Future of gas questioned
Like a cold shower on frigid winter morning, Ziff Energy director of gas consulting Ed Kallio offered a chilling assessment of where the NWT stands in relation to its oil and gas potential at last week’s Inuvik Petroleum Show.
A guest speaker at the trade show, Kallio has more than 30 years of petroleum industry experience.
At the time, Kallio said, the North American price for natural gas was set by the cost of liquefied natural gas imports which made the proposed Mackenzie Valley Gas project economically viable.
“We’ve got a huge North American resource,” said Kallio.
‘There are resources elsewhere that have been unlocked with horizontal drilling into shale deposits.’
Mackenzie Valley gas, Kallio said, will remain too expensive to drill and transport far into the foreseeable future thanks to the abundance of cheap gas elsewhere on the continent.
“The joint review panel http://www.cheapjerseys11.com/ (of the Mackenzie Valley gas project) took too long and the window was missed,” said Kallio.
“Supply is growing. It’s unconstrained. We can find all the gas we need to meet any demand, including the potential for LNG exports.”
With the Mackenzie Valley gas essentially off the radar, Kallio’s message to participants at the Inuvik trade show was that the territory needs to make sure it doesn’t miss the boat on oil potential in the Sahtu.
“I’m worried that bureaucratic dysfunction regulatory dysfunction is going to hold up the Canol (shale) play on the oil side which looks very promising,” said Kallio.
Most recently, Husky Energy and ConocoPhillips announced they were suspending exploration in the Sahtu region. Oil exploration related spending in the region had been a boon to the regional economy.
Neither Husky nor ConocoPhillips made any negative comments on the GNWT’s regulatory regime, but Kallio thinks the message is clear.
“The industry has voted with its feet,” said Kallio. “The message is, get real.”
“Business is done differently in other jurisdictions,” he said. “You’ve got to model yourself around systems in provinces or states that understand fracking and understand the industry.”
The GNWT is on the verge of beginning a review announced earlier this month of its regulations governing fracking.
When the review was announced, Industry, Tourism and Investment cheap jerseys Minister David Ramsay said that part of the GNWT’s plan was to develop regulations responsive to industry’s need for clear time lines surrounding applications to develop oil and gas potential in the territory.
If, as Kallio said, the oil industry has voted with its feet in the Sahtu, Ramsay believes the GNWT is on track to bring investment back to the region.
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