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Ppt regulatory overview of shale gas in bc final
 

Ppt regulatory overview of shale gas in bc final

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A regulatory overview of Shale Gas in British Columbia from the BC Oil and Gas Commission

A regulatory overview of Shale Gas in British Columbia from the BC Oil and Gas Commission

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  • [speaking notes from Ken Paulson presentation which put gas reserves in perspective]Approximately five years ago, industry experts were predicting a drastic reduction in viable gas production from the Western Canada Sedimentary Basin, and North America in general. Market predictions were favouring investment in import terminals for liquefied natural gas (LNG) where gas from offshore suppliers could be imported and moved through the North American transportation grid to market. Regulators were anticipating an influx of LNG facility applications as well as a myriad of infrastructure modifications to handle the resulting new flow regime.In five short years, this forecasthas been revamped due to the advent of economically viable methods to access gas trapped in shales and similar tight formations. At the current rates of production and exploration, it is estimated that there are more than 20 years of gas reserves in B.C.
  • There are essentially two established “shale” gas plays in B.C.The Horn River Basin north of Fort Nelson is comprised of multiple stacked shale packages collectively referred to as the Horn River shales.The regional Heritage Montney formation in the Peace River region of B.C. is dominantly very fine grained sand and silts. The Montney is not considered a true shale play but is considered by some to be a hybrid play showing greater permeability than the Horn river shale. This map shows the heart of the Montney development, however the play trend continues on up to the North West. At full development it potentially may double the area shown here.Unique issues associated with each area are:Horn River basin is situated in the far north away from any existing oil and gas development – access and infrastructure are issues and the Commission has been working hard with the producers in the basin to ensure orderly development.For end 2010 total CUM HRB is 97 BCF (up from 48 end 2009)HRB produced as much in 2010 as all years previous.  The Montney play overlies the city of Dawson Creek – quality of life, environmental foot print are issues that the Commission and stakeholders must address.Montney Cum ProductionEnd 2009 320 BCFEnd 2010 577 BCFAlmost as much Montney production in 2010 as all years previous combined!As you can see both areas have great resource potential with resource estimates shown here.For comparison – OGIP estimates for the conventional reservoirs in B.C. are 50 Tcf.
  • [note – these notes came from September 2010 presentation and while there may be a slight shift in capacity numbers, Corey and I felt that these notes were still relevant]

Ppt regulatory overview of shale gas in bc final Ppt regulatory overview of shale gas in bc final Presentation Transcript

  • Realizing the Potential
    Regulatory Overview of Shale Gas in British Columbia
    Presented by Alex Ferguson
    March 2011
    1
  • Topics
    B.C.’s Oil and Gas Sector
    Our Resources
    Infrastructure
    Regulation
    A Few Observations
    Realizing the Potential
    Regulatory Overview of Shale Gas in British Columbia
    2
  • 3
  • British Columbia
    oil and gas sector
    Inventory
    1 ERCB well and pipeline inventory obtained from the Executive Summary of the
    2009 ERCB Field Surveillance and Operations Branch Provincial Summary.
    2 Drilling activity obtained from the CAPP 2010 Statistical Handbook.
    3 Obtained from Texas Railroad Commission’s Texas Drilling Statistics.
    4 Well and pipeline inventory obtained from Railroad Commission of Texas Strategic Plan.
    4
  • Asset Distribution
    5
    British Columbia
    oil and gas sector
  • 6
    British Columbia
    Our Resources
    Gas reserves on the rise
    2010
    912.0 109m3
    2009
    659.9 109m3
    Established gas reserves increase for tenth year in a row.
    Much of this increase will come from recognition of the Horn River Basin reserves which are being booked for the first time in 2010.  Note that these numbers are PRELIMINARY
  • British Columbia
    Our Resources
    Liard Basin
    • Shale
    • 1,150 sq km
    • Early development
    Horn River Basin
    • Shale
    • 11,900 sq km
    • 75-170 Tcf marketable natural gas
    • 97 Bcf cumulative production
    4
    1
    1
    2
    3
    4
    2
    3
    Cordova Embayment
    • Shale
    • 2,590 sq km
    • 30-68 Tcf marketable gas
    • Early development
    Montney
    • Tight gas/shale
    • 15,281 sq km
    • 77-176 Tcf marketable gas
    • 577 Bcf cumulative production
    7
  • British Columbia
    8
    Our Resources
    _____________________________________________________________________
    Courtesy Apache
  • British Columbia
    Our Resources
    9
    Raw Natural Gas Production
    Oil Production
    2010
    34.9 109m3
    1,268 103m3
    Montney Trend:
    24% of total production,
    up from 13% in 2009
    Horn River Basin:
    10% of total production,
    up from 5% in 2009
    2009
    30.8 109m3
    1,219 103m3
  • 10
    British Columbia
    Infrastructure and Development
    Pipelines & Facilities
    Significant increase in natural gas processing capabilities
    • Cabin Gas Plant : Initial capacity 400 mmcf
    • KSL Pipeline: Capacity 1,000 mmcf/day
    • Kitimat LNG Facility: Planned capacity 700 mmcf/year
    • Fort Nelson Plant Expansion: Capacity 1,089 mmcf/day
    Capacity of new gas plants in British Columbia
    In the last two years:
    • Five new gas plants are in operation
    • Three new gas plants in construction
    • Four new gas plants in operation
    • Total projected increase 0.903 bcf
  • 11
    British Columbia
    Infrastructure and Development – Commission Regulated Pipelines
  • British Columbia
    Infrastructure and Development
    Targeted Royalty Programs*
    Programs provide reduced royalty rates
    Programs provide credits
    Administered by the Ministry of Energy
    Designed to: generate investment, accelerate project timelines and improve infrastructure in support of long-term development
    * From MENER presentation British Columbia’s Infrastructure Royalty Credit Program
    12
  • 13
    British Columbia
    Regulation
    Regulating Unconventional Gas Development
    Shale Gas = Unconventional Development
    • Difference in size, nature and method of extraction
    Challenges
    • Environmental Issues
    • Water Usage
    • Water Disposal
    • Well Spacing
    • Regulating
  • 14
    British Columbia
    Regulation
    Meeting the Challenges –
    Oil and Gas Activities Act (OGAA)
    Modernizes the regulatory framework
    Responsive to growth & innovation
    • Technological advances
    • Rapid-response tools
    • Unconventional resources
    • Updates technical regulations
    • Strengthens oversight and engagement
    • Special projects
  • 15
    British Columbia
    Regulation
    Meeting the Challenges - Management for success
    Basin-level management
    • Resource development unit
    • Linking surface and subsurface
    Organizational capacity and alignment
    • Focus on stakeholders
    • A well-managed business
    Rapid-response implementation of OGAA
    Enhancing single-window regulatory authority
    Special features of Commission
    • Board regulation-making authority
    • Delegated decision-making model
  • Public expectations on the rise:
    • Regulatory oversight
    • Constraints on industry activity
    • Transparency of industry activity and performance
    • Complexity of regulatory models
    Peace River
    16
    British Columbia
    A few observations
  • Alex FergusonCommissioneralex.ferguson@gov.bc.ca
    www.bcogc.ca
    Realizing the Potential
    Regulatory Overview of Shale Gas in British Columbia
    17