Could shale gas extraction save Ontario's economic butt?

There is a race on in Ontario to stake out a claim to Ontario's shale gas reserves, with at least three companies purchasing land or buying gas rights.

Ontario - Mooncor announced in May 2008 it had begun what it termed an "aggressive land acquisition" in southwestern Ontario. The company wants to tap into Ontario's largely ignored large reservoirs of shale gas, and had aimed to purchase 100,000 acres of Ontario lands in order to gain exclusive access to the shale gas. No one has put a dollar value on that gas, presumably because it is difficult to extract and it is not yet known if there is enough present to be commercially viable. Following suit is Talisman Energy, while American companies are seeking to sell their shale gas to Ontario. The new gas rush is taking place in North America and Europe. Described as unconventional gas, Tony Hayward, the head of BP said recovery of shale gas is a "complete game changer." Hayward predicted shale gas would change the future of energy in the United States. Norfolk County, Kettle Point and the Blue Mountains in the Collingwood area have been pinpointed as sites with the greatest shale gas potential. Two years ago, the question was whether the extraction of Ontario's shale gas could be commercially viable. Reports that Mooncor has now acquired 23,000 acres of the 100,000 it had identified means that somebody thinks there's money in shale gas recovery. There's one sticky little problem for the Blue Mountain shale gas, identified as having Ontario's best shale gas potential. The Blue Mountains are part of the Niagara Escarpment, a World Biosphere Reserve. It is almost ironic that the unique geologic features that created the Niagara Escarpment also ensured that deposits of gas would be secreted away in the rock formations. However, some development and resource extraction activities are permitted on the escarpment. That problem likely won't be insurmountable for resource companies. What might be the real sticking point is Ontario's non-business residents. Shale gas is gas that has been trapped into small pockets in layers of rock and clay, and is very difficult to extract. Sixty years ago, the method of hydraulic fracturing was developed. Promoted as an inexpensive method to get at shale gas and widely used throughout the United States, hydraulic fracturing or fracting as it is commonly called, has raised the ire of some who claim the chemicals used in the process contaminate drinking water. The Environmental Protection Agency (EPA) has now launched a two year study on the health and environmental impacts of fracting. The EPA had exempted fracting from the U.S.'s water protection act, even though there was a lack of concrete studies into the environmental and health impacts. There is another aspect to allowing the extraction, one that the Ontario government might be wise to consider in depth. The proposed extraction of shale gas in New York State saw residents bitterly divided, with almost half opposing the development over human health and safety concerns, while the other half wants the revenue generation and job creation the resource extraction might be able to offer. The state government has imposed a moratorium on the plans to extract the shale gas. The price of natural gas has been depressed for the past year, but today's price is not seen as holding into the future when natural gas reserves will become depleted. In the interim, however, there are abundant natural gas reserves throughout the world, including Canada. Combine these factors with the high costs of shale gas extraction, it is hard to explain the attraction of the resource. Those in the industry say the development of shale gas deposits will create employment, something Ontario, with it's steady unemployment rate of 9.1%, desires. Given the complexities of the issues surrounding the recovery of shale gas, combined with the current market situation, it is likely that development of the resource will not take place for years, thus not providing the province with a quick fix to the fallout from the recession.