Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, February 20, 2013

Newfoundland Shale Oil Find By Shoal Point Energy Is Potentially Huge

CALGARY - As a junior energy explorer comes closer to finding out whether North America's next big shale oil find lies beneath the western coast of Newfoundland, concerns are being raised about the environmental effects fracking could have in the remote region.

Shoal Point Energy Ltd. (CNSX:SPE) spent the winter holidays hammering out a farmout deal with Black Spruce Exploration, a subsidiary of Foothills Capital Corp., that will enable as many as 12 exploration wells to be drilled over the next few years in the Green Point shale.

After that, the companies aim to have a better idea of how much black gold can be coaxed out the narrow stretch of rock — and hopefully attract deeper pocketed investors to help scale up the discovery.

"It's not the big long-term solution yet," Shoal Point chief executive officer George Langdon said in an interview.

As in other shale formations throughout North America, tapping the Green Point will require hydraulic fracturing, or fracking, to unlock the resource. The process involves injecting a mixture of water, sand and chemicals underground at high pressure in order to crack the rock.

Fracking has unleashed huge supplies of natural gas and oil from shales across the continent, but it also brings with it controversy over its potential environmental effects.

Bob Diamond, chair of the Bay St. George Sustainability Network, said fracking has become a hot topic in his community.

Less than a dozen people attended his group's first meeting on the issue, but that number swelled to 60 for a second gathering last week.

"We're not against oil or oil development or exploration," Diamond said from Stephenville, N.L.

"We want to ensure that it's not going to have any significant impact on our health or our environment."

In addition to the safety of the fracking process itself, Diamond said he's also worried about all of the trucks and heavy equipment moving around the area and the safety of drilling in a coastal region prone to wild weather.

He also wants to make sure that other industries, such as tourism and fisheries, aren't harmed.

"I'd like to see a moratorium on gas and oil fracking," said Diamond.

"In Newfoundland, there's actually no kind of regulatory structure in place yet to deal with fracking, which alarms a lot of people."

He said recent fracking guidelines set out by the New Brunswick government seem to strike the right balance, and he'd like to see his province follow suit.

David Murray, CEO of Foothills Capital Corp., said although fracking is new to western Newfoundland, the technology has been around for a long time and has been safely used around the world.

"We know that people will be concerned about it because they're not as experienced in this area as to what's involved. But do we see any real technical issues here? The answer is no," he said.

He said there are no groundwater sources at risk from the drilling.

Shoal Point, a small Toronto-based outfit, set up a data room last summer where potential partners could access company information. Firms from around the world — some large and some small — took a look at what Shoal Point had to offer.

Langdon had expected the potential size of the Green Point — one estimate pegs it as having 23 billion barrels of oil in place — would be enough to lure a big-name partner.

But so far no major firms have been reeled in, likely because there is still a lot of drilling to be done before they're convinced those barrels can be produced economically.

"I think that it's big enough now and they should be looking at it," said Langdon.

"It's a new area. Maybe not many people are as familiar with the geology as we are. In any case, that's the way they look at it and I think the time will come when we'll be very, very interested in it."

Black Spruce brings shale oil expertise to the table and can help take operating costs off of Shoal Point's shoulders.

"These guys were having a tough time even though all the geological information seemed to be outstanding," said Murray.

Another Foothills subsidiary works in the Bakken shale, a massive oil deposit centred in North Dakota that's producing enough oil to drastically alter the North American market.

Black Spruce is arranging with other Foothills affiliates to bring drilling equipment and materials to the remote area of Newfoundland, where so far it's been costly and logistically difficult to drill.

"We felt that we could provide a solution for these guys that many other people couldn't, where they'd have to go to many different places to shop," said Murray.

In the first phase of the partnership, Black Spruce has agreed to drill one well on each of Shoal Point's three blocks for a 40 per cent interest.

Black Spruce will also have the option to drill a fourth well in a location of its choosing, enabling it to earn a 50 per cent interest.

Once the optional well is drilled, the companies can choose to enter their deal's second phase, which involves drilling up to eight more wells, giving Black Spruce a 60 per cent interest.

The top priority will be to finish off a well on the southernmost block, where Shoal Point's lease has already expired. The regulator, the Canada-Newfoundland Offshore Petroleum Board, has been "patient" in allowing Shoal Point time to complete the work this year.

"As the first company exploring for an unconventional play in offshore Newfoundland, they've given us a lot of discretion and flexibility to prove that this could be a commercial venture. And we are very appreciative of that fact," said Langdon.

Once Shoal Point and Black Spruce have proven that oil can be produced from the rock, they can apply to the board for a significant discovery licence.

Shoal Point is by far the biggest landowner in the Green Point, having amassed more than 280,000 hectares across its three blocks. Shoal Point owns 100 per cent of two of those blocks and 80 per cent of another.

Shoal Point's activity so far has been at the south edge of the formation, which stretches north along the coast well past Gros Morne National Park.

The Green Point extends into the offshore, but the wells are being drilled from on land into the formation.

Recent fluid injection tests by Shoal Point's Houston-based contractor showed promising results when it comes to the rock's permeability.

"Every time we turn over a stone, things look better on the technical side. We're very, very happy about that," said Langdon.

Murray said there's "no question" the Green Point holds a lot of oil, but it remains to be seen how much of it can flow to the surface on its own steam.

"There's only one way to determine that at this point from the technology that we have today, and that's to actually drill."

Original Article
Source: huffingtonpost.ca
Author: Lauren Krugel

No comments:

Post a Comment