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Husky invests close to $45 million in Slater River camp expansion Corporation to apply to conduct horizontal fracking in 2014, according to Sahtu MLA
Daron Letts
Northern News Services
Published Monday, August 26, 2013
LLI GOLINE/NORMAN WELLS
Husky Energy Inc. is bulking up its Slater River camp this fall, investing close to $45 million in upgraded infrastructure at its Canol shale play leases, 40 kilometres southeast of Norman Wells.
Husky Energy Inc.'s Slater River camp, seen here on Aug. 14, is undergoing a $45-million expansion this fall. Husky is constructing a 200-metre-by-305-metre padded storage site, a 1,400-metre-long-by-60-metre airstrip and a 40-kilometre-by-20-metre all-weather access road, among other infrastructure projects. - photo courtesy of Norman Yakeleya |
Workers are resuming work on the second half of a 40-kilometre-by-20-metre all-weather road, according to Husky spokesperson Mel Duval. Construction is now underway on a 1,400-metre-by-60-metre airstrip and work is scheduled to begin on a 200-metre-by-305-metre padded storage site, among other infrastructure projects.
"We are also continuing our consultations with the community on the next steps in our drilling program," Duval stated in an e-mail to News/North.
The major petroleum player is scheduled to continue its activity in the region for a long time to come, according to Rob Peabody, Husky's chief operating officer.
"Long term, we see it as a project with significant potential and the results we have had, and the progress we have made to date, still leave us very happy to continue there," he told investors during a recent teleconference. "We are working through with community consultations on the next stage of our program, and we are also continuing to analyze the results from the first wells we drilled there in the last year."
Husky drilled and cased two vertical pilot wells last year to evaluate the region's canol shale formation, and completed a 3D seismic program over a 220-square-kilometre area. It has a permit with the Sahtu Land and Water Board to drill and evaluate two more vertical wells, but construction has not begun.
"Timing has not yet been confirmed," Duval stated.
Husky has not disclosed what types of extraction methods it might use on its exploration areas on two parcels of the Canol, Hare Indian and Bluefish Shales between Norman Wells and Tulita. However, Sahtu MLA Norman Yakeleya said horizontal hydraulic fracturing, commonly known as horizontal fracking, will be necessary, shortly after meeting with Husky officials and surveying the camp by helicopter on Aug. 14.
"They have to go horizontal and they've got to frack," Yakeleya said. "They've got to test the rate of flow of the oil coming out of those (two existing) wells. That will then
determine what kind of production they'll be going into."
Horizontal hydraulic fracturing involves high pressure pumping of sand, water, and chemicals into cracks in the formation, allowing gas and oil to flow through into the well bore once the pressure is released.
Duval declined to comment on Husky's future exploration plans, but Yakeleya said the Calgary-based corporation will apply to conduct horizontal hydraulic fracturing next year.
"Husky said they want to do it right and do it properly and cover all their bases before they go to the Sahtu Land and Water Board and ask for a permit to build two horizontal fracking wells," he said.
On June 11, the Sahtu Land and Water Board granted ConocoPhillips Canada a land-use permit and water licence to drill and hydraulically fracture two exploratory wells on its Sahtu leases, representing the first time horizontal hydraulic fracturing has been given a thumbs up by the board.
"The Canol shale has a huge potential. Not in the millions, but in the billions of barrels of oil, and the technique (exploration companies) want to use is horizontal fracking," Yakeleya said. "That's the method they can use that can produce the billion barrels of oil."
The Standing Committee on Economic Development and Infrastructure called on the GNWT to produce a policy framework for hydraulic fracturing last year, and in June 2012 the departments
of Environment and Natural Resources and Industry, Tourism and Investment commissioned studies outlining the economic opportunities and environmental concerns related to the practice. A resulting report based on best practices from other jurisdictions and countries highlighted environmental concerns, such as groundwater contamination, wastewater management and disposal from above-ground activities, chemical additives and fuel handling, well blow-outs, water usage and supply, land consumption and disturbance, air quality and induced seismic activity.
"We're going through a learning curve on guidelines on fracking because everybody has their own opinion or their research on the type of fracking and what fracking can do to the land and how it can be regulated and what needs to be done to bring this type of method of extracting oil to our region," Yakeleya said.
Natural Resources Minister Michael Miltenberger told News/North he plans to release a draft of the department's horizontal hydraulic fracturing guidelines by November, after which he will solicit public input before establishing it as policy.
Now that technology exists to extract Sahtu shale reserves, Yakeleya said the territory should embrace it.
"We're at the brink of a turn in the history of energy resources in the Sahtu that would be a significant contributor to the North and to Canada. There's no doubt about it," he said. "So, now we need government to step up with us, in their business plans and their long-term strategy on energy."
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