Some light info..... There really is no real constraint on the supply of natural gas for British Columbia, says Jihad Traya. The constraint for producers comes from the demand.
“Supply is infinite, and demand is constrained,” the Solomon Associates manager of natural gas consulting told Thursday’s Canadian Society for Unconventional Resources (CSUR) B.C. unconventional gas technical forum in Calgary. He said there is no “flaw” on the supply side as western Canadian producers could boost production by one bcf per day within a drilling season, and B.C. Montney represents some of the lowest-cost gas to produce.
“The flaw is that everyone is good at what you [producers] do. The flaw is that what you think is secret is also known by somebody else, and they do it just as well as you do. What ends up happening, we end up producing more and more, we dump it in AECO because that is what we just do, and what happens to AECO prices is they crater.”
One way to deal with this “flaw” is for producers to create their own demand, he said. For example, building a natural gas-fired power plant represents some of the cheapest demand to grow. Nonetheless, he suggested, developing any new markets is necessarily going to be a costly endeavour, indicative of the fact it is a lot more complicated on the demand side than on the supply side.