F. Kennedy once said, "There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction." 

It speaks to our choice – do we take this risk on shale gas to move the province towards greater prosperity, or do we default to comfortable inaction and pin our hopes to some unknown game-changer opportunity yet to be discovered?

The choice is tough because everyone wants to do the right thing, but we don’t yet agree on what that thing is. 

Let’s face it though; we may never have a clear answer to the potential outcome of shale gas extraction in the years ahead.

For now, perhaps the only thing we can do is allow government continue to explore the opportunity. 

That way, one day in the near future when we more clearly understand the potential, we can make a more informed decision by weighing the risks versus the reward.