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Q.
Myth: Electricity is the number one energy source in Quebec.
Reality: Hydrocarbons (oil and natural gas) are the main energy source, as they account for more than 50% of Quebec’s energy demand. Coal: 1% Reference (French only) Reality: The economic situation of several Canadian provinces has changed a lot since the start of oil production. For example, in the late 1990s, the economic situation of Newfoundland was comparable to that of Gaspé today. In 2009 the government of Newfoundland and Labrador estimated the number of oil industry–related jobs at nearly 5,000. In 2011 the proportion of employees who were residents of this province was 93% for Hibernia, 92% for Terra Nova, and 92% for White Rose. In Quebec, the industry is in its infancy and therefore at the startup phase, so certain specialized services are not yet available in our province. However, it is important for Pétrolia to call on local businesses to build and prepare drilling sites, transport goods, and meet its various needs during operations. (http://bourque.petroliagaz.com/en/project/partners) Pétrolia aims to maximize the local spinoffs from these projects by promoting the employment of firms and workers in the communities in which it operates. This concern is reflected in a contract clause with our outside suppliers, with a view to encouraging them to do business with local companies for their work needs in Quebec. The industry’s development will have the same economic impact as in Newfoundland and Labrador. Reality: Many test wells have revealed the presence of oil in Quebec’s subsoil. In the Haldimand project, located in Gaspé, we estimate that there are nearly eight million recoverable barrels. The sedimentary basins of Quebec, which cover over 200,000 km2, offer potential for the discovery of new fossil fuel reserves. These basins stretch from the border with Ontario to the border with Newfoundland and Labrador, along the axis of the St. Lawrence River. The absence of oil production in Quebec is due to an insufficient level of exploration activity. Reality: This perception is due to the embryonic state of the industry in Quebec. In fact, exploration activities have been carried out in Quebec since the 19th century. The Gaspé Peninsula is one of the first places in Canada where oil was explored. In Quebec, more than 300 test wells have been drilled with a view to discovering oil. Thanks to Pétrolia’s recent work, there are new opportunities in Quebec. It is now possible to develop an oil industry in the province. Reality: The systematic opposition of these two sectors is not justified. In many areas where oil and gas exploration is carried out, the tourism industry continues to play an important role in the economy. The oil industry is an economic driver because it creates jobs directly and indirectly. Its impact on the tourism industry is generally positive. Again, Newfoundland is a good example. Oil production began there in the late 1990s with no negative impact on tourism observed. In fact, since 2003, the number of visitors from outside the province has increased annually by an average of 3% (5% for money spent) to reach 518,000 visitors in 2010. A report by North Dakota State University shows that for several years oil has been the second largest industry, followed by tourism. What’s more, tourism has continued to grow beyond that of surrounding states—by 37.6% since 2001 compared to 31% for the rest of the U.S. The same phenomenon has occurred in Alberta and Ohio. North Dakota has experienced major economic growth because of its oil sector. Reality: International Energy Agency forecasts indicate that global energy demand will increase 40% by 2035 and that oil will remain the world’s primary energy source. Although the relative weight of oil in the overall energy balance is declining, oil demand is growing. Replacing oil with renewable energy sources that appear less harmful, notably for transportation, is a long process. And in certain applications, there are simply no alternatives to oil at this time; for example, more than 6,000 everyday products are made from oil. Oil is therefore an invaluable resource, which must of course be used responsibly. More efficient use is a priority, even if Quebec’s subsoil seems able to partially meet our needs. Pétrolia’s long-term objective is to promote research and renewable energy. Reality: Thousands of commonly used products are made with oil, including synthetic rubbers (gloves, running shoes, balls, garden hoses, etc.), personal care products (soap, toothpaste, baby oil, make-up, etc.), fabrics (nylon, Orlon, carpet, etc.), and medical products (aspirin, Vaseline, alcohol, antibiotics, etc.). Even for transportation, there is no alternative for certain oil applications, as is the case in air transport. Reality: All human activities involve risk, and oil production is no exception. As with other activities, accidents are usually due to error, negligence, or technical failure. Compliance with industry and government safety rules makes it possible to reduce this risk to a very low level that compares favorably with that of other industrial sectors. There are millions of oil wells, the majority of which are located in inhabited areas. This is a mature industry that is in control of its technologies and that complies with the highest health, safety, and environmental standards. Reality: There are thousands of oil-producing companies of all sizes. Of course multinationals get more attention, mainly because their activities include distribution, which puts them in direct contact with consumers. Oil discoveries are often made by small exploration companies, some of which prefer to let bigger players develop the deposits they discover. At Pétrolia, we believe it is possible to establish a responsible Quebec oil company that produces local resources to meet local needs. In Pétrolia’s search for financing, maintaining control over permits and resources is a priority.
