Some governments in Quebec dreamed of seeing the province exploit possible oil and gas resources, but this industry never saw the light of day, mainly because of the controversy it aroused. Ultimately, however, it should cost taxpayers at least $219 million, according to a non-exhaustive count of the Duty. A bill that should increase further with the closure of all the wells drilled over the decades.
Regardless of the outcome of the 11 lawsuits brought by companies that held exploration licenses and are seeking hundreds of millions of dollars in damages, it is already established that the oil exploration industry and gas will have cost the Quebec government at least $219 million.
A $92 million bill stems from the shale oil exploration project on Anticosti Island launched in 2014 by the PQ government of Pauline Marois. By putting an end to the project, the Liberal government of Philippe Couillard agreed to pay $62 million in compensation to the companies involved or which controlled exploration permits on the island. The government had previously injected $30 million into exploration work.
Partner
The Anticosti saga, an island now aspiring to earn UNESCO World Heritage listing, isn’t the only exploration project the government has invested funds in. According to data provided by the Ministère de l’Économie, de l’Innovation et de l’Énergie (MEIE), Investissement Québec had injected $8.5 million into a “joint venture” for exploration work on the oil project and Bourque gas station in Gaspésie.
This investment was made with Pétrolia (acquired by Pieridae Energy) and Tugliq — two companies that are now suing the government and demanding millions of dollars in compensation. The drilling work was carried out, “but was not conclusive”, and since the merger of Pétrolia with Pieridae, “the project is inactive”, specifies the MEIE.
Investissement Québec also injected $18.4 million between 2012 and 2017 into the Galt oil project, located in Gaspésie. During “production trials” in 2015 and 2016, no fewer than 17,000 barrels were pumped into the area. “Investissement Québec still holds just over 17% of the Galt property,” specifies the MEIE. “The project is inactive and is currently the subject of legal action by the promoter Utica Resources against the Government of Quebec. This lawsuit arose out of a denial of a drilling permit.
Well to close
To these amounts must also be added the $100 million earmarked to put an end to the search for fossil fuel deposits in Quebec. Of this amount, $33 million to close the 60 exploration wells still owned by companies and $66 million as compensation to the companies.
According to what the MEIE indicates, 60 “definitive closure plans” have been filed, including 36 that have been “approved”. “For the 36 plans approved, they could be subject to a request for modification by the ministry depending on the results of the hydrogeological studies in progress. For unapproved plans, the analyzes are continuing, ”says one in a written response. Post-closure monitoring of each well will then have to be carried out by the Quebec government over the next few years.
In accordance with the provisions of Law 21, all the wells must be closed by the end of 2027, with the exception of those which could be the subject of a “pilot project for the acquisition of knowledge”. Sinks could be used for carbon capture and storage projects.
In addition to the 60 exploration wells, some of which leaked, the Quebec government is responsible for dozens of old exploration wells drilled over the decades in different regions of Quebec. There are 775 in the province, including 534 that have been located and 95 that require “work” to help stop gas or oil leaks. However, while some wells have been experiencing leaks for several years, even decades, decontamination and closure work has been slow to materialize.