The National Energy Board (NEB) has issued its Short Term Canadian Natural Gas Delivery Report 2007 - 2009. It indicates that there will be a decrease from 483 million cubic metres per day at the end of 2006 to a range of 410 to 449 million cubic meters per day.

The Chair of the NEB, Gaéton Caron, noted that, "The drilling pace that sustained Canadian natural gas deliverability is gone, for the moment." During 2006, drilling in the Western Canadian Sedimentary Basin (WCSB) slowed for the following reasons:

  • Continued high costs including labour;
  • The increasing Canadian dollar value affecting profit margins on U.S. exports;
  • Stable, moderate natural gas prices reducing return on investment; and
  • Investment in oil and oil sands development which competes for investment capital with natural gas drilling.

Although a reduction in deliverability is forecast, ongoing drilling is increasingly focusing on the deeper, western side of the WCSB. This area requires more complex, and therefore more expensive, drilling. However, the potential for larger returns is high. "We see cause for optimism as deeper drilling and improved techniques help producers deliver tighter gas from deeper wells. In the longer term, Canadians should rest assured that their natural gas needs will be met as other sources, such as unconventional gas, liquefied natural gas, or gas from frontier areas, enters Canada's energy market.", said Caron.

The report also noted that the deliverability of coalbed methane continued to grow during the period from 2003 to 2006 to about 23 million cubic metres per day, up from 14.5 million cubic metres per day that the NEB previously forecast in 2006.

The full text of the report can be viewed by visiting:  http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/ntrlgs/ntrlgsdlvrblty20072009/ntrlgsdlvrblty20072009-eng.pdf