Big Gas in B.C.

The Horn River Basin in northeastern B.C. is proving to be a major natural gas find. This must be frustrating to the government of B.C. who are trying to discourage the use of natural gas because it is a fossil fuel that is thought to contribute to global warming. A policy that leads to lost royalties is is even more galling when the government is facing record deficits. If you really believe that natural gas contributes to global warming why would you sell exploration leases for big bucks in the first place. The dilemma for the government grows with each report like the following:

HOUSTON — Exxon Mobil Corp. has been scouring the globe for natural gas locked inside shale formations, and said it thinks it may have a world-class find in Canada.

In an interview with The Wall Street Journal, Tim Cejka, Exxon’s head of global exploration, said the company has been bullish on shale-gas exploration since 2003, locating promising gas-bearing rock formations and snapping up leases on them.

Exxon is most encouraged by the exploration of 250,000 acres it has leased in the Horn River Basin, in northern British Columbia. Mr. Cejka said results from the first four wells lead the company to conclude that each well will produce between 16 million and 18 million cubic feet of gas a day.

That’s five times the size of average wells in Texas’s Barnett shale and comparable to big wells in Louisiana’s Haynesville shale, two major shale-gas fields that already have moved the U.S. natural-gas market from scarcity to abundance….

Other energy companies also are excited about the Horn River field. "This may be the best shale play in North America," said Michael Graham, an executive vice president at EnCana Corp., a Calgary company that already has a big Horn River presence. Mr. Graham said EnCana’s latest wells are approaching Exxon’s in terms of initial production.

Source:http://online.wsj.com/article/SB124716768350519225.html

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