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Shale gas: Quebec farmers are missing out on a golden opportunity

Montreal, Wednesday, May 27, 2015 – In the debate over the development of shale gas, the voices of environmentalist groups have to date carried further than the voices of those who favour development. But what about those who have natural gas wells on their land? An Economic Note published today by the MEI presents the testimony of actors who have often been overlooked in the media frenzy.

The moratorium that is currently in effect blocks activity in the shale gas sector in Quebec and prevents numerous landowners and municipalities from signing beneficial agreements with companies exploring Quebec’s subsoil. “Quebec entrepreneurs are missing out on substantial sums of money, revenues that would ensure the future of their farms for many years,” says Youri Chassin, author of the publication.

The province has 34 wells, more than half of them having used hydraulic fracturing to extract gas. One of these wells is located near Bécancour, on a wood lot belonging to René Bérubé. Talisman Energy drilled a well on his land in exchange for which he received a 39-year financial compensation package, indexed and renewable. The landowner says he is satisfied with this agreement since it incorporates the demands he had, among other things regarding the use of felled trees and the rehabilitation of the land once the well is sealed.

This practice is also common in Alberta, where a large number of farms and ranches are dotted with gas wells, points out Youri Chassin. “Over there, farmers receive several thousands of dollars a year in compensation per well, that they can then reinvest in their farms, among other things in the modernization of their equipment.”

What about the risks? Since 2008, out of a sample of 11,500 gas wells drilled in the northeastern United States, only 40 environmental incidents are listed. None of these incidents had any negative impact on human health. In Alberta, there were only 91 leaks in 2014, whereas there are over 260,000 gas and oil wells. Three incidents affected waterways, while just one affected the flora, but none had any impact on animals or on human health.

The government’s next energy strategy should therefore take these facts into account, says Youri Chassin, who specifies that even if farmers are open to seeing projects developed on their land or in their communities, they remain concerned about environmental impacts. Indeed, since farmers want to pass on their farms to the next generation, whatever affects land values, water quality, harvests or herd health is of paramount importance to them.

The Economic Note entitled “Some Overlooked Voices in the Shale Gas Debate” was prepared by Youri Chassin, Economist and Research Director at the MEI, in collaboration with Guillaume Tremblay, Public Policy Analyst. This publication is available on our website.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

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Interview requests: David Descôteaux, Communications Coordinator, MEI Tel.: 514-273-0969 ext. 2233 / Cell.: 514-919-4450 / Email: ddescoteaux@iedm.org

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