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CBM vital to Alberta gas supply
By Gary Park For Petroleum News
Coalbed methane is rapidly becoming the one positive element in Alberta’s natural gas sector, slowing the rate of decline in the province’s conventional reserves, which have tumbled 40 percent since 1982, the Alberta Energy and Utilities Board reported in its 2005 report.
The surge in coalbed methane drilling to 3,189 successful wells last year lifted proven reserves for the resource to 741 billion cubic feet from 263 bcf at the end of 2004 and more than offset a 268 bcf decline in conventional gas reserves, which entered 2006 at 38.4 trillion cubic feet, or close to eight years of supplies at current rates of production.
The report said Alberta produced 4.9 tcf of marketable gas in 2005, with coalbed methane contributing 50 million cubic feet.
The province tallied 13,248 successful conventional gas wells in 2005, up 2 percent from 2004 and the board expects to see an average of 12,000 wells completed annually over its 2006-2015 forecast period, including 3,000 CBM wells per year.
But, despite these levels of activity, the regulator warned that rising demand for gas within Alberta along with the decline in conventional volumes will sharply reduce what is available for removal from the province over the next 10 years.
It expects Alberta will consume 42 percent of its production in 2015 compared with 27 percent last year.
Board Chairman Neil McCrank said in a speech that conventional gas has “obviously turned the corner and there is less available today than there was yesterday.”
“But there are other potential resources available ... such as coalbed methane and shale gas.”
The board said it expects conventional production to again drop by 2 percent this year and 3 percent in subsequent years.
Gas reserve additions from drilling totaled 2.96 tcf, while re-assessments of older pools added 1.48 tcf.
Much of Alberta’s gas activity was concentrated on the shallow southeastern plays, which contain more than half of the province’s producing wells but only 20 percent of its 2005 production. Conventional oil production up Conventional oil production rose 2 percent last year to 571,400 barrels per day and recoverable reserves of conventional crude were up 2 percent to 1.6 billion barrels, but reserve replacement accounted for only 63 percent of output.
Bitumen production was 1.06 million bpd and remaining reserves were virtually unchanged at 174 billion barrels
McCrank said the province has “merely scratched the surface of Alberta’s oil sands reserves” of 174 billion barrels, adding that the resource, second only to Saudi Arabia in reserve numbers, is “extractable at a reasonable cost and in a stable political environment.”
With more than C$100 billion worth of projects in various planning stages, he expects bitumen output to roughly triple by 2015 from last year’s 1.06 million bpd.
But McCrank said it is important to back up the numbers with a credible record on the world stage.
He said the “scrutiny is much higher (now that Alberta) has become a fundamental part of the continental energy equation.”
Although the reserve numbers are virtually unchanged from many years ago, the deposits are “more of a world story now ... we’ve been saying this for a long time, but it has never been as much of a national story or international story as it is now,” he said.
Of the other petroleum resources, remaining established reserves were estimated at 761 million barrels of ethane (2005 production was 252,000 bpd), 1.1 billion barrels of natural gas liquids (propane, butanes and pentanes plus) and 89 million metric tons of sulfur.
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