Canada good on gas for a century

CSUG: Low and high case projections are two to four times greater than previous estimates; include shale gas but not hydrates

Gary Park

For Petroleum News

Canada could be sitting on 4,000 trillion cubic feet of natural gas – a motherlode that has been “dramatically” changed by the emergence of shale and tight gas and would be sufficient to meet domestic needs for another 100 years, according to data compiled by the Canadian Society for Unconventional Gas, or CSUG.

The analysis, covering Canada from coast-to-coast, includes conventional and unconventional resources and estimates the market portion at 700 trillion to 1,300 trillion cubic feet.

“The magnitude of these numbers may blow you away,” said CSUG president Mike Dawson.

“We have an awful lot of natural gas potential lying within the country.”

Of its projected marketable gas, CSUG said 357 tcf is conventional and between 376 tcf and 947 tcf is unconventional.

Shale gas, which is still in its infancy in Canada, is believed to account for 128 tcf to 343 tcf, tight gas 215 tcf to 476 tcf and coalbed methane at 34 tcf to 129 tcf.

According to the report, gas in place by resource type is: Conventional, 692 tcf; coalbed methane, 801 tcf; tight gas, 1,311 tcf; and shale gas, 1,111 tcf.

Gas hydrates were not included.

The low and high case projections are double to four times greater than previous estimates.

Canada currently produces about 5 to 6 tcf of gas a year, consuming 2.6 tcf domestically and exporting the rest to the United States.

Dawson said Canada’s gas resource potential has previously been “all over the map. As far as we know, this is the first time all these numbers have been put in one place.”

He said the Western Canada Sedimentary Basin, or WCSB, which extends from northern Canada into British Columbia, Alberta, Saskatchewan and Manitoba, retains the lion’s share of the resources, noting that the WCSB has 482 tcf of the 692 tcf of conventional gas in place.

Not all convention plays delineated

He said the numbers will almost certainly increase because CSUG’s assessment does not include some plays the industry is “only now beginning to tinker with.”

Dawson said the numbers don’t include the Duvernay, Montney, Horn River, Liard and Mackenzie Valley plays in Alberta, British Columbia and the Northwest Territories; the deep thermogenic Colorado group of shales in western Alberta, the bulk of the St. Lawrence Lowlands in Quebec; the Central Maritimes Basin in the Gulf of St. Lawrence with an onshore component in New Brunswick and the southern tip of Newfoundland.

Report supports greening of fossil fuels

Dawson said that if the industry can persuade even 5 percent of the Canadian heavy vehicle fleet to switch to gas, demand will rise by 53 billion cubic feet per year.

He said efforts also are under way to persuade power generators to switch from coal to gas (which produces half the greenhouse gas emissions for the same output,) noting a recent U.S. study also estimates there is sufficient gas in that country to meet demand for another 100 years.

“The North American market has an awful lot of gas and there’s going to be continued pressure on natural gas pricing, barring any kind of significant growth in demand,” he said.

To develop its numbers, CSUG first commissioned Petrel Robertson Consulting to summarize the range of assessment of Canada’s gas resource base, which it then converted into a total marketable resource.

Georges Bank moratorium extended

The Canadian and Nova Scotia governments said they will extend by another three years a moratorium on Georges Bank, a rich and ecologically sensitive fishing ground that is believed to hold a large oil and gas deposit off both Nova Scotia and New England.

The 1988 moratorium was set to expire in 2012, but the governments said it will be extended to December 31, 2015, “to gather and develop information on the delicate Georges Bank ecosystem, particularly about fishing and petroleum activities and technologies.”

U.S. President Barack Obama had already stretched the moratorium on the U.S. side to 2017, although a decision to reverse that position could come as early as 2015.

Nova Scotia Premier Darrell Dexter said any decision on the moratorium “could have significant economic and environmental impacts” on Nova Scotia, Canada and beyond.

“It is critical that government understands these impacts before such a decision is made,” he said.

Mark Butler, policy director for the Halifax, Nova Scotia-based Ecology Action center, said the extension was the “right thing to do for the fishery.”

“We have to get out of this endless cycle of studies and public consultations. While science and changes in the industry are important, the value of Georges Bank doesn’t change. We need to make a permanent decision to protect Georges Bank,” he said.

Moratorium being discussed before Gulf

The Geological Survey of Canada has estimated the Canadian zone of Georges Bank has recoverable resources of 10 trillion cubic feet of natural gas and 2 billion barrels of oil.

Paul McEachern, managing director of the Offshore Technology Association of Nova Scotia, welcomed the government decision not to extend the ban beyond 2013.

“All we have ever asked for is a dispassionate scientific review,” he said. “If the government needs additional time to do that … let’s let the scientists do their analysis without undue pressure from any side.”

—Gary Park