Louis Lapierre Report

7/30/2019 Louis Lapierre Report

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THE PATH

FORWARD

Lis LPi, Ph.D., C.M.


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The Path Forward

Throughout this process I became acutely aware o the economic importance andbenecial impact the shale gas industry could have on our province as well as the veryreal concerns o New Brunswickers. I began to think about how the two could co-exist.

Given the divergent views on this subject I have taken it upon mysel to proposewhat I believe is a sustainable path orward, i this industry is to exist in any orm inNew Brunswick.

Government and industry proponents have not done enough to provide a clear andcredible New Brunswick based, science-driven direction on this industrial opportunity, inmy view. The opportunity requires a high degree o accountability to New Brunswickersand I hope my suggested path orward can help do that.

I truly believe the Path Forward should be considered by all stakeholders when examiningthe potential or a shale gas industry in New Brunswick.

Sincerely,

Louis LaPierre, PhD. CM


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SECTION I:PUBLIC MEETING SUMMARY

SECTION I:PUBLIC MEETING SUMMARY


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The Path Forward

1

In May o 2012, I was asked to chair a panel with members o the Natural Gas Group atthe request o the provincial government to obtain eedback rom New Brunswickerson the proposed regulations which were released on May 17th, 2012. The originalintent o the meetings was to take recommendations based on specic sections o

the drat document Responsible Environmental Management o Oil and Gas Activities inNew Brunswick, back to government. It is believed that consultation withNew Brunswickers would improve the regulations while inorming citizens o the rulesand guidelines that would protect them and their environment should a shale gasindustry develop in the provinces uture.

During the months o June, July and August I heard rom over 200 New Brunswickers

through 9 public meetings and subsequent presentations as they expressed theirposition on shale gas development. The panel heard rom representatives on both sideso the issue; however the majority o participants that spoke at the public meetingswere against the development o natural gas. It should be noted that once the public

meetings began the majority o participants had not yet amiliarized themselves with thegovernments proposed regulations document and would use the orum to voice theiropinions and concerns. Thereore some participants that attended the meetings weresatised that the proposed regulations already addressed a lot o their concerns.

Grand Falls

Blackville

Bathurst

Chipman

Havelock

NortonFredericton

Durham Bridge

Hillsborough

Moncton

Bouctouche


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Louis LaPierre, Ph.D., C.M.

October 2012 2

There has been an active group o New Brunswickers rom across the province thatoppose shale gas exploration and used the public meetings to express their discontentand as an opportunity to present research they ound that was contrary to the industry.Some o the acts and gures that were reerenced in the public meetings were dicult

to substantiate.

Given the importance o the gas industry or commercial and industry business inNew Brunswick paired with the diminishing supply o o-shore gas in Nova Scotia, Iwas surprised that various business chambers, boards o trade and municipalities didnot choose to make a ormal position or recommendation through the consultationprocess. The sole report I received rom such an organization was a position paper

rom the Association o Francophone Municipalities. I personally nd it concerning thatorganizations such as these chose to remain silent on an issue that could have a prooundimpact on New Brunswicks economy.

Participants rom across the province shared many o the same concerns with the majorityo comments alling into the ollowing themes: Water, Well Casing, Industrialization,Economy, Environment, Health, Legal and Energy.

Below I have summarized what I heard rom New Brunswickers during this listeningexercise. It goes without saying that the topic o shale gas is currently a very divisive issueor New Brunswickers. I approached this assignment rom an impartial perspective whilelooking through the lens o what is best or New Brunswicks uture.

Smm f h Mi Isss

Government Integrity

Education

Water Contamination

Security of Fresh Water Supply

Baseline Testing

Well Integrity

Safety

Regulations

Property Value

Transportation Impact

Social Impacts

Rural Way of Life

Jobs

Royalties

Chemicals

Health Risks

Fines and Enforcement

Gas for New Brunswick


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The Path Forward

3

GovernMent InteGrIty

Many people came to the meetings expecting to voice their concerns directly to politiciansand some were disappointed that there was no political presence at the meetings.Many people called or a reerendum on shale gas stating that the government doesnot have the right to proceed with the industry without an agreement rom the people.Many reerences were made to the proposed asset sale o NB Power, as it represented agovernment policy that was met with signicant opposition around the province until

the deal was ultimately cancelled. Comments were made insinuating that the only reasonwhy the Liberals were deeated in 2010 was because they acted contrary to the will o thepeople. Participants warned that the Alward government could ace a similar ate and bethe second one term government in New Brunswicks history as a result o not properlyconsulting with the public on shale gas.

I you remember well, in the last election, we had a liberal government

that wouldnt listen to the people on the whole issue o energy. You know

what happened? Theyre no longer there. So we have convinced ourselves

that we have a power and that we can make things happen, i we consider

that our quality o lie is compromised. The Government o New Brunswick

must absolutely nd nancial means other than those o shale gas to

nance our programs. Roger Doiron

Some o the participants stated that they elt as though the government had alreadymade the decision to proceed and was working with the industry. They elt that thegovernment website was propaganda and that all o the acts, gures and pictures usedin presentations painted an inaccurate picture o how ugly the industry can be or areaswith gas production. They also elt that the governments use o the term natural gas asopposed to shale gas was the governments way to mislead the public.

The Natural Gas Group received many complaints rom participants that meetings wereonly held in rural areas, and in some areas where no leases or exploration existed.Participants elt that the cities should have had meetings as the industry would impactall New Brunswick and most people lived in the cities. The meeting locations requiredpeople to travel long distances to attend and have their voices heard, thereore makingthem eel disenranchised. They believed the meeting locations not only segregated thepopulation by urban verses rural, but also by rich verses poor, as low income individualscould not aord to attend the public meetings because they didnt have a car.


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October 2012 4

Rural New Brunswickers also had concerns regarding the perceived lack o representationin the legislature, as most o the seats are in the cities, thereore giving them more say.People on both sides o the issue have serious concerns about people living in southernurban centres making decisions that will impact their rural existence. People opposed to

industry stated that city dwellers lacked an appreciation or the rural way o lie, whereaspeople in avour o developing an industry stated that urban New Brunswickers areunamiliar with how desolate rural communities are.

eDuCatIon

Another concern that was raised on more than one occasion was the level o education

that one required to read and properly understand the proposed regulations and theinormation ound on the government website. People believe that government shouldstrive to keep the inormation at a basic th grade level so that all New Brunswickerscan make an inormed decision. Concerns were expressed that the proposed regulation

documents were not written at a level which avoured a comprehension o the issues bythe average New Brunswicker. I have remained mindul o these concerns throughoutthis report.

Water

An issue o concern that was raised at all o the sessions was the impact a potential industrycould have on the water supply o New Brunswick. Concerns were raised through both amicro and macro lens, as many people were worried about the impact to their personalwells that they rely on or drinking and other important household uses, while others

raised concerns about the provinces water supply and the potential risk o pollutingand contaminating New Brunswicks streams and rivers. It was stated very clearly at the

meetings that water is one o New Brunswicks most valuable resources and must beprotected.

I have grouped the water-related issues into ve categories, as ollows:

WaterContamination

SecurityofourFreshWaterSupply

BaselineTesting

DistancesfromDomesticWells

PenobsquisExperience


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The Path Forward

5

W Cmii

New Brunswickers expressed concerns that water contamination can happen during

the various stages o the racking process both under and above ground. Participants

suggested that there was a heightened risk o water contamination underground i therewere well casing problems that resulted in a leak or rom the migration o rack fuid thatwas not recovered at the surace and remained in the ground. One participant reerencedthe statistic that 60-70% o the slick water remains in the ground, which they ound tobe alarming. Examples o fow back water contamination have been documented inother jurisdictions and are cause or concern. While many participants are aware thathydroracking generally happens several hundred meters below the depth o a waterwell, there remain concerns that rack fuid would migrate upwards, thereore placing the

ground water supply and water wells at risk.

Concerns o waste water run-o and well pad drainage are also potential risks or

above ground water contamination. Participants shared concerns about the handlingand transportation o water ater it has the racking chemicals added. The majority oreported incidents and spills have resulted rom human error, thereore many questions

arose rom participants regarding the monitoring systems that would be in place at thedrilling sites to ensure saety throughout the process.

