More gas than Alberta
Published Tuesday November 17th, 2009
Resources: Two new studies reveal there is much more potential natural gas trapped in southern New Brunswick's shale than previously estimated
OTTAWA - The potential natural gas reserves deep in southern New Brunswick's shale exceed even the huge amount that a new federal study concludes lies under the rest of Canada's entire East Coast.
The first study in 25 years to assess the overall potential oil and natural gas reserves on the East Coast concluded the region has far more than geologists thought.
The Maritimes Basin contains an estimated 39 trillion cubic feet (tcf) of natural gas, says the Geological Survey of Canada, a branch of Natural Resources Canada.
By comparison, the Beaufort Sea and Mackenzie River delta in the Arctic have an estimated 65 tcf and Western Canada has 58 tcf left.
"The whole of eastern Canada's potential is very exciting," said Les Fyffe, director of the geological surveys branch of New Brunswick's Department of Natural Resources.
"But the shale gas potential is the exciting part to New Brunswick."
Between Sussex and Elgin there's an estimated 67 trillion cubic feet of natural gas that wasn't counted in the study's tally.
It's trapped in a 300-metre-thick shale formation that starts two kilometres down.
"That's where we're looking for the future of natural gas exploration in New Brunswick - in the shale gas," said Fyffe.
"It's twice as much as the whole natural gas potential on the conventional side given in the (federal) report.
"So you can see what the great potential that has for New Brunswick."
Southern New Brunswick shale gas estimate became public in June in a study commissioned by Corridor Resources Inc. (TSX:CDH), which has the McCully gas field near Sussex.
The federal study did not estimate the potential reserves of shale gas in the region because of the limited data available.
But it did say these "significant unconventional gas resources await further exploration and that a positive outlook for success is justified."
Shale gas is called an unconventional source because it is harder and costlier to get out of the rock than the conventional source in more porous types of sedimentary rock.
Typically, shale gas fields are a long-term investment because they run at lower volumes and low pressures, but for a long time - possibly decades.
One of Corridor's McCully holes has been drilled deep enough to reach shale gas rather than the conventional source found in the sandstone above it, said Fyffe.
The Maritimes Basin is a large formation of sedimentary rock underlying the southern Gulf of St. Lawrence, the Cabot Strait, the southwestern Grand Banks and the northeastern Newfoundland continental shelves.
The basin covers 250,000 square kilometers.
About 75 per cent of its total area is offshore - where drilling to find gas and eventual commercial development are both more expensive than on land.
Fyffe points out the federal study estimates the gas "in place," which does not mean it would necessarily be profitable to pump out of the ground.
There could be years of exploration drilling and seismic surveys before commercial operations begin for either conventional or unconventional sources of gas.
Still, exploration is continuing in New Brunswick.
Four new parcels of oil and natural gas rights were issued by the provincial Department of Natural Resources in late 2008 and early 2009 with almost $5.5 million in commitments for exploration work.
The department will also close a tender call for rights to a parcel in southwestern New Brunswick next month.
In total, nine companies hold more than 40 agreements on more than 400,000 hectares in the province.
As for shale gas, "they're just starting to look," said Fyffe. "
Shale gas potential is just starting to be recognized in the Maritimes Basin.
"We're new at it compared to places like Texas but companies are starting to perk up their ears because of the thickness of our shales."
Shale gas was hardly commercially viable a decade ago.
Now it makes up about 10 per cent of natural gas supply in the U.S., thanks to new technology, generally higher gas prices and dwindling conventional supplies.
The federal study says shale gas could become one of the most important sources of energy in North America over the coming decades.
Corridor's McCully gas, discovered in 2000, is transported via the Maritimes & Northeast Pipeline.
It generated royalties to the province worth $7.4 million in 2008.
A significant drop in gas prices this year means royalties will likely be lower for 2009.
Still, production in the second quarter of 2009 was about 22 million cubic feet of natural gas per day from about 26 wells.
The 1984 study estimated the recoverable natural gas in Quebec and the Maritimes at only 3.5 tcf.
The new federal study's co-authors were not available for comment.
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