Hydraulic fracturing in Canada

Geological formations

The Spirit River, Cardium, Duvernay, Viking, Montney (AB and BC), and Horn River formations are stratigraphical units of the Western Canadian Sedimentary Basin (WCSB) which underlies 1,400,000 square kilometres (540,000 sq mi) of Western Canada and which contains one of the world's largest reserves of petroleum and natural gas. The Bakken formation is a rock unit of the Williston Basin that extends into southern Saskatchewan. In the early 2000s significant increases in production the Williston Basin began because of application of horizontal drilling techniques, especially in the Bakken Formation.

Technologies

The first commercial application of hydraulic fracturing was by Halliburton Oil Well Cementing Company (Howco) in 1949 in Stephens County, Oklahoma and in Archer County, Texas, using a blend of crude oil and a proppant of screened river sand into existing wells with no horizontal drilling. In the 1950s about 750 US gal (2,800 l; 620 imp gal) of fluid and 400 lb (180 kg) were used. By 2010 treatments averaged "approximately 60,000 US gal (230,000 l; 50,000 imp gal) of fluid and 100,000 lb (45,000 kg) of propping agent, with the largest treatments exceeding 1,000,000 US gal (3,800,000 l; 830,000 imp gal) of fluid and 5,000,000 lb (2,300,000 kg) of proppant."

In 2011 the Wall Street Journal summarized the history of hydraulic fracturing,

"Only a decade ago Texas oil engineers hit upon the idea of combining two established technologies to release natural gas trapped in shale formations. Horizontal drilling—in which wells turn sideways after a certain depth—opens up big new production areas. Producers then use a 60-year-old technique called hydraulic fracturing—in which water, sand and chemicals are injected into the well at high pressure—to loosen the shale and release gas (and increasingly, oil)."

Horizontal oil or gas wells were unusual until the 1980s. Then in the late 1980s, operators along the Texas Gulf Coast began completing thousands of oil wells by drilling horizontally in the Austin Chalk, and giving 'massive' hydraulic fracturing treatments to the wellbores. Horizontal wells proved much more effective than vertical wells in producing oil from the tight chalk.

Cost and lifespan of hydraulic fracturing

Oil producers spend US$12 million upfront to drill a well but it is so efficient and produces so well during its short, 18-month lifespan, that oil producers using this technology can still make a profit even with oil at $50 a barrel.

Alberta

Because of its vast oil and gas resources, Alberta is the busiest province in terms of hydraulic fracturing. The first well to be fractured in Canada was the discovery well of the giant Pembina oil field in 1953 and since then over 170,000 wells have been fractured. The Pembina field is a "sweet spot" in the much larger Cardium Formation, and the formation is still growing in importance as multistage horizontal fracturing is increasingly used.

The Alberta Geological Survey evaluated the potential of new fracturing techniques to produce oil and gas from shale formations in the province, and found at least five prospects which show immediate promise: the Duvernay Formation, the Muskwa Formation, the Montney Formation, the Nordegg Member, and the basal Banff and Exshaw Formations. These formations may contain up to 1.3 quadrillion cubic feet (37×10^¹² m³) of gas-in-place. Since shale resources are in the early stages of development in Alberta, it is not known what portion of these resources can be economically produced.

Even as the price of oil declined dramatically in 2014, hydraulic fracturing in so-called "sweet spots" such as the Cardium and Duvernay in Alberta, remained financially viable.

British Columbia

Talisman Energy, which was recently acquired by the Spanish company Repsol, "has extensive operations in the Montney shale gas area." In late July 2011 the Government of British Columbia gave Talisman Energy, whose head office is in Calgary, a twenty-year long-term water licence to draw water from the BC Hydro-owned Williston Lake reservoir.

In 2013, the Fort Nelson First Nation, a remote community in northeastern B.C. with 800 community members, expressed frustration with royalties associated with gas produced through hydraulic fracturing in their territory. Three of British Columbia's four shale-gas reserves – the Horn River, Liard and Cordova Basins are on their lands. Those basins hold the key to B.C.’s LNG ambitions."