Participants voiced concerns or their uture should water contamination occur. Manyviewed the shale gas industry as a ticking time bomb which could potentially have adetrimental impact on the uture. A clean water supply is needed or human survival tothe extent that the Vatican recently declared water as a human right.

On March 23, 2012, the Catholic Church registry in Rome has taken a

stand and declared water a human right William Brewer

Thereore New Brunswickers take the risks that have been so widely publicized in

other jurisdictions very seriously, as they value the plentiul supply o clean water thatNew Brunswick currently has.

Sci f Fsh W Sppl

New Brunswickers depend on their water supply and believe that our ability to havean abundance o clean water is what makes this province a great place to live. I heardrom many people that depend on water or their livelihood, small businesses and

entrepreneurial ventures. Farmers raised concerns or the protection o their water asthey depend on having a large quantity o water available to them at all times or theoverall operation o their arms. They also raised the importance that they have cleanwater so that their product, both ood and livestock meet regulatory standards. Thecodes and regulations that armers abide by are stringent, particularly or armers whowish to comply with organic certications, thereore they cant risk the possibility o theirwater supply being contaminated.


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October 2012 6

Recently introduced industrial cranberry operations in Rogersville also need a securesupply o clean resh water to meet exporting expectations. Participants expressedthat it is imperative that the government be mindul o guidelines that other long-termprospering industries must adhere to.

New Brunswickers are aware that large amounts o water are required to complete arack, and as a result have serious concerns that local water sources will be used andruined during the process. Some o the wells that have been hydroracked in the provincehave used water rom municipal resources which many participants nd troubling. Whilea hierarchy o water or use in the racking process has been proposed within the dratregulations, many participants state that is impossible and unjust to prioritize water

resources as they are all valuable. Hydroracking under certain conditions can possiblybe perormed using other solutions and products such as propane and recycled waterwhich participants seem to have ewer concerns with.

Participants cautioned the government and municipalities to not give away water orree, and to charge a ee comparable to what one would pay or a bottle o water. Thebelie is that gas companies would begin to look or solutions other than water to rack

with. Some presenters suggested that it may be time to stop regarding water as a reecommodity that is available to industry or little or no costs.

Once water is used as part o a rack it needs to be treated, transported and appropriatelyhandled throughout the recycling process. Presently waste racking water romNew Brunswick is treated at a acility in Debert, Nova Scotia and transported by truck.

Once water is treated to an acceptable industrial standard it is released into the Bay oFundy. Some participants regarded this as polluting the marine environment, as it was

not treated to the level o drinking water prior to its release to the natural environment.

Bsli sig

Many people are uncomortable with any exploratory testing or disturbance o the groundand water table. Participants raised concerns that the government is unaware o what liesbeneath the surace and that proper aquier mapping should be completed beore any

exploratory testing. To ully protect New Brunswicks water, participants requested thatwell documented water table ino be readily available to the public. Many non governmentorganizations exist around the province with the purpose to protect New Brunswickswater and other items o ecological value, and they have a vested interest in having this

ino available to the public or accountability and oversight. The recommendation wasmade by various participants that the government should undertake a comprehensivedelineation o the watershed where industrial shale gas extraction is being considered.

The delineation should identiy the recharge and discharge source or the water tableand it should also identiy vulnerable areas within the watershed where ground water

extraction could be problematic.


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The Path Forward

7

Discs fm dmsic wlls

As stated in the introduction o this summary, the public meetings heard rom

New Brunswickers on all sides o the issue. Many New Brunswickers voiced concerns

that they had about a particular issue, and i a proposed regulation remediated thatissue they could consider supporting a shale gas industry in the province. One osuch issues was the distance or setback that would be required rom residential wells.New Brunswickers were pleased that companies could not perorm tests or developmenton private property without land owner consent, however participants raised the issueo natural gas companies drilling in close proximity to their wells without requiringaccess to their land. This was an area that was very valuable to the public consultationprocess, as participants provided their own recommendations o proposed distances

based on drat regulations. The recommendation was made or the distance to be thesame across board to 250 m, which increases the proposed distance o any permanentbuilding to 100 m.

Pbsqis expic

The issue o Penobsquis residents loosing their wells was raised on many occasions duringthe public meetings, particularly in the southern part o the province. Comments ranged

rom, what was the cause, how the residents were treated by government and industry,and their current property value. Contradictory statements made it apparent that theactual cause o residents loosing their wells has yet to be determined. It was evident thatmany people believe through their personal understanding o the issue that exploratorytesting, including seismic could cause similar issues. The situation in Penobsquis adds aunique element to the discussion as it is an example o what can go wrong that is very

close to home.

Over the course o the sessions many people linked the unctionality o their residentialwell and its ability to produce clean water directly to the value o their home and land. Itbecame clear that New Brunswickers would not tolerate any risk and would passionatelyprotect their water. Municipalities in the province have passed resolutions to place a localmoratorium on exploration as residents expressed concerns over their wells.

I am the Mayor o Bouctouche and Im here with the Mayors o

Richibucto and St. Antoine. Whats going to happen i shale gas

is racked and our water systems are racked too? Aldeo Saulnier

New Brunswickers want to hear rom scientists that it is possible to have their waterprotected and that the government regulations will be enorced to ensure that it is.


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October 2012 8

Water Related Recommendations:

1. Tests will need to be perormed bothprior to and through various stages

o the exploration and drilling processto ensure that well water has notbeen contaminated or compromisedin any way. The data collected shouldbe periodically subjected to anindependent third party evaluation.

2. Enable the identication anddelineation and mapping o the majoraquiers prior to any exploration.

3. The water that is currently used during

hydroracking in the province can betreated at the Debert water treatmentacility, however should a ull scaleshale gas industry be developedin New Brunswick, a suitable watertreatment acility will need to be setup in the province.

4. The province should consider creatinga water management strategy akin tothe way orestry and wildlie are

handled through a regulatoryramework.

WeLL CaSInG

Well casing integrity was another itemthat received many mentions during thepublic meetings. Well ailures and leaksare reported to be the root cause o mostproblems associated to hydroracking or

shale gas development. Similar to water,the concerns are both above and belowthe surace; thereore building codes and saety standards need to be enorced bygovernment regulation to ensure the saety and security o the operations.


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The Path Forward

9

Concerns were expressed on the adequacy o the current regulationsin our main areas, as ollows:

WellIntegrity

Safety Earthquakes

Regulations

Wll Igi

The integrity o the well casing is paramount to the saety o a shale gas industry. A

number o statistics exist where aulty wells resulted in leaks and emitted air pollutants.One statistic that was heard at many o the sessions was that 6% o wells ailed, howeverthis statistic could not be veried. Industry representatives have indicated that wellailures were ewer than 2%.

Sf

The issue o saety was raised at a number o meetings with participants drawing ontheir various levels o expertise and dierent personal experiences. One individual

that attended a number o the meetings drew on his knowledge as a retired corporatesaety advisor and made the panel aware o standards used in other jurisdictions as wellas international guidelines that could be applied to monitoring a New Brunswick gasindustry to ensure saety. One participant advocated or an outside regulatory agencyto peer review all saety codes and incident reports. The belie is that with proper saetycodes and procedures that a lot o incidents would not occur. The recommendation was

made to set up an Occupational Health and Saety centre in the province to help establishthe rules and monitor the industry.

Participants that had experience working in industrial settings, including the oil andgas industry, identied that they are always cognizant o the risks associated with theduties they are asked to perorm. Many participants who voiced their support or a shalegas industry in the province believe that it can be done saely with proper regulationand training.

I went to school in Medicine Hat, Alberta, known as the Gas city in 1960s.

