Natural gas returns less likely on Island
Despite hopes earlier this decade that central Vancouver Island could soon be the centre of a vibrant natural gas industry, those expectations have faded dramatically.
Mike Dawson, president of the Canadian Society for Unconventional Gas, said changing markets and new technologies over the last few years have made it difficult for energy companies to tap into the billions of cubic feet of coal bed gas, a very pure form of natural gas, in the region.
In the Nanaimo coal basin, stretching roughly from Chemainus to Parksville, the province estimates there is about 300 billion cubic feet of gas trapped beneath the earth, and another 800 billion cubic feet of gas in the Comox-Campbell River coal basin.A number of energy companies began moving forward in 2002 to determine how much of the gas they could access for commercial uses.
Quinsam Coal and U.S.-based Cornerstone Gas were looking to drill exploratory wells in an area northwest of the Campbell River Airport to determine the potential for development.
In 2004, the Snuneymuxw First Nation signed an agreement with Akita Drilling to look at developing the gas in the Nanaimo basin.
But Dawson said the slow economy has led to the price of natural gas to drop to levels that wouldn't justify the costs of extraction of the gas on the Island.
He said new technology in the U.S. that has allowed the industry to extract natural gas resources from shale deposits (which are easily-accessible and plentiful) for the first time has led to the industry's interest to stray from Vancouver Island to other sources in the U.S. that are nearer to the markets.
"Certainly the wind has come out of the sails for the development of the industry on Vancouver Island at this time," Dawson said from his Calgary office Monday.
"If the pace of the economic recovery in North America picks up, the markets may demand the development of new natural gas sources but right now we have a large amount of gas in an environment where less is needed."