Originally published in Blakes Bulletin on Energy - Oil
& Gas, September 2010
On August 31, 2010, Quebec's Minister of Sustainable
Development, Environment and Parks (the Minister)mandated the
Bureau d'audiences publiques surl' environnement
(BAPE – Public Hearings on the Environment Board) to
propose a framework for shale gas exploration and development in
the province.The Quebec government intends to table oil and gas
legislation in the spring of 2011.
Shale gas in the Province of Quebec
Shale gas is natural gas trapped in rock formations called shale
located 1,000 to 3,000 metres below ground level. New technology
has made extracting this gas economically viable. This is done by
drilling horizontal wells and fracturing the shale using
pressurized water and other additives.
Quebec shale gas reserves are found in the Utica deposit in the
St. Lawrence River Valley, between Quebec City and Montréal.
It is estimated that the deposit contains billions of cubic feet of
recoverable natural gas. On land, exploration is taking place on
agricultural properties located within municipal boundaries, with
good road andrail access.
There is a moratorium on oil and gas exploration in the Gulf of
St. Lawrence pending completion of a federal review.
While various laws have an impact on shale gas exploration and
development in the province of Quebec, there is no law or
regulation dealing specifically with this type of activity. The
Quebec government is expected to submit a bill to regulate oil and
gas production in the province by the spring of 2011. In the mean
time, the Mining Act currently serves as the main
statutory framework for the exploration for, and development of,
shale gas in the province. Under the Mining Act,
prospecting licences are granted based on the
According to the "free mining" principle under the
everyone has access to the resource;
the first applicant is granted the right to explore;
in the event of discovery, the applicant is guaranteed the
right to develop the resource; and
the discovery and development of deposits are left to industry
Prospecting licences are valid for five years and are renewable.
In exchange for exploration rights, licence holders must pay an
annual rent and carry out geological or geophysical work or
drilling. The dollar value of the work required is calculated based
on the surface area covered by the licence.
A prospector who discovers an economically viable amount of gas
is granted a 20-year, renewable, natural gas development lease.
In 2006, the Quebec government released its 2006-2015energy
strategy, which sets orientations for each field of energy-related
activities, including oil and gas. The Quebec government has since
announced that it will take various actions to ensure the
sustainable development of the shale gas industry. The BAPE's
shale gas mandate and the modernization of the oil and gas
statutory and regulatory framework expected for the spring of
2011are part of the Quebec government's energy strategy.
The BAPE's Shale Gas Mandate
The Environment Quality Act (EQA) regulates
environmental protection in Quebec. The EQA creates the BAPE, which
reviews environmental questions at there quest of the Minister,
sometimes with public input.
Given the Quebec government's commitment to explore the
development of oil and gas on Quebec territory the Minister has
entrusted the BAPE with the task of proposing a framework for the
exploration, development and extraction of shale gas in order to
foster harmoniousco existence of these activities and the
populations concerned, the environment and the other fields of
activity on the territory.
As part of its mandate, the BAPE must propose guidelines for the
statutory and regulatory framework for natural gas exploration,
development and gathering infrastructure. The BAPE will hold public
consultations in the three main regions affected by shale gas
exploration and development. The BAPE's mandate began on
September 7, 2010 and the agency is due to submit its report on
February 4, 2011.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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