Canada’s push to protect 10 per cent of its marine areas by 2020 won’t face opposition from Nova Scotia’s offshore petroleum regulator.
But the Canada-Nova Scotia Offshore Petroleum Board won’t stand in the way of offshore fracking.
Carl Makrides, the board’s resources director, faced questions recently about whether the organization will need to push back on some of the marine protected areas.
“It’s not really our job to advocate for or against,” Makrides, a geologist, told an audience of scientists and students at Dalhousie University on Friday.
The province or the feds could do that, he said.
“We’re here to kind of regulate and manage processes,” Makrides said.
“We’re kind of like policemen. So we don’t set the fines for speeding, but we have to stop you if you speed.”
If a marine protected area were proposed in the middle of an area Shell has pledged to spend $1 billion exploring, “it may be in the province’s interest to say, ‘Hey guys, how is this going to effect this company doing work here?’” Makrides said. “We leave that to the governments to push back. Our job is to just be advisors. We have to sort of stay neutral in that sort of stuff.”
St. Ann’s Bank Marine Protected Area off Scatarie Island, which covers an area of about 4,300 square kilometres and extends out almost all the way to the boundary between Nova Scotia and Newfoundland, is now in the works.
“In this area currently the regulations would not permit seismic or drilling without the permission of the minister of fisheries,” Makrides said. “So effectively it’s a no-go zone for oil and gas.”
A spot called the Gully, the largest underwater canyon off the East Coast of North America at 13 kilometres wide and 65 kilometres long, is already protected under Canadian law.
“There are other candidate areas that we know that (the Department of Fisheries and Oceans) is considering, which they haven’t shared with us yet,” Makrides said.
“They’re not bound to until it (planning) gets more mature. But we do know that their goal is to protect 10 per cent. It doesn’t mean 10 per cent in this sector. But it’s 10 per cent for the country as a whole.”
Seismic testing and drilling can’t be done in the Gully, he said.
“And, essentially, you really won’t be able to do that either in the St. Ann’s Bank (area of interest). So future (marine protected areas) may or may not have the same limitations. It’s really up to whatever the conservation objectives are of the (marine protected area).”
Seismic testing, but not drilling, might be allowed in future marine protected areas, he said. “Or they may say you can’t do either.”
Protecting marine areas shouldn’t hinder oil and gas exploration off Nova Scotia, said Susanna Fuller, a marine biologist with the Ecology Action Centre.
“They allow lateral drilling under the Gully,” Fuller said in an email. “And it seems like Shell isn’t finding much anyway. And ideally, we would stop looking for more oil and gas because the poor oceans can’t handle climate change.”
Canada “can very easily protect 10 per cent, even 30 per cent of (our) oceans without impeding any oil and gas development and impacting relatively few fisheries,” she said.
“We have a different set of criteria for terrestrial protection — we would never accept industrial logging or mining or oil and gas development in our national parks or wilderness areas, yet it seems sometimes a heavy lift to make the case that industrial fishing and resource extraction should not happen in a (marine protected area). It is an interesting reversal of the burden of proof that we would never accept on land.”
Nova Scotia’s onshore moratorium on the controversial practice known as hydraulic fracturing does not stretch to the ocean surrounding the province, the Dal audience heard Friday.
“The fracking laws here don’t apply offshore, full stop,” Makrides said.
He pointed to two wells drilled off Cape Breton in the 1970s by Shell and Murphy Oil.
“One of them was actually flow tested, was not able to flow, so the company actually fracked it with, actually, hydrochloric acid — there’s a nasty frack fluid — and then tried to flow it,” Makrides said.
“It still didn’t flow. The reservoir was so tight. There are very tight sandstones there in the carboniferous basin, at least at this particular location.”
That said, the Canada-Nova Scotia Offshore Petroleum Board would have to evaluate any new fracking proposal to make sure it was done in a responsible manner, he said. “We wouldn’t just be able to frack willy-nilly.”
