Regulation or Moratorium? New Brunswick’s Fracking Future

Shale gas development is a contentious issue in Atlantic Canada. Public concerns over fracking encouraged Newfoundland and Labrador’s (NL) Progressive Conservative government to impose a moratorium and, similarly, the newly elected Nova Scotia (NS) Liberals promised continue the province’s ban on fracking.

In New Brunswick (NB), where seismic testing is determining the possible opportunities for shale gas development, this issue has become an even hotter debate topic.

NB’s Progressive Conservative government asserted that seismic testing will continue and the opposition Liberals–with support from local Aboriginal leaders and other opposition groups–have recently renewed their call for a fracking moratorium.

While there are serious concerns that must be addressed, however, a fracking moratorium is not a sound policy route: there is a risk of shutting down the debate on what could be a major boost for Atlantic Canada’s economy.

The principal public concern surrounding fracking is the contamination of drinking water. Some observers suggest that the fracking process could contaminate drinking water and damage water tables from which people draw their wells. Water contamination is a serious concern for individuals for obvious reasons and, as such, due consideration must be given. There are others, though, who argue that this is not necessarily the case (although, this is, in and of itself, another debate).

However, a moratorium is not an appropriate policy route to deal with these concerns for two reasons.

The first reason is that banning fracking would discourage companies from exploring for possible shale gas opportunities. NB’s shale gas reserves are still largely unknown and not exploring what the province has available would be an irresponsible policy.

The second reason is that a moratorium prohibits constructive discussion on the issue. In other words, banning fracking gives more legitimacy to the anti-shale gas side, which could result in the destruction of legitimate arguments from the pro-shale gas side.

Regulation, rather than moratorium, is a much better policy tool for government to use in dealing with the fracking industry.

Adrian Park, from the University of New Brunswick, recently published an article that notes jurisdictions in the United States that have experienced horror stories associated with fracking are by and large those with weak regulations. Park’s article also points out that those jurisdictions that have developed the resource alongside strong regulation, such as North Dakota and British Columbia, have experienced far fewer publicised horror stories.

British Columbia, for example, requires oil and gas companies to ensure there are no adverse effects on the quality or quantity of water where development is happening. The province also has the Surface Rights Board (SRB), which requires natural resource companies to compensate landowners for damages resulting from resource extraction.

Ultimately, other governments must follow-suit, especially in Atlantic Canada where the economic possibilities from shale gas development are largely unknown. North Dakota and British Columbia are success stories in the fracking industry because they chose a policy route that allowed the industry to develop in a safe manner: they choose to regulate and have the discussion rather than close the debate.

Randy Kaye is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

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