New Brunswick

Shale gas companies must 'protect the surface resources'

Steve Harding, the chief executive officer of Contact Exploration, writes that hydrocarbon development in New Brunswick has been a success.

A series of special op-eds written on the shale gas industry

Steve Harding is president and chief executive officer of Contact Exploration.

Harding has roughly 27 years of experience in the industry. He has worked with EnCana Corporation, Alberta Energy and Husky Energy.

Harding has extensive experience with oil and gas exploration and development.

He is a geologist with the Association of Professional Engineers, Geologists and Geophysicists of Alberta.

The Stoney Creek Field approximately 15 kilometres south of Moncton is the largest asset operated by Contact Exploration. 

The field has been a fixture in New Brunswick for more than 100 years. In addition to oil which continues to be produced from Stoney Creek, the field provided natural gas to Moncton for many decades, before final transmission in 1991.

Today the field is managed by a local operations team on behalf of Contact who enable the company’s wells to maintain production.

Our chief operator has literally worked in the field his entire adult life. Electricians, machinists, welders and various other local support personnel provide ongoing expertise to the project.

Oil produced from the field is stored in steel tanks at surface from where it is trucked to a local oil refinery where the oil is converted to diesel, gasoline and fuel oil.

During periods when new wells are being drilled, employment greatly expands, as rig crews and the companies that support them are deployed to wellsite. Local service businesses are immediately impacted by such activity.

Employment questions

Within our local jurisdiction the biggest questions we face are related to employment, with the hope that as our business grows, additional employment will be required, which it will be.

Contact has recently drilled a new well in the greater Hillsborough region, which was also successful in encountering an oil-bearing reservoir. This new undeveloped oil pool represents an opportunity for additional economic development in the region.

With further testing and delineation, this hydrocarbon discovery will begin a new cycle of oil production for the region.

When hydrocarbon is produced, the government is entitled to royalties based upon production levels. Greater production results in higher royalty dollars paid to the government, which may then be used to assist in various programs within the Province.

Furthermore, employment dollars paid to those directly involved with our programs are subject to taxes, which of course benefit the province as well.

Technology has greatly assisted in developing hydrocarbon in many ways. It is now possible to drill into several parts of a reservoir from a single surface location, utilizing horizontal or directional well techniques.

Less surface impact increases efficiencies with production and greatly reduces ground disturbance and required infrastructure.

Sophisticated techniques

All of Contact’s projects in New Brunswick today and in the future will utilize sophisticated oil and gas development techniques allowing superior reservoir and environmental management.

The regulatory framework in New Brunswick is one of the most rigorous in North America, involving detailed environmental review and technical assessment before wells are drilled or hydrocarbon produced.

Among the requirements within the approval process is the rigorous testing and retesting of water wells in the area. Such baseline studies enable a better understanding of ground water before and after drilling. No water wells within New Brunswick have been negatively impacted by the oil and gas industry.

Communications challenge

The greatest challenges facing our industry within New Brunswick are the clear communication of how the industry is regulated, how the environment is protected and how we conduct our business.

Although our specific region is characterized by a long successful history of oil and gas activity, specific oil and gas terms such as fracking have only recently become popularized by the media. It should be noted that fracing is not a new process; nor new to the province of New Brunswick.

In New Brunswick, modern fracking technology has been implemented on over 50 wells in the past three decades, remaining a safe technique as regulated by the government. In Alberta, another jurisdiction with rigorous environmental regulations, over 167,000 wells have been fraced safely within the past 30 years.

If a company, such as Contact, is to remain in business it must operate within all regulations and in a manner that preserves the environment. There is no alternative to such a philosophy.

Within the province of New Brunswick, we will continue to protect the surface resources while developing the province’s subsurface mineral resources, bringing economic benefits to the communities we operate in.