New Brunswick's Petroleum Potential

New Brunswick is one of the oldest oil-producing provinces in the world. While it does not have any commercial crude oil production, it is a net producer of refined petroleum products (RPPs) and a significant supplier of gasoline to the United States East Coast. The Irving Oil Refinery in Saint John, the only refinery in the province, has a capacity of 320 thousand barrels per day, producing excess RPPs for export. In addition to refined products, Irving Oil also sells unprocessed crude oil. New Brunswick's motor gasoline demand in 2019 was 1,364 litres per capita, 8% above the national average. The province's diesel demand in the same year was 602 litres per capita, 30% below the national average.

New Brunswick's first oil wells

New Brunswick is one of the oldest oil-producing provinces in the world. The first oil well in the province was drilled near Dover in 1859, about 15 km southeast of Moncton on the east side of the Petitcodiac River. This well, along with three others, was drilled by H.C. Tweedal, a refiner from Pittsburgh. These four shallow wells produced a small quantity of oil.

The discovery of oil in the region was significant as it sparked the search for oil and gas in the Albert Formation, which is a geological area in New Brunswick. The wells in the Dover area were drilled into Lower Carboniferous lacustrine sandstones of the Albert Formation. This formation has since been the focus of most oil and gas exploration in the province.

The Stoney Creek Field, located on the west side of the Petitcodiac River, is another early oil and gas wellfield in New Brunswick. Exploration of this field began in 1908, and it produced natural gas until 1991. The field resumed oil production in 2007, and by 2011, it had produced an estimated 800,000 barrels of paraffinic oil and three billion cubic feet of sweet natural gas.

New Brunswick has a long history in the oil and gas sector, dating back to the 19th century. While the province has never become a major player in the industry, it has played a role in the development of natural resources in Canada. The discovery of oil and gas in New Brunswick led to the development of infrastructure, such as pipelines and refineries, and the province continues to be a producer and supplier of oil and gas products today.

Irving Oil's Saint John refinery

The Irving Oil Refinery in Saint John, New Brunswick, is currently the largest oil refinery in Canada, with a refining capacity of over 300,000 barrels of refined products per day. It was built in 1960 through a partnership between Irving Oil and Standard Oil Co. of California (SOCAL) and has been upgraded several times since. The refinery produces a wide range of products, including gasoline, diesel, heating oil, jet fuel, propane, and asphalt. Over half of the energy products are exported to the northeast US, while the rest are sold in wholesale and retail markets in Eastern Canada.

The refinery is supplied with crude oil delivered primarily by supertankers to the company's Canaport deep-water terminal, which was commissioned in 1970. Irving Oil's Canaport terminal covers 430 hectares of land and sea floor in the east end of Saint John and has a storage capacity of six million barrels. The terminal supplies the Saint John refinery from shipments received from ocean-going tankers that arrive from around the world multiple times every month.

In 2015, Irving Oil announced that it was no longer importing Bakken shale oil and was instead importing cheaper crudes from Saudi Arabia. This decision sparked controversy, with Conservative politician Andrew Scheer stating in 2017 that Canada should ban the import of oil from Saudi Arabia due to human rights and environmental concerns.

In recent years, the Irving Oil Refinery has faced challenges due to the coronavirus pandemic, resulting in a reduced workforce and operational scale. Despite these difficulties, the refinery remains a critical source of fuel for the US Northeast market and a significant contributor to Canada's gasoline exports.

Oil and gas sector emissions

New Brunswick is one of the oldest oil-producing provinces in the world. The first oil well in the province was drilled in 1859, and since then, exploration for oil and gas has been concentrated on the Albert formation. While New Brunswick is not a major player in the oil and gas industry, it has a few smaller, traditional oil and gas wells, such as the Stoney Creek Field, which produced oil and natural gas from 1909 to 1991 and resumed production in 2007. The province's natural gas production has decreased in recent years, and there is currently a moratorium on hydraulic fracturing.

