Higgs pitches First Nations on up to $1.6B in revenue with possible shale gas expansion

Premier Blaine Higgs is pitching First Nations on hefty revenue potential if they agree to allow new shale gas development in New Brunswick.

But at least one Mi'kmaw chief is already standing in opposition to any new potential fracking because of environmental concerns and worries that it's being used as a political bargaining chip.

Higgs confirmed in an interview that his government sent all chiefs a letter this month outlining how they could potentially see between $800 million and $1.6 billion in revenue — shared among them over 20 years — if a shale gas reserve near Sussex is further developed.

"The potential opportunity for First Nations is an absolute game changer for every First Nations community in this province," Higgs said.

The move by the Higgs government signals the premier's latest efforts to reignite the industry after former premier Brian Gallant imposed a moratorium on fracking in 2014 following violent protests.

The process of fracking involves injecting a mixture of sand, chemicals and usually water into the ground under high pressure to break rock and capture natural gas that couldn't be obtained otherwise.

It has drawn opposition over fears it could endanger the groundwater supply and potentially have other harmful environmental effects.

Tax-sharing agreement held hostage: chief

The province's proposal wasn't well received by Chief Terry Richardson of Pabineau First Nation in northeastern New Brunswick, near Bathurst.

That's because it came as he, and other Mi'kmaw chiefs, are months away from seeing an end to tax-revenue-sharing agreements that brought millions to communities annually.

Higgs announced he was ending those agreements in 2021, sparking backlash from both Wolastoqey and Mi'kmaw leaders.

Now Richardson said he feels like Higgs is "holding this tax agreement hostage" as a way to get approval for fracking.

"I mean that's what he's basically doing, is saying 'Well, I took your tax agreement away, but here, look at all this money you can make by agreeing to fracking,'" Richardson said.

Richardson said he's mainly concerned about potential environmental impacts from fracking, adding he hasn't seen any new information to allay those concerns.

And even if he was on board with lifting the moratorium, he doesn't think it would go over well with his community members.

"I don't think it's gonna fly," Richardson said.

"We have to revisit this in our communities and see what our community's perspective is, but I'm almost safe in 100 per cent saying that … unless the technology has changed, there would be a lack of of support for this."

Mi'gmawe'l Tplu'taqnn Inc. represents Mi'kmaw communities in New Brunswick. Spokesperson Jennifer Coleman said in an email that staff have submitted a proposal to the province regarding resource revenue sharing.

"Under that proposal, all projects would be subject to a rights impact assessment," Coleman said. "We are still waiting to have a meeting on that proposal."

The Wolastoqey Nation, which represents Wolastoqey communities in the province, declined to comment.

In 2019, Higgs quietly carved out a small exemption to the Liberal moratorium for an area near Sussex where Headwater Exploration, formerly known as Corridor Resources, was already extracting gas.

If the moratorium were to be lifted in order to allow new fracking to take place, certain conditions would have to be met, including setting up a process for the province to meet its duty to consult with First Nations.

Higgs said an area known as McCully Field near Sussex is the only site currently being looked at for expanded shale gas extraction.

With the field containing about a trillion cubic feet of natural gas, he said it could supply domestic markets to off-set the reliance on burning coal for electricity, and it could supply European markets looking to turn away from Russian gas.

'An extraordinary opportunity': energy analyst

The prospect of getting First Nations leaders to agree to expanding shale gas extraction in the McCully Field would be "massive" for New Brunswick, said Todd McDonald, president of Energy Atlantica, an energy consulting and trading firm.

"It's an extraordinary opportunity," McDonald said.

He's been in the industry for 20 years and said he's seen the highs and lows of market prices for shale gas.

Still, he said the business case for extracting shale gas in New Brunswick is "viable," considering consumers here are paying four times more than consumers in Alberta, where the gas is imported from.

"The first portion of any new natural gas could go to meet our own needs … then as we produce more gas than what we need we would actually have gas to export."

Limited window to acquire 'social license'

While there might be a business case for shale gas right now, that's not guaranteed to last, said Herb Emery, an economist at the University of New Brunswick.

That's because natural gas — while cleaner than other fossil fuels — is supposed to only be a "transitional" energy source to be phased out as green energy sources take precedent, he said.

That means New Brunswick has a limited window to fulfil its duty to consult First Nations, acquire the "social license" to lift the fracking moratorium, and then obtain federal regulatory approvals.

"In order for it to be viable in New Brunswick you'd need to resolve those three things … probably within a time scale of a few years, not a decade, because you're still going to take about a decade to develop the resource and get it to market," he said.