Q.
What kind of noise will residents be exposed to during drilling?
First of all, a study by the Anticosti Chair at Université Laval study found that noise should not be an issue. Further studies will be carried out before drilling on Haldimand No. 4 begins. If necessary, certain noise reduction measures could be implemented.
Q.
How many jobs will oil production create? Will there be jobs for people from the Gaspé Peninsula?
Pétrolia is still in the exploration phase, with a view to determining whether its production capacity estimates are correct. Production will be a long process spread over many months.
Q.
How long will production last?
As Pétrolia expands its activities and projects, its labor needs will increase. Many local subcontractors have already been called on to work in the region. The following list shows the services and jobs for which local workers are given priority. Drillers, driller assistant, shift boss, derrickhand, floorman, laborer, local logistics, food services, housekeeping, certified welding, traffic sign procurement and installation, forestry road maintenance, sawdust supply, provision of cranes and other handling equipment, domestic wastewater service, provision of covered trailers for collection and storage, general transportation services (flatbed and lowbed trailers), purchase and rental of four-wheel-drive trucks, fluid transportation services, and provision of fuel, drinking water, and security.
We cannot yet confirm whether production will go forward, since we are still at the exploration stage. We are currently checking estimates we made based on data from seismic surveys conducted as part of exploratory drilling. The production duration will be determined by the amount of oil discovered, a number of other analyses, and confirmation drilling.
Q.
Has the government set up a trust fund to restore sites at the end of their life in the event of a spill?
No fund has been set up, but this measure is currently under discussion at the National Assembly. Pétrolia is taking the initiative and making sure this requirement is met. We also have several types of insurance coverage that increases depending on the type of work carried out, which allows us to respond effectively and quickly in the event of an incident. There are three transportation options: truck, train, and ship. The production volume will dictate the method used to bring crude oil to the refinery. If the oil production is cost-effective, a land-use and development plan will be prepared together with the community. This plan is among the documents required to obtain a production lease. The next drilling program will provide answers to this question. Pétrolia aims to ensure harmonious integration in keeping with the region’s development vision. Many cases around the world show that oil activity stimulates the local economy (Alberta, Newfoundland, North Dakota, Texas, etc.).
Pétrolia is a Quebec company and is fully committed to remaining one. We plan on employing as many Quebecers as possible for each of our operations, while respecting Quebec values.
Q.
Will companies extract all the oil found underground?
No, since this would be impossible. So-called conventional wells can extract a maximum of 50% of the resource, while nonconventional wells can extract 5%. In the case of Bourque, we believe that if there is marketable oil, the ground porosity and permeability will allow us to extract nearly 40% of the total oil in the reservoir.
Q.
Do the oil resources form an underground pocket that will collapse after production?
No, because the oil and gas is found in pores in the source rock that are comparable to the pores in a sponge. This means it is impossible for there to be any land problem related to oil and gas production or exploration.
The map below shows the locations of three wells—Haldimand 1, Haldimand 2, and Haldimand 4—as well as the path Haldimand 4 will follow below ground (in red). The site will be accessed via a private road as per an agreement made with the landowner. We have met with all neighbors liable to be inconvenienced by comings and goings along this road, and shared all the information they may need.
Q.
How far is the test well from residences? Why was this location chosen?
The closest dwelling to Haldimand 4 is 350 meters away (the minimum required by law is 100 meters). This is equivalent to three-and-one-half soccer fields.