They have a lot o gas wells there. They had gas wells that blew out with the

60s technology. Those gas wells are still there, they are not blowing up

anymore. Thats because things are a lot saer. A lot o improvements havebeen made in 50 years. Things are really sae now. Thats my experience

with gas, and it was positive. It can be done saely. Wayne Hold, Renous


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October 2012 10

Some participants have lived in other parts o Canadaand are amiliar with living in a community that isadjacent to gas and oil production and have no personalsaety concerns. While others cited that the health

complications that they are currently dealing with area result o years they spent in close proximity to theperceived pollutants associated with the industry.

ehqs

Some studies have ound that the process ohydroracking is linked to earthquakes which manyNew Brunswickers nd extremely troubling. Even

minor earthquakes can cause structural damage aboveground, as well as the possibility o obstructing well

casing below the surace. People stated their belie that the process o hydrorackingis unnatural and it is the apparent cause o earthquakes. Concerns were also expressedon the risks that remain once the well is sealed, as a participant shared concerns aboutthe possibility that cement seals, which are used to block a well, could be compromisedshould an earthquake occur.

rglis

As noted in the introduction, the intended purpose o the consultations was to provideeedback on the proposed regulations. Many New Brunswickers submitted commentsonline or attended public sessions providing detailed eedback on specic sections o

the drat document. It should be noted that the majority o participants at the publicsessions had not had time to review the proposed regulations until arriving at the session,and in some instances individuals were pleased with the approach the government wastaking, in particular with the mandatory requirement to disclose all chemicals in racking

fuid. This rule was put in place ater citizens voiced their grave concerns when chemicaldisclosure was not available publicly as is the case in other jurisdictions because ocorporate condentiality agreements.

One item that was raised on several occasions was the governments ability to imposeand enorce the regulations on the industry. There were allegations that the governmentwould make exceptions and be lenient on regulations to appease industry. An incident

in the all o 2011 where a gas company perormed seismic tests within a municipalitywithout receiving appropriate permission to do so, proved to be a circumstance wheregovernment regulations were not presently strong enough to hold the companyaccountable or actions contrary to regulations. This incident drew scepticism rommany interested parties on the governments ability to enorce regulation, given that thegovernment states that New Brunswick will have the most stringent gas regulations inNorth America.

Photo looking southeast at the potash mine; it is

a picture o the Corridor Resources F-67 well pad

during drilling operations in the McCully Field.


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The Path Forward

11

For the gas industry to operate with the checks and balances included as part o theproposed regulations, a signicant number o monitors, inspectors and emergencyresponders will need to beavailable. Concerns over who the

monitors would report to and whowould pay or them was raised.New Brunswickers have hesitationsi monitors report to industry andwould view this type o scenario asa direct confict o interest.

The role o the individual inspectorswas also an item o discussion atthe public meetings based on theproposed regulations. Currently

the role o the inspectors is notclear, thereore questions aroseabout whether checks would be routine, or would they only be perormed when acomplaint was made or incident led. As well, would gas companies be given notication

when an inspection was to take place or would they happen unannounced? Becausethese will be newly created positions specically or the shale gas industry many itemsneed to be determined such as the requency o inspections, where will the trainingbe provided or inspectors and what is the optimal number needed to ensure thatregulations are enorced throughout the industry.

Well Casing Recommendations:

1. A monitoring system will need to be created to oversee several stages o gasdevelopment with monitors onsite as well as unannounced checks.

2. Proper training must be provided or all industry workers to ensure saety o all

employees and to reduce risk o human error.

This picture is the Corridor Resources F-58 well pad in the McCully Field,currently producing natural gas. This well pad is in the production stage.


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October 2012 12

InDuStrIaLIzatIon

Participants rom both sides o the issue voiced their opinion on industrialization and theimpact it could have on New Brunswick.

A wide range o topics t in this category identiying both the benets and the challenges

associated with the industry, as ollows:

PropertyValue

TransportationImpacts/Road Destruction

Noise

Lossofruralserenity

Pp vl

Property value was raised by a number o participants, many in reerence to the incidentat Penobsquis where some individuals lost their wells. The concern by many is what willhappen to the value o their home i their well is compromised. Many people have a loto equity invested into their home and need assurance that they will be able to sell it ata reasonable market price when they decide to sell. Many expressed concern that the

security bonds which would be required rom the companies are not sucient to coverthe damages ollowing the contamination o their land.

Farmers and ood producers that operate on large pieces o land had serious concernsabout their land value, in addition to the concerns that they had or their reliance on large

quantities o water. They eel that people will not want or trust their product i they areset up beside a producing well pad.

Im producing milk and we have very strict guidelines to be able

produce milk to be able to send to the province so that the people

have a very good product. Im going to be trying to produce a product

or consumers with polluted land and water. How am I supposed to

grow ood that people will trust me to grow ood, to grow crops, to

eed my cattle and produce milk. What will happen? How am I going

to be compensated or my land or everything that I do now, that has

been done or 75 years. Margo, Memramcook (4th generation armer)


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The Path Forward

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The majority o the leases that have been given to gas companies or exploration areor rural areas. Many hardworking New Brunswickers have invested a lot o money intotheir homes and view their property as their own personal rural retreat. For many itremains their sole retirement und. Because o this they view any disruption to the natural

surroundings o their home is very unsettling. The participants took comort in knowingthat they would have the nal say o whether to allow development on their property,but they continue to have concerns about the potential impact i their neighbours inadjacent properties choose to allow development. New Brunswickers want assurancerom the government that industry will be required to pay the dierence i the value otheir land depreciates in any way.

tspi Impcs / rd Dsci

One o the challenges associated with the shale gas industry is the amount o tracthat is required while setting up the well pad and during production. Large quantities

o water need to be trucked in as well as many other heavy materials which can be verydestructive to rural roads which are not used to, or designed or large amounts o heavyequipment trac.

In addition to the destruction to the roadways, many rural New Brunswickers have

saety concerns or their children with increased trac as well as the constant noise. Theassumption is that the well operation would be 24 hours a day 7 days a week, whichwould also mean that trac would be continuous.

New Brunswickers pay a lot o money or their roadways and keeping their roads in goodcondition is important to them. Participants want to ensure that any destruction to their

roads as a result o heavy equipment trac will be repaired when production is complete.

nis

The trac noise associated with natural gas production will presumably be o somedisturbance to many homes located along the haul routes. While many participantsraised specic trac concerns, the panel also heard rom New Brunswickers who hadserious concerns about the decibel levels o operating compressors and the permanentdamage it could cause.

The concern is that private landowners will be subjected to the constant noise eventhough they are located a air distance away rom the well pad. There are many health

studies that examine the health hazards associated with continuous exposure to industrialsound. They also believe that this will have a damaging impact on their property value, aswell as compromise the enjoyment they receive rom doing outdoor activities.


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October 2012 14

One participant in Grand Falls voiced concerns about the possible impact noise couldhave on domestic animals, bats and other wildlie. Low requency sound which isinaudible by humans travels arther than high requency, thereore more research needsto be done on the possible side eects o noise, specically rom a compressor that runs

continuously. Research has shown the side eects and health risks associated with thesound o wind mills, thereore there is sensitivity about the noise o the industry.

Lss f rl Si

Rural New Brunswickers have made a conscience choice to live in rural areas and haveembraced its way o lie and do not want it disturbed. The panel heard rom manyNew Brunswickers, particularly younger generations that take great pride in growingtheir own ood, maintaining large properties and raising young amilies in rural

New Brunswick.

Some o the people grew up and continue to reside within the communities where theywere born, while others have retreated to create their own rural existence, some o whichcontinue to work in the city and commute to live in a natural rural setting.

People have chosen to live in areas like Havelock and Cornhill and

Petitcodiac because o the way o lie possible, and many o us

commute great distances to go to work. Jane Bradbrook, Cornhill

These individuals are against any industrialization that would impact the lie they havecreated and eel that shale gas development would devastate the rural New Brunswick

way o lie or generations to come.

eConoMyLike other Maritime provinces, the uture o New Brunswicks economy comes with itschallenges as younger generations leave the province in search o employment whileNew Brunswicks population continues to age, thereore placing increasing demands

on the health care system. New Brunswicks unemployment rate is one o the highestin the country with a large percentage o seasonal workers. New Brunswick currentlyreceives a large percentage o its operating budget to provide health care, educationand other services through equalization payments rom the ederal government. Theprovinces that have best weathered the economic storm have been those that have

developed their natural resources such as Alberta, Saskatchewan, British Columbia andNewoundland & Labrador.


