Quebec Is Being Deprived of the Benefits of Shale Gas Development

Largely overlooked in the shale gas debate that has taken place in Quebec in recent years between industry proponents and environmentalist groups were the farmers who might have benefited from having natural gas wells on their land. Thanks to the moratorium that is currently in effect, many Quebec landowners are missing out on a golden opportunity.

In Alberta, many farms and ranches are dotted with gas wells, which entitle landowners to annual compensation of anywhere from $2,000 to $3,500 per well installed on dry or pasture land, and from $4,000 to $7,500 per well on irrigated land. That money is often reinvested in better equipment, buildings, and livestock in order to increase the profitability of the farm or ranch. Quebec farmers have no such opportunity to collect substantial sums of money by signing agreements with companies exploring Quebec’s subsoil — revenues that would ensure the future of their farms for many years.

Quebec municipalities are also being deprived of lucrative opportunities. The town of Huntingdon had offered the gas industry the services of its waste-water treatment plants, underutilized since the disappearance of the region’s textile industry. Had it not been for the moratorium, this could have brought in nearly $600,000 a year for the town of 2,500 inhabitants, increasing its budget considerably.

What of the environmental risks that were the justification for the cessation of activities in this sector? Hydraulic fracturing, after all, is a procedure by which a mixture of water, sand, and additives is injected into the ground under high pressure in order to fragment the rock formations in which natural gas is trapped. Since some of these additives can be hazardous to human health in sufficiently high concentrations, they must not find their way into the water table.

According to the industry, the risk of a significant leak polluting water reserves is very low. Hydraulic fracturing generally happens at depths of at least 1,600 metres, and gas wells have an additional layer of steel and cement casing to protect the groundwater in aquifers, which are located much closer to the surface.

So far, the facts support this assessment. Out of a sample of 11,560 gas wells drilled since 2008 in the northeastern United States, only 40 water-related incidents caused by hydraulic fracturing are listed — and none of these incidents had any negative impact on human health.

The fact that many are ready and willing to have gas wells on their land would suggest that the fears of environmentalist groups are overblown. Farmers would hardly have an interest in allowing gas wells to be drilled on their land if there were a high risk of contaminating the water they draw on, as this would negatively affect their harvests and the health of their herds, and in turn, the value of their farms. After all, the dream of every farmer is to pass on the farm to the next generation with an ever-increasing value, a dream that embodies the true meaning of sustainable development.

Youri Chassin is Economist and Research Director at the Montreal Economic Institute. The views reflected in this op-ed are his own.

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