East Coast poised to join West, Arctic in petroleum party

Marianne White, Canwest News Service

Published: Monday, November 09, 2009

QUEBEC - The natural gas and oil potential of Canada's East Coast is substantial and could rival the reserves in the West and Arctic Ocean, according to a recent federal government study.

The Geological Survey of Canada, a research arm of the federal Natural Resources Department, assessed for the first time the overall hydrocarbon potential of a region known as the Maritimes Basin.

A new federal study suggests the east coast has potential to develop new energy resources similar to Newfoundland's Hibernia development pictured above.

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This 250,000 square kilometres area includes the southern Gulf of St. Lawrence, Cabot Strait and southwestern Grand Banks with onshore ties to Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.

According to the survey published in October, this region contains an estimated 39 trillion cubic feet (tcf) of hydrocarbons, mostly natural gas.

"This is huge," said Natural Resources geologist Denis Lavoie, co-author of the study. "We knew there was a good potential in Eastern Canada but it's the first time we are able to quantify it."

He said this untapped potential represents the equivalent of seven years of production of natural gas in Canada.

Lavoie said Eastern Canada's gas reserves are just slightly below the estimated 58 trillion cubic feet of gas left in Western Canada sedimentary basin.

He also noted the Maritimes Basin could easily rival the potential of the Beaufort Sea and the Mackenzie Delta in the Arctic, where an estimated 65 trillion cubic feet of natural gas lies.

The project to build a pipeline to bring the gas down from the Arctic to energy-hungry markets in the Canada and the United States has been stalled for years given the high cost of transportation.

"Eastern Canada has almost as much gas as the Arctic, but what is more interesting for this region is that it is already in the market. There is no need to build an expensive pipeline to carry gas," Lavoie said.

Several fields in this region have already been discovered, including the McCully natural gas field in southern New Brunswick.

Independent oil and gas industry analyst Ian Doig said the report does highlight an interesting potential but fails to answer the biggest question: is it profitable to tap into these reserves?

"Politicians and people in the industry can get really excited about this and see billions and billions in profit, but the thing is that it is going to cost billions and billions to get the gas out of there," Doig said.

He noted offshore fields discovered off Nova Scotia and Newfoundland in the past few decades have never proved to be worth drilling for economic reasons.

Doig also stressed it might become more worthwhile to tap into reserves of shale gas if natural gas prices stay low and new technologies make it cheaper to extract shale gas.

There is a huge shale formation in Quebec in the St. Lawrence Lowlands, known as the Utica Shale.

Lavoie said his department did not look into the shale gas potential in Atlantic Canada or Quebec. But he said that, according to industry estimates, there could be as much natural gas between Quebec City and Montreal in the Utica Shale as in the Maritimes Basin.