FREDERICTON – The New Brunswick government has granted SWN Resources Canada a five-year extension to their search licences in the province.
SWN has 32 licences to search in the province that were set to expire in 2016, but are now scheduled to expire in 2021. They originally won the bid to explore on March 17, 2010. As a part of that winning bid, the company committed to spending $47 million on exploration projects.
The extension comes despite an almost year-old moratorium that has halted industry from fracking rock in the province.
“Extension or no extension, there’s no hydraulic fracturing happening in the province of New Brunswick,” said N.B. Energy Minister Donald Arseneault. “Until that moratorium is lifted, there will be no hydraulic fracturing by anyone.”
Arseneault had granted SWN a year-long extension in March. Since then, a change to the Oil and Natural Gas Act has allowed the Minister to grant longer extensions.
Arseneault says allowing this extension is also about being legally responsible.
“Responsible in the sense that we have to protect ourselves legally, I mean there’s certain challenges that potentially may be raised,” he said. “And at the same time, if the moratorium is lifted, then we have to make sure we have an industry that’s there as well.”
For SWN, they say they’re committed and hopeful their work will be able to continue in the province.
The company did have plans to drill four exploratory wells, two near Rexton and two near Chipman, last spring.
But in a letter from SWN’s Executive Vice President of Corporate Development, Jeff Sherrick, the company said they would have to cancel those plans because of the moratorium on hydraulic fracturing.
Hydraulic fracturing, commonly known as fracking, is a controversial method used in the extraction of shale gas.
“(T)he commitment to a moratorium has forced us to suspend our drilling plans and rededicate resources to projects in other jurisdictions,” the letter read.
On Monday, the manager of SWN’s New Brunswick Exploration project said this extension doesn’t mean they have immediate plans to drill those wells, despite being technically allowed under the moratorium.
“The next phase of our program is to drill stratigraphic vertical wells. The moratorium is on hydraulic fracturing but if you can’t fracture the wells that we drill then there’s really not much point in drilling them because that would be the follow-up step,” said Chad Peters, manager of New Brunswick Exploration with SWN.
“I’m not going to presume as to what they’re going to do but obviously we’d like to continue our work here and see if we can find some gas and develop wells.”
Meanwhile, the hydraulic fracturing commission has been doing extensive work studying the issue.
They’ve met with SWN and Corridor Resources, and their report with recommendations is due in March.
“We’re hopeful that the recommendations will come out some time in the new year and that government would, with those recommendations, lift the moratorium,” said Joel Richardson, with the Canadian Manufacturers and Exporters.
“With some specific conditions to be placed on industry and communities so that we all understand what needs to be followed in order to be able to develop the resource safely and responsibly.”
The provincial government has said the moratorium will not be lifted until five conditions are met.