Saskatchewan

The Bakken shale oil and gas boom underway since 2009, driven by hydraulic fracturing technologies, has contributed to record growth, high employment rates and increase in population, in the province of Saskatchewan. Hydraulic fracturing has benefited small towns like Kindersley which saw its population increase to over 5,000 with the boom. Kindersley sells its treated municipal wastewater to oilfield service companies to use in hydraulic fracturing. As the price of oil dropped dramatically in late 2014 partially in response to the shale oil boom, towns like Kinderslely are more vulnerable.

Quebec

The Utica Shale, a stratigraphical unit of Middle Ordovician age underlies much of the northeastern United States and in the subsurface in the provinces of Quebec and Ontario.

Drilling and producing from the Utica Shale began in 2006 in Quebec, focusing on an area south of the St. Lawrence River between Montreal and Quebec City. Interest has grown in the region since Denver-based Forest Oil Corp. announced a significant discovery there after testing two vertical wells. Forest Oil said its Quebec assets may hold as much as four trillion cubic feet of gas reserves, and that the Utica shale has similar rock properties to the Barnett shale in Texas.

Forest Oil, which has several junior partners in the region, has drilled both vertical and horizontal wells. Calgary-based Talisman Energy has drilled five vertical Utica wells, and began drilling two horizontal Utica wells in late 2009 with its partner Questerre Energy, which holds under lease more than 1 million gross acres of land in the region. Other companies in the play are Quebec-based Gastem and Calgary-based Canbriam Energy.

The Utica Shale in Quebec potentially holds 4×10^¹² cu ft (110×10^⁹ m³) at production rates of 1×10^⁶ cu ft (28,000 m³) per day From 2006 through 2009 24 wells, both vertical and horizontal, were drilled to test the Utica. Positive gas flow test results were reported, although none of the wells were producing at the end of 2009. Gastem, one of the Utica shale producers, took its Utica Shale expertise to drill across the border in New York state.

In June 2011, the Quebec firm Pétrolia claimed to have discovered about 30 billion barrels of oil on the island of Anticosti, which is the first time that significant reserves have been found in the province.

Debates on the merits of hydraulic fracturing have been on-going in Quebec since at least 2008. In 2012 the Parti Québécois government imposed a five-year moratorium on hydraulic fracturing in the region between Montreal and Quebec City, called the St. Lawrence Lowlands, with a population of about 2 million people.

Prior to announcing her provincial election campaign, former Premier of Quebec and former leader of the Parti Québécois (PQ), Pauline Marois, announced that the PQ party would spend $115 million to help finance two exploratory shale gas operations as a prelude to hydraulic fracturing for oil on Anticosti Island that would have been a catalyst for ending the moratorium.|

In February 2014, prior to announcing her provincial election campaign, former Premier of Quebec and former leader of the Parti Québécois (PQ), Pauline Marois, announced that the provincial government would help finance two exploratory shale gas operations as a prelude to hydraulic fracturing on the island, with the province pledging $115-million to finance drilling for two separate joint ventures in exchange for rights to 50% of the licences and 60% of any commercial profit. It was the first oil and gas deal of any size for the province. With the change in government that occurred in April 2014, the Liberals of Philippe Couillard could change that decision.

Petrolia Inc., Corridor Resources and Maurel & Prom formed one joint-venture, while Junex Inc. was still seeking a private partner.

In November 2014 a report published by Quebec’s advisory office of environmental hearings, the Bureau d’audiences publiques sur l’environnement (BAPE), found "shale gas development in the Montreal-to-Quebec City region wouldn’t be worthwhile." BAPE warned of a "magnitude of potential impacts associated with shale gas industry in an area as populous and sensitive as the St. Lawrence Lowlands." The Quebec Oil and Gas Association challenged the accuracy of BAPE's report. On 16 December 2014 Quebec's Premier Philippe Couillard responded to the BAPE report stating there will be no hydraulic fracturing due to a lack of economic or financial interest and a lack of social acceptability.

Hydraulic fracturing fluid

Under the Canada Oil and Gas Operations Act, the National Energy Board (NEB) requests operators to submit the composition of the hydraulic fracturing fluids used in their operation that will be published online for public disclosure on the FracFocus.ca website.