Slumping oil prices familiar territory for natural gas producers

by News Staff Posted Feb 17, 2015 7:41 am MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Slumping oil prices familiar territory for natural gas producers With all the talk about oil prices, natural gas production is often over looked, but it was a big deal in Alberta for a long time.Gas prices saw a decline during the 2008 recession and while oil prices are expected to bounce back, natural gas doesn’t look like it will ever get back the levels it was at a decade ago.When things started to fall apart, gas producers scaled back operations and in some cases, companies diversified and actually invested in oil exploration.David Yager, National Leader Oil Field Services with MNP LLP Calgary, told 660News the value of natural gas produced in Canada in 2005 was $52-billion. In 2012 it was down to $12-billion.When everything was going well before the drop off in 2008, gas was going for $10 per thousand cubic feet.“I thought going into this downturn last fall when the price of oil was going down and the price of gas was steady, I thought maybe it would be immune, but the two-year average price for gas for 2013/2014 is about four dollars per thousand cubic feet and now we’re substantially below that,” he said, adding the conventional gas business which helped spark the oil boon is all but gone.He explained oil companies are in much better shape and he doesn’t see any massive long term pullbacks or planned obsolescence.There’s also a silver lining. Low gas prices are good news for the oilsands, which use natural gas and it’s also good for home heating prices and energy prices as well.Yager noted that’s one market that looks promising in Alberta, as coal fire power plants convert to natural gas.In fact, that’s the biggest market for natural gas in the United States.

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