20 July NS Hydraulic Fracturing Review Verschuren Centre 1250 Grand Lake Road Sydney NS B1P 6L2

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1 202 Brownlow Avenue Suite A305 Cambridge 1 Dartmouth NS B3B 1T5 Phone July 2014 NS Hydraulic Fracturing Review Verschuren Centre 1250 Grand Lake Road Sydney NS B1P 6L2 hfreview@cbu.ca Re: Submission of Public Consultation on Discussion Paper: The Environmental Impacts of Hydraulic Fracturing in Nova Scotia A public participatory risk assessment Please find attached a written submission from The Maritimes Energy Association to the Expert Panel for your review. Maritimes Energy appreciates the opportunity to provide a written submission believing it provides a much more inclusive, informed and open public consultation process, particularly for those uncomfortable with a hearing process. Should you have any questions, please do not hesitate to contact me. With best regards, Barbara B. Pike Chief Executive Officer

2 Submission on Discussion Paper: The Environemental Impacts of Hydraulic Fracturing in Nova Scotia A public participatory risk assessment 20 July 2014

3 About The Maritimes Energy Association The Maritimes Energy Association is an independent, not-for-profit organization representing businesses that provide goods and services to the energy industry in eastern Canada onshore & offshore, renewable & non-renewable. Some producers and operators are members of the association, but our core membership are the local companies that employ thousands of people and invest hundreds of millions of dollars in our regional economies. Our core membership provide the goods and services to design, build and maintain energy projects in this region and beyond. Maritimes Energy receives no core funding from government or special interest foundations. We are solely funded on membership fees and event revenue. Overview The mission of The Maritimes Energy Association is to identify, support, and promote the development of opportunities in the east coast energy industry. However, it is not about development at any cost. The association supports the responsible development of energy resources under a robust and efficient regulatory regime that reflects the latest technology and best practices. This is consistent whether the resource is offshore or onshore and whether it is a renewable resource or a non-renewable one. Responsible development is the key to onshore oil and gas exploration and production. Such development must include a robust and strict regulatory framework that meets the needs of Nova Scotians. The province can take direction from existing jurisdictions in Canada, that are successfully producing their natural petroleum resources. That is not to say that just because the industry operates safely in British Columbia, Alberta and Saskatchewan, it follows that it operates safely here. Rather we take a look at how it operates safely in western Canada, and use that experience to provide the rules for the operations in this province. No activity is without risk. No development is without risk. However, we mitigate risk everyday in our lives and in our businesses. Rules and regulation can and do help mitigate the risk inherent in any industrial development, even more so in the petroleum industry. While stimulation by hydraulic fracture is positioned by some to be a relatively new technology, it has been successfully used for oil, natural gas and water wells for more than 60 years. Horizontal or directional drilling has also been used in the industry for decades, and with advances in technology became more mainstream in the 1970 s. It is the combination of these two technologies over the last decade that has spurred the natural gas and oil in shale revolution. Tens of thousands of oil and gas wells have been stimulated by hydraulic fracture in Canada over the decades. In recent years hundreds of horizontal wells are stimulated by hyrdaulic fracture each year in Canada with minimal impact. A few problems have been reported in the United States. Investigation has shown these problems to be caused by inadequate casing or cementing jobs, in other words well construction issues. So it is not the stimulation of the horizontal by hydraulic fracture, but inadequate casing and cementing of the initial vertical well bore close to the surface and not the horizontal at a thousand metres or more below the surface. Again, these are cases in the United States and do not reflect the experience in Canada s industry that operates under more rigid regulatory regimes. Similarly, the experience in this region is proof that hydraulic fracturing can be conducted safely and responsibly. In New Brunswick, 49 wells have been stimulated by hydraulic fracture without incident. There are 29 natural gas wells producing in the Sussex area and 18 oil wells in the Stoney Creek area.

