Draining Canada first
Despite record drilling activity, natural gas extraction volumes have slipped from the peak set in 2002, and output per well is now declining at an annual rate of 28%. Put another way, energy companies must add 3,000 more wells in 2007 on top of the 15,000 now in production just to keep output from diminishing.
That would be a daunting challenge even if there were spare rigs and drilling crews standing by. As it now stands, there is no spare capacity of this sort anywhere in North America.
With only eight years of proven reserves left in Canada, Hughes suspects that natural gas output is about to fall off a cliff. Barring a miracle or two, Canada will soon experience challenges in providing for its own citizens, let alone producing surplus volumes bound for American furnaces.
We're all fucked. We'll be on our knees begging for LNG tanker deliveries from the Middle East within a few years. We'll be crawling to the Russians with tears streaming down our faces, pleading for anything at all they might kindly send our way.