History of The Petroleum Industry in Canada (natural Gas) - Supply, Demand and Price

Supply, Demand and Price

While Canada is one of the world's three largest gas producers (the other two are Russia and the United States), she does not host many of the world's largest gas fields. It is therefore not surprising that, although in the final years of the 20th century Western Canada saw a rapid escalation in natural gas drilling, for the first time the rate of production growth began to falter.

In early 2000, as Murphy Oil, Apache and Beau Canada announced their discovery of the Ladyfern Slave Point gas field in a remote area of Northeastern British Columbia, their achievement seemed to herald a new era of successful wildcat exploration. As word of a major discovery leaked out, many of the significant players in the industry jumped on the bandwagon. A frenzy of land purchases, drilling and pipeline construction followed. In little more than a year, production from the new fields rose to more than 700 million cubic feet (20,000,000 m3) per day - and this from an area only accessible during the cold winter months. Production from this region helped raise Canada's gas production to a new peak (in late 2001) of 17.4 billion cubic feet (490,000,000 m3) of sales gas per day. Then production began to decline slightly.

Rather than representing a new era of large discoveries, Ladyfern appears to have been just another increasingly rare large gas find. During boom periods in the 1950s, for example, gas exploration yielded large new gas fields almost every year, and many discoveries waited for years to be tied into the pipeline network. As the industry matured, such discoveries became unusual. Prior to Ladyfern, the last large gas discovery had been at Caroline, more than ten years earlier.