It is the Commission's opinion that the IROR concept affords

ample opportunity to earn generous rates of return if the sponsors

form, and permits consumers to obtain the natural gas they need an acceptable price.

Part 2: Deliverability of Canadian Gas*

Canadian gas,

which potentially could be included in a pipeline

from Alaska, would come from Western Canada and, in the longer term,

may also come from the Mackenzie Delta

the Arctic Islands area.

Western Canadian Petroleum Province

Beaufort Sea region and/or

This region includes the sedimentary rock portions of the Prairie and the Northwest and Yukon Territories lying between the Precambrian Shield and the Rocky Mountains.

Geology This is the best known area in Canada in terms of subsurface geology and is in a mature stage of hydrocarbon exploration. 9/ The oil and gas region of Alberta is located in the southwestern part of the Western Canadian Sedimentary Basin and southern Saskatchewan and Manitoba are on the northern side of the Williston Basin. Both basins have simple structural geology and low regional dips. Most of the oil and gas in both basins occurs in stratigraphic traps.

The Williston Basin in Saskatchewan and Manitoba is a simple, relatively shallow basin that has exhibited a low hydrocarbon potential. The best prospects appear to have been tested and the

*Prepared by Joseph P. Riva, Jr., Science Policy Research

Division.

9/ Department of Energy, Mines and Resources of Canada. Oil and Natural Gas Resources of Canada, 1976. Minister of Supply Services, Canada, 1976. Report EP77-1. p. 25.

maining potential appears to be small. 10/ The rocks in the basin nge from Ordovician to Cretaceous (500 million to 65 million years d). In Alberta there is reasonable expectation for additional drocarbon discoveries in stratigraphic traps that are less vious and perhaps smaller than those found to date, and in deeper rts of the basin that have yet to be thoroughly tested. 11/

The hydrocarbon accumulations of Alberta may be considered in

o groups, those occuring in the geologically complex foothills zone the Rocky Mountains and those found in the gently dipping rocks neath the Interior Plains. A number of large gas accumulations, ne associated with oil, have been found in the foothills belt ich separates the Rocky Mountains from the Alberta Plains. e fields are essentially complex fault structures which have en overthrust from the west. Most of the gas accumulations cur in Mississippian (345 million year old) dolomitic limestones, t there are also some Triassic (225 million year old) and #onian (395 million year old) producers. 12/ The Alberta Plains, ing northweast of the foothills zone, consists of an area of about ,000 square miles of mainly Mesozoic and Paleozoic strata (570 65 million years old). There are two principle types of hydrocarbon

57-087 0 80 16

Oilfields of the World. Houston, Gulf

accumulations, Paleozoic reef limestone oilfields and Mesozoic

sandstone gas accumulations. 13/

Future

The deeper part of the Western Canada Sedimentary Basin lies in northeastern British Columbia. Because the region was deeply buried under sediments in the past and has a relatively high geothermal gradient in some places, the discoveries have mostly been of gas. Most of the drilling has been on surface indications or on features such as reef structures which are found by geophysical methods. exploration will most likely be for relatively deep stratigraphic traps. Exploration Activity--The Western Canada Sedimentary Basin is in a mature stage of hydrocarbon exploration. Almost 100,000 wells have been drilled in the region since the discovery of the Leduc oil field in 1947 and these wells have resulted in the discovery of over 3,000 fields, most of which occur within Alberta. The last major discovery in Alberta had been in 1965 until the 1976 discovery of oil at West Pembina and gas at Elmworth-Wapiti. The Elmworth gas play cuts across a deep, gas prone area straddling the Alberta-British Columbia border. Between them, the two new discoveries have dominated Alberta drilling the past year. 14/ The Elmworth gas discoveries have been made mainly in the Lower Cretaceous rocks. Nearly 100 wells have been drilled, ranging from 6,000 to 12,000 feet in depth. Proved and probable reserves

13/ Ibid., p. 283.

14/ Crow, Patrick. Two big plays spur Canadian drilling flurry. The Oil and Gas Journal, February 26, 1979: 93.

in the Elmworth area have been estimated at 6 trillion cubic

feet.

Economic considerations in the Western Canada region differ ;reatly from those in any of the frontier areas. The infrastrucure is already in place and the logistical problems are minimal. hus, even the smallest pools are expected to be economic. Most of the larger structures have probably already been tested and xploration in the future will probably be devoted to searching or the remaining smaller structural pools and the downdip,

ight sandstone gas accumulations of the deeper parts of the basin, uch as Elmworth.

eserves, Resource Estimates and Production Capability--Proved gas eserves for Western Canada were estimated by the National Energy oard at 65.8 trillion cubic feet at the end of 1978. 15/

Projections

f reserve additions for the area to the year 2000 vary considerably, rom 32 to 103 trillion cubic feet. 16/ The fundamental thesis upon hich the higher figures are based is that as reservoir quality deterioates larger and larger amounts of natural gas are trapped in the lower orosity sands. In areas such as Elmworth, the the gas is thought to be rapped by a gas-water interface where high water saturation of the low ermeability rock reduces gas permeability to near zero, resulting in

15/ The National Energy Board. Canadian Natural Gas Supply and equirements. Minister of Supply and Services, Canada, 1979. p. 8.

16/ Ibid., p. 9.