Examining the Effects of Environmental Policy on Shale Gas Production: The Case of Alberta, Canada

Abstract

The increase in natural gas production in North America resulting from the implementation of new technologies related to the fracturing (fracking) of natural gas-bearing shale reservoirs has enhanced the security of supply and lowered energy costs in the continent. Yet the environmental impact associated with shale gas development has raised concerns and debate among energy and environmental policy makers as to how best to address these concerns. As Canada’s largest producer of natural gas, the Province of Alberta is an example of a jurisdiction with numerous regulations for dealing with such environmental risks. This paper applies the CO/RE model of Konschnik and Bolingin examining Alberta’s environmental regulatory framework and the impact; it will have on further shale gas production in the province. Aside from the identification of risks associated with increased seismicity, the results of this examination suggest that the current regulatory environment does not appear to have any adverse effect on current and future shale gas production within the province. Furthermore, Alberta’s environmental regulation has influenced shale gas producers to pursue innovation in technology and engineering practice and has helped establish a collaborative approach to mitigating environmental risk.