Western Canada produces 16.6 billion cubic feet of gas a day, representing the lion's share of the nation's total output. About 75% of the region's gas is extracted from easy-to-produce conventional reserves, with the remainder coming from "unconventional" reserves - gas deposits located in formations such as coal beds - that require more expensive production techniques.

To maintain current levels of production, 2.5 bcf/d of new production must be found to match current depletion. This will require both conventional and unconventional sources. Since unconventional is less productive the report suggests that either 17,000 conventional, or 25,000 unconventional wells will be needed. Contrast this with the 15,645 wells drilled in 2004 and with the 658 rigs drilling in Canada last week. The Canadian rig count is up some 329 rigs over this time last year.

As with the US production in Canada is relatively flat, despite the increased drilling activity, which is turning increasingly toward unconventional sources. There are 3,500 exploratory wells already planned for 2006, with the hope that this will increase unconventional production from 0.45 to 0.7 bcf/day by the end of the year. To put this in context, the oil sands operations are currently using around 1 bcf/day, and are seeking to treble this in the years ahead. Must be time to watch We Were Warned