By the OGJ Online Staff
HOUSTON, Sept. 12 -- Canada had 233 tcf of nominally marketable conventional natural gas resources as of the end of 1998 -- a 40-year supply at that year's rate of production.
However, those resources will never be fully tapped, said the Canadian Gas Potential Committee in a 4-year study.
This is the second Canadian reserves study issued by the volunteer group of 50 geoscientists. The first was 4 years ago (OGJ, Dec. 15, 1997, p. 67).
Many of the gas pools studied are marketable in name only. Some won't be economic. Some will not be within reach of explorers, e.g. under cities, in national parks, and in other areas where drilling is not allowed.
The committee compares the ratio of marketable gas to gas in place in the discovered pools in a play and applies that ratio to the undiscovered gas in place, yielding an estimate dubbed nominal marketable gas. In frontier basins, even the discovered fields are considered to contain nominal marketable gas, because most fields have undergone minimal delineation drilling and production testing.
The committee also reiterated that the average size of newly discovered gas pools will be smaller, increasing exploration and development costs (OGJ, Nov. 16, 1998, p. 38). Also, production from remote locations in Canada's north and offshore regions will be more expensive to develop than supplies from the Western Canada Sedimentary basin.
At the end of 1998, said the study, the Western Canada Sedimentary basin held an estimated 54 tcf of gas reserves plus 88 tcf of undiscovered nominal marketable gas -- representing 61% of Canada's conventional gas assets.
"Excellent exploration targets remain to be found, mainly in the Rocky Mountain foothills and Devonian geological traps under the Canadian prairie; however, an increasing proportion of the gas supply will be drawn from small, short-lived Cretaceous pools," said Robert A. Meneley, chief analyst and principal author of the study.
The committee estimated that the 150 largest undiscovered pools are high-impact exploration targets that range in size from 40 bcf to 1 tcf, and contain about 25% of Western Canada's potential. Another 25% is expected to be contained in 3,000 pools ranging in size from 2.5 bcf to 40 bcf. Another 40% will come from 65,000 smaller pools, said the study.
Roland Priddle, chairman of the CGPC, said, "While Canadians have long looked to the North and to 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."
Authors of the study estimate the near frontiers of Canada -- off Nova Scotia, in the Mackenzie Corridor, and in the Mackenzie Delta -- hold 35 tcf of discovered and undiscovered nominally marketable gas. Most of this potential will require billions of dollars worth of investment to develop and connect to markets.
Some more remote frontier basins -- such as in the Arctic Islands and off Labrador -- have yielded large, high-quality discoveries, but are dispersed over large areas in environments hostile to oil and gas development, said the committee. Other areas -- off the West Coast, for example -- contain conceptual plays but no discoveries. Major exploration programs will be required just to confirm the existence of those plays.
The Canadian Gas Potential Committee did say that Canada's coalbed methane nonconventional resource may provide important gas supplies, but will require extensive research into production methods. It estimates commercial coalbed methane production may be achieved in the next 10 years.
The committee noted Canada has "tremendous potential" in gas hydrates. "However, field research into unlocking this resource is at an infant stage and will require considerable effort and time to determine whether there is any future potential for harvesting methane from gas hydrates. Studies currently underway in the Mackenzie Delta and offshore Japan will be critical first steps in understanding the potential of gas hydrates," it said.