The oil and gas sector in New Brunswick is a significant contributor to greenhouse gas (GHG) emissions. In 2020, the sector emitted 3.4 megatonnes (MT) of carbon dioxide equivalent (CO2e), with 3.3 MT attributable to petroleum refining and 0.1 MT to production, processing, and transmission. This makes the oil and gas sector the largest emitting sector in the province, accounting for 27% of total emissions.

To address these emissions, the federal government has implemented the Clean Fuel Standard, a regulatory regime that aims to reduce the carbon intensity of petroleum refineries and fuel importers. This policy sets targets for emissions and establishes financial rewards and penalties for companies to incentivize them to lower their emissions. The regulations allow companies to comply through various means, such as mixing ethanol with gasoline or investing in electric vehicle charging stations.

The Clean Fuel Standard has been a source of contention in New Brunswick, with oil companies arguing that the costs of compliance are too high. There have been hearings and debates around the accurate calculation of these costs, with experts claiming that oil companies are being overcompensated, leading to overcharging of consumers. Additionally, there are concerns about the potential impact of these regulations on the local economy, as companies may consider moving their operations to other regions with less stringent regulatory regimes.

To reduce emissions from the oil and gas sector, New Brunswick has implemented several measures. The province has adopted stricter standards for hydraulic fracturing, including baseline testing of water wells, disclosure of chemicals used, and the establishment of security bonds. Additionally, the government has developed an Environmental Protection Plan to ensure responsible environmental practices in land-based oil and gas activities, with a specific focus on drilling and hydro-fracking.

Petroleum pricing

New Brunswick is one of the oldest oil-producing provinces in the world. While it does not have any commercial crude oil production, it is a net producer of refined petroleum products (RPPs) and a significant supplier of gasoline to the United States East Coast. The pricing of petroleum in New Brunswick is regulated by the New Brunswick Energy and Utilities Board, which sets maximum prices at the retail level for gasoline, diesel, furnace oil, and propane on a weekly basis.

The Irving Oil Refinery in Saint John is the only refinery in New Brunswick and is the largest in Canada. With a capacity of 320 thousand barrels per day, it produces RPPs in excess of New Brunswick's needs, primarily for export to the US and neighbouring provinces. The refinery has been at the centre of discussions around petroleum pricing in the province.

In recent years, there has been controversy over a property tax exemption granted to Irving Oil by the New Brunswick government in 1981 to help the company during the oil crisis. This exemption was temporarily revoked in 2023, although the exact reason is unclear. The exemption has been politically controversial, with opposition parties calling for its review and potential cancellation.

In terms of petroleum pricing, there have been concerns about overcharging consumers. In 2024, it was reported that New Brunswick had been overestimating the cost of federal clean fuel regulations on oil companies, resulting in consumers being overcharged by millions of dollars. This has led to debates about the formulas used to calculate these costs and the impact on petroleum prices.

The Clean Fuel Standard, a regulatory regime pushed by the federal government, has also been a point of contention. It aims to reduce the carbon intensity of petroleum products but has been criticised for increasing costs for oil companies and potentially leading to higher prices for consumers. The implementation of these regulations and their impact on petroleum pricing in New Brunswick is an ongoing discussion.

Oil and natural gas exploration

New Brunswick is one of the oldest oil-producing provinces in the world. The first oil well in North America was drilled in the province in 1859, about 15 km southeast of Moncton on the east side of the Petitcodiac River. Four shallow wells produced a small quantity of oil. Since then, most oil and gas exploration has focused on the Albert formation, where the first well was drilled.

New Brunswick does not have any commercial crude oil production. However, it is a net producer of refined petroleum products (RPPs) and a significant supplier of gasoline to the United States East Coast. The Irving Oil Refinery in Saint John is the only refinery in the province and the largest in Canada, with a capacity of 320 thousand barrels per day. It produces RPPs in excess of New Brunswick's needs, primarily for export to the US and neighbouring provinces.

Natural gas production in New Brunswick is relatively small, averaging 5.4 million cubic feet per day in 2020, representing less than 0.1% of total Canadian natural gas production. Natural gas is produced from the McCully Field, near Sussex, which was discovered in 2000.

A moratorium on hydraulic fracturing has been in place in New Brunswick since 2014, which may impact future oil and natural gas exploration and production in the province.

Frequently asked questions