RE:RE:RE:BC Natural Gas Partnership Implications
U.S. natural gas production has been growing for the past five years with the growth in shale gas production and in associated gas from tight oil wells. In 2013, marketable natural gas production averaged 66.5 bcf per day, up one per cent from 2012, reducing the need for imports from Canada.
Canadian and U.S. gas markets that were well supplied at historically moderate prices for the past few years could see prices tightening because of continued low levels of gas drilling, rising natural gas demand, and the significant amounts of gas injection required to reach average levels prior to the next heating season, says the study.
The NEB says that the key difference from its previous market assessment (2013-2015) is higher natural gas prices resulting from the unusually cold winter and the greater than expected withdrawal of natural gas from storage.
Although Canadian natural gas prices in 2013 tracked very close to the board’s mid-range price case, the 14 bcf per day of marketable natural gas in 2013 was higher than the board’s higher price case projection of 13.3 bcf per day, it notes.
“Higher production than was projected reflects efficiency improvements such as drilling multiple wells from a single pad that reduced costs by allowing wells to be drilled more quickly,” says the study. As well, initial production rates from wells continue to be strong, in both developed and newer gas plays, because of technology improvements, including more fracture stages per well, it says.