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The Path Forward

15

The economic realities that New Brunswick aces are perhaps the most divisive issues owhere people stand on Shale Gas:

Jobs

Royalties BusinessCase

Jbs

Those who are in avour o shale gas production ocus primarily on the economic benetsit would have or the entire province. While those who are opposed indicated that a

shale gas industry would provide limited employment and that many more jobs couldbe created i we embraced the green energy alternatives such as solar, wind and otherrenewable options. Many participants expressed the need or jobs in New Brunswick tokeep our people at home. Currently many New Brunswickers travel to work in the oil and

gas industry at many o the same jobs that would be required or a ull scale shale gasindustry here at home. The idea o keeping New Brunswicks work orce in the provinceas part o the tax base was the most prominent reason in avour o an industry.

Everyone here knows someone that is working out west in Alberta

that is part o their prosperous economy. This is New Brunswicks

opportunity to reconnect amilies. The industry will lead to the well

paying jobs that are needed in this province. Saskatchewan is prospering,

Alberta is prospering and I hope New Brunswick will prosper soon.

David Donahue, Blackville

The meeting in Blackville had the most participants that spoke in avour o the industry

or its regional economic benets. In addition to the direct jobs that would be associatedwith the industry, there are also many indirect jobs that would spin o within the dierentcommunities. Many entrepreneurs are anxiously anticipating the opportunities thatcould arise should a ull scale industry take place rom people providing materials or thewell pads, such as the abrication o work trailers, to servicing the infux o workers withaccommodations and restaurants. An increased tax base would also mean more money

spent in New Brunswick on housing and other big ticket purchases.


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October 2012 16

Some participants that were critical o the industry warned that the majority o the jobswould go to people rom out o province because the training that is required to workin the industry is so specic that New Brunswicks current workorce could not meet thedemand. Others believed that the job numbers that the government and industry state

could result rom a shale gas industry are largely infated, and they also caution that theshale gas industry is a short term industry and that 15 years down the road all o thecompanies will return to western Canada and the United States, while local businessesthat opened to eed the boom would be boarded up.

These New Brunswickers want government to look at ways New Brunswick can havesustainable growth and worry o a boom and bust phenomenon.

rlis

In addition to the drat regulations the government also released document Sharing o

Royal Revenues From Natural Gas Activities in New Brunswick, to discuss a potential royaltystructure. New Brunswickers eel that both the landowner and the communities shouldreceive a sizeable royalty or assuming the potential risk o drilling activities. Participantsquestioned the current royalty ormula stating that the companies will have a lot o coststo cover and that ew prots will exist. They also believe that all o the royalties or the

province will be swallowed up to pay or inspectors and other required inrastructure.Industry representatives indicated that the proposed royalty structure was notsustainable and that it didnt refect the current Canadian practices. They suggested thatNew Brunswick should review the royalty structure in BC as a possible model.

Bsiss Cs

Participants expressed the need to be brought ully up to speed on the provinces

numbers and orecasts associated with the industry. Some participants were critical ojob numbers and other economic spinos that the provincial government predicts wouldresult rom a ull scale shale gas operation. New Brunswickers want to see the businesscase or the industry and many eel that all advancements in regulation and explorationshould come to a complete halt until all o the material is made available to the public. Acomparison was made that investors do not provide money to entrepreneurs without asolid business case, thereore they believe that New Brunswickers should be regarded asthe investors and their investment is their environment and their workorce.

Recommendations on the Economy:1. Develop a comprehensive business case or the development o a shale gas industry

in New Brunswick detailing and evaluating the positive and negative impacts orboth the short and long term.


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The Path Forward

17

envIronMent

New Brunswickers care a great deal about their environment and have ormed manygroups that advocate or increased protection. Environment protection was one o theprimary concerns that was raised at all meetings with many citing alarm over potentialrisk to water quality. Participants also cited concerns they have pertaining to other kindso pollution.

The most prominent environmental issues include:

Pollution

EIAProcess

Permits

Plli

It is no secret that many communities with an industry presence have identied somechanges in air quality. Years ago large scale pulp and paper mills were viewed as verydamaging to the environment and health with many people linking respiratory illnesses,such as asthma to their proximity o the mill site. Today many changes have been madeand all industries are orced to comply with environmental regulations and air quality

monitoring. Regulations such as these help the ederal government reach GreenhouseGas reduction targets.

As noted earlier New Brunswickers have done a considerable amount o personal researchassociated with the shale gas industry and have ound that communities with a shale

gas industry have experienced increased rates o air pollution, hazardous radiation anddamage to the riparian zone.

Studies provided by the presenters support the claim that the procedure o hydrorackingis more damaging to the environment with high emissions o greenhouse gas, comparableto operating a large coal red plant. New Brunswickers have been working to lowertheir GHG emissions and have been able to do so as a result o minimal industry andmanuacturing sectors. Canadas Department o Environment recently announced thatNew Brunswick had the lowest GHG emissions in the country.

eIa Pcss

New Brunswickers take pride in government regulation that is in place to protect theirenvironment and the standards that industry must adhere to. The Environmental ImpactAssessment is a procedure that all industrial activity must go through.

Throughout the public consultation process we heard rom people on both sides o theissue. Industry eels that their projects are oten held up because o the length o time ittakes the government to complete the assessment.


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October 2012 18

Others who are opposed to the industry have concerns that the government is toolenient, and in the back pocket o the gas companies and thereore will not reject anyproposals.

When I look at the government publications and the website thatweve been directed to by the government to make an inormed

decision on this I am very disappointed. I believe the government

has done an enormous disservice to the people o this province. That

website is a propaganda piece. It is unabashedly pro-industry. This is

such a disservice. The act o the matter is that the spin is positive shale

gas development. Steven Gilbert

Participants reerenced projects that had caused problems in their communities andwere interested to learn that the EIA process is new and that many o the projects thatwere completed in previous years would not pass todays EIA process.

Industry representatives expressed concerns with the current EIA process by indicatingthat the time it currently takes to process an application is detrimental to the developmento the industry. They nd that the process which requires all phases o the explorationto be subjected to the same level o review to be excessive and unnecessary. Industryexpressed the need to streamline the process and that one government agency shouldbe responsible or the processing o the applications and permitting.

Pmis

The Panel heard rom representatives that work in the gas industry who are rustratedwith the permit process as they are held up or months and in some instances years

to obtain the required permits to advance their project. They eel that having to dealwith dierent government departments is a waste o government resources as they areoten supplying the same inormation to dierent departments. Industry would like tosee more cooperation among government departments to allow or aster processingand less duplication.

Recommendations on Environment:

1. Government should consider the establishment o a central agency to processall permitting and EIA application.

2. Dene appropriate time lines or all the phases o the government review.


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The Path Forward

19

HeaLtH

Many o the concerns associated with a shale gas industry, particularly with watercontamination are linked to possible health risks. When matters o health and diseasewere raised we heard very passionate pleas and arguments against the industry. A loto the inormation that exists in the media ocuses on health issues that people living inareas with shale development attribute to the industry.

The purpose o the meetings were to comment on the proposed regulations, but manypeople said that they elt uncomortable commenting on any aspect o the industry untilthey knew the potential health risks. Many participants elt that Public Health should bepart o the panel, while others were satised that the Department o Health is currentlyconducting their own independent study o the industry.

It is apparent that the health issues will need to be addressed to clearly dene the health

implications associated with the shale gas industry, including:

Chemicals

Research

FirstResponders

HealthRisks

SocialRisks

Chmicls

One o the biggest concerns is what chemicals are used in the rack fuid because

o the perceived risk that it could contaminate drinking water. The current rules inNew Brunswick stipulate that companies need to disclose what chemical additives are

being used, however people want the specic cocktail recipes posted online. There areconcerns over the synergistic reaction o various chemicals once they are mixed in rackingfuid. At this time not enough research has been done rom a health perspective to ullyunderstand the risks to people and environment when certain levels o the chemicals aremixed together.

rsch

Prominent members o the health care community have come out opposing the shale

gas industry citing the lack o research into the industry as their major concern. Theyindicated that the engineering o the shale gas extraction process was clearly ahead othe peer reviewed science. Health care proessionals that attended the public meetingsare in avour o a moratorium until more time has elapsed or peer reviewed articles tobe published. One emergency room doctor stated that without knowing all o the actsit is impossible to treat patients adequately until they have total disclosure o all thechemicals involved.


