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Not that long, it would seem:

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.

Zardoz wrote: We'll be crawling to the Russians with tears streaming down our faces, pleading for anything at all they might kindly send our way.

Soon it will be Mister Putin.

As Heinberg points out at every opportunity it´s geography that is americas problem. Everything of value is on the other side of the planet and the demand there is rising. That USA has a huge addiction and megalomanical behaviour are not an assets in solving the problem. It may be that the crash and burn scenario on the dollar will wipe away the debt through hyperinflation but the fundamental problem of addiction and control stays.

DesertBear2 wrote:

Zardoz wrote: We'll be crawling to the Russians with tears streaming down our faces, pleading for anything at all they might kindly send our way.

Soon it will be Mister Putin.

Or, to GWB, Mister Pooty-poot

As long as North America remains free from invasion, tar sands production will flow south first.

It can be argued that North America has already been economically invaded, with the complicit help of it's own elite(of all stripes), and is being systematically looted in all areas from capital markets to manufacturing infrastructure to raw materials.

The looting will be complete within 5 to 10 years. Once complete, the North American consumer base will be tossed aside like a dirty rag.

It's as clear as the ass on a goat.

There is a nasty conflict no one wants to talk about. Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

The more serious question is, how long will the US allow Canada to own its resources? It's not just natural gas, it's all strategic resources that the US is in short supply, not counting coal.

I don't see North America falling into regional conflict any time soon. Greater global conflict will likely come first.

RdSnt wrote:Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

All gas in canada ends up going to the tar sands. And future increased demand is going to have to come from LNG brought into Vancouver. Thats about the only choice they have, otherwise they'll have to stabilize oil production, with or without a Mackenzie delta pipeline.

The US will have to do the same as imports from Canada decline. For example, an LNG train brought into the Baja or anywhere near southern california will shut down high cost Rockies production brought into the same area...but the rockies production will change direction and flow north to cover the declining Canadian imports.

RGR,

Easier said than done, especially when people on this board are the only ones talking about it. We have to assume that the people in the world that hate us will sell us in the US the LNG, which is more questionable every day; we also have to assume that the US will have the finances to purchase the LNG (also more questionable each day); and that the necessary facilities to import and transport the LNG will be built and built in time and in sufficient capacity to make up for NG depletion - also questionable.


I might feel better about the issue if I heard our politicians or MSM discussing the issue, but it seems gay marriage and other more pressing moral issues are confronting us. There is a season for all things.

RdSnt wrote:There is a nasty conflict no one wants to talk about. Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

Do you mean before or after the portion that Canadians need to hold onto to heat their homes and businesses?

Relying on LNG runs you back into the same problem you have with the tar sands. You need NG to re-constitute the LNG. They don't thaw the LNG naturally, it's heated. Plus you need to dry it as well, and the LNG is not shipped in its final form, it needs to be refined further before sending down the pipe.

ReserveGrowthRulz wrote:

RdSnt wrote:Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

All gas in canada ends up going to the tar sands. And future increased demand is going to have to come from LNG brought into Vancouver. Thats about the only choice they have, otherwise they'll have to stabilize oil production, with or without a Mackenzie delta pipeline.

The US will have to do the same as imports from Canada decline. For example, an LNG train brought into the Baja or anywhere near southern california will shut down high cost Rockies production brought into the same area...but the rockies production will change direction and flow north to cover the declining Canadian imports.

A very good question.

WildRose wrote:

RdSnt wrote:There is a nasty conflict no one wants to talk about. Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

Do you mean before or after the portion that Canadians need to hold onto to heat their homes and businesses?

I have to ask: Are Canada's NG reserves really that low? Or are they only that low because of strict regulations on what constitutes 'proven' reserves?

They've been declining in reserves for a while, but there hasn't been any major dropoff in reserves. It's taken 10 years to drop 10 trln cubic feet, roughly 15%. They're production is going down and will continue, so that will make their reserves last even longer.

RGR, do you have any data on the P2 reserves of Canada? It doesn't seem to me, after looking at their reserves and production data, that they can have a major drop-off in production and hit zero soon. Possibly a sharp drop followed by a steady production of uncoventional NG for a very long time (at a much lower rate)?

