History of The Petroleum Industry in Canada (natural Gas) - Complacency

Complacency

The existence of these resources has led to complacency among consumers, who still assume they will always be supplied with gas at "affordable" prices. Developing these resources can have substantial impacts on the environment through closer well spacing, more intensive infrastructure, additional noise from compression, the challenges of water disposal, NIMBY issues, and other factors. In recent years, changes in production technology (notably horizontal drilling and more advanced systems of hydraulic fracturing or "fraccing") have greatly increased shale gas production. Greater shale gas production in the United States has been an important factor in reduced Canadian exports to that country.

Consider this matter in the context that natural gas producers generally buy mineral rights from the Crown but must negotiate surface access and other land rights with their neighbours. In this environment, the chances are high that some projects will face delays as a result of public hearings - for example, as Shell and the other contenders did at the Caroline hearing. After all, those with an interest in a single land use decision could include petroleum producers, Aboriginal communities, landowners, farmers, ranchers, loggers, trappers, campers, sports and environmental groups, and others. Many conflicting interests need to be resolved.

Forecasters now commonly suggest that western Canada's conventional gas production has peaked and will continue to decline. Gaps between traditional supply and growing demand are already being filled with gas from such diverse sources as tight sands; coalbed methane; and since January 2000, frontier gas and liquids from Nova Scotia's Sable Offshore Energy Project. Other likely future sources include Mackenzie Delta gas and liquefied natural gas from abroad. This suggests higher future costs and risks, and that suggests higher-priced future energy.