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October 2012 20

Its hard to do public health studies because there is diculty with proving

the public health afects. I you come to me because you have a headache,

unny rashes , or nose bleeds its vague, because there are too many diferential

diagnoses that it can be. Currently I cant prove they result rom drilling in your

area unless we have dedicated people doing public health impact assessmentsboth prospectively and retrospectively. Dr. Angie LeGresley, Moncton

Fis rspds

First responders need to be ully aware o all the potential risks and hazards they aredealing with when assessing an emergency situation in order to take the correct actions.Details about specic chemicals and treatments need to be made available by requestto all health care proessionals in the province. Doctors have stated publicly that without

knowing all o the acts they cant properly treat their patient thereore placing theindividual at greater risk.

Hlh riss

The panel heard touching stories rom cancer survivors who begged the governmentnot to endanger the health o its citizens. Studies exist that compare areas with shalegas production to those without and notice signicant increase in the amount o cancer

cases, respiratory problems and other illnesses. There are concerns that the shale gasindustry would be similar to Agent Orange where New Brunswickers that were exposedto the chemical developed many health problems years later.

Scil riss

Certain participants voiced concerns o the social problems that result rom an economicboom citing many o the challenges that oil and gas producing communities ace.Increased rates o crime, homelessness, drug addition and prostitution have resulted in

communities such as Fort McMurray. Participants alluded to the act that the provincecurrently doesnt have the resources to provide help to people who currently need it andwonder what will happen when all o these problems spiral out o control.

People had concerns that the industry would only benet those who were directlyworking in it and that the cost o housing and other commodities would increasesubstantially, thereore making things unaordable or many other hardworking

New Brunswickers. Participants cited the astronomical prices that people pay or housingin Alberta and dont want that to happen in New Brunswick. People believe that the lowcost o living is one o the greatest reasons to raise a amily in New Brunswick and thegovernment should work to protect that.


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October 2012 22

Cmpsi

We heard rom many New Brunswickers that have concerns o private citizens being tied

up in lengthy and costly legal battles with major corporations i their property or health

is compromised. Many o the people that we heard rom have unavourable impressionso oil and gas companies and believe that they have little regard or the landowner andtheir property. There are many stories available that reerence people using all o theirsavings attempting to sue the companies, but to no avail, as the companys large legaldepartments purposely use delay tactics until the plainti uses up all o their resources.New Brunswickers dont want to eel as though theyre up against the gas companiesalone and they want their government to protect their interests.

In a case that there is damage and water has been contaminated, a

homeowner will loose land value. Where do they recover the value?

Who would buy property that is contaminated? Who is going to look

ater the landowner? Ann Cramer, Derby JunctionNew Brunswickers believe that no amount o money can be paid to compensate ordamaging ones health or the environment, and believe that the proposed bond is notsucient insurance considering the risk.

efcm

New Brunswickers would like to know where the resources are going to come rom toenorce the regulations and who will keep the companies accountable. Its apparent

that any regulations need to be strictly enorced and that additional sta will need to behired to ensure the regulations are adhered to. Participants expressed that government

intentions to have the most stringent regulations in North America is meaningless i theyare not enorceable.

Bd f Pf

Stories in the media stipulate that one o the most dicult aspects in many o the courtcases is proving that the gas companies are responsible. The proposed regulations are

drated in such a way that industry would need to prove that they are not responsibleor any issues that could arise. Thereore in interest o both parties, testing will need tobe done through various stages o the production. Industry representatives indicatedthat burden o proo legislation would be a show stopper or the development o the

industry.


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The Path Forward

23

Pmissi

Landowners are satised that they have the right to deny access to gas companies or

any type o exploration and drilling. Participants came to some o the sessions citing

incidents in the United States where gas companies used private land without acquiringpermission.

Municipalities across the province have been very involved in the discussion o a possibleshale gas industry. A number o Mayors and councils have passed motions to ban seismictesting and hydroracking within city limits. One question that arose was who had

absolute authority, the land owner or municipality, and i a municipality could preventsomeone rom leasing their land.

Legal Recommendations:

1. Test and implement the proposed regulations and legislation within an operating

ramework.

enerGy

There were dierent options expressed by participants regarding the best energydirection or New Brunswick.

There are two major areas o note here, including:

EnergyOptions

GasforNewBrunswick

eg opis

We heard rom individuals who believe that government should be looking intorenewable energy and develop an expertise that could be exported to the world. Theybelieve that because o the small size o our province and where we are positioned thatwe should move towards wind, tidal and solar energy, and begin to shut down largepower plants that are costly and damaging to the environment.

Gs f nw Bswic

To many New Brunswickers natural gas is a uel that is available or home heating, and

the option o converting to natural gas is not available in most areas o the province.There is a strong sentiment that exists o whether or not it is worth all o the potential riskto extract natural gas only to be sold to the United States.


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October 2012 24

In the past we saw the benets o resource development locally,

Moncton had a pipeline rom the workings in Albert Mines area.

Not only was it exported but it was used locally as well. What it

seems like so ar is that this pipe is heading or New England. To

me that doesnt seem like its supporting communities. I we goorward how will we ensure that development helps communities?

Bernard Woolsey, Curryville

People eel that the province should wait to extract natural gas until the market value ishigher or until better technology exists to extract it with minimal risk. New Brunswickersare not keen to disrupt their lives without any benet.

One participant in Grand Falls said that he would be in avour o an industry i theentire province could benet. Natural gas is positioned to become the uel o choice orindustry and eventually automobiles, thereore setting up inrastructure and being early

adopters could be very benecial or the province. Because the natural gas belongs tothe province any development o a gas industry in New Brunswick should ensure that aportion o the gas is allocated to the economic development within New Brunswick. The

panel heard rom a number o participants that they do not want to have their naturalresources shipped away rom the province without a clear expression o a net benet toNew Brunswickers.

The low price o natural gas at the time o this report is one o the leading reasons peoplebelieve the government should hold o on development. However it was also brought

to the panels attention that the low market value is benecial to large industrial plantsas they use large quantities o natural gas or their daily operation. The distribution o

low cost natural gas around the province could also provide incentive to develop newindustries which depend on a secure energy source.

Energy Recommendations:

1. Government should consider the identication o a heritage gas pool which wouldbe dedicated or New Brunswick.

FIrSt natIonS

Members o the First Nations community that attended the meetings shared concerns or

the environment and mother earth. They believe that it is a violation o the treaty rights

and are concerned that the process had advanced to the exploratory process withoutproper consultation with the indigenous people. First Nations participants cautionedthat consulting with Chies alone is not an adequate consultation. Another member othe First Nations community had serious concerns over wasting water and the proposedhierarchy o water as all water is valuable and goes against the will o their creator.


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The Path Forward

25

They also voiced their opposition to shale development because o the risks associatedwith the industry and because o the damaging impact it could have on hunting andharvesting ability.

First Nations Recommendation:1. Government must consult with all First Nations Leaders in New Brunswick.

ConCLuSIon

All o the input received during my tour convinces me that there are some important issuesto be addressed by government and industry as regards to the possible developmento shale gas in New Brunswick. I have also isolated key recommendations that Ibelieve are undamental to establishing a credible basis on which to ask the citizens oNew Brunswick to consider this opportunity.

A moratorium on uture shale gas exploration activities would not provide the opportunityto address the concerns o the citizens nor would it enable government to dene theeconomic potential o the shale gas industry.

By its denition a moratorium is an authorized period o delay or waiting without dening

the issues that would be addressed during the period o the moratorium. Such a delaywould likely prevent important discourse among proponents, opponents, and the publicand would not advance the debate concerning the major issues surrounding a shale gasindustry.

