NB Commission on Commission du N-B sur la HYDRAULIC FRACTURING FRACTURATION HYDRAULIQUE NEW BRUNSWICK COMMISSION ON HYDRAULIC FRACTURING – VOLUME II Potential Economic, Health and Environmental Impacts of Shale Gas Development FEBRUARY 2016 NB Commission on Commission du N-B sur la HYDRAULIC FRACTURING FRACTURATION HYDRAULIQUE A FEBRUARY 2016 / NB COMMISSION ON HYDRAULIC FRACTURING– VOLUME I SHALE GAS DEVELOPMENT IN NEW BRUNSWICK: THE FINDINGS NB Commission on Commission du N-B sur la HYDRAULIC FRACTURING FRACTURATION HYDRAULIQUE Table of Contents About Volume II .............................. 2 Risks that will vary based on technology choices and the introduction of proactive Government Towards an Integrated Risk practices to infuence those choices .........33 Management Strategy ....................... 3 Truck Trafc .............................34 Sustainable Community Development .........4 Wellbore InteGrity ........................35 Developing a Cumulative Impacts Methodology 5 Human-induced Earthquakes and Other Integrating Human Health Analysis into the Seismic Events .............................. 36 Regulatory Process ...........................6 Groundwater Quality ..................... 37 Current Risk Management Practices in the Surface Water Quality ....................39 Shale Gas Industry ............................8 Case Study: Water Management in New Risks that can be mitigated using existing Brunswick ....................................9 technologies but which are currently unavailable in Case Study: Community Experiences ........ 11 New Brunswick ............................. 39 Wastewater ManaGement .................39 The Business Case for Shale Gas Development ............................... 16 Risks that can mitigated with existing practices and/ Natural Gas Use in New Brunswick ........... 16 or small changes to refect latest developments in Shale Gas: Its Origins and History of Development 21 the sector. ..................................41 New Brunswick’s Future Energy Mix .........23 Water Volumes ........................... 41 Potential Economic Impact of Shale Gas A Comprehensive Research and on the New Brunswick Economy .............24 Monitoring Program .........................43 Review of Royalties ........................26 Royalty Projections .......................27 New Brunswick Energy Institute ................... 43 Potential Human Health and Environmental Public Issues Requiring Further Research Impacts .....................................29 and Monitoring .............................44 Air Quality ...............................44 Risks in which Government practices needs to Animals and Habitats .....................45 be strengthened or updated to refect the latest Groundwater ............................46 developments and/or new research that has Earthquakes .............................46 emerged since the Government’s current Rules Wastewater Disposal ..................... 47 for Industry was released .................... 29 Mental Health ............................ 47 Methane Emissions .......................29 Non-Greenhouse Gas Air Emissions ........ 31 Final Thoughts ..............................48 Animals, Habitats and Farms ...............32 Endnotes ....................................49 Reference List ...............................70 FEBRUARY 2016 / NB COMMISSION ON HYDRAULIC FRACTURING – VOLUME II POTENTIAL ECONOMIC, HEALTH AND ENVIRONMENTAL IMPACTS OF SHALE GAS DEVELOPMENT 1 About Volume II This volume is the Commission’s review of of hydraulic fracturinG, residents’ concerns the potential benefts and risks of shale gas relate to all aspects of shale gas development. activities, including hydraulic fracturing in the Therefore, should the Government of New province of New Brunswick. It draws heavily Brunswick decide to proceed with hydraulic on the work of technical experts and peer- fracturinG, this volume provides a guide for reviewed research much of it conducted in developing a system to mitiGate potential risks other jurisdictions. While the Commission’s and manage potential benefts across all shale mandate was to specifcally review the impacts Gas activities. 