Anticosti: Windfall or money pit?
Published Friday, February 14, 2014 7:21PM EST
The PQ announcement of a possible $45-billion government windfall from drilling on Anticosti Island had chins wagging in economic circles Friday, as some mused over the prospects of Quebec becoming a petro-state.
Some noted that the announcement put the cart before the horse, as there remains no firm evidence of such massive potential wealth on the sparsely-populated, Quebec-owned island in the St. Lawrence.
Currently the most noticeable natural resource on the island is the massive number of deer which thrive in the absence of such natural predators as wolves and bears.
One oil executive involved in the deal confessed to CTV Montreal Friday that that there’s no guarantee that the oil or natural gas will be found in the desired quantities.
“The questions that remain unanswered are: ‘what are the recovery rates what is the mixture of oil compared to gas and gas liquids?’” said Myron Tetreault, President and CEO of Petrolia Inc.
Whether Quebec will ever become Saudi Arabia of the north or stumbles into a deep money-pit is a question expected to be answered over the next few years when exploratory drilling gets into gear.
A good haul of oil could allow Quebec to eliminate or reduce the $11 billion cost of oil it burns through each year in imports and could even turn the province into an oil exporter.
A significant oil discovery could bring significant prosperity, not just to the province but to all of Canada, although Premier Marois had already pitched the costs of sharing the potential windfall as a reason to support sovereignty.
But the potential economic benefits of such new wealth would far outweigh the headaches of potential money quarrels among Canadian provinces according to one business representative.
”If we succeed, it means Quebecers will get wealthier and perhaps equalization payments will go down eventually,” said Michel Leblanc of the Montreal Board Of Trade.
New technology, such as fracking and horizontal drilling are expected to help snatch resources once considered too difficult to reach.
But even those technological innovations do not a guaranteed find make.
“The investment is quite risky because the government could lose all of it's money in that adventure because we don't' know if there's oil in there so it's a leap of faith,” said Karel Mayrand of The David Suzuki Foundation.
His group, like several other environmental groups, has criticized the plan, as it apparently doesn’t jibe with the Parti Quebecois plan to push for renewable resources.
Opposition leader Philippe Couillard said Friday that the project was a sort of lottery ticket bought with Quebec taxpayer money.
However CAQ leader Francois Legault expressed approval, saying that risking $115 million for a potential $45 billion profit made sense.