Given the industrial and commercial activities which are currently dependent on a secured

supply o competitively priced natural gas it is important that we continue determiningthe potential or extracting a supply rom our own provincial shale gas deposits.

While there is a belie that New Brunswick does possess large scale shale gas deposits,the potential still needs to be calibrated through more exploration and testing. Amoratorium will only serve to delay that important study and postpone making adetermination i there is a business case or shale gas extraction, how it can be done onan environmentally sound basis, and how proposed regulations can be implemented to

have the desired eect.

It is only through a rational, science-based process and structured dialogue not amoratorium that we can assess the issues associated with Shale Gas to decide i we willproceed with the development here in New Brunswick.


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SECTION II:THE PATH FORWARD

SECTION II:THE PATH FORWARD


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The Path Forward

26

SeCtIon II: tHe PatH ForWarD

Following our tour o New Brunswick and ater listening to individuals, groups andindustry representatives it is apparent that there is a great divergence o opinions on theissues associated with the development o a shale gas industry in New Brunswick.

It was apparent rom the discussion throughout the tour and the written submissionsreceived that both government and industry have ailed to provide the inormationneeded or citizens to clearly understand the environmental, economic, and socialimplications associated with shale gas development. The government also did notcommunicate a cohesive business plan to support the benets that a shale gas industrycould bring to the people o New Brunswick.

While some believe that New Brunswick does possess large scale shale gas deposits, thereis still much investigation needed to quantiy the commercial viability o the industry,

and to determine whether the extraction o the gas can be done in an environmentallysound manner. There is also a need to assure the public that health-related issues can beproperly assessed.

Citizens need to be assured that should they be negatively impacted by any phase o

the exploration activity they will be adequately compensated without having to resortto a lengthy and costly legal litigation with a company. In the ollowing proposed pathorward I am suggesting that an ombudsman oce be established within the EUB withull power to allocate compensation to citizens which are negatively impacted. Thegovernment and the companies will be let to determine who is ultimately responsibleor the incident. This is to ensure that should a citizen experience a problem that it will be

immediately remediated.

It should also be noted that gas exploration in rural New Brunswick cannot be comparedto similar operations in remote parts o British Columbia and Alberta. In New Brunswickthe exploration activities can be located close to or within rural communities. Manyresidents within these communities have an attachment which reaches back manygenerations. They have pride in the community they helped to build. For many the equityin their homes, arms etc. is a valuable part o their retirement which they wish to protect.

Thereore it is important that they are properly inormed on industrial activities which

are being considered within their community. They need to be provided with credibleactual inormation on these issues. It was evident during the hearings that citizens were

not receiving the required inormation they deserved.


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October 2012 27

Given the importance o resource development to New Brunswick I have taken theopportunity to develop a possible path orward or our province when it comes toresponsible exploration or gas and oil. I eel compelled to attempt to provide someadditional options by which we can assess the positive and negative impacts associated

with the development o a shale gas industry. I believe a new, richer model is called orto bring citizens together. The government should change its current course to create astronger, more ocused program designed to determine i, in act, this industry can be anet benet to our province.

Concerns o rural New Brunswick communities experiencing the impacts o boom andbust cycles have been brought to my attention. This is understandable because the

shale gas industry is nite it has a beginning, a working liecycle, and an end when thereserves run out. While I do believe that plans need to be in place to mitigate potentialnegative social impacts associated with shale gas industrialization, I do not believethat New Brunswick will experience the boom and bust phenomenon. Simply put,

New Brunswick is too small and has little in common with remote gas developmentregions in Alberta, BC, Saskatchewan, Ontario, or Labrador.

Unlike other jurisdictions that have experienced boom and bust scenarios, the workersthat would be associated with the New Brunswick shale gas industry would locate inpre-existing communities. And, many o the rural communities where gas could beextracted will not be gaining signicant new population. Instead many areas will bewelcoming workers back rom other provinces or re-employing workers who have lost

jobs in other industries rather than making room or short-term, transient employees.

Our current transportation systems and institutional inrastructure already serve to link

all areas o the province. In addition, communities where exploration could happen willnot expand beyond their capacity. Necessary services such as hospitals, schools, grocerystores, and even car dealerships already exist within a natural service area adjacent tothese communities so the businesses there or within driving distance will grow organicallyto meet the likely increases in activity.

The town o Sussex is an example o the positive impact that resource development canhave on a rural community. During the last ten years the community growth has beendeveloped in a constructive manner with little disruption to the rural town citizens wereaccustomed to, as the rural character remains present.


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The Path Forward

28

When you look at the top our provincial economies in Canada Alberta, British Columbia,Saskatchewan, and Newoundland and Labrador they all have one thing in common.All our are resource-based economies that are creating jobs, economic prosperity andwealth within their borders thanks to the abundant natural resources they possess. All

our provinces would maintain that the extraction o those resources is done in a sae andenvironmentally responsible manner.

The success o these our provincial economies begs the question how couldNew Brunswick address public concerns and still participate in the energy economy?

envIronMentaL anD HeaLtH

ConCernS

Environmental and health related issues were dominant throughout the progress o the

tour. Given that there are already active gas production elds in New Brunswick thereis a need to address these issues with a structured process to ensure all the scienticinormation available rom citizens and the industry is reviewed or its relevancy toNew Brunswick.

During the course o the review I was presented with numerous reports, scienticstudies, and other related documents that express both opposition and support or theshale gas industry. I did review the written comments and the reports that were submitted.However, my mandate did not provide me with sucient time to conduct a throroughanalysis o the material. Nor do I have the comprehensive expertise to conduct a scienticpeer review o all the reerenced literature and reports.

The governments Natural Gas Group compiled an extensive, annotated scienticbibliography during the preparation o the proposed regulations or the industry, butthat list was not segmented to indicate which sources had been subjected to peer review.

Participants during the tour echoed the worry over the limited amount o veried, actualinormation about shale gas which is available in a ormat that can be easily accessed by

the average citizen.

For these reasons an independent scientic peer review o the literature and technicalreports is a necessary rst step to provide a comprehensive overview o the environmentaland health issues that may relate to the extraction o shale gas in New Brunswick in my

view. Ater the review is complete we would be in a position to identiy any knowledgegaps and to provide valid inormation to the public in a ormat that makes it easy to

understand.


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October 2012 29

The diagram below provides an overview o how such a review could be structured. Giventhe advances in technology and management practices, many o the issues identied inthe early stages o the industry have been addressed. However, in order to gain a ullunderstanding, I would recommend we proceed with a ull scientic review o the peer

reviewed literature or both environment and health.

In addition I recommend that a shale gas health database be established to supporthealth care proessionals and assuage concerns o citizens. Both provincial HealthAuthorities should be involved in the set-up and management o the database to

ensure it is completeandavailabletophysicians or rst respondersona 24/7basis.

This database would provide:

A listing of all the chemicals used in any active fracking process underway in

New Brunswick. Information of the chemical structure and toxicity pathways of the fracking

ingredients.

Informationonthesynergisticpropertiesofvariouschemicalswhenmixedtogether

in a racking ormula.

Technical Advances

Knowledge

Gaps

Emerging body of

Information/Knowledge

Evolution of

Knowledge Gaps

Evolution of Issues/

Concerns/Knowledge Gaps

Assessment of Risks

Scientic Peer Review of Information/Literature on Shale Gas

1 Year

5 Years

10 Years

15 Years


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The Path Forward

30

CreDIBILIty GaP

Many rural participants during the tour communicated they are worried about the lack oelected rural representatives who will bring their concerns to government. Cities, towns,and incorporated municipalities have a structure where citizens can voice their concernsand issues publicly on a continuing basis. Rural citizens who live in unincorporated areasdo not have any other choice than to go directly to their Member o the LegislativeAssembly (MLA).

A particular consequence o this void is that more than 40 groups o citizens haveorganized to obtain even more inormation on the issues, especially inormation regardingracking. As many participants expressed a distrust towards government sponsoredinormation there remains a need to deliver veried inormation rom a credible sourceand in a context that relates directly to New Brunswick.

