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

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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

    1. 1. Realizing the Potential<br />Regulatory Overview of Shale Gas in British Columbia<br />Presented by Alex Ferguson<br />March 2011<br />1<br />
    2. 2. Topics<br />B.C.’s Oil and Gas Sector<br />Our Resources<br />Infrastructure<br />Regulation<br />A Few Observations<br />Realizing the Potential<br />Regulatory Overview of Shale Gas in British Columbia<br />2<br />
    3. 3. 3<br />
    4. 4. British Columbia<br />oil and gas sector<br />Inventory<br />1 ERCB well and pipeline inventory obtained from the Executive Summary of the <br />2009 ERCB Field Surveillance and Operations Branch Provincial Summary.<br />2 Drilling activity obtained from the CAPP 2010 Statistical Handbook.<br />3 Obtained from Texas Railroad Commission’s Texas Drilling Statistics.<br />4 Well and pipeline inventory obtained from Railroad Commission of Texas Strategic Plan.<br />4<br />
    5. 5. Asset Distribution<br />5<br />British Columbia<br />oil and gas sector<br />
    6. 6. 6<br />British Columbia<br />Our Resources<br />Gas reserves on the rise<br />2010<br />912.0 109m3<br />2009<br />659.9 109m3<br />Established gas reserves increase for tenth year in a row.<br />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<br />
    7. 7. British Columbia<br />Our Resources<br />Liard Basin<br /><ul><li>Shale
    8. 8. 1,150 sq km
    9. 9. Early development</li></ul>Horn River Basin<br /><ul><li> Shale
    10. 10. 11,900 sq km
    11. 11. 75-170 Tcf marketable natural gas
    12. 12. 97 Bcf cumulative production</li></ul>4<br />1<br />1<br />2<br />3<br />4<br />2<br />3<br />Cordova Embayment<br /><ul><li> Shale
    13. 13. 2,590 sq km
    14. 14. 30-68 Tcf marketable gas
    15. 15. Early development</li></ul>Montney<br /><ul><li>Tight gas/shale
    16. 16. 15,281 sq km
    17. 17. 77-176 Tcf marketable gas
    18. 18. 577 Bcf cumulative production</li></ul>7<br />
    19. 19. British Columbia<br />8<br />Our Resources<br /> _____________________________________________________________________<br />Courtesy Apache<br />
    20. 20. British Columbia<br />Our Resources<br />9<br />Raw Natural Gas Production<br />Oil Production<br />2010<br />34.9 109m3<br />1,268 103m3<br />Montney Trend:<br />24% of total production, <br />up from 13% in 2009<br />Horn River Basin:<br />10% of total production, <br />up from 5% in 2009<br />2009<br />30.8 109m3<br />1,219 103m3<br />
    21. 21. 10<br />British Columbia<br />Infrastructure and Development<br />Pipelines & Facilities<br />Significant increase in natural gas processing capabilities<br /><ul><li> Cabin Gas Plant : Initial capacity 400 mmcf
    22. 22. KSL Pipeline: Capacity 1,000 mmcf/day
    23. 23. Kitimat LNG Facility: Planned capacity 700 mmcf/year
    24. 24. Fort Nelson Plant Expansion: Capacity 1,089 mmcf/day</li></ul>Capacity of new gas plants in British Columbia<br />In the last two years:<br /><ul><li> Five new gas plants are in operation
    25. 25. Three new gas plants in construction
    26. 26. Four new gas plants in operation
    27. 27. Total projected increase 0.903 bcf</li></li></ul><li>11<br />British Columbia<br />Infrastructure and Development – Commission Regulated Pipelines<br />
    28. 28. British Columbia<br />Infrastructure and Development<br />Targeted Royalty Programs* <br />Programs provide reduced royalty rates<br /> Programs provide credits<br />Administered by the Ministry of Energy<br />Designed to: generate investment, accelerate project timelines and improve infrastructure in support of long-term development<br />* From MENER presentation British Columbia’s Infrastructure Royalty Credit Program<br />12<br />
    29. 29. 13<br />British Columbia<br />Regulation<br />Regulating Unconventional Gas Development<br />Shale Gas = Unconventional Development<br /><ul><li>Difference in size, nature and method of extraction</li></ul>Challenges<br /><ul><li>Environmental Issues
    30. 30. Water Usage
    31. 31. Water Disposal
    32. 32. Well Spacing
    33. 33. Regulating</li></li></ul><li>14<br />British Columbia<br />Regulation<br />Meeting the Challenges – <br />Oil and Gas Activities Act (OGAA)<br />Modernizes the regulatory framework<br />Responsive to growth & innovation<br /><ul><li> Technological advances
    34. 34. Rapid-response tools
    35. 35. Unconventional resources
    36. 36. Updates technical regulations
    37. 37. Strengthens oversight and engagement
    38. 38. Special projects</li></li></ul><li>15<br />British Columbia<br />Regulation<br />Meeting the Challenges - Management for success<br />Basin-level management<br /><ul><li>Resource development unit
    39. 39. Linking surface and subsurface</li></ul>Organizational capacity and alignment<br /><ul><li>Focus on stakeholders
    40. 40. A well-managed business</li></ul>Rapid-response implementation of OGAA<br />Enhancing single-window regulatory authority<br />Special features of Commission<br /><ul><li>Board regulation-making authority
    41. 41. Delegated decision-making model</li></li></ul><li>Public expectations on the rise:<br /><ul><li>Regulatory oversight
    42. 42. Constraints on industry activity
    43. 43. Transparency of industry activity and performance
    44. 44. Complexity of regulatory models</li></ul>Peace River<br />16<br />British Columbia<br />A few observations<br />
    45. 45. Alex FergusonCommissioneralex.ferguson@gov.bc.ca<br />www.bcogc.ca<br />Realizing the Potential<br />Regulatory Overview of Shale Gas in British Columbia<br />17<br />

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