Canada: Drilling Gulf of Saint Lawrence Under Review

Environmental activists as well as Hollywood star Ethan Hawke are speaking out against oil and gas drilling in the Gulf of Saint Lawrence. They believe that the Gulf has a unique environment that makes it unsuitable for exploration. Not only do the activists fear an oil spill similar to Transocean's Deepwater Horizon spill in the Gulf of Mexico in April 2010, but they say even seismic and exploratory drilling could disturb the Gulf's fragile ecosystem.

The Gulf of Saint Lawrence borders five Canadian provinces – Quebec, Newfoundland and Labrador, Prince Edward Island, New Brunswick and Nova Scotia. The activists say that if oil does spill into its waters, the Gulf's counter-clockwise currents would push contaminated waters to shore. Ice on parts of the estuary also would hinder clean-up efforts.

According to an article by David Suzuki on Nov. 10, 2011, "the Gulf of Saint Lawrence represents about two-thirds of Canada's overall national maritime-related gross domestic product. It provides a unique and fragile environment for more than 2,200 species of invertebrates and 19 species of marine mammals, and it is culturally, biologically and socially important for the people of Quebec and Atlantic Canada."

Currently, there is a moratorium on any exploration and production in the Saint Lawrence River upstream of the western tip of Anticosti Island. The Minister of Natural Resources and Wildlife enacted The Act to Limit Oil and Gas Activities on June 10, 2011. According to the Ministry, "the complexity and fragility of the river's ecosystem" could not be put at risk "at the expense of other commercial sectors."

A second environmental assessment started in March 2010. The remaining part of the Gulf of Saint Lawrence -- the Baie des Chaleurs basin, the Anticosti basin and the Magdalen basin -- are under review. The assessment is expected to be completed in 3Q 2012.

According to an article on November 7 in the Montreal Gazette, a coalition of environmental groups from Quebec and Atlantic Canada has asked Pierre Arcand, Quebec Environment Minister, to order public hearings into the future of oil and gas exploration and production in the Gulf of Saint Lawrence.

The Saint Lawrence Coalition says Quebec's strategic environmental assessment "is too narrow, there has been little effort to publicize that it is taking place, and the complexity of the issue has made it difficult for the public to participate," the article states.

The Coalition says Quebec's Natural Resources Department, which is overseeing the assessment, has a conflict of interest in the matter as its job is to develop natural resources. The Coalition says the assessment should be under the direction of the Bureau d'audiences publiques sur l'environnement (BAPE).

In addition, the coalition is asking for public information meetings to be held in bordering communities, which would push the environmental assessment's public-consultation process to March 2012 instead of this month.


Exploration & Production


According to an August 2011 article by Andre Turmel, oil drilling in Quebec started in 1860 in Gaspesie, but development picked up in the 1960s when reflection seismology enhanced exploration. Hydro-Quebec was granted a licence to explore the Gulf of Saint Lawrence and its estuary in 1963. However, the operator drilled few wells.

Interest in drilling the Gulf of Saint Lawrence did not take off until the 1990s primarily due to a discouraging exploration report the Société québécoise d'initiatives pétrolières (SOQUIP) released in 1984 stating that Quebec had low hydrocarbon potential. But, in 1995 when an oil discovery was made in Port-au-Port, west Newfoundland, interest soared.

Turmel wrote that the Quebec Minister of Natural Resources and Wildlife granted licenses to explore 200,768 hectares in the Gulf of Saint Lawrence in 1996 and 1997. Corridor Resources, a Nova Scotia-based producer, acquired the licenses to the Old Harry area, which lies between Newfoundland and Quebec in the Laurentian Channel. It runs about 30 km long and 12 km wide.

However, "the federal government did not recognize the validity of the licenses granted by the Québec government within the Gulf of Saint Lawrence," Turmel wrote.

Corridor Resources then acquired a five-year exploration license for the Old Harry area in 2008 from the Canada-Newfoundland Offshore Resources Board. Newfoundland owns about one-third of the deposit according to a 1964 maritime boundary agreement.

Old Harry is believed to be one of the largest undrilled geological structures in Eastern Canada containing up to 5 Tcf of natural gas or 2 bbl.

Corridor conducted a geohazard survey of the 125,000 acres of the Newfoundland section from Oct. 12-15, 2010, the company posted on its website. Corridor tested seafloor sediments and tried to identify other significant seafloor features during this survey. According to its website, Corridor employed both a fisheries observer and a marine mammal observer on the survey vessel, MV Anticosti. Results from the geohazard survey were encouraging; however, the Quebec section remains untouched due to the 1997 offshore drilling moratorium.

Corridor filed permits with the C-NLOPB in February 2011 to drill an exploration well. The operator is waiting for regulatory approval, but could drill as early as 3Q 2012.


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