While the Legault government promises to put an end to oil and gas exploration in Quebec, the Court has just ruled in favor of a company which contested the refusal of an oil drilling permit in the Gaspé. Ironically, the government is also a shareholder in this project, into which it has already injected at least $ 10 million in public funds.
A subsidiary of Utica Resources, Gaspé Énergies, had launched a legal action to challenge the decision of the Minister of Energy and Natural Resources, Jonatan Julien, to deny him a drilling permit in 2020 for the Galt oil project. , located west of Gaspé.
The latter had used a provision of the Hydrocarbons Law which prohibits any drilling within 1000 meters of a water environment, unless the Minister judges that “the planned activities do not compromise the integrity and conservation of the water environment. “. This is section 23 of the “Regulation respecting the exploration, production and storage of hydrocarbons on land”.
Utica Resources believed that its oil exploration program does not pose a risk to the protection of the waterways in this area, which includes the York salmon river. The company therefore requested authorization to complete it, in order to confirm whether there is any potential for commercial exploitation.
The Court has just partially ruled in favor of Gaspé Énergies by ordering the Minister to reassess the case, but without using the provisions of Article 23. The court also ruled that the justification for the Minister’s decision was insufficient. .
Ironically, the government holds a 17% stake in the Galt project. It was acquired following an investment by the Couillard government in 2017, through Ressources Québec. Even if it tried to part with this stake, the Legault government was unable to do so, due to lack of interest from investors.
Earlier this fall, the Legault government announced its intention to end oil and gas projects in Quebec. If it goes ahead as promised, the Legault government will also have to manage several compensation requests from companies that still hold exploration permits.
Compensation
This is the case of Utica Resources, a company controlled by Austrian shareholders. It got its hands on several permits abandoned by other companies, so much so that it now controls 29 permits, totaling approximately 4,400 km2 in the lowlands of the St. Lawrence and in the Gaspé.
According to what its president, Mario Lévesque, specified last month in a written response to To have to, the value of the assets would amount to “several billion dollars”. An opinion shared by the president of the Association de l’énergie du Québec, Éric Tétrault, who believes that on its own, shale gas from the St.Lawrence Valley could represent “lost profits” of “3 to $ 5 billion ”.
Mr. Lévesque adds that the end of the projects decreed by the Legault government is equivalent to an “expropriation”, which must provide for “the payment of compensation fixed according to the value of the property expropriated and the damage caused” by this decision. “To do otherwise and to violate the law would be very damaging to Quebec’s reputation with all investors, both Quebecers and foreigners,” he says.