It is strange that the natural gas falloff is going on at the same time that natural gas pricess are so stable. Admittedly, they are up considerably compared to four years ago. But, no signs of a panic, and in fact, Ontario, the industrial and population powerhouse of the country is busy building natural gas fired electrical generation capacity to deal with long term growth and to phase out coal fired generation.

As to how long Canada will allow the U.S. to absorb its energy resources, all I can say is that the U.S. was very astute in its free trade agreement dealings back in the early 90's. Canada can erect no barriers to export of energy to the States. Whatever taxes or royalites levied on energy apply equally to production sold in Canada or the U.S. Its a common energy market now.

WildRose wrote:

RdSnt wrote:There is a nasty conflict no one wants to talk about. Do you ship the natural gas to the US or use it to process tar sands? The US needs the output from the tar sand as well, but they can't have both.

Do you mean before or after the portion that Canadians need to hold onto to heat their homes and businesses?

So what you're asking is, will Canadians be allowed to heat their homes if it means less oil flowing into the States?

I think we all know the answer to that.

For those like myself, who have a rudimentary understanding of the natural gas industry in Canada:

Note-a lot of the information or statistics are outdated, (more importantly, provided by a government ministry...make of that what you will), but it gives an overview, primer, and big picture of the natural gas economy in Canada, and to some degree, the U.S.

From "Ministry of Natural Resources"

http://www2.nrcan.gc.ca/es/ener2000/onl ... ap3b_e.cfm

I think it's useful to understand that natural gas production is limited by infrastructure, regulation, and economics more than what is actually in the ground. Or more correctly, they are intertwined.

Also: an link within the site that has a report on energy within North America from 2005. Might be helpful to some.

http://www2.nrcan.gc.ca/es/es/NA-enrgpic2006/home-e.htm

HI guys,
I've read several links on NG in Canada. It's known that there are about 8 years of NG left in Canada given current rate of consumption/import to States. Could you tell me where this number (8 years) came from? I can't find a data on that. Thanks

Kalinka wrote:HI guys,
I've read several links on NG in Canada. It's known that there are about 8 years of NG left in Canada given current rate of consumption/import to States. Could you tell me where this number (8 years) came from? I can't find a data on that. Thanks

The number probably comes from a calculation like this.

Years remaining = ( Total Reserves / Current Consumption )

Its a completely bogus calculation though, so anyone who presents it to you as "truth" must be treated as suspect.

Rate is not directly comparable to reserves, which is just the beginning of why its bogus.

Who knows how long Alberta can supply oil from the oil sands, Albertans are starting to discover some more large gas basins west in the foothills...We are also starting to make synthetic gas from the oil sands which will cut the use of NG for oil sands processess. Alberta takes it's business with the USA very serious and we now ship probably 90% south to the USA...We also have our own Offices right in Washington....A lot of Americans keep assuming they are required to deal with Ottawa for oil and gas....That is not true at all...Each Province owns their own resources and do not need Ottawa's permission to sell those resources....Quebec, Ontario, Newfoundland BC and Manitoba supply a huge amount of your electricity.....Alberta has most of the coal, oil and gas.....Alberta will soon be the USA's biggest single supplier of oil and last count 1.7 Trillion barrels of proven reserves, not like the ME were reserves are hard to verify.....We are going to build the largest refinery in the world, here in Alberta...Our new Prime Minister here in Alberta is apparently going to the USA looking for more English speaking tradesmen to accelerate construction....High paying jobs here in English speaking Alberta for good tradesmen....We Albertan's like Americans because it was 95% American investment that developed Alberta's oil and gas business....

"1.7 trillion barrels of proven reserves"

Now that is a total crock. The accessible reserves are 300 billion barrels. Estimating the total hydrocarbon deposits does not constitute proven reserves. There is a hard upper bound on what can be considered reserves as dictated by EROEI. At the end of the day total reserves are meaningless, it is the *extraction rate* that matters. Tar sands are pathetic in this regard and Alberta will be lucky to see 3.5 million barrels per day by 2020.