(BY HUGO)

The Munk School of Global Affairs convenes a conference on water protection in the context of shale gas development.

The conference, titled «Fracture Lines: Will Canada's Water be Protected in the Rush to Develop Shale Gas?», will be held on 14 October 2010 at the University of Toronto. A draft programme is available here.

This is very interesting and timely given the current rush to develop shale gas in Canada. In particular, such developments raise concerns in Québec, where private interests and the government appear to have decided that shale gas exploitation is urgent and necessary. A recent opinion letter in Le Devoir (in French) identifies the social and environmental issues related to this subject in Québec.

Interestingly, a representative of the Québec ministry for Sustainable Development and the Environment will be among the plethora of industry representatives speaking at the Munk Conference.

UPDATE: As possible points of discussion for the conference panels on «statutory authority and regulatory preparedness» and «legal and liability issues», Byard Duncan reports on Alternet that gas companies drilling in Pennsylvania have committed nearly 1,500 environmental violations in just two years, while the Environmental Working Group reports that fracking companies might illegally inject diesel underground.

(BY HUGO)

Propublica reports on a peer-reviewed article by Stephen Osborn et al., «Methane contamination of drinking water accompanying gas-well drilling and hydraulic fracturing», which was recently published in the Proceedings of the National Academy of Sciences. Excerpts from the abstract read as follows:

«In aquifers overlying the Marcellus and Utica shale formations of northeastern Pennsylvania and upstate New York, we document systematic evidence for methane contamination of drinking water associated with shale gas extraction. (...) We conclude that greater stewardship, data, and— possibly—regulation are needed to ensure the sustainable future of shale-gas extraction and to improve public confidence in its use.»

The article mentions hypotheses about the mechanisms causing drinking water contamination from fracking: 1) gas migration; 2) leaky gas-well casings; and, 3) increased connectivity of the rock formation due to extensive fracturing. Only options 2) and 3) appear probable to the authors, with leaky gas-well a likely possibility.

Hopefully, this type of evidence will be considered in the strategic environmental study to be conducted on shale gas exploitation in Québec.

(BY HUGO)

(BY HUGO)

The U.S.A. House of Representatives Committee on Energy and Commerce, Minority Staff, released yesterday a report on the «Chemicals Used in Hydraulic Fracturing». A part of its executive summary reads as follows:

«The most widely used chemical in hydraulic fracturing during this time period, as measured by the number of compounds containing the chemical, was methanol. Methanol, which was used in 342 hydraulic fracturing products, is a hazardous air pollutant and is on the candidate list for potential regulation under the Safe Drinking Water Act.

Some of the other most widely used chemicals were isopropyl alcohol (used in 274 products), 2-butoxyethanol (used in 126 products), and ethylene glycol (used in 119 products). Between 2005 and 2009, the oil and gas service companies used hydraulic fracturing products containing 29 chemicals that are (1) known or possible human carcinogens, (2) regulated under the Safe Drinking Water Act for their risks to human health, or (3) listed as hazardous air pollutants under the Clean Air Act. These 29 chemicals were components of more than 650 different products used in hydraulic fracturing.»

The U.S. congressional committee notes that common chemical compounds in fracking fluids are known human carcinogens and can damage the central nervous system, liver and kidneys. For example, 2-butoxyethanol, which was used in 126 fracking fluid products from 2005 to 2009 in the U.S.A., is easily absorbed and distributed in the human. It can cause the destruction of red blood cells, as well as damages to the spleen, liver and bone marrow (see p.7 of the U.S. congressional committee report).


This is a very interesting read considering the paucity of information regarding fracking fluids in the recent BAPE report on shale gas exploitation in Québec (see p.57-58 of the BAPE report for public concern on human and environmental contamination as well as p.123-125 for the recommendations).

(BY HUGO)

Disputes related to shale gas exploitation have arrived before the courts in the U.S.A. In RailRoad Commission of Texas v. Texas Citizens for a Safe Future and Clean Water, the issue relates to the re-injection of drilling fluids underground after their use for hydraulic fracturing. The Court thus describes the factual background:

«Fracing a well entails pumping large volumes of water and sand into reservoir rock, which then mixes with saline formation water and must be flowed back out of the well before production can begin. A company fracing a well must dispose of the resulting waste. Most companies do so by injecting the waste into subsurface zones which are naturally saline environments, usually in old wells converted to injection wells. A company seeking to convert a well to an injection well for oil and gas waste must apply to the Commission for a permit.»

The Commission can grant an injection permit when, inter alia, the use or installation of the injection well «is in the public interest». In this instance, the Commission granted a permit to a fracking company notably because the «production of hydrocarbons for use by the people of Texas and industry serves the public interest».

This determination is contested before the Court, and the crux of the matter turns on the degree of discretion that the Commission has in interpreting the notion of public interest.

