Questerre Energy

Mike's Blog

Mar
25

I wish someone would ask me

For some time now opponents of local natural gas development in Quebec have said with low gas prices it's not economic.  Ergo we shouldn't develop it. It begs the question: if it's really not economic to develop, why spend any time or effort opposing it? With their days work done, why don't they just grab a Coors light? Instead we have three year environmental studies, a second BAPE process about to start and a recent proposed law for a five year moratorium (now dead with the election call). The Government even introduced a large increase to annual permit rentals.  Opponents also say industry got their permits too cheap and should pay more (though they never said that before there was a discovery). If in fact the project is uneconomic wouldn't it make more sense to reduce the costs?  Clearly someone must think it is economic or why increase the burdens on industry? It seems a lot of effort for something that won't go forward because it's uneconomic.  Shakespeare might have said about the «bloqueux » 'me thinks you doth protest too much'.  We wouldn't disagree there has been too much protesting and not enough rational discussion. The new comprehensive environmental report is a good start.  It confirms the environmental impacts can be managed with best practices.  However, even this report suggests the project might not be economic. I wish someone would ask me.  After all it is our shareholder's money at risk and it is our job to understand the risks and rewards. In Quebec we only need to drill to less than 2 kilometres or half the depth of our project in Alberta.  In addition, we wouldn't pay to ship our gas across the country because it's right where it's needed, close to Quebeckers' businesses and barbecues.  We could be receiving about $6 per thousand cubic feet in Quebec which is more than we receive in Western Canada.  Offsetting this is our natural gas in Quebec is clean and dry so we wouldn't receive any revenue from petroleum liquids. Our opinion is the cheaper drilling and higher prices make up for the lack of revenue from petroleum liquids.  We think it's up to the Government to set fair fiscal terms with an effective regulatory system.  If they do, we think the project can be economic. That's why we at least, don't think it's Miller time yet.

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