Western Conference of Public Service Commissioners
Natural Gas and the Provision of Electricity: Is there enough?
North America Market Growth:Forecasted to Reach 30Tcf by 2015
Key Drivers:• North American
economic growth
• Electric Power Generation
• e-world power requirements
• Clean Air Initiatives
• Climate Change
• Natural Gas is the Preferred Fuel
ANNUAL (Tcf)
23.9 25.328.2
32.536.0
1998 2000 2005 2010 2015
Industry Industry ProfileProfile
The CanadianThe CanadianOil and Natural Gas IndustryOil and Natural Gas Industry
Canada’s Oil andNatural Gas Industry
• World’s 3rd largest natural gas producer
• World’s 13th largest crude oil producer
• Oil & gas trade surplus accounts for:– Close 50% of Canada’s trade balance
• Employment near 500,000 in Canada
• Invest close to $25 billion in 2001– Largest single private sector investor in Canada
- 0.55- 0.55
+1.4+1.4
+ 2.7
+ 0.10+ 0.10
+ 0.3+ 0.3- 0.10
+ 2.5+ 2.5
Basin Supply Growth:
2000 - 2005 (bcf/d)
Canada: 2.8 bcf/d
US: 3.75 bcf/d
Total: 6.55 bcf/d
Approximately 45% Of New Gas Supply To Come From Canada - Major New Pipe Needed
Alaska and MacKenzie Delta gas assumed to come on beyond 2005.
Ultimate Potential of Natural Gas
RemainingRemaining ProducedProduced
North of 60North of 60
175 Tcf175 Tcf
BritishBritish
ColumbiaColumbia
50 Tcf50 Tcf
AlbertaAlberta
270 Tcf270 Tcf SaskatchewanSaskatchewan
9 Tcf9 Tcf
Grand BanksGrand Banks
and Scotian Shelfand Scotian Shelf
63 Tcf63 Tcf
Other Frontier*Other Frontier*
89 Tcf89 Tcfincludes other
regions offshore east coast & west
coast
Source: NEBSource: NEB
Western Canada - Gas Wells Drilled & Natural Gas Price
0
2000
4000
6000
8000
10000
12000
1970 1974 1978 1982 1986 1990 1994 1998
Wells
(bar)
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Cd
n$
/m
cf
# Gas wellsPlantgate price
Source: CAPP& ARC Financial forecast
2001
Northeast B.C. Supply Basin:Record Year for Wells Drilled
• 50 Tcf Ultimate Potential
• 754 wells drilled
• 1,204,000 metres drilled
• Oil & Gas Incentive Initiatives
0
200
400
600
800
1990 1992 1994 1996 1998 2000
WE
LL
S
Wells DrilledWells Drilled
Northeast British Columbia Supply:Supply Numbers Reaching Record Levels
• Fort Nelson and southern NWT Area– very strong supply response– Fort Liard growth
• Fort St. John Area– ample processing capacity– shallow finds– growing interest
• Pine River Area– deep gas is economic– acid gas injection project– Plant full
FortNelson
Plant
BuckinghorsePlant
SikanniPlant
PineRiverPlant
JedneyPlants
Chetwynd
Aitken Ck.Plant
Boundary LakePlant
Fort St.John
HighwayPlant
Nova
Fort St. JohnGathering
Fort Nelson
Helmet/Peggo/PeshGatheringFort Nelson
Gathering
B.C.
YukonN.W.T.
Alberta
McMahon PlantCS 2
BRITISHCOLUMBIA
ALBERTA
N.W.T.YUKON
U.S.A.
Westcoast Energy
Plant (regulated)
Compressor Stn.
Pipeline
Gathering
Legend
Westcoast Gas Services
Plant (unregulated)
Fort LiardFort Liard
Fort NelsonFort Nelson
Fort St. JohnFort St. John
Pine RiverPine River
Top Natural Gas Wells in 2000/ 2001
Anderson - 27 mmcfd
Anderson - 19 mmcfd
Mobil - 18 mmcfd
NAL - 17 mmcfd
Burlington - 15 mmcfd
Petro-Canada - 15 mmcfd
Mobil - 15 mmcfd
Talisman - 13 mmcfd
Source: First Energy Can 88 - 14 mmcfd
Petro-Canada - 14 mmcfd
2001 Wells:
Murphy/Apache @ Ladyfern - 100 mmcf/d
AEC @ Ladyfern - 60 mmcf/dTethys/PetroCan @ Townsend- 11 mmcf/d
Frontier Supplies:Potential B.C. Terminus
11
Prudhoe Bay+2.4 Bcf/d - 2007/2008
Prudhoe Bay+2.4 Bcf/d - 2007/2008
Mackenzie Delta+1 Bcf/d - 2007/2008
Mackenzie Delta+1 Bcf/d - 2007/2008
Gordondale/Boundary Lake area
The Alaska Highway Pipeline Project:Incremental Supplies by 2007/2008
• 2700 km (Prudhoe Bay to Boundary Lake)
• 2.5 Bcf/d increasing to 4 Bcf/d
• Approval in-place
• In-service 2007/2008
• Producers:– BP– ExxonMobil– Phillips
1 0T r a n s C a n a d a
b a r t s t a d m t a s k f o r c e J u l 2 1 2 0 0 0
A N G T S
Y u k o n
A l a s k a
N u n a v u t
N o r t h w e s tT e r r i t o r i e s
B . C .
A l b e r t a
A N N G T C
F o o t h i l l s A N G T S
31 Tcf Proven 99 Tcf UltimatePotential
31 Tcf Proven 99 Tcf UltimatePotential
Currently -- 8 Bcf Production - Currently -- 8 Bcf Production - 7 Bcf Reinjection7 Bcf Reinjection
Currently -- 8 Bcf Production - Currently -- 8 Bcf Production - 7 Bcf Reinjection7 Bcf Reinjection
Mackenzie Delta:Incremental Supplies in 2007 to 2008
• 1760 km (Delta to Boundary Lake)
• 1.0 Bcf/d to 2.0 Bcf/d
• No Current production
• Producers:– Imperial– Gulf– Shell– Burlington– Petro-Canada– AEC– Anderson
2 0T r a n s C a n a d a
b a r t s t a d m t a s k f o r c e J u l 2 1 2 0 0 0
M a c k e n z i e V a l l e y
Y u k o n
A l a s k a
N u n a v u t
N o r t h w e s tT e r r i t o r i e s
B . C .
A l b e r t a
9 Tcf Proven (3 Tcf Off-shore)64 Tcf UltimatePotential
9 Tcf Proven (3 Tcf Off-shore)64 Tcf UltimatePotential
Natural Gas Supply Challenges
• Access to the resource• Timely approval processes• Rising costs - tax, F&D, land, power• High decline rates• Move to deeper areas
- Shorter drilling season - Higher risk - Size and availability of deep rig fleet - Gas plants constraints in deeper areas - More sour gas