Shale and tight gas prospects improve Canadian natural gas deliverability outlook



    CALGARY, Oct. 23 /CNW/ - Conventional natural gas production is expected
to decline by approximately seven per cent between now and 2010, but further
development of shale and tight gas prospects in northeast B.C. may be able to
offset this decline, says a National Energy Board (NEB) report released today.
    The report, Short-term Natural Gas Deliverability 2008-2010, presents
three possible scenarios for deliverability based on the different levels of
drilling investment that may occur - a reference case, a low case and a high
case. While all three scenarios take into account the development of shale and
tight gas prospects in the Horn River and Montney plays of northeast B.C., the
high case scenario projects a higher level of investment in this area.
    "Canada has a large natural gas resource base and ongoing efforts to
further enhance innovation and efficiency will ensure that Canadian natural
gas continues to make a key contribution to North American natural gas
supply," said National Energy Board Chair Gaétan Caron.
    Advances in drilling techniques and technology in recent years are
allowing companies to access the shale and tight gas, which was previously
difficult to produce. Although this development is still in the early stages,
it has the potential to dramatically alter previous projections for a decline
in the Western Canadian Sedimentary Basin (WCSB). Ninety-eight per cent of
Canada's natural gas production comes from the WCSB.
    "In our consultations with producers we heard a great deal of enthusiasm
for the resource potential on the western side of the basin," said Gaétan
Caron. "The basin on the western side is much deeper and less developed
compared to the east."
    While Canada's natural gas potential remains high, the development of
these energy resources still depends on North American natural gas markets.
The current global economic situation could result in declining demand.
Meanwhile, natural gas production in the U.S. has increased by eight per cent.
Declining production in Canada is also impacted by the high cost of production
in Canada, and falling gas prices.
    North American natural gas prices were particularly volatile between
September 2007 and August 2008, swinging from C$5 to $11 and back to $7 per
gigajoule (GJ). The report states that natural gas would need to reach $8 to
$9 per GJ in western Canada in order to maintain or accelerate current
drilling levels.

    The NEB is an independent federal agency that regulates several parts of
Canada's energy industry. The NEB's purpose is to promote safety and security,
environmental protection and efficient energy infrastructure and markets in
the Canadian public interest, within the mandate set by Parliament in the
regulation of pipelines, energy development and trade. As part of its mandate,
the NEB monitors the supply of all energy commodities in Canada and reports
its findings. The NEB Internet site is regularly updated with new energy
information for the Canadian public.

    This news release and the Short Term Natural Gas Deliverability Report
are available on the Board's Internet site at www.neb-one.gc.ca.




For further information:

For further information: Tara O'Donovan, tara.odonovan@neb-one.gc.ca,
Communications Officer, Telephone: (403) 299-3371, TTY (teletype):
1-800-632-1663; For a copy of the Short Term Natural Gas Deliverability
Report: National Energy Board, library@neb-one.gc.ca, Ground Floor, 444
Seventh Avenue SW Calgary, Alberta T2P 0X8, Telephone: (403) 299-3561,
Telephone (toll free): 1-800-899-1265, Telecopier: (403) 292-5576, Telecopier
(toll free): 1-877-288-8803, TTY (teletype): 1-800-632-1663


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