I would also recommend that a structured process be designed to enable citizens withdivergent views on shale gas to debate the issues within in an environment o mutualtrust and respect.

a reSourCe neW BrunSWICk neeDS

Our goal in New Brunswick should be tolook at natural resource opportunities thatwill improve our economic outlook withoutdamaging our natural or social environment.But New Brunswick participants were very

clear on one point during my tour they do notwant to have shale gas extraction take place

in our province i it is all exported elsewhere.Unless they have a chance to benet rom theresource that is brought to the surace they arenot convinced the risks are warranted.

So, how would we use new supplies odomestically produced shale gas?

First, our province will need new supplies o

natural gas to sustain existing users. EventuallyNew Brunswick residents and businesseswill have to purchase natural gas rom newsources to uel its economy. It is importantthat those new supplies come rom secure and

competitively priced sources.Maritimes and Northeast Pipeline


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October 2012 31

ManyNewBrunswickhomesandbusinessesusenaturalgasnowandmoremaywant

to convert to avoid high oil prices while contributing to reducing greenhousegas emissions.

TheNova Scotia oshore gas supply we currently depend on is estimated to be

depleted in the next 4 to 5 years, with ew new wells coming online to replace thesupply in sucient high volumes.

NewBrunswickindustrywillneedtoacquirenewlargesuppliesofnaturalgasinthe

oreseeable uture.

Second, shale gas could also contribute to provincial prosperity in many dierent ways.

Providingjobsforworkersdisplacedfromotherindustriesorthosealreadyworkingin

the oil and gas industry somewhere else in Canada and across the globe. Supporting localNew Brunswick businesses ranging from equipmentwholesalers,

engineering consultants, hoteliers, gas/convenience store owners, restaurateurs,

and more. Pumpingroyaltyrevenue intoprovincialcoerstohelp fundessential services likehighways, education, and health care.

Creatingopportunitiesforworld-classresearchandexportableintellectualproperty

related to the industry. Spin-ogrowthinotherbusinessesthatdependonasteadysupplyofnaturalgasfor

their operations.

Given that the gas belongs to New Brunswick one important step the government

could take to keep the benets o the industry in the province would be to setaside a portion o the extracted gas or the exclusive use o New Brunswickers in

building our economy. Like the highly successul Alberta Heritage Pool o oil andgas, the reserved portion o shale gas would provide home-based users with aguaranteed, aordable and readily available supply o gas that is independent ooreign market price fuctuations.

A secured supply o shale gas the New Brunswick Heritage Pool could:

MakeiteconomictoconvertcurrentelectricalgenerationlikeColesonCoveorBelledune rom coal and oil to natural gas;

Enabletheconversionofthetransportindustry,reducingfuelcostsaswellasatmospheric emissions;

Enabletheestablishmentofanaturalgasdistributionnetworkacrosstheprovince;

Enhance industrial and commercial development inNew Brunswick by oering astable supply o cleaner energy within a xed cost structure like the regime thatapplies to the Alberta Heritage Pool or to Hydro Qubec industrial electricity rates.

With these opportunities hanging in the balance, what could we do dierently to helpNew Brunswickers make an inormed judgement about the shale gas industry?


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The Path Forward

32

rISk aSSeSSMent MoDeL

A structured, science-based risk assessment process is required to determine bothhealth, environmental, social, and economic risks associated with a New Brunswick shalegas industry. New Brunswick shale gas deposits have dierent geological specicityand it is not evident that data which has been gathered rom other jurisdictions can beextrapolated to the New Brunswick situation.

A science-based risk assessment process would dene the level o risk associated witheach phase o exploration, extraction, and management to dene mitigation options aswell as monitoring programs that need to be implemented to compile statistical datarelevant to New Brunswick.

Once the risk assessments are dened or each segment o shale gas developmentthe appropriate impact evaluations will establish the management system that will be

required to ensure that shale gas can be extracted saely.

The chart below provides an overview o elements within a risk assessment model.

Monitoring data is

reviewed within an

adaptive

management

framework

High risk levels

identified

EIA/HIA Review

Acceptance with

modifications and

conditions

Rejection ofproposal

Mitigation options

Monitoring Program

Acceptable level

of risk

No risk

identified

Projectaccepted

Risk assessment

Model

Project Review:Scope Potentialfor Health and

Environment Risks

Screening , compilation andassessment of risk levels

Current industrypractices

ScientificData

IdentifyAssumptions

Assess Impact ofnew technologies


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October 2012 33

Bsiss Mdl

Citizens we heard rom during the tour wanted some tangible evidence that a shale gasindustry would benet those o us who live here. I we are enduring the impacts and

managing the risks there is an expectation that we should also enjoy direct, measurableand desirable benets. They also want an assurance that the shale gas industry will notcompromise our natural or social environment, nor will it jeopardize public health.

I recommend a thorough business model be prepared to establish a rationale or the

industry and show how it will benet New Brunswick in the short and long term. Bothdirect and indirect benets should be quantied along with specics on investment,economic development and job opportunities that would be created.

Importantly, the model should also paint a picture o the social outcomes o developingthe industry to ensure citizens have a well-rounded, act-based view o the opportunity.

Phsd appch

The work o the various licensedexploration companies to map andresearch most o the potential gasdeposits in the southern hal o theprovince all at once without inormingcitizens thoroughly has contributed to a

spirited public debate among aectedcommunities ocused on their naturalenvironment, the security o clean watersupplies, and their rural way o lie. Thisshotgun approach to exploration hasraised the alarm although little or noactual exploration has taken place todate. As a result the collection o scientic

data through various methods such as seismic testing has been greatly misunderstood.

To remedy this situation I recommend that the government adopt a phased approach touture exploration initiatives. This staged-in approach would be rolled out in an adaptivemanagement ramework which means that new knowledge and experience is constantlybeing integrated back into the activities o the industry participants.

Provincial geologists examine rock on Hwy 1 road cuts, just to

the east o Norton. The exposed outcrops are Albert Formation

shale rocks.


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The Path Forward

34

A phased approach would restrict the exploration ocus to specic areas chosen withinput rom community leaders and residents rather than the widespread area approachcurrently used. It would oer the possibility to veriy the ollowing:

Theeectivenessoftheproposed legislationandindustryregulations; testinginareal operational setting would identiy vulnerabilities in the legislation and correctmisgivings in the application o the regulations.

Provide a forum where the aected residents could be informed and involved

throughout the exploration and extraction processes. Give us an opportunity to collect sound, comparable socio-economic data and

develop robust eco-metric models to assess the impacts o gas development inNew Brunswick.

The conditions to develop and implement appropriatemonitoring programs that

will ensure that the issues and concerns o citizens are properly addressed withinsound science-based monitoring parameters.

Baselinedataonwater,air,andotheraspectsofthenaturalenvironment.

Enabletheidenticationanddelineationofmajoraquiferspriortoexploration.

InDuStry GovernanCe

Currently the Natural Gas Group is made up o civil servants who have been assignedrom a variety o areas within government to lend their expertise to the development oregulations and oversight o the industry as scientic testing was getting underway. Quitesimply this will not be adequate to deal with the long term implications o developing anindustry. A more permanent management structure is needed.

Even beore limited exploration starts in 2013 it is my recommendation that a new

industry governance model be established in New Brunswick to manage the gas and oilsectors, rom exploration to market.

I am recommending that the oversight o shale gas development in New Brunswick betranserred to the Minister o Energy as soon as possible and integrated with provincialenergy policy. Natural gas is an opportunity or New Brunswick to develop our owwnlower cost, cleaner uel source or use in New Brunswick and or sale in the export market.

It is rst and oremost an energy option that should be managed in our provincialgovernment structure where the accountability or energy policy resides.


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The Path Forward

36

GovernMent DePartMentS & aGenCIeS

The Gas & Oil Secretariat would report to Minister o Energy and serve as the rst point-

o-contact and the government clearing the house to provide inormation to the industryon project applications. The commission would ensure there is no duplication or delay inthe processing o applications or permits.

The Department o Environment would be responsible or the application o anylegislation, ocial environmental monitoring, project screenings and conducting

Environmental Impact Assessments (EIAs).

