Province betting on oil in our backyard

$300,000 aerial survey around Sarnia region aims to detect signs of additional oil reserves

QUEEN'S PARK BUREAU: Rob Ferguson - January 26, 2009

Can more black gold and natural gas be squeezed from Ontario's tiny and little-known oil patch near Sarnia?

Ever hopeful, the Ontario government is spending $300,000 on an airborne geophysical survey of 11,000 square kilometres to find out. It argues that more drilling in these challenging economic times could stimulate the local economy.

That means people like Pat McGee.

Her husband, Charlie Fairbank, runs five-employee Fairbank Oil in the town of Oil Springs, shipping relatively small amounts of crude – 24,000 barrels a year from 320 pumpjacks – to the massive Imperial Oil refinery in Sarnia.

McGee notes the low price of oil on world markets lately – down to $46.47 (U.S.) a barrel on Friday from $147 last July – might make it tough for anyone to get interested in exploration right now.

"It all depends on the price," she says. "That July high was short-lived. Our marriage vows just about said `for boom or bust,'" she quips.

Starting next month, a Piper Navajo packed with electronic equipment will take to the skies between Strathroy and Sarnia and Lake Erie and Lake Huron to do the survey.

"To be honest, we're probably not going to find a Saudi Arabia in here," says Derek Armstrong, a Paleozoic geologist with the ministry of northern development and mines in Sudbury.

Asked how much oil and gas might lie waiting, he said: "Until you look, you don't know."

What is known is that Ontario's oil patch – where the global petroleum industry began in the mid-1800s – was born 550 million years ago when rocks full of dead marine organisms like algae and plankton were deposited in the floor of ancient seas and buried as the land mass migrated north from the Equator to its current location. Depending on the depth and temperature, those dead organisms can transform into oil and gas.

If the magnetic images produced in six weeks of flying straight lines 200 metres above the ground, 500 metres apart, don't point to more oil and gas potential, there is hope they may reveal giant caverns suitable for storing carbon dioxide in the fight against climate change.

But critics still question why a government that likes to portray itself as environmentally friendly – Premier Dalton McGuinty has been touting electric cars and ethanol plants lately – is looking for more fossil fuels.

"Exploration for oil and gas is going in exactly the wrong direction in a globally warmed world that is rapidly growing much worse," says David Martin of Greenpeace.

Northern Development and Mines Minister Michael Gravelle defends the survey as "a quick, cost-effective way" to determine whether the oil patch can get busier.

Officials note there is still demand for oil, and Ontario's reserves have the benefit of being easier to extract from the ground than Alberta's tar sands and are close to refineries.

That is why even major oil and gas companies like Calgary-based Talisman have properties in the area, along with "mom and pop" producers like Fairbank.

Talisman, for example, pumps 900 barrels of oil a day and 12 million cubic feet of natural gas in Ontario – puny compared with the company's 2008 daily production of 430,000 barrels a day of oil and natural gas equivalents at all its properties.

"The thing is they are so close to markets and they have ... low operating costs," said Talisman spokesperson Phoebe Buckland. "Even though the pools are relatively small, they are attractive for those reasons."

Not everyone in the oil patch agrees the $300,000 for the survey is money well spent.

Previous surveys haven't produced any miracles, although locals are still finding oil on their own, says Ian Veen of Black Creek Well Services, a 30-year veteran of the industry.

"It hasn't ever played out," he said in an interview. "I think our premier is reaching for something he can't find."

Progressive Conservative energy critic John Yakabuski smells politics, given that much of the survey area is in the Chatham-Kent-Essex riding of Liberal MPP Pat Hoy.

"The political bargain is they're making Pat Hoy very happy because it looks like economic development," said Yakabuski, who also wonders why the government is looking for carbon sequestration sites given that former energy minister Dwight Duncan has questioned the feasibility of such storage methods.

"They've said it doesn't work."

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