B.C. natural gas production pumped up in 2016, figures indicate
An aerial view of a natural gas processing plant in the Horn River shale basin near Fort Nelson, B.C., Nov. 19, 2008. (Shaun Polczer/CanWest News Service)
Natural gas production in B.C., and exports to the U.S., increased seven per cent over the first nine months of 2016 despite dismal numbers for drilling new wells, statistics from the Ministry of Natural Gas Development show.
That short-term rise runs counter to longer-term projections from the U.S. Energy Information Agency that estimate U.S. imports of Canadian natural gas will fall dramatically over the coming decades with increases in American domestic production.
B.C. natural gas producers produced a net 35.6 billion cubic metres of gas between January and the end of September of last year and exported 11.8 billion cubic metres to the U.S., which reverses a decline in U.S. exports experienced in 2015.
The production figures are a brighter spot for B.C.'s energy sector than new drilling activity. Gas producers drilled just 341 new wells in 2016, according to figures from the B.C. Oil and Gas Commission, a 23-year low.
Over the longer term, however, the U.S. EIA predicted "U.S. imports of natural gas from Canada, primarily from the West where most of Canada's natural gas is produced, (will) continue to decline," according to the agency's annual energy outlook for 2017. B.C. produces about one-third of Canada's natural gas.
U.S. natural gas production is also on the rise, according to the report, driven by a continuing drilling boom as producers use hydraulic fracturing to tap shale gas reserves in eastern states such as Pennsylvania, which has fuelled American gas exports to Eastern Canada.
And for the moment, that increase in production is helping fuel U.S. exports of liquefied natural gas, the report said. The first U.S. export plant at Sabine Pass in Louisiana sent its first shipments to market starting in 2016.
In the meantime, B.C. producers with drilling rights in the so-called Montney shale-gas formation that surrounds Fort St. John and Dawson Creek in the province's northeast are bumping up drilling activity which is proving attractive for the other hydrocarbons its shale deposits contain.
Encana Corp., in recent corporate presentations, said the Montney region is one of four areas where it will ramp up spending and production to tap liquids such as propane and a light oil-like fuel referred to as condensate.
In its presentation, the company said it expects its increase in production to "be in the upper range of, or exceed" its growth target of 15 to 20 per cent for 2017.