New Brunswick's Oil Origins

New Brunswick is one of the oldest oil-producing provinces in the world, with its first oil well drilled near Dover in 1859. However, it has never become a major player in the industry. The Irving Oil Refinery in Saint John is the only refinery in the province and the largest in Canada, with a capacity of 320,000 barrels per day. While the majority of its crude oil supply comes from non-Canadian sources, such as Saudi Arabia, it also receives oil from western Canada and offshore Newfoundland and Labrador. New Brunswick is also known for its 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.

New Brunswick's first oil well

New Brunswick is one of the oldest oil-producing provinces in the world. The first oil well in the province was drilled in 1859, around 15 km southeast of Moncton on the east side of the Petitcodiac River. This well, along with three others drilled in the same area, were constructed by H.C. Tweedal, a refiner from Pittsburgh. These four shallow wells produced a small quantity of oil, but they were significant as they were among the first oil wells in North America. The discovery of oil in this region, known as the Albert Formation, led to further exploration and drilling in subsequent years.

The Albert Formation, consisting of Lower Carboniferous lacustrine sandstones, became a focal point for oil and gas exploration in New Brunswick. This initial discovery played a pivotal role in shaping the province's oil industry and established New Brunswick as a prominent player in the oil sector. The wells drilled by Tweedal were a significant milestone, not just for the province but also for the entire continent, as they marked the early days of the oil industry in North America.

The oil industry in New Brunswick has evolved since those early days, with the establishment of refineries and the development of infrastructure for transporting and storing crude oil. The Irving Oil Refinery, located in Saint John, is the only refinery in the province and the largest in Canada. It was built in 1960 through a partnership between Irving Oil and Standard Oil Co. of California (SOCAL). The refinery has undergone several expansions and upgrades over the years, including a major $1.5 billion upgrade in 2000.

Today, the Irving Oil Refinery plays a crucial role in meeting the energy demands of not just New Brunswick but also the neighbouring provinces and the United States. While New Brunswick does not have any commercial crude oil production, the Irving Oil Refinery processes over 320,000 barrels of crude oil per day, with a significant portion being exported to the US East Coast. This refinery is a key contributor to the province's economy and has solidified New Brunswick's position in the oil industry, building upon the foundations laid by those first oil wells drilled by H.C. Tweedal in the 19th century.

The Irving Oil Refinery

The refinery has a capacity of over 320,000 barrels (51,000 m3) of crude oil per day, making it a crucial component of the East Coast energy market. More than half of its finished energy products, including gasoline, diesel, heating oil, jet fuel, propane, and asphalt, are exported to the Northeast United States. The refinery primarily receives its crude oil supply from Irving's Canaport Marine Terminal, which can accommodate ultra-large crude carriers (ULCC) and has a substantial oil storage capacity of six million barrels.

In addition to its refining operations, Irving Oil also operates over 900 fuelling stations across eastern Canada and the northeastern United States. The company's wholesale and industrial fuels business emphasizes responsive customer service and building long-lasting relationships. They serve their business customers in three unique markets: blending and packaging, wholesale and specialty fuels, and cargo and product trading.

In recent years, Irving Oil has faced some controversies and challenges. In 2010, the company cancelled an $8-billion project, known as Eider Rock, which would have involved constructing a second refinery adjacent to the Canaport property. Additionally, there have been concerns raised about the environmental impact of the refinery's operations, with allegations that the government ignored the public interest in favour of big business.

In 2023, Irving Oil announced a strategic review that includes the possibility of a full or partial sale of the company. Despite this, Irving Oil remains a significant player in the energy industry, particularly in the eastern regions of North America.

Shale gas deposits

New Brunswick has an estimated 80 trillion cubic feet of gas locked in the Frederick Brook Shale formation, a geological basin in the southern half of the province. The New Brunswick government estimates there are 80 trillion cubic feet (tcf) of gas reserves in the Frederick Brook Shale, with the potential for holding large volumes of natural gas. The formation, which was created more than 300 million years ago, runs along the south shore of New Brunswick from the Hampton area to Sackville.

The sought-after gas deposits in the Frederick Brook Shale have sparked a renewed interest in the province's natural gas sector in recent years, particularly regarding shale gas deposits and the use of new mining techniques to extract the gas. The New Brunswick government claims the province has the thickest shale gas reservoir in North America.