Q.
What will be the impact in terms of increased heavy vehicle traffic?
The drilling site is located in a wooded area.The site was chosen according to geological, legal, and environmental criteria. For example, the drilling site will be located away from areas zoned as urban areas by the municipality.
Some forty heavy vehicles will be needed to transport equipment from the Bourque drilling site to the Haldimand 4 site. This will take three days. Once drilling has been completed, another three days will be needed to remove the equipment. During drilling, an average of five trucks per week will drive to the site.
Q.
Visually, will the work be very noticeable?
According to traffic data from Ministère des Transports du Québec, the Haldimand section of Highway 132 normally carries between 2,000 and 2,999 vehicles per day. Only around 250 of these are heavy vehicles. Local residents should therefore notice little increase in traffic.
No it will not. The drilling site is in a wooded area far from the road and residences. The drilling rig’s mast, which is around 40 meters high, is the only piece of equipment that may be visible during drilling. Remember that the mast will disappear from the landscape as soon as drilling is completed. We estimate that the drilling rig will remain in place for around six weeks. The derrick will be lit, making it more visible at night. During production tests the gas flare may be visible as well.
Q.
How does horizontal drilling work? Why did you choose this method?
Drilling a horizontal well is basically the same as drilling a vertical well. The only difference is that, once you reach a certain depth, the course of the well is gradually altered until it reaches a horizontal path. In the case of Haldimand 4, the trajectory won’t be perfectly horizontal because the so-called horizontal section, around 2 km in length, will in fact trace a gentle slope, taking it from 650 m to 1,100 m in depth. The path was chosen to cut across the greatest number of natural fractures so as to optimize production, if we get to that stage. In other words, the path was dictated by geological factors.
Q.
Does horizontal drilling entail increased environmental risks?
No. As mentioned, drilling a horizontal well is no different than drilling a vertical well. Drilling wells involves boring a hole around 8 inches in diameter through source rock (rock containing petroleum) to divert the oil into a well where it can be collected.
Q.
Is horizontal drilling another word for hydraulic fracturing?
Horizontal wells also boast an environmental advantage, in that they limit the number of drilling sites.
Absolutely not. Drilling, whether horizontal or vertical, is a production method that is totally separate from hydraulic fracturing. Hydraulic fracturing requires special approvals from multiple government ministries (MRNF and MDDEP), so there is no danger that it will be done in secret.
Q.
How will drilling wastes be disposed of?
As per the Environment Quality Act, contaminated drilling wastes must be transported to an authorized site. When drilling has been completed, the residual materials (mud and cuttings) will first be tested in a laboratory. Then, depending on the test results, they will be taken to an MDDEP-authorized treatment center or landfill.
Q.
How many wells will be drilled on the Haldimand deposit?
It’s too early to say. After drilling the Haldimand 4 test well, we will be in a better position to answer this question. To give you an idea, oil production for a deposit of this size (12 km2) generally requires six or seven wells. Three of these drill sites have already been chosen (Haldimand 1, 2, and 4). The results we see at Haldimand 4 will thus enable us to decide on the total number of wells needed.
Yes. To secure a production lease, we must draft a land use and development plan and submit it for approval to Ministère des Ressources naturelles et de la Faune. Moreover, in order to develop the deposit, we need to obtain a certificate of authorization from Ministère du Développement durable, de l’Environnement et des Parcs. During these steps, Pétrolia plans to consult with municipal authorities and local residents to make sure this new project is harmoniously integrated into the community.
Q.
How big will the pipeline be?
Pétrolia and Québénergie are hoping that test drilling on Haldimand 4 will lead to production along the Haldimand deposit. The oil produced could then be transported to a transshipment facility like the one Pétrolia has purchased in the Sandy Beach Industrial Park. If we go forward with production, the oil will undoubtedly be transported via a small pipeline measuring less than 10 inches in diameter, and may run underground. The development plan provides for a number of scenarios depending on daily production capacity; we will know more once the capacity has been confirmed. What is certain is that, if we go forward with production, the plan will be designed to permit scalability.
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Did You Know?
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