Liard Basin one of world's largest shale gas deposits
Premier calls findings of new National Energy report 'encouraging'
Meagan Leonard
Northern News Services
Monday, March 21, 2016
ACHO DENE KOE/FORT LIARD
One quarter of the country's second-largest known gas resource is located in the Northwest Territories, according to a report released by the National Energy Board on March 16.
Straddling the boundaries of British Columbia, the Yukon and the Northwest Territories, the Liard Basin is an extensive depression comprised of sediments up to 540-million years old. The deposit is expected to contain 6,201 billion cubic metres of marketable, unconventional natural gas with more than three quarters in British Columbia, 20 per cent in the NWT and three per cent in the Yukon.
The report is the first detailed study released on the basin's resources which determined it is one of the largest shale gas resources in the world and contains enough natural gas to supply the country for 68 years.
A resource is determined based on an estimate of the amount of oil or natural gas found in a given reservoir and can be extracted using existing technology.
Canada's largest gas resource is the Montney Formation located in southeastern British Columbia and Alberta which contains 12,714 billion cubic metres.
In a speech given at the annual oil and gas summit held in Calgary March 14 and 15, Premier Bob McLeod said the territory would support responsible development of the Liard resource and work to settle its outstanding land claims in the interim.
"(The resource) is highly encouraging and could produce many jobs and billions in revenue if the project is pursued with responsibility and vigour," he said. "Our government is aware of the lack of certainty in land use structure and the challenge this poses for the natural resource industries. Our government will work tirelessly to settle outstanding land claims."
The Liard Basin Hydrocarbon Project started in 2012 and is a scientific collaboration between the NWT Geological Survey, the governments of the Yukon and B.C. and the National Energy Board. Field work conducted since then has focused on a shale rock in the Upper Besa River Formation north of Fort Liard studying five outcrops and has gathered data on petroleum gas potential in the region's shale formations.
Previous projects focused on conventional petroleum extraction while this initiative looked at the "unconventional" shale potential of the area. Unconventional gas is more challenging to economically remove from rock formations without using complex drilling techniques and technology. Shale gas requires horizontal drilling and multi-stage hydraulic fracturing to achieve economic production.
Shale gas is created when organic material from plankton or plants is warmed and buried over time. Eventually the organic matter starts to break apart. At lower temperatures oil is created, while at higher temperatures natural gas is created - some escapes and fills conventional reservoirs while the rest remains trapped in shale.
Cabinet spokesperson Andrew Livingstone told News/North in an e-mail that fracking would be required to extract the resources but engagement sessions would be held with aboriginal governments in the event the Liard basin is developed.
"We will continue to engage aboriginal governments in the NWT in the spirit of respect, recognition and responsibility, fostering an environment of partnership and co-operation," he said.
The deposit is in an attractive investment due to its proximity to a major highway and previously established gas pipelines in all three jurisdictions from conventional wells that have been producing for decades. Livingstone said the GNWT is preparing for the industry to make a comeback by simplifying the land tenure regime and updating the Oil and Gas Operations Act.
"Oil and gas markets are cyclical by nature. We have seen prices rise and fall frequently over the past decades," he said. "We fully expect demand will return and, in the meantime, we are working to streamline regulation and legislation."
In 2014, Canada's total natural gas usage was 90.6 billion cubic metres. It is estimated the country still has 24,069 billion cubic metres of gas in areas already served by major pipeline systems - the equivalent of 267 years of supply.
"This study reinforces the fact that Canada has a very large natural gas resource base at its disposal, and Canadians will be well supplied with natural gas for as long as they need it," said National Energy Board CEO Peter Watson in a news release. "Studies like this one also enable all governments to be better informed when building policy around resource development and energy markets."
