Fossil fuel exploration in Quebec

Uncertainty rules

By Antoine Dion-Ortega

A helicopter brings equipment to seismic survey lines in August 2012. By mid-September, Junex had carried out nearly 4,000 detonations on the 224-km lines it had cleared out | François Jacob

In the past two years, a number of political decisions have significantly reduced the room to maneouver for energy exploration companies in Quebec. They have watched as, one by one, the doors have been shut to the point where the future of their field is uncertain in the province.

In September 2010, the government declared a permanent moratorium on exploration in the St. Lawrence Estuary and undertook the second part of its Strategic Environmental Assessment (SEA) of the Quebec portion of the gulf. Génivar, the engineering firm in charge of carrying out the SEA, is expected to release its report this autumn. It could recommend Quebec no longer permit oil exploration in the gulf, including on the Old Harry site, a salt feature that may host a billion barrels of oil.

Furthermore, in May 2011, the Shale Gas Committee was established, bringing a halt to natural gas exploration. Exploration companies have preferred to wait for the committee’s recommendations, which are set to be released in November 2013. Until these issues are addressed, some companies have opted to shift their operations into the oil fields on the Gaspé Peninsula and Anticosti Island. They could once again meet political resistance, particularly if the government decides not to support these new exploration efforts. Junior companies currently active in the oil field include Pétrolia, Junex and Corridor Resources.

Paradigm shift on Anticosti

“In terms of oil, we are really at the beginning in the East,” said Jacques Pelletier, president of Forage de l’Est, as he showed me his drilling site. “It’s not like in the West, in Alberta, where they have already found oil deposits. Here, we are in the embryonic stage.” The small company, with only 10 employees, began conducting stratigraphic core drilling on the Anticosti Island on behalf of Pétrolia this summer.

This is not, however, the first time that companies have worked to find oil on this island of almost 8,000 square kilometres, which is around 16 times the size of the island of Montreal. Since the 1960s, major companies like Esso, Shell and Hydro-Québec have attempted, albeit without success, to find significant deposits. In 2007, Pétrolia followed in the footsteps of these giants and acquired rights on the island. Like its predecessors, Pétrolia began searching for conventional reservoirs in the Trenton Black River formation, where oil could have migrated from the bedrock at a depth of 1,800 metres. To date, the company has not managed to locate oil in this structure.

In 2011, however, the company unveiled the results of an analysis of a core collected in the summer of 2010. These revealed a groundbreaking direction for fossil fuels research that promises an alternative to conventional reservoirs.

“We discovered that the oil was still in the source rock and had not come out,” said André Proulx, president of Pétrolia. “This has completely turned exploration upside down.”

For the first time, the attention focused on the Macasty shale, the formation located above Trenton Black River. This structure is the lateral equivalent to the Utica shale found in Ohio, which is known to be rich in oil. In fact, petroleum consulting firm Sproule Associates Limited estimated in the summer of 2011 that, based upon the similarities between these two formations, Pétrolia’s permits could potentially yield 30.9 billion barrels of oil.

The only dilemma is that the Macasty shale’s low permeability makes it difficult for the oil to move, requiring hydraulic fracturing, which in the current political climate appears riddled with snags. “We haven’t gotten to that stage at this time,” says Proulx.

Challenging political environment

Project manager Jérémie Lavoie accompanied us on the 224-kilometre trail that Junex cleared to conduct a seismic survey this past summer a few kilometres away.

“The seismic survey is a must before drilling,” he said. “It decreases the financial risks.”

In 2007, Junex acquired exploration rights to approximately 100,000 hectares on Anticosti. The company is also well aware of the enormous potential of the Macasty shale. In October 2011, oil and gas consulting firm Netherland, Sewell & Associates found that the area it acquired permits for a potential yield of 12.2 billion barrels of oil.

“It is similar to the geology of the St. Lawrence Lowlands; it has the same structures,” explained Jean-Yves Lavoie, CEO of Junex. “The difference is that in the Lowlands, we are in the gas window. On Anticosti, because it is less mature, there is less pressure and sediment above, so we are in the oil window.”

Nevertheless, Proulx and Lavoie are reluctant to focus their efforts exclusively on the Macasty shale. On September 20, the new minister of natural resources, Martine Ouellet, released a shocking statement that had a sobering effect: “Hydraulic fracturing will never be safe.” The exploration of deeper and more conventional targets therefore continues to run parallel to drilling the Macasty. The two presidents are confident that the potential of conventional deposits still justifies their investments on the island.

Despite the enormous potential for oil, totalling more than 42 billion barrels, there is still a long way to go. To reassure the public, the juniors would like to convince the province to support them on a hydraulic fracturing pilot project. They are also aware that without the government’s financial contribution to an eventual production project on Anticosti, no major player would want to embark on such an expensive venture.

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