BY Brad Herald
Following the completion of a legislative report on hydraulic fracturing, the Yukon government is in a better position to assess the potential of its natural gas resources. This opportunity should be explored further to determine if it can help meet increasing energy demand, in Canada and beyond.
In jurisdictions where hydraulic fracturing is a long-standing practice, such as British Columbia, Alberta and Saskatchewan, experience demonstrates the process is done safely and responsibly, a result of robust regulations and industry best practices. More than 215,000 wells have been hydraulically fractured in Alberta, B.C. and Saskatchewan over the past 60 years. This experience also demonstrates the significant economic and social benefits linked to development, including job creation, royalty and tax payments, and other contributions to communities.
While it is unknown at present how much natural gas actually exists in Yukon, a federal government estimate indicates there may be 17 trillion cubic feet in place, enough to meet Yukon’s needs for more than 10,000 years at current demand levels. This means the potential for a cheap, local fuel source in an area where fuel is currently extremely expensive.
Hydraulic fracturing, a process used for more than 60 years in Western Canada, is necessary to access these resources, typically found between two and three kilometres below ground, up to 10 times deeper than drinking water sources.
Canada is recognized as a leader in developing oil and natural gas from shale safely and responsibly through hydraulic fracturing, a process used every day across North America.
Through directives outlined by provincial regulators, the Alberta Energy Regulator and the BC Oil and Gas Commission in British Columbia, industry activities are regulated to ensure the health and safety of the public. In the Northwest Territories the Office of the Regulator of Oil and Gas Operations oversees safe, responsible oil and gas development.
According to a study commissioned by Natural Resources Canada, greenhouse gas emissions from natural gas produced from shale rock – taking into account all stages of production, processing, transportation and the use of fuel gas – are about four per cent higher than from conventional natural gas production and use. Even with the four per cent included, natural gas used in power generation emits significantly fewer greenhouse gases than and far fewer smog-causing air pollutants than diesel and coal fuels.
A 2012 study by the Massachusetts Institute of Technology that examined the U.S. industry said: “It is clear that the production of shale gas and specifically the associated hydraulic fracturing operations have not materially altered the total GHG emissions from the natural gas sector.”
Resource development could also mean an economic opportunity for Yukon. Looking at the benefits of natural gas development in other jurisdictions serves as an indicator of potential benefits.
According to the Canadian Energy Research Institute, in 2010 the natural gas sector employed more than 172,000 Canadians directly and indirectly. By the year 2035 this number is expected to nearly double to 317,000 jobs across Canada. Over the next 25 years, people employed in natural gas could earn as much as $339 billion.
Yukon’s Department of Energy, Mines and Resources vision states: “Yukon will have a sustainable and secure energy sector that is environmentally, economically and socially responsible; developing and using energy resources to meet Yukon’s energy needs and generating benefits for Yukon people, both now and for generations to come.”
In fact, developing Yukon’s natural gas resource meets all seven of the government’s energy principles.
Natural gas development can be sustainable, provide energy security, allow self-sufficiency, optimize natural benefits, fit with climate change policy coordination, create an opportunity for Yukon to be a leader in responsible development, and present opportunities for partnerships.
The opportunity should be pursued.
Brad Herald is vice-president of Western Canada and natural gas markets for the Canadian Association of Petroleum Producers.