Alberta has a huge natural gas resource, but much of it will stay in the ground unless prices increase substantially, says the province's Energy Resources Conservation Board.
Imperial Oil Ltd. earlier sounded much the same kind of warning on Alberta crude oil (OGJ, June 8, p. 97).
In a detailed study, ERCB said an additional 136 tcf of gas could be found in Alberta. That potential is 20% up from previous estimates. It would more than double existing reserves of 59 tcf.
ERCB figures show average prices for Alberta gas fell 20% in 1991 to $1.30-1.35 (Canadian)/Mcf. The board said prices will have to recover to $3 (Canadian)/Mcf to yield 70% of its estimate of its resource estimate. Its forecast suggests gas prices will increase to that level in 1991 dollars in the forseeable future.
ERCB warned natural gas shortages will develop by 2002 even if prices do reach $3. So buyers will have to pay higher prices than they do today to ensure adequate supplies.
Prices of about $5/Mcf would result in development of 87% of its estimate of reserves, the board said.
Most industry analysts forecast continuing weak prices in 1992 and then a slow but steady increase into the mid-1990s.
ERCB based its study on industry surveys and field analyses.
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