Canada's known natural gas reserves continue to decline even though a record number of wells were drilled in 2003.
In its annual estimate of energy reserves, the Canadian Association of Petroleum Producers (CAPP) says that natural gas reserves declined by 2.5 trillion cubic feet by the end of last year, to 56.6 trillion cubic feet.
A major factor in the decline was a decision by Alberta's energy regulator to lower the gas estimates by 7.5 trillion cubic feet for thousands of small single-well pools that had little or no production.
The numbers were also affected by a major writedown in reserves at the Sable Offshore Energy Project - the only producing gas site off Canada's East Coast.
More than 70 per cent of the gas wells drilled in 2003 were in shallow pools located in southern Alberta and Saskatchewan.
Although only 59 per cent of gas production was replaced last year, more gas was found in both Saskatchewan and B.C., where replacement rates were 261 per cent and 120 per cent, respectively.
"The exploration is pushing into the northern part of B.C. and I don't think that's a surprise to anybody," said Greg Stringham, CAPP's vice-president of markets.
According to CAPP, Canada is the third-largest natural gas producer in the world and by far the largest supplier of gas to the huge U.S. market.
But conventional supplies have been waning for several years now, forcing energy companies to drill more wells for less reserves, all the while searching for new gas pools in more remote and harder to access areas like northeastern B.C. and the Mackenzie Delta in the Northwest Territories.
The CAPP report also said Canada's crude oil reserves rose slightly in 2003 to 12 billion barrels as more projects came onstream in the northern Alberta oilsands.
Epcor says it will build a 39.6-megawatt wind farm near Goderich, Ont., on the shores of Lake Huron.
The Edmonton company was one of several firms chosen by the Ontario government for wind-energy projects announced last week.
"By working together, we can address the challenges of ensuring a strong and affordable power supply and protection of the environment," said Epcor president and CEO Don Lowry.
Calgary-based Canadian Hydro Developers said it will supply 67.5 megawatts of electricity from wind resources at the Melancthon Grey Wind Project as part of its 20-year Renewable Energy Supply contract from the Ontario Electricity Financial Corp. This initial phase will be located in Melancthon Township, near Shelburne.
"This contract will result in the development of significant new generating assets for Canadian Hydro," said CEO John Keating. Since 2000, Canadian Hydro has invested more than $179 million in the development of seven low-impact renewable energy projects in Alberta and B.C.
The deals with the government are part of 10 "green" energy projects inked by the province to bring in jobs, investment and enough electricity to power more than 100,000 homes a year, said Ontario Energy Minister Dwight Duncan.
The province also signed 20-year deals with two small water projects and three plants that use gas from sewage or landfills to generate energy. Once built, the projects will represent two per cent of Ontario's peak electricity demand.
Pipeline company Fort Chicago Energy Partners LP is paying about $270 million for the Alberta Ethane Gathering System, a 1,324-kilometre pipeline that feeds the Nova Chemicals Corp. and Dow Chemical Canada ethylene complex at Joffre.
Separately, Nova said it was selling its stake in the pipeline for $93 million. The pipeline also handles 50 per cent of the ethane feedstock for Dow's ethylene site at Fort Saskatchewan.
Calgary-based Fort Chicago said that Pittsburgh-based Nova Chemicals will operate the system.
Fort Chicago and its affiliates already own a 50-per-cent interest in the 3,000-kilometre Alliance Pipeline - which ships natural gas from northeastern British Columbia to markets near Chicago - and an approximate 42.7-per-cent stake in Aux Sable and Alliance Canada Marketing.
Stormy seas kept containment crews at bay for several days last week after about 170,000 litres - the equivalent of 1,000 barrels - of oil dumped into the ocean during a malfunction aboard the Terra Nova oil platform.
"It's a large spill," said Fred Way, acting chairman and CEO of the Canada-Newfoundland Offshore Petroleum Board, which monitors the industry in the province.
The board has suspended operations at Terra Nova until further notice.
The spill was the largest yet for Canada's East Coast offshore industry. But it was tiny when compared with other major spills - in 1989, the oil tanker Exxon Valdez leaked 42 million litres of oil when it ran aground on the coast of Alaska.
The company said the spill occurred when oil that would normally be separated from water was released into the ocean as a result of a mechanical problem. A second spill later in the week at the Henry Goodrich, a mobile drilling unit two kilometres northeast of the Terra Nova platform, was much smaller and quickly contained.
Petro-Canada estimates only about 20 to 25 per cent of the original oil spill will be recovered. Most of the rest will dissipate into the ocean and eventually break down.
The company said late last week that two separate pieces of equipment malfunctioned.
Syncrude Canada Ltd. has received regulatory approval for a sulphur dioxide emissions reduction project (SERP) at its Mildred Lake Upgrader. The application was filed jointly with Alberta Environment and the Alberta Energy and Utilities Board in mid-2003.
The $400-million emissions reduction program involves retrofitting a three-train flue gas-scrubbing system into the operation of Syncrude's two existing cokers.
SERP will more than halve total sulphur dioxide emissions from the currently approved level of 245 tonnes per day, the company said in a news release. Other emissions, such as particulate matter and metals, are also expected to be reduced by around 50 per cent.
Gentry Resources Ltd. is buying oil and natural gas assets in southern Alberta for $8 million, the Calgary company said.
The assets in Alberta's Princess area produce about 195 barrels of oil equivalent per day. The name of the seller was not disclosed.
This deal includes 1,400 hectares and increases the company's working interests in the Tilley oil field, where Gentry has already been operating, to about 72 per cent.
Alberta energy firms Viking Energy Royalty Trust and Calpine Natural Gas Trust (CNG) plan to merge in a stock swap that would put Viking's management in charge. The combined entity would have a market capitalization of $1.15 billion, the companies said last week.
Under terms of an agreement approved by each trust's board of directors, every CNG Trust unit would be exchanged for two Viking trust units.
The plan still requires regulatory approval and the support of a majority of at least two-thirds of CNG Trust's unitholders voting at a meeting around Jan. 27.
- The Canadian Press and Business Edge
