Shale gas is energy's "game-changer".
According to Chris Weston, president and chief executive of Centrica's direct energy unit, this single source of energy has grown so much in North America that it is bigger than the UK's entire gas production. Some experts believe shale gas will account for half of all North American production by the end of the decade.
Technological advances over the past 10 years have meant that it is finally economically viable to drill great distances horizontally, fracture the tightly packed shale rock and capture the gas. Shale gas production has rocketed in the US, with President Obama promoting the technology in overseas trade talks.
But the great new frontier could be the Western Canadian Sedimentary Basin, which is already a great source of oil and more conventional natural gas. In the past two years, energy companies have spent about CA$6bn (£3.9bn) on buying land there, much of it in the Triassic Montney and Devonian Horn River fields in northern British Columbia, where there are vast reservoirs of shale gas.
ExxonMobil and Shell are among the major oil companies ramping up operations, while China, Japan and Korean are among the Asian players who see western Canada as the future of their energy supplies. "The revolution in technology has allowed rocks that are known to have contained gas to be reached that weren't reachable in the past," says a leading oil and gas banker. "So the whole continent's potential has increased and North America is going to become a net exporter of gas."
Already the world's third biggest natural gas producer, Canada will most likely lead the way in North American exports. It has huge ports and the potential to develop more on the west coast, making it perfect to export gas to energy-hungry Asia.
For example, Korea's natural gas company, Kogas, sent a delegation to Inuvik in the Northwest Territories to evaluate the potential for an export facility on the Beaufort Sea. The chief executive, Kangsoo Choo, led the party, and will have noted that Kogas will need an icebreaker to crack through the frozen sea to reach the Bering Strait.
Note that the companies mentioned above are all big names. In a recent article, a Shell Canada Upstream geologist, Daniel John Kerridge Ross, wrote: "With increasing prices in Horn River, small companies are at a disadvantage, especially where large contiguous [neighbouring] blocks are posted."
However, oil majors still like to minimise their risk, so a number of joint venture partnerships and stake sales have taken place in recently making western Canada one of energy's deal-making hotspots.
An example is South Africa's Sasol teaming up with the Calgary-based Talisman Energy to develop a plant in British Columbia potentially costing up to CA$10bn. The plant would turn 44 trillion cubic ft of shale gas to liquid. This follows on from Talisman selling 50 per cent stakes in its Farrell Creek and Cypress A assets To Sasol, deals that will eventually cost Sasol more than CA$2bn.
At a conference call with analysts last month, Sasol's senior group executive, Lean Strauss, pointed out how welcoming the Canadian government had been: "We have been pleased with our engagement by local authorities. They have been extremely helpful ... very positive about what GTL can bring to Canada."
This is more than mere PR-speak. There is huge support for exploration and production in the wake of the Conservatives' election victory in May, including the construction of a natural gas pipeline from Alberta to British Columbia.
The political will to turn Canada into the world's premier energy exporting country could ensure that shale gas becomes that game-changer.
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