West coast hoping for its own oil boom

John Crosbie telegram@thetelegram.com
Published on October 5, 2013
John Crosbie

The announcement of offshore oil and gas in the Flemish Pass Basin means there are bright prospects and great opportunities at last in sight for oil and gas development on the west coast of Newfoundland.

Statoil and Husky Oil has said the well drilled at Bay du Nord has between 300 million and 600 million barrels of recoverable light oil. In the Flemish Pass area there have been three discoveries now, including the Mizzen discovery, estimated to have between 100 million to 200 million barrels of oil, and Harpoon, where they have not yet done the work necessary to give an accurate estimate.

The west coast has seen a great deal of activity by smaller oil and gas entrepreneurs, especially of Newfoundland origin, and this is where the future looks promising, as reported by Black Spruce Exploration Corp. in their Western Newfoundland Update Project Magazine. (This informative and interesting publication can be viewed online at Black Spruce Exploration’s website, www.blspexp.com. Just go to the media section of the website and click on fact sheets.)

Black Spruce strongly believes western Newfoundland has the potential for an energy industry to rival Hibernia and is focused on developing an oil-based industry which, if successful, will bring economic prosperity to the region.

In their first year they are targeting $60 million in capital expenditures to create a stabilized production base.  

The company opened its head office in Corner Brook on Sept. 11 and has acquired a drilling rig which will be the first available for western Newfoundland, arriving this year. Black Spruce also has warehouse space for pipe facilities and everything needed for an offshore 2-D/3-D seismic program.

Drilling — which is critical to discovery — will start at the Garden Hill Battery well at Cape St. George, which has a producing oil well from a deep carbonate formation known as the Aguathuna.

Hydraulic fracturing, the technology that will be used to open the flow path for oil from the reservoir to the wellbore, has only been around since the late 1940s. It is vital for western Newfoundland if that region is ever going to fully achieve economic prosperity from the oil industry.

Black Spruce says it is committed to protecting the environment through best-practice regulations imposed by governments as well as through industry-established practices as they are developed and enforced.

The company has 2,359,381 acres under its control — an area reaching from Daniel’s Harbour south down to Cape St. George in the Bay St. George area.

Black Spruce has set its sights on Green Point shale — the resource rock for oil, which could contain more than a billion barrels.

Information on the project is available to anyone who wishes to be informed. The online magazine tackles critical claims about hydraulic fracturing that have been made about the project, and the magazine addresses each one in detail.

It also explains how hydraulic fracturing works and lists any additives the company will use in such activity.

As the project moves forward, the public will be given opportunities to have questions answered.

Black Spruce says there are over 200,000 hydraulically fractured wells in Western Canada and there has not been one case of drinking water contamination reported from stimulation fluid to date. There are more than 1 million such wells in the United States.

The company has no leases within Gros Morne National Park and won’t be drilling within those boundaries.

The responsibility for regulating the oil and gas industry, including the chemicals used in that sector, falls to the provinces.

What is fracking? It’s a safe and proven process. It is used by the water well industry, as well as the oil and gas sector, to help increase water production. The fissures in the rock, millimetres in diameter, require sand to help prop them open. Otherwise they will close.

The project magazine points out that hydraulic fracturing fluids are 99.5 per cent water and sand. Chemicals generally make up less than one-half of one per cent of fracturing fluids. Usually, fewer than 10 chemicals are used in fracking; Black Spruce anticipates using 11.

Flowback water will be contained and treated in accordance with government regulations. Any hydraulic fracturing fluids remaining underground are trapped in the rock, with 800–3,000 metres of impermeable rock acting as a barrier.

Black Spruce uses modern best practices to ensure the well casings are properly cemented, including pressure-testing the cement before fracking occurs.

The company notes that getting permission to explore in our province is a rigorous, extensive and scientifically demanding process, with many checks and balances. Projects only move forward when all requirements are met.

In the last 20 years or so, local entrepreneurs and risk investment types have been trying to develop numerous potential oil and gas sites in western Newfoundland without any real success. Larger international oil and gas companies that are prepared to invest huge amounts of money in likely possibilities have not taken any great interest in developing the potential which has been recognized in western Newfoundland for at least a hundred years.

It’s time for a major effort to be made to see whether or not there are substantial oil and gas resources onshore and in the near offshore in this whole western area, and I hope the interest and investment of a company like Black Spruce will be encouraged.

The company appears to have the resources, personnel and experience to realize the full potential on the west coast, while we continue to have great success in the offshore off our east coast.

This is entrepreneurial risk-taking at its best.

Shoal Point Energy and Black Spruce plan to drill as many as four exploration wells on the Port au Port Peninsula which will run the wells out under the inshore area of the adjacent bay.

If they find success it will be of great value to west coast Newfoundland, and to us all.

John Crosbie welcomes your feedback by email at telegram@thetelegram.com.