The Court finds that «the phrase “public interest” is anything but clear and unambiguous». As a result, the Court must defer to the Commission's interpretation of the notion of public interest, and the Commission's decision to grant an injection permit stands. A more substantial study of the courts decision by Stephen Dillard, Barclay Nicholson and Kadian Blanson from Fulbright & Jaworski LLP can be found here.

This case is not relevant in the context of both the regulatory regime for natural resources management and the administrative law applicable in Québec. Nevertheless, this case illustrates the risk related to the interpretation of legal notions like public interest when they are tied to authorisation regimes relying on administrative discretion. As argued in a previous post, the notion of public interest found in the new Québec water withdrawal authorisation regime should be further defined to avoid an excessive degree of discretion.

Meanwhile, an article by Robert Howarth et al., «Methane and greenhouse-gas footprint of natural gas from shale formations», has just been published in Climatic Change Letters. Excerpts from the article's summary read as follows:

«[A n]ew study demonstrates that shale gas is not the planet-friendly gas it is thought to be. Natural gas extracted from shale formations has a greater greenhouse gas footprint - in the form of methane emissions - than conventional gas, oil and coal over a 20 year period. This calls into question the logic of its use as a climate-friendly alternative to fossil fuels[...]

[O]verall, during the life cycle of an average shale-gas well, between four to eight percent of the total production of the well is emitted to the atmosphere as methane, via routine venting and equipment leaks, as well as with flow-back return fluids during drill out following the fracturing of the shale formations. Routine production and downstream methane emissions are also large, but comparable to those of conventional gas.»

In light of the Texan case above, one may wonder whether climate change and its potentially catastrophic consequences that are brought about by fossil fuels such as shale gas are in the public interest.

Finally, another excellent article by Louis-Gilles Francoeur in Le Devoir (here - in French) provides a great perspective on the management of energy resources in Québec.

(BY HUGO)

An article (in French) by Louis-Gilles Francoeur in Le Devoir informs that hydraulic fracturing operations in Québec are conducted without the toxic dissolvents that are used in the United-States and contaminate groundwater.

The unanswered question is: if the contaminants are actually not used and, as it appears, not required in Québec, why are they needed and used in the U.S.A.?

(BY HUGO)

Since the provincial prime minister has made a mockery of the mandate given to the BAPE (see previous post) by declaring that shale gas exploitation was inevitable, one of the central issues identified by Le Devoir and the CQDE that is yet to be discussed is the apportionment of benefits between private interests and the general public.

As revealed this summer by La Presse (one article here from Charles Côté - in French), Québec is the Canadian jurisdiction where the legal framework for mining is the most industry-friendly and taxes or royalties are the lowest. Instead of increasing royalties on the industry, the Minister for natural resources has declared that fees for day-care nurseries would be increased if shale gas exploitation does not go forward as planned (article here from Alexander Shields, Le Devoir).

In this context, an article by Bernard Roth, «NAFTA, Alberta Oil Sands Royalties, and Change: Yes We Can?» (2009) Vol.46 Alberta Law Review 333, would send a clear warning signal to a political class more attuned to the general interest. The problem with initially low royalties is that it might be impossible to increase them for one class of investors without serious difficulties. Roth's conclusion reads as follows:

«The Alberta government has announced an intention to follow suit by increasing royalties on all oil sands production, irrespective of its vintage. This is the first time since Canada entered into the NAFTA that a Canadian government has tried to capture additional value in an attempt to get what it believes to be its fair share of oil production. The NAFTA has arguably created a form of quasi-constitutional property protection for American and Mexican investors in Canada, which does not allow Canadian governments and legislators to expropriate without compensation. It may still be possible to impose this type of expropriation on Canadian investors, just not their American and Mexican counterparts. Alberta's oil sands leasing practices may have been effective when Alberta exercised more or less complete sovereignty over its resources. Before the NAFTA, ambiguities could be clarified through subsequent legislation and responsibility for compensation could be expressly disclaimed. It appears that Alberta did not adapt its Crown leasing practices to make it clear that the grants it makes are subject to an absolute and unfettered right to increase royalties without compensation in a post-NAFTA world. In the absence of a clear reservation to this effect, it may well be reasonable for oil sands investors to demand compensation. Under the NAFTA, a very good case can be made for compensation to recover the loss in value to oil sands investments that would result from increased royalties proposed by the Government of Alberta. The answer to the multi-billion dollar question posed by this article is: Yes we can! But, if we do, the Government of Canada may have to pay very large NAFTA awards to a lot of American oil companies.»

(BY HUGO)

Just a quick post to point to a letter (in French) from Michel Bélanger of the CQDE to Le Devoir on the absence of legal protection against the environmental impacts of shale gas exploitation in Québec.

(BY HUGO)

The Environmental Working Group recently released a report on hydraulic fracturing in the USA concluding that extraction activities using this technique threaten groundwater quality and drinking water sources. According to EWG, fracking should be subject to regulation under the Safe Drinking Water Act.