Department o Health would be the ocial provider o technical inormation to healthcare practitioners; they would have access to all pertinent health related inormation asprovided by industry participants as a condition o license.

NB Power could be a major customer or shale gas as well as possible manager o adistribution system or the gas in New Brunswick.

Eciency NB would review energy alternatives and provide advice to government onnatural gas usage. The commission could also liaise with the Energy Science Instituteto help assess the scientic, engineering, and economic issues associated with dierent

energy choices.

This new governance model would help deal with many o the major, contentious issuesexpressed by citizens during my tour.

TheEnergyScienceInstitutewouldprovideacrediblealternativetogovernmentand

industry in conducting research and monitoring the industry.o Providing an open orum or major stakeholders to meet and debate

industry issues.o Providing independent, statistical verication o data.o Assisting in mapping and creating digital models o provincial watersheds.o Conducting objective peer review o scientic literature, technical reports, and

other inormation.

o Helping government to prepare the business model and plan.o Developing and maintaining socio-econometric models to track economic

activities associated with the industry.

o Establishing a comprehensive data base o all chemicals used in gas extractionand production.

o Helping design a community participation model.o Giving scientic advice to the Minister o Energy.o Conducting environmental and health risk assessments.


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October 2012 37

The EUB would address shale gas rates within New Brunswick, royalty fees, and

related nancial issues. It is also structured to provide an eective orum throughwhich citizens aected by the shale gas industry could nd immediate solutions and

nancial support through the oce o an Industry Ombudsman.

enerGy & utILItIeS BoarD (euB)

The EUB would serve as the public review commission or gas rates in the province andbe responsible to oversee royalties issues.

In addition they would be the body to review public complaints and issue remedialcompliance orders, should issues arise, utilizing the $100 million bond as recommended

in the proposed provincial regulations. They could act in the capacity o an Ombudsmanto ensure objective and transparent resolution o disputes.

It makes sense to assign these roles to the EUB given they already have the legal authorityand unctional organization to take on these new shale gas issues in addition to theirexisting energy oversight mandate or the province.

enerGy InStItute

As part o the new structure the province would create The Energy Institute, which wouldbe an independent body reporting to government through the Minister o Energy.

The Institute will work to ensure credible research and monitoring in support o shale gas

exploration and production in the province leading up to a decision about the industry

and its uture in New Brunswick.

Idpd effcs rsch Pgm

The eects research program would be conducted under the auspices o the EnergyScience Institute by tapping into research capacities within the our provincial universities:Mount Allison University, Universit de Moncton, University o New Brunswick, and St.

Thomas University. These Universities possess highly qualied, independent researcherswithin their centres o excellence and unded chairs. An eects research program wouldalso provide an excellent opportunity to train graduate students.

Miig/Cmplic adis

The Energy Science Institute could undertake periodic statistical review o data collectedand provide reports to the public. The Institute could also conduct risk assessments onissues associated with the production o shale gas.


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The Path Forward

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Cmmici d Ifmi

The Energy Science Institute would be responsible to develop and maintain an eectivecommunication program that would provide actual and up-to-date inormation on the

shale gas industry.

The Energy Science Institute could also play host to conerences, public orums, andstakeholder workshops that would serve as public venues to review and explore newtechnology, highlight new research, and debate ndings.

The Institute would conduct peer review assessments o the published literature andprovide assessments or government and the public.

Fdig

The Institute would require an annual budget or a limited sta in the vicinity o $2 million

dollars per year. Initially, unding could be provided in part rom the Environmental TrustFund, however, as the industry develops unding should be provided rom the shale gasroyalties.

The unds would be allocated primarily to research and monitoring activities.

ConCLuSIon

During my tour I became convinced that a rational, science-based process and structureddialogue is needed to properly determine whether there is a viable shale gas industry in

New Brunswick, and i that economic potential can be realized in a sae manner.

The Path Forward that I have outlined here is based on experience I have gained inother similar roles and I encourage all parties in New Brunswick to renew their eortsto establish a working process that acilitates discourse that will help citizens make aninormed choice.


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October 2012 39

BIoGraPHICaL noteS

Lis LPi, Ph.D., C.M.

Louis LaPierre is Proessor Emeritus in Biology at the Universit de Moncton since October2003. At this same university, he was holder o the K.-C.-Irving Chair in SustainableDevelopment rom 1993 to 2001, proessor o Wildlie and Environmental Ecology rom1970 to 1999, and Director o the Master in Environmental Studies program rom 1994to 1999. Between 1990 and 1994, he was also director o the Environmental ScienceResearch Centre.

Since 1996, Dr. LaPierre is chair o the Institute or Environmental Monitoring and Researchassociated with the low-level fying program in Labrador and northeastern Qubec(appointed by the Minister o National Deense). He also serves as a Council Member o

Sustainable Development Technology Canada since 2003. And in September 2008, hewas named as a member o the list o prequalied members o assessment panels orthe Canadian Environmental Assessment Agency. Since April 2010, he is a member tothe NB Power board o directors. Since July 2011, he is a member o the Environmental

Assessment Panel or the Marathon Platinum Group Metals and Copper Mine Project.And in May 2012, he has been named as Panel Chair or the NB Shale Gas.

Dr. LaPierre was appointed as a member o the Order o Canada in 2012 or his contributionsto the protection and preservation o the natural environment at the local, provincial andnational levels.

As a concerned citizen and active member o several environmental groups, Dr. LaPierrehas dedicated the past 35 years to the protection o the environment at the provincial,national and international levels. He served as chair o the Fundy Model Forest or 10years. He was chairman o the Environmental Council o New Brunswick between 1981and 1990 and, between 1989 and 1991 was chairman o the Sustainable Development

Task Force or the Premiers Round Table on Environment and Economy. From 1998to 2003, Dr. LaPierre co-chaired the Round Table with the New Brunswick Minister o

Economic Development. In April 1997, he was invited to develop an integrated strategyor the protection o natural areas in New Brunswick. From 2004 to 2006, he was amember o the Canadian Standards Association. From 2004 to 2006, he was a member othe Fisheries Resource Conservation Council. In 2005 and 2006, he was a member o the

Environmental Review Panel or the environmental assessment o the Sydney Tar Ponds.In 2007, he was Chair o the Advisory Committee on Used-Tire Management or the NovaScotia Department o Environment and Labour.


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The Path Forward

From 2001 to 2010, he was a Tribunal Review Ocer or the Canadian EnvironmentalProtection Act. From September 2008 to August 2009, he was chair o the joint reviewpanel or the Bruce Power New Nuclear Reactor project. From November 2009 to February

2010,hewasamemberoftheAdvisoryPanelontheproposedNB/Qubecelectricitytransaction.

In 2006, Dr. LaPierre received a crystal maple lea award rom the Canadian Model ForestNetwork. In 2001, he received an Honorary Doctorate in Science rom the Universit Sainte-Anne. He was recognized as Alumnus o the Year or 2000 by this same university. Hereceived the Governor Generals 125th Anniversary Medal in 1993, as well as EnvironmentCanadas Ecocitizenship Award in 1992, and the Lietime Achievement award in 1991.Rotary International/Dieppe Club presented him in 1994with the Paul Harris Fellow

award. He was recognized as Alumnus o the Year or 1994 by the Universit de Moncton.He was a member o National Deenses Environmental Protection Task Force. He was

a ounding member o the Nova Forest Alliance o Nova Scotia. He was a member othe scientic team reviewing PEIs xed link impact on the environment. In 1996, he wasawarded the Tree o Lie Award rom the Canadian Association o Forestry or his work onorest ecosystems. He served as a member o the National Round Table on Environmentand the Economy Private Woodlot Task Force. He was the recipient o the 1997 GreaterMoncton Excellence Award in Environment, and the Town o Dieppe honored him withthe New Brunswick Heritage Day Outstanding Citizen Award in August 1997.

In 1998, Dr. LaPierre was awarded as an honorary citizen o the Town o Bouctouche orhis work as Chair o the Bouctouche Dune Eco-tourism project. He was the recipient otwo Proessi

Louis Lapierre Report

Documents

Transcript of Louis Lapierre Report