4 The University of New Brunswick studied groundwater and water wells near the producing McCully field and found no evidence that petroleum activity affected water quality. The study was released by the Geological Survey of Canada last year and concluded, there is no indication that development and production at the McCully gas field has affected water wells. Concern has been raised about the treatment and disposal of produced water. Disposal of industrial waste water is not unique to the petroleum industry. However, add the word frack to the phrase waste water and some would suggest it is an insurmountable problem. That is not the case. There are many methods of treatment and disposal considered standard in the oil and gas sector. Methods include reinjection, reuse, treatment and safe disposal. That some raise alarms about produced water does not mean it cannot be safely and responsibly handled. There is not one solution for all, but there is a solution for each well. Companies in this region are well experienced in the safe treatment of produced water with solutions on a case by case basis. The volume of water used to fracture a well has also raised concerns in some quarters. Such concerns are raised in isolation from other industrial and recreational usage that are more familiar and accepted, in fact aren t questioned. In addition, the industry continues to find methods to recycle water used to fracture wells and find non-potable aquifers deep below surface. The volume and number of chemicals added to water for the hydraulic fracture is misunderstood and misrepresented. The percentages are low and while the selection can be from a long list, the actual number of chemicals used on a specific job is low. Practice in Canada has been for the full public disclosure of the chemicals used in the fracture fluid on a well specific basis. The industry continues to develop fracturing fluid that has the less environmental risks. Regulatory authorities in Canada are requiring full public disclosure. Discussion Paper: The Environmental Impacts of Hydraulic Fracutirng in Nova Scotia A public participatory risk assessment The Maritimes Energy Association welcomes and endorses the process that has been used by the Expert Panel releasing discussion papers and providing the opportunity for individuals and groups to comment in a non-confrontational setting. While others have criticized and taken to the media to complain about the process, the association is pleased that the panel seeks independent and informed comment on its papers. For the most part these papers have been balanced and informed. While this issue is divisive, Maritimes Energy has been comforted that there is a balance and the discussion papers, while at times are onesided, are overall balanced. That is until this discussion paper was released. Anyone familiar with environmental impacts of energy projects understand the basic principles of environmental regulations and guidelines. These are documents that we live with each day and that our member companies assess, analyse and implement on a daily basis. It is our expertise and experience that makes us conclude that this particular discussion paper falls far short of any balanced, informed or impartial assessment. At first we attempted to go through the paper on a clause by clause basis, but quickly realized that such an effort required a complete re-write of this paper.

5 It is disheartening that this discussion paper contains no refererences to the rules, guidelines, regulations or practices in Canada s oil and gas industry. When we have a question about practices, we seek the expertise of Canada s regulatory agencies, considered the best in the world. This paper does not reference any of the best practices developed and enforced in Canada. We don t even have to head west for examples of responsible development. Here, in our own backyard, in New Brunswick, Corridor Resources and Contact Exploration have been producing natural gas and oil safely, without incident, for more than a decade. Yet, this discussion paper fails to mention or reference the record of our companies, or our services, or our supplies, in making that possible. The biased tone of this paper is reflected in the fact it does not reference any of Canada s regulatory authorities, whether that is in British Columbia, Alberta, or Saskatchewan. These are regulatory regimes that are considered global leaders. These are regulatory regimes that work to ensure that the industry in Canada reflects best practices, latest technology and strict rules. Yet nowhere in this paper, can we find reference to the experience in this country, let alone this region. Why would the authors include references to Pennsylvania and pictures from that state, when right next door in New Brunswick we have an example of production that is a decade old, complies with strict rules and operates without incident? The standards held by the oil and gas industry in this country are without equal. The first standard is always the safety of its people and the environment. This is reflected in the day to day operations and the expectations it holds all its supply chain companies. We trust that there are others who will provide comment on this discussion paper that have the manpower to go clause by clause on the inadequacies of this paper. As an association representing the local companies that provide environmental assessments and impact statements on energy projects, the flaws in this paper are too numerous to detail. It is also disheartening that this discussion paper referenced a few hundred comments as reflective of the general population of Nova Scotia. I ask in reply, does our voice reflect as one, or as our 300 plus member companies, or as the thousands of Nova Scotians who work for our member companies? As an association that has reviewed and commented on many environmental assessments for renewable and non-renewable energy projects in this region, we can conclude that this paper is neither reflective of best practices for environmental assessments, nor provides a balanced assessment of environmental impacts of an industry that could exist in this province. May we suggest in this case, that the Expert Panel go back and prepare an impartial environmental assessment that reflects best practices and the robust regulatory regime that exists in this country, not in juristictions that we neither want to, nor actually mirror. Conclusion As this Expert Panel reviews the mountains of material that has been submitted, The Maritimes Energy Association encourages it to look to the ways to enable the safe and responsible development of the oil and gas potential onshore Nova Scotia. We recognize risk in all activity, but risk can be mitigated to enable safe and responsible development. Unfortunately, such mitigation is not reflected in this discussion paper on environmental impacts.

6 As with life, the only way to eliminate risk is to do nothing, to say no. Yet, in this country there are jurisdictions that have proven this industry can be developed under robust, strict and defined rules with minimal impact on the environment. For this province, at this time, onshore petroleum resource development, and in particular natural gas development is an important part of our energy mix. It is not the only part, but it is an important part of a mix that includes our renewable and non-renewable energy resources. Finding the solutions to enable safe and responsible development in this province is within our reach. It is a robust and efficient regulatory regime that reflects the latest technologies and best practice to enable safe and responsible development that makes that happen.