AARON BESWICK Truro Bureau Chronicle Herald
November 6, 2015
Low gas prices may be bigger obstacle than ecological concerns
Ethan Hawke might want to keep his powder dry.
When the Hollywood star held a news conference two weeks ago in Antigonish County with local First Nations and a group opposed to oil exploration in the Gulf of St. Lawrence, the media’s spotlight shone hard.
But after Hawke and all the reporters drove away in their gas-powered vehicles, two important questions remained.
If our society relies on hydrocarbons that we drill for on the Scotian Shelf and import from around the world, then why can’t we drill in the Gulf of St. Lawrence?
And how realistic is it that commercially viable oil will be found in the gulf anyway?
“The incredibly and blatantly obvious statement to make is that with oil prices down in numbers that start with a four (around US$40 dollars a barrel), the economic viability of many projects is not good,” said Gregory Chornoboy, a former oil industry analyst in Calgary who has reported on Corridor Resources.
“That would be an expensive well to drill.”
All the hype is around the plan of a Halifax junior exploration company to drill one exploratory well on a geological feature called Old Harry, about 80 kilometres west of Newfoundland’s most southern point.
“Old Harry has all the attributes required to hold a large resource,” said Grant Wach, a Dalhousie University geology professor who specializes in petroleum geoscience.
“But we won’t know until we drill.”
Basically, Old Harry is a big bubble of sandstone underneath the sea floor that is covered by shale rock.
Sandstone is important because it is filled with all kinds of little holes that can hold oil or gas. The shale is important because it works like a bottle cap, preventing the hydrocarbons from being released into the water.
So Corridor’s seismic data has indicated Old Harry is a good gas can. What’s not known is whether it’s empty.
A 2009 assessment by the Geological Survey of Canada estimated 39 trillion cubic feet of in-place natural gas and 1.5 billion barrels of oil in the southern Gulf of St. Lawrence, which includes Old Harry.
Those are big numbers that grabbed a lot of attention from the political and industrial leaders of the five cash-strapped provinces bordering the Gulf of St. Lawrence and from those opposed to oil exploration due to environmental concerns.
But don’t keep your eyes peeled on the horizon for tugs towing drilling rigs.
There have been 10 exploratory wells drilled in the gulf since 1944, none of which resulted in oil getting pumped out of the ground. Just one exploration well costs tens of millions of dollars to drill.
According to Corridor Resource’s annual reports, it has been unsuccessfully seeking a partner with deep pockets to fund its Old Harry exploration since 1997. In 2012, it went farther and hired consulting firm Macquarie Tristone to help it find a partner, but still no luck.
The price of oil, meanwhile, is half what it was in 2012.
“That’s always been a mystery to me,” Wach said when asked why a partner hasn’t been found.
“The geology is good and the technical staff at Corridor is superb. If this were in Alberta, it would be a slam dunk.”
But the communities surrounding the Gulf of St. Lawrence are a long way from Alberta.
“In the absence of objective scientific evidence stating that oil and gas activities in the Gulf of St. Lawrence poses no real risks to our eco-system and to our renewable resources, all hydrocarbon exploration activities, including seismic testing, should be suspended,” reads a letter signed by 20 fishermen’s associations, fish plant owners and First Nations leaders recently sent to the federal ministers of environment, fisheries and oceans and natural resources.
Then there’s David Suzuki, the Sierra Club and a host of grassroots environmental groups adamantly opposed to more drilling in the gulf.
The image of the Deepwater Horizon oil rig burning and sinking after a blowout in 2010 still holds power over a lot of minds on the East Coast.
Representatives of Shell Canada and the Canada-Nova Scotia Offshore Petroleum Board were grilled by the legislature’s resource committee on response plans in the event of a blowout during drilling of two exploration wells about 250 kilometres southwest of Shelburne over the next 10 months.
So if we allow drilling on the Atlantic coast, why would we not allow it in the gulf? Both are important fishing grounds that could be badly hurt by an oil spill.
And the boats that take fishermen, scientists and tourists out to both waterways are powered by hydrocarbons that came out of the ground somewhere.
“We recognize as a society that not every activity can take place everywhere,” said Boris Worm, a marine biologist at Dalhousie University.
“We don’t do nuclear testing everywhere. We don’t build polluting industries in residential areas.”
He said he doesn’t think there should be drilling on the Scotian Shelf or in the gulf. But the gulf, said Worm, would be particularly sensitive to a spill due to a combination of geography and biology.
It exchanges water with the Atlantic Ocean through the Cabot Strait and the Strait of Belle Isle. This means that water circulates around the gulf before draining out.
The Gulf of St. Lawrence is also significantly colder than the Gulf of Mexico and lacks the bacteria that work to naturally break down oil. So oil spilled in the Gulf of St. Lawrence and carried into river estuaries would be there for a long time, said Worm.
Those salt marsh estuaries, protected by the Atlantic’s big waves, are nurseries for all manner of sea creatures. The spartina salt grasses of those estuaries, meanwhile, produce more biological matter per hectare than the rainforest and flush it out to fuel the ocean food web.
Wach said the industry has learned a lot since the Deepwater Horizon disaster, and people should take a holistic view. Oil tankers and large ships carrying many chemicals pass through the gulf daily on their way to fuel the industries of Central Canada; those, he said, are a greater risk than a single exploratory well.
The stakes are high. The decision on whether Corridor gets permission to drill will fall to the Canada-Newfoundland and Labrador Offshore Petroleum Board, responsible for the area of the gulf in which most of Old Harry is located.
Corridor is midway through the board’s environmental assessment process, which has drawn lots of public comment from those opposed to the project.
“Geologists are usually optimists, so I do think it will happen,” said Wach.
But geologists don’t hold the purse strings. Those who do at big companies like British Petroleum and Shell haven’t come forward yet to team up with Corridor.
While no-one from the company was available to comment this week on Old Harry, president Steve Moran provided a written statement.
“Corridor is confident it can proceed safely and responsibly with its exploration programs at Old Harry, under Canada’s rigorous environmental regulation,” Moran wrote.
“This exploration program is currently before the Canada-Newfoundland and Labrador Offshore Petroleum Board. Corridor will continue to address any issues raised as part of this regulatory process.”
Source: Chronicle Herald