Shale gas is energy’s “game-changer”. According to Chris Weston, president and chief executive of Centrica’s direct energy unit, this single source of energy has grown so much in North America that it is bigger than the UK’s entire gas production. Some experts believe shale gas will account for half of all North American production by the end of the decade.
Technological advances over the past 10 years have meant that it is finally economically viable to drill great distances horizontally, fracture the tightly packed shale rock and capture the gas. Shale gas production has rocketed in the US, with President Obama promoting the technology in overseas trade talks.
But the great new frontier could be the Western Canadian Sedimentary Basin, which is already a great source of oil and more conventional natural gas. In the past two years, energy companies have spent about CA$6bn (£3.9bn) on buying land there, much of it in the Triassic Montney and Devonian Horn River fields in northern British Columbia, where there are vast reservoirs of shale gas.
ExxonMobil and Shell are among the major oil companies ramping up operations, while China, Japan and Korean are among the Asian players who see western Canada as the future of their energy supplies. “The revolution in technology has allowed rocks that are known to have contained gas to be reached that weren’t reachable in the past,” says a leading oil and gas banker. “So the whole continent’s potential has increased and North America is going to become a net exporter of gas.”
Already the world’s third biggest natural gas producer, Canada will most likely lead the way in North American exports. It has huge ports and the potential to develop more on the west coast, making it perfect to export gas to energy-hungry Asia.