SWN Resources will resume shale gas exploration

SWN Resources will be operating again in New Brunswick this summer and will betesting to see if the company has a viable chance of developing a shale gas industry in the province.

The company was forced toabandon its seismic testing planslast summer because of delays inobtaining the necessary permits from the provincial government.

When SWN Resources announced it would not conduct any testing last year, a company official indicated a decision on whether there was a viable shale gas industry would be delayed until 2016.

Nicki Atkinson, the exploration manager for SWN Resources Canada, said the company still feels it will have to wait a few years before knowing if it will be able todevelop a shale gas industry.

"What we will do in the upcoming years is follow that up with a drilling program and that will be, like I said, in the next couple of years. And then I'll be in a much better position to answer that question," she said.

Atkinson said the company estimates there is a 10 per cent chance of SWN Resources being able to establish shale gas production in New Brunswick.

"It's a wildcat operation and it has risk associated with it and we're looking at about probably a one in 10 chance of success," she said.

"So, again, we're in the early stages."

SWN has the rights to explore about1.1 million hectares of the 1.4 million the province has issued licences for, according to information released in 2012.

The majority of SWNs licences stretch from southwestern New Brunswick and then across the province to Richibucto.

Strictoil and gas rules

The New Brunswick government has faced two years of protests against developing the shale gas industry and in particular, the use of the contentious practice of hydraulic fracturing or hydro-fracking.

Hydro-fracking is a process where exploration companies inject a mixture of water, sand and chemicals into the ground, creating cracks in shale rock formations to extract natural gas from areas that would otherwise go untapped.

Opponents are concerned the process will ruin the water supply and damage the surrounding environment.

Premier David Alward and several senior cabinet ministers have announced a series of regulatory changes designed to tighten the rules governing the shale gas industry.

Energy and Mines Minister Craig Leonard said in February the provinces oil and gas regulations were among thestrictest in North America.

Alward has said the shale gas industry could provide new jobs for the province, which is dealing with double-digit unemployment levels and a large budget deficit.

Former Liberal premier Frank McKennasaid in a February speech that developing the shale gas industry could generate more than $7 billion in royalties and tax revenues.