Old Harry sparks new border dispute

QUEBEC – A new border dispute is brewing between Newfoundland and Quebec.

Caught in the middle is Old Harry, named for the nearest settlement; the village of Old Harry, 80 kilometres to the southwest on Quebec’s Iles-de-la-Madeleine.

And unlike Quebec’s longtime refusal to recognize the 1927 line defining where Quebec’s wilderness ends and rocky Labrador begins, the stakes in this latest boundary discord are huge.

Old Harry, in the Gulf of St. Lawrence, is a 29-kilometre-long field of undersea hydrocarbons, estimated to hold as much as two billion barrels of oil or five trillion cubic feet of natural gas, enough to meet Quebec’s needs for 25 years.

Only drilling will determine whether it is gas or oil. But Norm Miller, whose Corridor Resources Inc. of Halifax has been keen to drill for 14 years, says that based on the geology, gas is more likely.

Old Harry would have twice the potential of the Hibernia oilfield, which transformed Newfoundland and Labrador from a "have-not" to a "have" province, or three times the potential of Nova Scotia’s Sable Island gas field.

But drilling at Old Harry has been stalled because it is not clear where the undersea border lies between the two provinces.

Also, Quebec does not have an agreement with the federal government, which claims ownership of undersea gas and oil deposits.

Newfoundland and Labrador recently fired a shot across Quebec’s bow in a letter Natural Resources Minister Kathy Dunderdale sent in reply to Nathalie Normandeau, her Quebec counterpart.

Normandeau had asked Dunderdale what measures were planned in light of the April 20 Deepwater Horizon disaster in the Gulf of Mexico.

Dunderdale replied that Newfoundland had adopted "new oversight measures," had no plans for a moratorium on offshore drilling, then noted Normandeau’s reference to a " ‘cross-border geological structure,’ by which I assume you are referring to the Old Harry prospect."

"Please be advised that, apart from the line established pursuant to the 2002 award of the arbitration tribunal concerning the delimitation of portions of the offshore areas between Newfoundland and Labrador and Nova Scotia, the government of Newfoundland and Labrador has never agreed to a line demarcating the boundary of its offshore area in the Gulf of St. Lawrence," the Newfoundland minister wrote.

"I hope this response addresses your concerns."

Ken Morrissey, Dunderdale’s press secretary, explained that in Newfoundland’s view, "There isn’t any existing border now."

Quebec disagrees, sticking to the "Stanfield line," agreed to in 1964 by the four Atlantic premiers, led by then Nova Scotia premier Robert Stanfield, but with Newfoundland premier Joey Smallwood also signing on to the line, which would give most of Old Harry to Quebec.

The 2002 ruling Dunderdale refers to was to delineate the offshore boundary between Newfoundland and Nova Scotia on the Atlantic side, not the Gulf.

But Gerard LaForest, a retired Supreme Court of Canada justice from New Brunswick, who led to the tribunal, ruled the 1964 line was not valid, because the provinces did not submit it to the federal government, as required in the constitution.

Normandeau, in Sacramento, Calif., to promote Quebec’s hydroelectrical potential, said Quebec is sticking to the 1964 line.

"Newfoundland has been telling us for years that they don’t recognize the 1964 line," the Quebec minister said, adding that her priority is an agreement with the federal government, similar to the 1985 Atlantic Accord which allowed Newfoundland to develop its offshore potential.

And she wants that agreement with Ottawa to "recognize Quebec’s full jurisdiction in the Gulf of St. Lawrence."

"The federal government is telling us to go negotiate with Newfoundland and we’ll see after," Normandeau said.

"We say no, no no, no. Why would we negotiate with Newfoundland if we think there is no problem with the 1964 boundary? There has never been any question of negotiating with Newfoundland."

Normandeau is counting on Christian Paradis, a Quebecer and the federal natural resources minister, to be in her corner on the talks.

Meanwhile, time is running out for Corridor Resources.

Miller has had a licence from Quebec to drill in its portion of Old Harry since 1996. Corridor also has drilling rights in Newfoundland, which expire in 2013.

Faced with that deadline and the lack of an agreement between Quebec and Ottawa, Corridor is planning to drill on the Newfoundland side in 2012.

But now Green Party leader Elizabeth May, noting the environmental disaster in the Gulf of Mexico, wants a moratorium on drilling in the Gulf of St. Lawrence.