10/31/2013 12:38 EDT | Updated 12/31/2013 05:12 EST

Energy company granted permits to drill for natural gas in Nova Scotia

HALIFAX - An energy company has been granted permits to drill two test wells for natural gas in Nova Scotia's Pictou County.

Provincial Energy Minister Andrew Younger said Thursday that East Coast Energy has met all regulatory requirements to carry out its work along the Foord coal seam near Stellarton at a depth of 540 metres.

Younger stressed the permits do not allow the use of hydraulic fracturing, which is typically used to extract natural gas from shale formations.

The company has submitted an emergency response plan and must provide daily reports to the department once drilling begins, he said.

"Drilling companies must follow a strict regulatory approval process that ensures any activity is done in a safe manner that protects the environment," Younger said in a statement.

The drilling is expected to take place over 30 to 40 days.

Exploration for coal-bed methane — a type of natural gas trapped in coal seams — is nothing new for Nova Scotia.

More than 30 wells have been drilled in the province since 1979, most of them in the Stellarton area, the Energy Department says.

However, none of the wells produced enough to make them economically viable.

East Coast Energy took over Stealth Energy's production agreement in the Stellarton area and drilled a test hole in 2011 to indicate the exact position of the coal seam.

Stealth Energy still has an active coal-bed production agreement in the Springhill area. East Coast Energy has the only other production agreement in the province.

As part of its water management plan, East Coast Energy has tested all water wells within one kilometre of the two proposed well sites. The company says all 16 wells tested positive for natural gas and these results have been shared with residents.

The Foord coal seam is notorious for its high levels of methane gas.

On May 9, 1992, a sudden gush of methane escaped from the seam and erupted into flames inside the Westray coal mine near Plymouth, N.S., killing 26 miners.

Of the more than 2,500 men who have died in Nova Scotia mining accidents since the mid-1800s, about 250 were killed in explosions caused by methane seeping from the Foord seam.

"They're not drilling into the Westray mine," Younger said after a cabinet meeting. "I think if that was going to be raised as a concern, it would have come up at one of the many public meetings."

Note to readers: This is a corrected story. A previous version wrongly said coal-bed exploration dates back to the 1800's.