Joint Report Reveals Increase in British Columbia's NatGas Resources

The National Energy Board (NEB) and British Columbia Ministry of Energy, Mines and Petroleum Resources (MEMPR) issued a joint Energy Market Assessment (EMA), revealing the province has more than enough conventional gas resources to maintain a high level of energy activity for many years.

The EMA, entitled Northeast British Columbia's Ultimate Potential for Conventional Natural Gas, reports that as of year end 2003, the remaining gas available for future demand in the northeast area of the province is 35 Trillion cubic feet (Tcf). It also indicates an increase of ultimate conventional marketable gas resources of over 1 Tcf from the 1994 estimate of 51 Tcf to 52 Tcf. Ultimate potential is a science-based estimate of the total amount of conventional natural gas in northeast B.C., including what has been produced to date. The current annual production from this region is approximately 1 Tcf.

The report shows B.C. has additional conventional and unconventional gas resources that could be drawn upon in the future. These additional resources are located in B.C.'s northwest and interior basins, such as the Nechako and Bowser Basins, the southeast portion of the province and offshore. These are all areas in which the Provincial Government is interested in encouraging resource research and development.

British Columbia is an important contributor to Canada's natural gas supply, providing approximately 15 per cent of all production. The report is important as it provides the basis for sound resource management and sustainability planning, future production estimates, provincial revenue projections and more. Science-based information like this will inform the Province's considerations as it drafts the 2006 Energy Plan for B.C., due out before the end of the year.

"Our energy planning takes a great deal of factors into consideration, including what our current energy levels are, what is left and how we will manage those important resources," said Minister Richard Neufeld of the B.C. Ministry of Energy, Mines and Petroleum Resources. "Planning like this is informed by scientific reports like this. This new report - estimating an increase of 1 Tcf of natural gas resources - will encourage further international interest and investment in our resources as well."

As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and publishes reports including EMAs. Ultimate potential EMAs are published on an on-going basis to reflect changes in estimates based on new discoveries or new plays being developed. This is the second time the NEB has collaborated with a provincial department to produce a joint report.

"The partnership with the Ministry in B.C. was a valuable one as we were able to work together to better understand the gas resources in the province," said Kenneth Vollman, NEB chairman. "We're looking at the need for future assessments in other areas of the country and see the benefit of provincial partnerships to better serve the Canadian public."

The NEB is an independent federal agency that regulates several aspects of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. As part of its mandate the NEB monitors the supply of all energy commodities in Canada and publishes reports on energy, called Energy Market Assessments.

MEMPR manages the responsible development of B.C.'s energy, mining and petroleum resource sectors. The Ministry performance plan outlines our strategies to increase jobs, investment and revenue related to these sectors, while acting as an environmental steward protecting the affected land base.

Canada's role in the North American natural gas market is an important one. Today, Canada provides approximately one-quarter of the total North American gas production. While the key natural gas producing province in the country is Alberta, British Columbia also plays an important role. In 2003, British Columbia provided approximately 15 per cent of Canada's total production.

This Energy Market Assessment, Northeast British Columbia's Ultimate Potential for Conventional Natural Gas Resources, provides an outlook for what natural gas resources could be available for future use by the province. Ultimate potential for natural gas is a key factor in making projections of future supply. It provides basic information for further investigation of the pace of development, deliverability and economics.

This report is the result of a joint study by the National Energy Board (NEB) and the British Columbia Ministry of Energy, Mines and Petroleum Resources (MEMPR). It began in 2003 to focus specifically on the northeast area of the province due to increased drilling in the area and the discovery of several large pools in plays that had not been considered in previous studies. The joint study includes these key findings:

	    -  The total ultimate potential for northeast British Columbia, including
	       gas already produced, is 52 Tcf (trillion cubic feet).
	    -  The remaining gas available for future demand is 35 Tcf. With the
	       current annual production of 0.95 Tcf, this represents approximately
	       37 years of production.
	    -  The northeast part of British Columbia is not as mature as the Alberta
	       portions of the basin which means there is more upside for future
	    -  Additional conventional and unconventional resources are also
	       available elsewhere in B.C., both onshore and offshore.

	    Determining Ultimate Potential

The term ultimate potential refers to the estimate of the volume of marketable gas reserves that will be proven to exist in an area after exploration has ceased.

	                       Ultimate potential (equal sign)
	                discovered resources + undiscovered resources

For example, the total ultimate potential for B.C. is 52 Tcf. That number includes the amount already produced to the end of 2003 which was 17 Tcf and the remaining gas available for future demand which is 35 Tcf.

Northeast B.C. holds approximately one-quarter of the ultimate remaining potential of conventional natural gas in the Western Canada Sedimentary Basin (WCSB).

Better understanding of geological plays

The new estimate of ultimate potential shows that the distribution of the conventional gas in the geological and geographical sense has changed because of a better understanding of the WCSB area.

Between 1992 and 2003, the number of wells drilled in B.C. almost doubled from 7,582 to 14,568. These new wells provided additional information for the geological assessment of the area.

Geological plays in B.C. are relatively less developed than those in Alberta. As industry continues drill wells in B.C.'s portion of the WCSB, the knowledge gained from these wells may further increase the estimate of remaining gas potential.

Resources for the future

The study also noted that B.C. has additional conventional gas resources that could be drawn upon in the future. These resources are found in the interior basins, southeast B.C. and offshore basins. The province also has unconventional gas resources, such as shale gas, coalbed gas, tight gas and gas hydrates that could supplement the conventional gas resources.


Conventional natural gas in B.C. may continue to grow as industry expands
in this area. With continued activity in the WCSB and other areas of the
province, geological assessments will provide further information about what
lies beneath the soil. This in turn will create a better picture of the
ultimate potential for natural gas in the province.