Shale gas struggles to lift off in New Brunswick
Corridor Resources can't find a partner on hostile turf
No one said developing shale gas close to consuming markets would be easy. In what is perhaps another sign that companies are beginning to think twice before breaking trail on hostile turf, Halifax-based Corridor Resources Inc. said today that its search for a joint venture partner to develop a budding shale gas deposit on Canada’s east coast has been fruitless.
In a statement, Corridor attributed the withering desire among potential suitors to partner on a property estimated to hold a whopping 59.1 trillion cubic feet of gas-in-place to a broader economic malaise and low natural gas prices. But one wonders whether there is more to the story. Only two weeks ago, legislators in New Brunswick passed a non-binding resolution promoting “responsible” and prudent development of the province’s shale gas resource. The motion was accompanied by a petition signed by 16,000 people who opposed development, Oliver Moore at the Globe and Mail reported, leading some to believe that a sequel to the debate that sidelined shale gas in Quebec has now begun in earnest.
The brewing backlash is of a piece with a recent report from consultancy Ernst & Young, which noted that companies keen to capitalize on a highly prospective European shale resource could face a “tipping point” of resistance, beyond which “the tide of public opposition will be difficult for a government to ignore from a political standpoint.” In a recent interview, Norway’s energy minister, Ola Borten Moe, explained the difficulty in developing shale gas in densely populated regions to me this way: “The average Albertan has a lot more space than the average German.”
In Europe especially, he added, shale developers “will face challenges.”
The same is increasingly true in North America. We’ve already seen that even the faintest whiff of corporate negligence can provoke visceral reactions from those who would rather not see their backyards converted into mobile natural gas factories. The fallout from a U.S. Environmental Protection Agency study examining fouled drinking water in Pavillion, Wyoming, could mean more red tape and greater scrutiny for drillers, raising costs and delaying approvals, the Globe’s Carrie Tait and Nathan Vanderklippe report.
Calgary-based Encana Corp., the operator of the field that contains the suspect wells, denies any wrongdoing. But its public spat with the EPA comes as environmental groups south of the border shift their focus from campaigning against nebulous concepts like global warming in favor of fighting more immediate, local concerns, Leslie Kaufman writes at the New York Times.
Against this backdrop, one wonders whether Corridor Resources, which plans to continue its search for a partner next year, might instead cut its losses and follow the example set by Questerre Energy Corp. The Calgary-based junior saw its share price plummet after authorities in Quebec said no to shale gas. The company has since shifted focus, and last week announced it had signed a letter of intent to acquire a 10 per cent working interest in a prospective oil shale property in the American Midwest.
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