A severe drought across Western Canada could have a devastating impact on the oil and gas sector, which drills in some of the driest regions, according to a new report from Deloitte.
Limited water supplies could have a significant impact on oil and gas production, report warns, with many companies hoping to increase production and drill new export pipelines He warns that the timing couldn’t be worse for the industry. Facility It’s nearing completion.
Parts of Western Canada have been dry in recent years, but this year’s lower-than-usual snowfall in the mountains is an added concern.
“You can’t just pipe fresh water in. You might have to move the water or truck it to another location,” Andrew Botterill, an energy analyst at Deloitte Canada, said in an interview with CBC News. I can’t do it,” he said.
British Columbia’s energy regulator warned that snowfall is only 72 per cent of historical average.
He said both water trucking and water recycling would create more “expensive and complex” operations for companies.
Many communities are already on high alert for the potential for devastating drought and its impact on the availability of drinking water and industries such as agriculture.
This is the fourth year of drought conditions, and regulators have warned the industry of possible water restrictions this summer. The amount of water used in oil and gas production can vary, with drilling activities in some regions using up to 10 times more water than in others, depending on geological factors. Masu. Alberta Energy Regulator.
Regulators already limit the amount of water that oil sands and other energy projects can extract from the Athabasca River and some of the state’s other rivers. In some communities, Banned Oil patches are caused by using city water.
Federal Natural Resources Minister Jonathan Wilkinson said: “Water allocation will become an increasingly important issue.” “The long-term effects of climate change mean this is an ongoing challenge that we must address.”
Water is used for drilling and hydraulic fracturing. This is a common technique in which a high-pressure mixture of water, sand, and chemicals is injected into underground rock formations to form cracks and extract oil or natural gas. Using recycled water can affect drilling efficiency and increase costs.
Currently, oil prices are above average compared to the past decade, while natural gas prices are depressed. Therefore, drought can have a significant impact on natural gas production.
“When you combine the fact that there may be areas with water shortages and the fact that gas prices are low, the right thing to do is not to force the problem and provide more production at a higher cost. “That’s what we try to do,” Mike said. Belenky is the CEO of Advantage Energy, a medium-sized company that primarily produces natural gas.
Belenky has been closely monitoring rainfall all winter, not only because of water shortages but also because of the increased risk of wildfires.
“Really, the bigger concern is fire,” he says. “Last year was a terrible year with a lot of forest fires, and this year’s situation doesn’t look like it’s going to get any better.”
Despite colder temperatures, Alberta continues to experience an unseasonably warm and dry winter, leaving farmers concerned about how this summer’s crops will be affected. Travis McEwan has more.
More than 100 fires remain active in British Columbia and Alberta as both provinces continue to experience unusually dry conditions. Approximately 15 million hectares were burned nationwide last year, more than seven times the historic national annual average.
For the first time in 20 years, the Alberta government has begun water-sharing negotiations among licensees, including the energy and agriculture sectors, with the aim of reducing water use.
“Oil and natural gas companies are aggressively increasing their use of alternative water sources, such as low-quality groundwater, municipal wastewater, and recycled produced water, to reduce demand for fresh water,” the Canadian Petroleum Institute Regulations said. said Richard Wong, vice president of operations. The oil producers issued an emailed statement.
The industry group is working with the Alberta government to consider “low-risk interbasin water transfers to reduce pressure on water-stressed regions,” Wong said.
At last year’s COP28 United Nations Climate Summit, countries around the world agreed to transition away from fossil fuels to curb global warming.
Climate change will have a major impact on the country’s water supply as summers get hotter and winters get shorter, experts say. While precipitation is projected to increase overall, so too will the duration and severity of droughts.
