The Ontario Energy Board recently released staff recommendations from a natural gas market consultation process the Council of Canadians participated in last fall. The report which informed the consultation process referred to hydraulic fracturing (otherwise known as fracking) as a ‘game changer,’ suggesting it could be an important source of future supply for Ontario’s market.
Given the significant environmental and social costs of fracking (see our fact sheet here), we decided to intervene and ring some warning bells for the Board. We worked with fracking expert Lisa Sumi of Earthworks on a written submission to the Board. Lisa also joined Council of Canadians board member and trade and public interest lawyer Steven Shrybman and me at the OEB consultation to present her findings.
Given the focus of the consultation, Lisa’s presentation honed in on the following “key uncertainty” that was not fully considered by the report prepared for the board:
Concerns have been raised about the environmental impacts of hydraulic fracturing, a technique used to produce shale gas. If regulation of hydraulic fracturing becomes more stringent, this could slow the growth of shale gas production.
Lisa raised compelling examples of the environmental and social impacts of fracking and the responding legislation moving forward in U.S. states, as clear reason to question unconventional natural gas as a source of future supply in Ontario. You can read my blog about her presentation here and the report we submitted to the board here.
While the staff recommendations do not reflect the recognition of these risks to the extent that we wish they would, their report does contain some interested information and to a limited extent, our message did enter the report.
Overall, the report concludes that there is a significant amount of uncertainty surrounding Marcellus shale production – the impacts of fracking Marcellus shale and different legislative responses being pursued was an example that Lisa raised. In fact, they note that environmental concerns associated with shale gas production is a key uncertainty that could affect their report’s market projects.
Staff agrees that the Board should take a cautious and incremental approach to any regulatory response given the uncertainties.
Well, I suppose this is a start.
Not surprisingly, Trans Canada Pipeline (TCPL) painted a different picture for staff:
“TCPL expressed its belief that the recent and anticipated market changes present Ontario gas market participants with the opportunity to benefit from new gas supply options on a broad scale including rapidly expanding shale production in British Columbia, the Marcellus, the major United States of America (“U.S.”) Midcontinent areas and potentially Eastern Canada (Utica).”
They should read the news. Texas (Midcontinent state) just saw a Mayor leave his town (Dish Texas), concerned for his children’s health, suspecting health concerns in the town may be related to nearby fracked wells fracking . Buffalo recently banned fracking , so has Pittsburg (along with establishing a bill of community rights). The more than 30 quakes that shook two Arkansas cities over two days have been making headings and locals are blaming it on nearby fracking. Opposition is widespread in Quebec.
The Council’s argument that electricity sector planning needs to be informed by an understanding of the constraints on public policy and law relating to the energy sector that arise due to Canada’s international trade obligation, including those under NAFTA, while not heeded, is present in the staff report. An emphasis on greater reliance on heeding market trends highlighted throughout the report is also troubling.
The Canadian shale gas overview presentation given by the Canadian Society for Unconventional Gas and filed by the Canadian Gas Association to the board is also worth reading for an industry perspective. Particularly noteworthy is their map of marketable shale gas on pg 11, pictures of drilling activity for Horn River Shale in B.C., pg 20-23 and list of typical frac fluid additives pg 31.
It probably goes without saying – but take their framing of the regulation on fracking in Canada as fine and general downplaying of the water and broader environmental impacts on fracking with a grain of salt (or perhaps an entire salt silo).
