On May 15, 2013, the Minister of Sustainable Development, Environment, Wildlife and Parks, Mr. Yves-François Blanchet, introduced Bill 37 in the Québec National Assembly in order to establish a moratorium on various activities related to shale natural gas exploration and production in the St. Lawrence lowlands.

Scope of moratorium

The proposed moratorium would remain in effect until new rules for hydrocarbon exploration and production are adopted or for a maximum period of five years. It would apply to all drilling, fracturing and injectivity testing activities related to exploration for or production of shale gas. These activities would thus be prohibited on the territory covered by Bill 37, subject to a maximum fine of $6,000,000 or a maximum term of imprisonment of three years.

The Bill would not prevent the possibility of carrying out work for the purpose of repairing, maintaining or closing existing wells. Moreover, the prohibition would not apply to shale gas stratigraphic drilling related to exploration for or production of shale gas.

The moratorium would apply to the territory of 52 municipalities in the St. Lawrence lowlands. The Government would also have the power to extend the application of the moratorium to municipal territories contiguous to those already affected by the Bill.

Furthermore, authorizations previously issued under the Environment Quality Act (EQA) and well drilling licences, modification licences or completion licences issued under the Mining Act would be suspended in so far as they relate to the activities covered by the moratorium. The authorizations issued under the EQA could not be transferred, modified or revoked during the moratorium period. It should be noted that authorizations issued by the Québec Commission de protection du territoire agricole (CPTAQ) or municipal bodies would not be affected by the Bill.

Context and next steps

The proposed moratorium follows the decision of the previous Government made public on March 16, 2011 that it would no longer authorize fracturing activities other than for scientific research purposes until a Strategic Environmental Assessment on shale gas has been completed. This de facto moratorium had not resulted however in the adoption of a specific legislative or regulatory framework formally prohibiting activities related to shale gas exploration or production.

Before it can be adopted, Bill 37 will be subject to debate before a parliamentary commission and it will need to obtain the support of at least one of the two main opposition parties.

It should be noted that pursuant to a specific provision in the Bill, the application of the moratorium would entail no right to compensation from the province of Québec.