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Ppt regulatory overview of shale gas in bc final
- 1. Realizing the Potential Regulatory Overview of Shale Gas in British Columbia Presented by Alex Ferguson March 2011 1
- 2. 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. 3
- 4. 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
- 5. Asset Distribution 5 British Columbia oil and gas sector
- 6. 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
- 8. 1,150 sq km
- 10. 11,900 sq km
- 11. 75-170 Tcf marketable natural gas
- 13. 2,590 sq km
- 14. 30-68 Tcf marketable gas
- 16. 15,281 sq km
- 17. 77-176 Tcf marketable gas
- 18. 577 Bcf cumulative production7
- 19. British Columbia 8 Our Resources _____________________________________________________________________ Courtesy Apache
- 20. 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
- 22. KSL Pipeline: Capacity 1,000 mmcf/day
- 23. Kitimat LNG Facility: Planned capacity 700 mmcf/year
- 25. Three new gas plants in construction
- 26. Four new gas plants in operation
- 28. 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
- 30. Water Usage
- 31. Water Disposal
- 32. Well Spacing
- 36. Updates technical regulations
- 37. Strengthens oversight and engagement
- 42. Constraints on industry activity
- 43. Transparency of industry activity and performance
- 44. Complexity of regulatory modelsPeace River 16 British Columbia A few observations
- 45. Alex FergusonCommissioneralex.ferguson@gov.bc.ca www.bcogc.ca Realizing the Potential Regulatory Overview of Shale Gas in British Columbia 17
Editor's Notes
- [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]