About Alberta’s conventional gas supplies

Development of Alberta’s conventional natural gas stretches back many decades. The first natural gas well was drilled in a field near Medicine Hat in 1883.

Our province has been such a major producer of natural gas that, over time, considerable natural gas infrastructure has been established across our province. Today, Alberta has one of the most extensive natural gas pipeline systems in the world. This has been a competitive advantage for our province.

At the same time, our long history as a natural gas producer means that our conventional natural gas supplies have been declining.

In 2014, Alberta’s remaining established reserves of conventional natural gas stood at 30.7 trillion cubic feet. This is far below initial established reserves of 194.7 trillion cubic feet.

This decline has occurred across all conventional gas producing areas in Alberta’s portion of the Western Canada Sedimentary Basin. Simply put, we’ve already produced most of our conventional natural gas reserves. You can see from the graph below how our marketable gas supplies have steadily decreased.

Does this mean Alberta’s days of producing natural gas are nearing an end? Not necessarily. After all, 30.7 trillion cubic feet is fair bit of natural gas. At today’s current production level of around 10 billion cubic feet per day, it would last about eight years.

This figure can increase, as new technologies (such as horizontal drilling and multi-stage fracturing) make it possible to access conventional gas that was previously considered inaccessible, and as new pools are found using seismic testing and other tools.

Alberta also has substantial volumes of “unconventional” natural gas — such as shale gas, tight gas and coal bed methane. As technological and economic conditions change, some of these volumes will add to our total “remaining established reserves” in the future. Gas from these resources is already starting to be produced.

What this does mean, though, is that we’ve already produced much of our conventional natural gas that was easiest to access and easiest to extract. Generally speaking, industry is now targeting deeper and less permeable formations. Companies will need to use more complicated technologies and processes to get the gas out.

The costs to drill and produce natural gas are based on many factors, but generally speaking, the more technologically complicated it is to extract the gas, the more costly it is to produce. This has consequences for royalties, because the value of Alberta’s natural gas resources is influenced by how much it costs to produce them.

It’s also important to know that, unlike oil, there’s only one “type” of natural gas that is transported on the main natural gas pipelines, sold in the market and used to heat our homes and for industries. What we commonly call natural gas is largely methane.

However, the raw gas streams that come out of Alberta’s conventional gas fields generally contain other substances, in addition to methane.

Some gas streams contain heavier natural gas liquids (NGL) such as ethane, propane, butanes and pentanes. These are typically separated from the methane and sold on their own. When NGLs are present, a gas stream is commonly described as “wet” gas. When a gas stream is largely methane, we commonly describe it as “dry” gas.

Some gas streams can contain hydrogen sulfide (commonly referred to as sulphur), along with carbon dioxide, which are also removed from the methane. When hydrogen sulfide is present, a gas stream is commonly described as “sour” gas.

Alberta’s conventional gas fields are found around the province. Most of the gas formations in the eastern half of Alberta are at shallow or medium depths. Gas can be found in shallow and deep formations in the northwest corner of the province. In the foothills, Alberta generally has sour gas located in deep formations. Deep, sour gas is also found in tight sandstone formations around Grande Cache and in the Grande Prairie region.