Shale gas drilling stalled

Two major energy companies have postponed plans for the completion of two exploratory shale gas wells in Quebec for six months in the face of mounting public opposition to their role in the controversial energy extraction method.

Talisman Energy Inc. and Questerre Energy Corporation announced the decision last Thursday, only a week after the provincial government held public hearings on shale gas exploration. The hearings sparked a petition calling for a moratorium on the industry, to be discussed at further hearings in November. Quebec’s Bureau d’audiences publiques sur l’environnement (BAPE) is due to report on the companies’ practices in February.

Shale gas extraction uses a method called “fracking,” which involves blasting a mix of water, chemicals and sand into wells. Environmentalists and residents have expressed concern that long-term effects on drinking water and wildlife are poorly researched.

Kim Cornelissen, VP of l’Association québécoise de lutte contre la pollution atmospherique (AQPLA), is one critic who remains skeptical of the six-month delay.

“It’s hard to know what’s behind the decision to postpone it because the companies don’t like it when the citizens begin to do stuff,” said Cornelissen. “It’s maybe not the best time to do it. It might be temporary.”

Company spokespeople say the cost of the project informed the decision to postpone. Originally expected to rise in 2010, natural gas prices have dropped from nearly $16 (USD) in 2006 to $3.77 per million British thermal units. Prices are expected to continue to drop, causing financial difficulty for companies in the industry.

Since declaring its interest in shale gas, Talisman has suffered significant drops in profit (including a 98 per cent plummet in 2009) and has sacrificed both properties and employees in Calgary, most notably cutting 202 jobs in December 2009.

Questerre’s stocks dropped 14 per cent following their decision to postpone fracking. “I think the investors were disappointed,” said Karen Carle, Questerre’s Public and Governement Relations Coordinator, “but we’re not worried about commercial extraction yet. That will come later.”