Quebec ends drilling on Anticosti Island

QUEBEC — The Quebec government announced Friday there won’t be any further oil and gas exploration on Anticosti Island, putting the controversial drilling project to rest.

Natural Resources Minister Pierre Arcand said a decision was taken to protect the island’s natural character and support its bid to become a UNESCO World Heritage Site, which the province has formally backed.

“It was clear to us that it was very difficult both to exploit the hydrocarbons and at the same time to apply to UNESCO for Anticosti,” Arcand said in Montreal.

The project, conceived under the previous Parti Quebecois government, had become a political hot potato after Premier Philippe Couillard’s Liberals came to power in 2014.

In 2014, the PQ announced a $115 million investment, a first step towards gas exploration on Anticosti Island, estimating a potential of 46 billion barrels.

The exploration work was aimed at determining the hydrocarbon potential, in terms of quality and volume, on the eastern Quebec island.

However, Couillard increasingly distanced himself from the project after attending the international climate conference in Paris in 2015.

The premier expressed concerns about environmental risks and had questioned the project’s economic viability, repeatedly noting it was reached under the previous PQ government.

The provincial government said Friday that negotiations are underway to compensate a number of companies for cancelling their contracts.

Deals have been reached with Junex, Corridor and Maurel & Prom for a total compensation of $41.4 million.

Discussions are ongoing with Quebec City-based Petrolia Inc. (TSX-V:PEA) and Trans American.

Petrolia said in a statement that it held a different role than the foreign firms the province has settled with, in terms of status, interests and responsibilities.

“Under these circumstances, it is clear that the government of Quebec can not treat Petrolia on the same footing as the foreign companies,” the company said.

Petrolia added it will pursue negotiations in good faith, but was disappointed with the government’s decision.

“Although we are deeply disappointed by the turn of events, we are still convinced, even more than in 2014, of the potential and relevance of the Anticosti project for Quebec and for society,” said Martin Belanger, Petrolia’s acting president and chief executive officer.

“For us, Anticosti remains and will always remain a major economic project, capable of generating significant spin-offs for Quebec.”

The island located in the Gulf of St. Lawrence is home to deep canyons, impressive waterfalls and numerous caves.

The head of a local environmental group said the risks of drilling there would have far outweighed any potential economic benefit.

“Anticosti is a jewel, a place worthy of being part of UNESCO’s world heritage,” said Steven Guilbeault of Equiterre.

“Allowing oil companies to draw millions of litres of water, to dig thousands of oil wells, to inject chemicals in the soil would have been a grave error.”

Many local residents were opposed to oil and gas activity on the island and fear the environmental impact and dangers for fish and wildlife.

John Pineault, the mayor of the Quebec municipality and a fervent opponent of the drilling, says the firms must now restore the sites to what they were.

“Let them clean up their sites to put this behind us,” he said in an interview.

Pineault also thanked groups that had supported his efforts to have drilling stopped: First Nations, environmentalists and labour unions.

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