Declining gas volumes: drill bit not always the answer

The current and future natural gas situation in the United States and Canada are reviewed, the forecast for both countries being a steady increase in demand, a sustained increase in drilling activity, continued growth in technology and efficiency, better access to restricted areas, upward pressure on prices and increased media and political attention. Various myths concerning gas supply are explored to show that higher rig count or deepwater Gulf of Mexico resources will not necessarily generate large production increases, nor will Canada be able to immediately fill new gas pipeline capacity. The likely result will be a constrained supply environment, at least until the Arctic gas pipeline is completed some time after 2006. Not unexpectedly, gas price outlook is judged to be favourable