Yesterday, Louis-Gilles Francoeur reported in Le Devoir (in French - earlier article here) that the Québec Ministry for Natural Resources recently issued 580 drilling permits to extract shale gas in the St. Lawrence River Valley. The official opposition in the Québec National Assembly suggests that the government is attempting to exclude the autorisations from the standard environmental impact assessment process.

In an academic context, Water Wiki raises legal questions stemming from fracking operations.

(BY HUGO)

Just a quick post to follow up on reports relating to shale gas leaks from wells in Québec.

The Québec Ministry for Natural Resources and Wildlife, Nathalie Normandeau, has recently described gas leaks from fracking exploration wells as negligible by likening them to cow farts. Thankfully, less clownish politicians have taken a more cautious approach on the issue since then (article here by Robert Dutrisac and Louis-Gilles Francoeur, Le Devoir, 22 January 2011 - in French).

Now, Andrew Revkin from Dot Earth in the New York Times points to interesting scientific developments (blog post here):

- Abrahm Lustgarten, «Climate Benefits of Natural Gas May Be Overstated», 25 January 2011, Propublica;

- Robert Howarth, «Preliminary Assessment of the Greenhouse Gas Emissions from Natural Gas Obtanied by Hydraulic Fracturing», Departement of Ecology and Evolutionary Biology, Cornell University.

All well worth a read, and it supports the work done by Nature Québec (as reported here by Louis-Gilles Francoeur, Le Devoir, 19 January 2011 - both in French). Hopefully, these inputs will be considered by the BAPE.

(BY HUGO)

Le Devoir continues its fantastic job on the issue of shale gas development in Québec with an article (in French) by Antoine Robitaille on ties between the industry and the government.

According to the article, representatives for the industry with personal or previous professional relations to members of the cabinet have been mandated with lobbying in favour of shale gas development. Most relevant from a legal perspective, the Québec Oil and Gas Association (QOGA) has been mandated to push for the amendment of a couple of provisions in order to have Québec recognised as a jurisdiction that can welcome shale gas development. As appears from the Québec registry of lobbyists, the industry strives for the modification 2 specific provisions, namely section 22 of the Environment Quality Act (EQA) and section 246 of the Act respecting Land use planning and development (ARLUPD).

Section 22 of the EQA is an obvious hindrance to open access gas extraction as it prohibits unless authorised the operation of an industry, the carrying on of an activity or the use of an industrial process if it seems likely that this will result in an emission, deposit or discharge of contaminants into the environment or a change in the quality of the environment. It appears highly likely that a watering down of the prohibition contained in section 22 EQA would result from an amendment to the Regulation respecting the application of the Environment Quality Act (RAEQA) rather than from a legislative amendment to the EQA. Sections 1 to 6 RAEQA determine the extent of the prohibition contained in section 22 EQA. For example, section 1(2) RAEQA already exempts the staking of a claim and geophysical, geological or geochemical surveys authorized under the Mining Act from the application of section 22 EQA. Interestingly, the industry's desire to modify the scope of section 22 EQA might lead one to suspect that hydraulic fracturing does indeed pollute. This is in contradiction to the industry's official discourse.

Section 246 ARLUPD establishes the paramountcy of the mining regime over the land use and development framework managed at the municipal level. It states that no provision of the ARLUPD or other planning instrument and municipal regulation developed under the ARLUDP has the effect of preventing the staking or designation on a map of a claim, or exploration or search for or the development or exploration of mineral substances or underground reservoirs, carried on in accordance with the Mining Act. This provision has been a bone of contention between municipalities, the mining industry and the government for more than a decade, notably in northern mining regions where municipal sources for drinking water are often dependent on groundwater. Presumably, the QOGA desires to expand the reach of section 246 ARLUPD to include exploitation.

(BY HUGO)

For those who believe that stuff outside law is also interesting, do consider viewing Gasland from Josh Fox (special prize at Sundance 2010).

Link here to trailer on Youtube.

(BY HUGO)

Public scrutiny has finally forced the government to announce a public consultation (press release here - in French) on shale gas development in Québec. This is essential, as Québec mining law is currently undergoing a reform process. However, it remains a minor victory in a political context where the government pays lip service to participation in order to placate the public.

Le Devoir has excellent coverage on this issue (articles here - in French). A substantial article on hydraulic fracturing regulation in the U.S.A. by Steve Kellman and Molly Ramsey for the Circle of Blue offers a prospective overview of the issues we will face once the government gives the green light to the industry.

For those who doubt that the patterns we see down South will repeat themselves in Québec, here is an interesting detail in the Circle of Blue article. In 2008 the Director of the Pennsylvania Department of Environmental Protection declared about hydraulic fracturing: «What do you have to be afraid of? It’s only sand and water.» As reported in a previous blog at the beginning of 2010, the provincial government declared that only sand and water were used in Québec. In this respect, Jean Baril provides a legal perspective on the loopholes blocking adequate public information on fracking (article here - in French).