A new estimate of the gas resource locked in the Liard basin straddling the British Columbia, Yukon and Northwest Territories borders should be reason for celebration – with 219 trillion cubic feet of marketable gas, it’s among the largest shale gas deposits obtainable in the world.
In better times, this kind of eye-popping number might have triggered stock appreciation, pumped governments to ask development and promoted competition between corporate players eager to enter on the action.
But with the pile of nixed and challenged energy projects getting bigger, and natural gas prices languishing, the Liard’s supersized resource estimate mostly works as a reminder that Canada has great resource potential – try not to believe it in the near future.
The reasons behind the nation’s struggles to turn resources into exports are consistent: regulatory delays, opposition from aboriginal and environmental organizations, climate change worries, political mishandling and, ultimately, changing market conditions.
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According towards the study, published by the NEB Wednesday and done in collaboration using the British Columbia Gas and oil Commission, the Yukon Geological Survey, the Northwest Territories Geological Survey and the British Columbia Secretary of state for Gas Development, the Liard offers the world’s ninth-largest gas accumulation, and Canada’s second largest following the Montney, shared by Alberta and B.C.
The basin collected sediments from about 540 million years ago to around 65 million years back, plus some converted into shale that generated gas. The majority of the gas is in British Columbia, with 167 trillion cubic feet, the NWT landed 44 and also the Yukon eight.
Canada’s total gas usage in 2014 was 3.2 trillion cubic feet, which means the Liard could satisfy a lot more than 68 years of national consumption.
San Ramon, Calif.-based Chevron Corp., and Perth, Australia-based Woodside Energy, possess a handful of wells that are already producing gas that is transported by pipeline towards the southern part of B.C. and the U.S. North american. The partners intend to make use of the resource to give the proposed Kitimat LNG project on Canada’s West Coast if and when it’s built.
Mike Johnson, technical leader for hydrocarbon resources in the NEB, said the Liard is extremely prolific, has existing pipeline connections, and could see big development if gas prices increase.
“We aren’t well versed about the economics,” he said. “It’s more remote, therefore it might cost more to build up the resource, but the wells are really, really big.”
Today natural gas in Western Canada is depressed and there’s no upside around the corner.
It’s been pushed in many historic markets by shale gas produced in the United States. Proposals to build liquefaction facilities around the B.C. coast to allow exports to Asia are stuck in delays, while competing jurisdictions are jumping ahead.
The $36-billion North american LNG project proposed by Malaysia’s Petronas and its partners is due for a recommendation next week on whether or not this can move forward by federal Environment and Climate Change Minister Catherine McKenna. But it is likely to face further delay after Ottawa introduced new greenhouse-gas emissions considerations, fueling proponents’ frustration.
Last month, Royal Dutch Shell PLC delayed a decision on construction from the LNG Canada project until the end of the year, and AltaGas Ltd. put on contain the Douglas Channel project.
The lineup of cancelled or delayed projects was already long. It offers the Mackenzie gas pipeline, the Northern Gateway oil pipeline, the Keystone XL oil pipeline and the Alaska Highway gas pipeline.
Bob McLeod, premier from the Northwest Territories, said oil and gas companies “packed up and left” in the North after oil prices collapsed.
In an address towards the Arctic Gas and oil Symposium in Calgary, McLeod said his region is greatly impacted by global warming, which fuels forest fires and hinders ice roads.
But he explained its northern border also wants energy development since it needs jobs.
After losing Mackenzie gas, drilling in the Beaufort Sea and gas and oil activity in the central Mackenzie Valley, the NWT is get yourself ready for the following gas and oil upturn because they build infrastructure, reforming land tenure and helping with aboriginal land claim settlements, he explained.
“If you will find the resources then we expect that at some point the power is going to be required,” said McLeod, who remains hopeful the Mackenzie pipeline will ultimately be built. “If you look at the forecasts, they still see that even with the conversion to renewable and alternatives type of energy, there’ll be essential for gas and oil.”
ccattaneo@nationalpost.com
Twitter.com/cattaneooutwest
