Quebec’s Fracking Restrictions: Squandered Opportunity or Prudent Conservation?

ABSTRACT

This article first reviews key developments in the Quebec natural gas fracking timeline from initial exploratory well fracking in 2007 to the 2011 moratorium and the 2018 fracking prohibition. Next, the article estimates potential jobs and wealth losses from the prohibition in Quebec via a comparison between intensive fracking in northeastern Pennsylvania (which is similar in size to Quebec’s core potential fracking region) and adjacent counties in New York state where fracking is prohibited. Quebec’s job loss from fracking prohibition is estimated to be quite modest. Moreover, the estimated wealth effect range shows that allowing development of Quebec’s shale gas reserves may well have led to net wealth losses rather than gains for its citizens because of large declines in natural gas prices. While future shale gas development in Quebec is a possibility, given the preferences of Quebec’s citizens, the weak profitability prospects of the shale gas sector, and the ongoing cost reductions for solar and wind power, it seems most likely that Quebec’s Utica Shale gas reserves will remain undeveloped and that this will be a sound policy decision.

KEYWORDS:

• Fracking
• Quebec natural gas
• sustainability

Acknowledgments

The authors would like to thank the organizers and participants in “Québec Society in 2019: Current State and Future Prospects A Scholarly Colloquium”, March 14–16, 2019, École nationale d’adminstration publique (ÉNAP), Montreal for valuable feedback on this manuscript.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

No external funding provided for this research

Notes on contributors

Todd Potts

Dr. Todd Potts is a Professor of Economics at Indiana University of Pennsylvania. His areas of specialization include time series econometrics and monetary economics.

David Yerger

Dr. David Yerger is a Professor of Economics at Indiana University of Pennsylvania. His areas of specialization include energy economics and Canadian studies.