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BRITISH COLUMBIA
As concerns are raised over hydraulic fracturing undertaken by Paramount Resources Ltd. at its Cameron Hills project, much larger-scale oil extraction activity is taking place at the territory's border with British Columbia -- with the Horn River Basin shale play.

Encana drills, completes, ties in and produces multiple horizontal wells from a well pad at its Horn River area operations. The major shale play is located in northeast B.C., at the Northwest Territories border. - photo courtesy of Encana Corp.

Discovered by Encana Corp. in 2003, it is the largest shale gas field in the country, and while much of the development has been in the northeastern corner of B.C., the Horn River resource is widely known by geologists to contain deep shale zones extending into the Northwest Territories, and Fort Liard specifically.

“The gas didn’t stop at the border and (the oil companies) know that there is gas in the NWT,” said Shadab Khan, chief financial officer for Fort Liard's Acho Dene Koe Corporate Group.

A report issued in May by the National Energy Board in conjunction with B.C.'s Ministry of Energy and Mines has revised a previous estimate of shale gas deposits in the Horn River Basin that could represent a financial windfall for the NWT. The report said the potential for unconventional shale gas production in the basin could be as high as 96 trillion cubic feet and figures estimate a median average of 78 trillion cubic feet.

Drilling by members of the Horn River Shale and Gas Producers Group -- a consortium of companies that form a who’s who in the oil and gas business -- has not extended into the territory but Khan told NewsNorth the group is “hoping the gas prices rise because the oil companies will move North.”

Encana, Apache, Devon, EOG, Nexen, Quicksilver, Stone Mountain/Ramshorn, Imperial Oil/Exxon Mobil Canada, ConocoPhillips, Suncor and Pengrowth have been involved in exploration and development of the field in the last 10 years and in 2009, the group paid $240 million in land leases to all the community stakeholders associated with Horn River Basin development, a number that will continue to climb with exploration.

Khan said the Acho Dene Koe has been providing support services for the oil and gas companies in the Horn River Basin, including well construction, camp construction, and catering services.

First Nations have also benefited from the shale play activity, Fort Nelson First Nation Chief Kathi Dickie said, with the band's heavy construction company employing about 150 people, in addition to members starting up their own companies and increasing employment.

"Our position has always been we need to find a balance between the economic side and the environmental side," Dickie said.

"So the reality is: it's not going to go away, our people do need to eat, but industry has to find a better way to do it," she added, eluding to the techniques the producers group are using to bring the shale gas in the ground to the surface.

Shale gas, which is an unconventional form of natural gas trapped within sedimentary rock, does not lend itself to an easy flow through a vertical well.

This extraction challenge has resulted in the creation of innovative techniques for well-drilling, including drilling wells horizontally to adjust the puncture point of the gas reservoir, allowing for greater extraction of the gas deposit, according to an energy board report.

Hydraulic fracturing -- also known as fracking, a stimulation method often combined with horizontal drilling -- is used to extract gas that was previously not accessible from shale and tight rock formations, the producers group said in a 2010 report. After the wellbore has punctured the deposit, a fluid/sand mixture is pressure-pumped into the shale formation, creating breaks in the rock to allow the gas to flow to the wellbore.

The composition of the fracturing fluid is more than 99.5 per cent sand and water, the group said, with efforts being made to develop “environmentally responsible fluid designs," and vigilantly monitor the risks inherent with fracking fluid chemicals.

In a recent report calling for B.C. to slow down its shale gas development, the Centre for Policy Alternatives said "industry records have been set for water usage at individual multi-well shale gas

pads," noting 980,000 cubic metres of water pumped underground at a single well pad operated by Apache.

Dickie said the band is particularly concerned about the shale gas water use, in addition to greenhouse gas emissions, and the policy centre even noted increasing concern about earthquake activity in fracking zones.

Environmental concerns have not dampened the enthusiasm of some communities benefiting from the developments, with Fort Nelson, B.C., Mayor Bill Streeper anticipating economic spin-offs from the Horn River to be in the millions of dollars for the municipality of the Northern Rockies.

“We’re talking about long-term jobs here,” Streeper told NewsNorth. “Evidence coming forward from the find says it could yield astronomical numbers.”

The producers group estimates there will be 80 to 100 wells constructed at the Horn River Basin, and many of those wells will be drilled from multi-well pads.

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