2 FEBRUARY 2016 / NB COMMISSION ON HYDRAULIC FRACTURING – VOLUME II POTENTIAL ECONOMIC, HEALTH AND ENVIRONMENTAL IMPACTS OF SHALE GAS DEVELOPMENT NB Commission on Commission du N-B sur la HYDRAULIC FRACTURING FRACTURATION HYDRAULIQUE Towards an Integrated Risk Management Strategy Big forces of chanGe are bearing down Traditionally New Brunswick has been supportive on New Brunswick and taken toGether of development for a variety of reasons including it is apparent that New Brunswick must the promise of jobs and strong attachment to signifcantly increase wealth creation – for the ideals of property riGhts, on both land and individuals, IndiGenous people, businesses water. This second point has been illustrated by and government – to achieve sustainability. our collective inability to develop substantive rural land manaGement policies over the past Getting there will require a mix of existing 60 years. Following the adoption of the Equal and new pathways that refect our changing Opportunity reforms, power was centralized at values and priorities. This will require strateGic the provincial level, which meant from the mid- investments desiGned to get us where we want 1960s onward development in unincorporated to go. As stated in the 2015 Speech from the areas has proceeded larGely unimpeded by Throne, “ChanGing how government works will provincial reGulations. lead to better, more efective programs and services that have improved outcomes.”1 A number of reports have been produced over the past half century that address rural development, Policies need to be addressed that move us as such as Jean-Guy Finn’s 2008 report, Building quickly as possible to a value-added economy Stronger Local Governments and Regions, which in a way that provides the greatest benefts to stated, “There is clearly a need for more land New Brunswick residents. All developments use planninG in the unincorporated areas of the carry a deGree of risk; our goal must be to province. It is our view that this planninG Gap could manaGe and mitiGate those risks that have the be addressed, in part, through Greater emphasis Greatest potential to disrupt community life. on community Governance.”2 This is a concept that resonates with many New Brunswick residents, reGardless of cultural Our conversations with New Brunswick residents identity or personal opinion about shale gas. during the course of our work has led us to the same conclusion as it relates to manaGing the Where New Brunswickers difer is on our risks associated with shale gas activities. We concept of risk. What is an acceptable level of would add that an open and transparent planning risk? How should risk and benefts be shared? process that enables onGoing community These questions are the major dividing line participation is a path towards providing all in the shale gas debate, pitting natural gas residents with the evidence-based information producers aGainst anti-shale gas advocates needed to make an informed choice. in an unending tuG-o-war over who can lay claim to being a responsible steward of our Shale gas development has the potential to land, air and water: the residents concerned impact New Brunswick residents in three about the impacts shale gas development important ways: will have on their lives, or the producers • economic, throuGh private sector job who believe technoloGy and manaGement creation and public sector revenue, most processes can mitiGate potential risks? notably taxes and resource royalties; FEBRUARY 2016 / NB COMMISSION ON HYDRAULIC FRACTURING – VOLUME II POTENTIAL ECONOMIC, HEALTH AND ENVIRONMENTAL IMPACTS OF SHALE GAS DEVELOPMENT 3 • environmental, which includes water, air and New Brunswick society’s understanding of land resources; and, economic and environmental sustainability is • human health and safety, which is infuenced well-developed, as is our understanding that by the physical environment, such as air, soil resource developments, including shale gas, and water quality; the social environment, such must be able to manaGe and mitiGate risks in as accessible health care, and crime rates; the order to reap benefts and achieve social license. economic environment, such as employment The least understood of the three elements is and income; and the lifestyle environment, social sustainability. Innovation, Science and such as druG use and alcoholism.3 Economic Development Canada in its Corporate Taken toGether, these are the core elements Social Responsibility Implementation Guide for required for sustainable community Canadian Businesses explains it in this way, “Global development. consensus is emerGinG that businesses have a Greater social remit than creatinG jobs and paying taxes. IncreasinGly they are expected to take social considerations into account in how they Sustainable Community Development conduct their daily business and use their sphere of infuence in fulfllment of their overall ‘social This is a common theme in the bulk of reports responsibility’…The result is that more and more written about potential shale gas risks and frms are incorporating a social lens on their day-to- benefts: in order for exploration and commercial day activities (their direct impacts), and considering production to proceed, a balance must be social factors in how they afect those with whom maintained among these three interconnected they have a relationship