Toward a better understanding of shale gas

Tom Alexander is the general manager in New Brunswick for SWN Resources Canada.

Alexander joined Southwestern Energy in 1998 as a production engineer. He was a leader in Southwestern Energys Fayetteville Shale discovery team andwas responsible for the completion of up to 450 horizontal wells per year.

SWN Resources has a licence to search 2.5 million acres for shale gas deposits, primarily in southern New Brunswick.

Alexander served as a member of the U.S.Air Force, where he was a navigator and radar navigator in the Strategic Air Command, flying a B-52H.

Recent exploration for oil and natural gas in New Brunswick has generated spirited discussion. New Brunswickers have questions, and at SWN Resources Canada we take seriously our responsibility to provide credible, factual, well-documented information in response.

In March 2010, the province of New Brunswick awarded SWN Resources Canada, a wholly-owned subsidiary of Southwestern Energy Company, a licence to search 2.5 million acres primarily in the southern half of the province.

Engaging local residents near our operations has always been a priority for us, and we immediately began with 16 open houses in communities throughout our licence area.

We introduced our company, shared information about our plans, and answered questions.

Since then, we participated in six more open houses and more than 100 meetings and presentations with environmental groups, governmental departments, civic clubs, and economic development organizations.

With the University of New Brunswick, we organized discussions on regulatory best practices.

We also conducted workshops with the municipalities in the area of our exploration program and participated in other meetings outside of our licence areas to share our knowledge and experience.

Do commercial quantities of gas exist?

One question always arises: Do significant, commercial quantities of oil or gas even exist in New Brunswick within our licences?

To find out, we are in the second year of a three-year exploration program. To date we have conducted airborne gravity and magnetic surveys, two series of surface geochemistry, 2D seismic, air photography, and LIDAR (light detection and ranging used to determine surface topography).

If exploration confirms the presence of significant oil and/or gas, New Brunswick would benefit greatly from many millions of dollars in royalty revenue. These revenues could be important in supporting critical social services, helping to reduce debt and balance the budget, and supporting investment in new growth opportunities for New Brunswick.

'Our commitment to safe and environmentally conscious operations in New Brunswick reflects the operating philosophy throughout our company: If we cannot do what we do in a safe and environmentally responsible way, we simply will not do it. '

Furthermore, the province is studying ways in which part of the royalties might accrue to communities and individuals in and around oil and gas activities.

While it is not possible to project how many jobs might be created in New Brunswick, the industry in other areas with developed shale gas projects such as Alberta, British Columbia, Saskatchewan, Arkansas, Pennsylvania, and Texas has added tens of thousands of new, long-term, high-paying jobs.

With a successful discovery in New Brunswick, new jobs would be filled predominantly by local and regional residents who will be well-trained in industry best practices.

In the past two summers, our exploration programs either directly or indirectly (through Canadian subcontractors) employed more than 200 Atlantic Canadians, the majority of whom were from New Brunswick. We certainly plan to do the same in the future.

Our work has also benefitted local merchants who sold among other things fuel, parts, trucking services, lodging, and provisions to our crews.

Questions surrounding fracking

Another question frequently asked is centred on well stimulation, or fracking. Hydraulic fracturing has been used extensively for more than 60 years on more than two million wells in North America alone. Shale formations requiring little or no stimulation for economic production have been produced for decades, but natural gas locked inside deep, tight shale formations across North America has been largely inaccessible.

Improved technologythe combination of improved horizontal drilling and hydraulic fracturing has been the key to unlocking economic production of these reserves in tight formations while preserving environmental integrity.

The oil and natural gas industry is highly regulated by both federal and provincial jurisdictions, and in June the New Brunswick government made important announcements regarding even stronger regulations for natural gas development.

We are pleased to see the government planning ahead for the possibility of a significant discovery with strong rules tailored to the provinces specific needs. Equally important are qualified regulators in the office and the field ensuring compliance with all regulations and safeguarding the people and environment of New Brunswick.

We respect these regulations and constantly review our procedures to ensure compliance with all laws. Our work is always filtered through our corporate values which are based on doing the right thing for everyone involved.

New Brunswick does not need to choose between industry and the environment. We believe the two can successfully co-exist here as they do in other jurisdictions.

Properly constructed and managed oil or gas wells do not pose safety or environmental concerns. The proven techniques used today unlock considerable amounts of natural gas for delivery to consumers in an era where energy and energy independence have never been more important.

Our commitment to safe and environmentally conscious operations in New Brunswick reflects the operating philosophy throughout our company: If we cannot do what we do in a safe and environmentally responsible way, we simply will not do it.