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Arctic will only “supplement” Canada’s gas supplies, says comprehensive gas study Team of scientists says Western Canada will remain the key Canadian gas source; resources smaller than previously estimated at 233 trillion cubic feet Gary Park PNA Canadian Correspondent
Arctic gas reserves will be little more than a supplementary source of supply because of their remoteness and the billions of dollars needed to develop and connect the reserves to market, says the most comprehensive study ever undertaken of Canada’s gas resources.
Of the estimated 233 trillion cubic feet of “nominal marketable” reserves across Canada, 144 trillion cubic feet are in Western Canada, 11 trillion cubic feet in the onshore Northwest Territories, Yukon and Mackenzie Delta and 33 trillion cubic feet in the Arctic Islands and Beaufort Sea, said the Canadian Gas Potential Committee.
“While Canadians have long looked to the North and Canada’s offshore basins for large new supplies, our study indicates that Canada’s frontiers will simply supplement the nation’s core production from Western Canada,” the study said.
The authors estimate that the Mackenzie Corridor, Mackenzie Delta and the Nova Scotia offshore — the areas deemed most likely to be developed over the near term — hold a combined 35 trillion cubic feet of discovered and undiscovered marketable gas.
The more remote basins — the Arctic Islands and offshore Newfoundland-Labrador regions — have yielded large, high-quality discoveries, but are spread over huge, environmentally challenging areas, the findings said.
Other areas, such as the British Columbia offshore, hold conceptual plays, but no discoveries and major exploration programs will be needed just to confirm the existence of those reserves.
The committee, made up of 50 volunteer geologists, geophysicists, mathematicians and engineers, spent four years on the undertaking and based its findings on 1998 estimates.
40-year supply of gas The study said that the 233 trillion cubic feet of gas resources represents a 40-year supply based on the 1998 annual production rate of about 5.8 trillion cubic feet (of which almost 3 trillion cubic feet was exported to the United States).
That was a sharp drop from a 1994 projection that Canada had 50 years of remaining supply — a drop the committee said resulted from a changed methodology to achieve numbers that reflect a “realistic potential” for gas development.
“Our country has a depth of natural gas resources, but the results of our study remind all Canadians that there is a limit,” said committee chairman Roland Priddle, a former chairman of the National Energy Board.
The researchers didn’t analyze the financial viability of developing the gas prospects, but warned it’s unlikely that all of the gas can be developed and said many of the pools are marketable in name only.
The 570-page report said exploration could identify more than 200,000 new pools across Canada.
It projected as many as 200,000 exploration wells, double the number drilled so far in Canada, will be needed to tap the undiscovered gas potential of the Western Canadian Sedimentary Basin, the dominant producing basin which holds 61 percent of Canada’s remaining marketable gas.
Only 153 pools likely to be big But chief analyst Robert Meneley said it was likely that only 153 pools would contain reserves of 40 billion to 1 trillion cubic feet, most of them in the geologically complex foothills of the Canadian Rockies, while another 3,200 pools would likely hold 2.5 billion to 40 billion cubic feet.
Committee member Dick Proctor said explorers are “getting better at finding small pools, but, even with new technology, it will take an enormous amount of drilling to find those pools.”
Because some pools may never be found or be economic to develop, the realistic potential for Canada’s undiscovered resources is likely less than the 233 trillion cubic feet identified, the report said.
Despite the surging interest in opening up the East Coast offshore and the Arctic, Western Canada “will continue to be the main gas supply area ... but this area is mature and future supplies will increasingly be drawn from smaller, short-lived pools that require intensive exploratory drilling,” said Meneley.
“Excellent exploration targets remain to be found, mainly in the Rocky Mountain foothills and Devonian geological traps under the Canadian prairie,” he said. “However, an increasing proportion of the gas supply will be drawn from small, short-lived Cretaceous pools.”
The study said non-conventional gas sources, such as coalbed methane, need more extensive research into production methodologies.
Pilot projects would be critical before a reserve potential could be estimated, but if projects planned or in progress were successful commercial production could be achieved in the next 10 years, said Meneley.
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