An area off Nova Scotia known as the Eagle field, discovered by Shell in 1972, contains about 1.5 trillion cubic feet of natural gas, Makrides said.
“If you were to drill multi-lateral wells and frack it, you could probably produce 300 or 400 (trillion cubic feet of gas),” he said. “So if a company were to pick this up and propose that, we wouldn’t oppose it, as long as it was done in a responsible manner.”
Offshore fracking carries “significant cost,” he said. “That’s why chasing offshore chalk reservoirs is not viable.”
“The cost is very high. You have to bring in a frack vessel from the North Sea or the Gulf of Mexico. It’s a very expensive operation. So you’d have to be confident in your reserves before you do it.”
Exploration rights to a parcel of ocean floor off Cape Breton will be auctioned off later this year to the company willing to put the most cash into hunting for fossil fuels. A swathe of seabed south of Nova Scotia will be on offer in 2018 and exploration rights to another package slightly east of that will be up for grabs in 2019.
“We’d like to think that these areas will be interesting to companies and they’ll pick up land and bid, do seismic and drill wells. But we can’t say for certain,” Makrides said.
“When Shell came in here with a billion dollars in 2012, nobody could believe the size of the bids back in the day. But then, of course, the following year BP came out with a billion dollars. So you never know. Sometimes these things — you get surprised.”
BP, which delayed plans to drill later this year in the Scotian Basin, has announced publicly they are planning to drill in 2018.
“If oil prices tank, they could change their plans,” Makrides said. “They’re not bound to do it.”
He suspects that will happen in an area the company already examined using a 3-D seismic survey.
“They’re just going through the environmental assessment process currently,” he said, noting that process takes about 18 months to complete. “Based on that well, there may be subsequent drilling.”
In 2015, Statoil acquired licences off Nova Scotia. The Norwegian energy giant has pledged to spend $82 million exploring two parcels of sea floor about 180 kilometres south of Yarmouth.
“They haven’t made application to do anything right now,” Makrides said. “So they haven’t made application to seismic or drilling. We suspect that that might be coming down the road. But they haven’t shared their plans. They have a bit more time because their licences are more recent.”
Shell Canada announced earlier this year that it had permanently sealed an exploratory well in the Shelburne Basin dubbed Monterey Jack. Last fall, Shell capped another exploratory well named Cheshire about 120 kilometres away from Monterey Jack, and 250 kilometres off the coast of Nova Scotia.
“Shell is doing what most large operators do at this stage,” Markrides said. “They’re digesting all the information that they acquired. Shell did announce publicly that the two wells were non-commercial. Commercial quantities of hydrocarbons were not encountered in either well.”
Makrides was cagey about what Shell has determined so far about the area.
“I know a lot; I just can’t say it,” he said. “We get access to all the daily drilling data, log date, everything. So we have the full story. We’re just not allowed to make it public. Not for two years anyway.”
Companies usually “get interested around 250 million barrels recoverable of oil,” Makrides said.
“At 500, they’re probably really interested.”
For natural gas to work off Nova Scotia, “it’s got to be huge,” Makrides said. “It’s probably 5-10 (trillion cubic feet) recoverable.”
Companies might look at using the Sable and Deep Panuke infrastructure already in place to exploit new finds, he said. “That might be a scenario.”
The CNSOPB has looked at 15 undrilled significant discoveries on the continental shelf off Nova Scotia. All of them are within about 50 kilometres of Sable Island.
“There’s about a couple of (trillion cubic feet) of potential, collectively, in those discoveries,” Makrides said.
“And maybe something in the neighbourhood of 40-60 million barrels of oil, collectively. Most of the significant discoveries are actually natural gas. Only a couple of them are oil.”
Nova Scotia’s first offshore well was drilled in 1967.
There have been three distinct exploration phases since then, Makrides said. “One in the late 60s, early 70s, one in the mid-80s, and then one in the early 2000s.”