Corridor Resources, in partnership with Apache Canada, was the first company to explore shale gas opportunities in New Brunswick. In 2010, Corridor Resources announced that it had found more natural gas in southern New Brunswick than is available in all of western Canada's proven reserves. The company had nearly overlooked the gas deposit, having considered the well a dud, and it was abandoned for 11 years. Now, the well could become a major source of natural gas due to the emergence of technology that can extract natural gas from shale beds.

In 2011, nine companies held a Crown licence to search for shale gas deposits in New Brunswick, with 71 rights agreements covering more than 1.4 million hectares for exploration and production. Since 1990, the New Brunswick government's statistics show that 40 natural gas wells and 40 oil wells have been drilled, with another 49 wells undergoing hydraulic fracturing and nine wells being drilled horizontally.

In 2014, former premier Brian Gallant imposed a moratorium on fracking following violent protests. However, in 2023, Premier Blaine Higgs pitched First Nations on the potential for significant revenue sharing if they agreed to expand shale gas development in the province. Higgs highlighted the possibility of tapping into a reserve containing a trillion cubic feet of natural gas in an area known as the McCully Field, which could supply domestic and European markets. Despite this, at least one Mi'kmaw chief opposed any new fracking due to environmental concerns and worries about political bargaining.

Hydraulic fracturing

New Brunswick is one of the oldest oil-producing provinces in the world. However, it does not have any commercial crude oil production. The Irving Oil Refinery in Saint John is the only refinery in the province and the largest in Canada, with a capacity of 320,000 barrels per day. While the refinery primarily serves export markets in the US and neighbouring Canadian provinces, it produces refined petroleum products in excess of New Brunswick's needs.

New Brunswick's natural gas production comes from the McCully Field near Sussex, discovered in 2000 by Corridor Resources and Potash Corporation of Saskatchewan. A moratorium on hydraulic fracturing has been in place in New Brunswick since 2014, halting the development of new wells. Corridor Resources, which had been extracting natural gas in the Sussex region since 1999, announced in 2019 that it was shelving plans to frack in the area, citing "regulatory uncertainty".

In 2019, the New Brunswick government faced criticism for quietly lifting the fracking moratorium in the Sussex area. The decision was met with opposition from environmental and First Nations groups, who argued that the government had not conducted the necessary consultations with Indigenous communities. The government defended its decision, stating that consultations with Indigenous groups were of "paramount importance" and would be carried out before any development took place, which was expected to be at least two years away.

Oil and gas companies' development stage

The oil and gas industry is divided into three segments: upstream, midstream, and downstream. Each stage has distinct roles and processes that contribute to the overall development and production of oil and gas resources.

Upstream Stage:

The upstream stage, also known as the exploration and production (E&P) sector, involves locating and extracting oil and gas from beneath the earth's surface. This stage can be further divided into three phases: exploration, drilling, and extraction. During exploration, geologists and geophysicists use methods such as seismic surveys and satellite imaging to identify potential oil and gas reserves. Once a viable reserve is located, drilling engineers and reservoir engineers determine the best well placement and design. Drilling rigs are then used to bore wells and access the oil or gas trapped below the surface. In the final phase of the upstream stage, extraction, the oil or gas is drawn to the surface, sometimes using secondary recovery methods like water or gas injection to maximize yield.

Midstream Stage:

The midstream stage serves as a bridge between the upstream and downstream stages, focusing on processing, storing, and transporting oil and gas. During processing, impurities and various hydrocarbons are separated to meet market specifications. The processed oil and gas are then stored in specialized tanks or facilities until they are ready for transportation. Transportation methods can include pipelines, trucks, or tanker ships, depending on the distance and infrastructure.

Downstream Stage:

The downstream stage is where the refined oil and gas products are produced and distributed for consumer and industrial use. Refineries convert crude oil into a range of products, including gasoline, diesel, jet fuel, heating oil, and asphalt. Natural gas is treated to produce ethane, propane, and butane. The final step in the downstream stage is distribution, which involves selling and delivering these products to consumers, businesses, and industries. This includes gasoline stations, home heating providers, power plants, and petrochemical companies, among others.

Development Stage:

The development stage falls between the appraisal period and the beginning of field production. It involves a range of activities and processes, including environmental impact assessments, geophysics, geology, reservoir engineering, infrastructure development, well design and construction, and economics and risk assessment. Geologists, geophysicists, reservoir engineers, and other specialists collaborate to define a precise Field Development Plan (FDP) and ensure optimal field development. The costs and duration of the development phase depend on factors such as the field's location, the size and complexity of the facilities, and the number of wells required.

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